Washington State House of Representatives Office of Program Research | BILL ANALYSIS |
Financial Institutions & Insurance Committee |
HB 2404
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
Brief Description: Concerning group life insurance.
Sponsors: Representatives Santos and Bailey.
Brief Summary of Bill |
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Hearing Date: 1/12/10
Staff: Jon Hedegard (786-7127).
Background:
The Office of the Insurance Commissioner (OIC) regulates insurance transactions in the State of Washington. This includes life insurance policies that are issued or delivered in Washington. Insurance rates and insurance forms are filed with the OIC. The OIC ensures that the rates and forms comply with the Insurance Code. There are certain standard provisions for group policies.
Under state law, a group policy may only insure members of specified types of groups. The group is the policyholder and is required to pay the premiums on the policies. An insured person may be able to contribute funds to the premiums. A person must be a member to be insured under the group policy. These groups are:
employee groups;
credit union groups;
debtor groups;
associations which have: (1) been in active existence for at least one year; (2) a constitution and bylaws; and (3) been organized and maintained in good faith for purposes other than that of obtaining insurance;
labor union groups;
public employee associations;
trustee groups;
insurance producer groups;
the Washington State Patrol; and
financial institutions;
The dependents of employees or members of certain groups are also able to be insured under a group policy. This subset includes:
employee groups;
labor union groups;
public employee associations
trustee groups; and
the Washington state patrol.
Summary of Bill:
Group life insurance may be offered to a resident of this state under a group policy to a group other than a group currently in statute if the Insurance Commissioner (Commissioner) finds that:
the issuance of the group policy is not contrary to the best interest of the public;
the issuance of the group policy would result in economies of acquisition or administration; and
the benefits are reasonable in relation to the premiums charged.
Group life insurance coverage may not be offered by this type of group in this state under a policy issued in another state unless:
the other state has requirements substantially similar to those in the bill; and
the Commissioner or the insurance commissioner of the other state has determined that those requirements have been met.
The premium for the policy must be paid either from the policyholder's funds or from funds contributed by the covered persons, or from both.
Appropriation: None.
Fiscal Note: Not requested.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.