BILL REQ. #:  Z-0271.3 

Read first time 01/19/11.   Referred to Committee on Business & Financial Services.

     AN ACT Relating to insurance; amending RCW 4.28.080, 48.02.150, 48.02.190, 48.03.060, 48.05.200, 48.05.215, 48.10.170, 48.14.0201, 48.15.150, 48.17.380, 48.36A.350, 48.85.030, 48.94.010, 48.102.011, 48.102.021, 48.110.030, 48.110.055, and 48.155.020; and repealing RCW 48.05.210.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 4.28.080 and 1997 c 380 s 1 are each amended to read as follows:
     Service made in the modes provided in this section ((shall be taken and held to be)) is personal service. The summons shall be served by delivering a copy thereof, as follows:
     (1) If the action ((be)) is against any county in this state, to the county auditor or, during normal office hours, to the deputy auditor, or in the case of a charter county, summons may be served upon the agent, if any, designated by the legislative authority.
     (2) If against any town or incorporated city in the state, to the mayor, city manager, or, during normal office hours, to the mayor's or city manager's designated agent or the city clerk thereof.
     (3) If against a school or fire district, to the superintendent or commissioner thereof or by leaving the same in his or her office with an assistant superintendent, deputy commissioner, or business manager during normal business hours.
     (4) If against a railroad corporation, to any station, freight, ticket or other agent thereof within this state.
     (5) If against a corporation owning or operating sleeping cars, or hotel cars, to any person having charge of any of its cars or any agent found within the state.
     (6) If against a domestic insurance company, to any agent authorized by such company to solicit insurance within this state.
     (7)(a) If against ((a)) an unauthorized foreign or alien insurance company, as provided in ((chapter 48.05)) RCW 48.05.200.
     (b) If against an unauthorized insurer, as provided in RCW 48.05.215 and 48.15.150.
     (c) If against a reciprocal insurer, as provided in RCW 48.10.170.
     (d) If against a nonresident surplus line broker, as provided in RCW 48.15.073.
     (e) If against a nonresident insurance producer or title insurance agent, as provided in RCW 48.17.173.
     (f) If against a nonresident adjuster, as provided in RCW 48.17.380.
     (g) If against a fraternal benefit society, as provided in RCW 48.36A.350.
     (h) If against a nonresident reinsurance intermediary, as provided in RCW 48.94.010.
     (i) If against a nonresident life settlement provider, as provided in RCW 48.102.011.
     (j) If against a nonresident life settlement broker, as provided in RCW 48.102.021.
     (k) If against a service contract provider, as provided in RCW 48.110.030.
     (l) If against a protection product guarantee provider, as provided in RCW 48.110.055.
     (m) If against a discount plan organization, as provided in RCW 48.155.020.
     (8) If against a company or corporation doing any express business, to any agent authorized by said company or corporation to receive and deliver express matters and collect pay therefor within this state.
     (9) If ((the suit be)) against a company or corporation other than those designated in ((the preceding subdivisions)) subsections (1) through (8) of this section, to the president or other head of the company or corporation, the registered agent, secretary, cashier or managing agent thereof or to the secretary, stenographer or office assistant of the president or other head of the company or corporation, registered agent, secretary, cashier or managing agent.
     (10) If ((the suit be)) against a foreign corporation or nonresident joint stock company, partnership or association doing business within this state, to any agent, cashier or secretary thereof.
     (11) If against a minor under the age of fourteen years, to such minor personally, and also to his or her father, mother, guardian, or if there be none within this state, then to any person having the care or control of such minor, or with whom he or she resides, or in whose service he or she is employed, if such there be.
     (12) If against any person for whom a guardian has been appointed for any cause, then to such guardian.
     (13) If against a foreign or alien steamship company or steamship charterer, to any agent authorized by such company or charterer to solicit cargo or passengers for transportation to or from ports in the state of Washington.
     (14) If against a self-insurance program regulated by chapter 48.62 RCW, as provided in chapter 48.62 RCW.
     (15) In all other cases, to the defendant personally, or by leaving a copy of the summons at the house of his or her usual abode with some person of suitable age and discretion then resident therein.
     (16) In lieu of service under subsection (15) of this section, where the person cannot with reasonable diligence be served as described, the summons may be served as provided in this subsection, and shall be deemed complete on the tenth day after the required mailing: By leaving a copy at his or her usual mailing address with a person of suitable age and discretion who is a resident, proprietor, or agent thereof, and by thereafter mailing a copy by first-class mail, postage prepaid, to the person to be served at his or her usual mailing address. For the purposes of this subsection, "usual mailing address" ((shall)) does not include a United States postal service post office box or the person's place of employment.

Sec. 2   RCW 48.02.150 and 2009 c 549 s 7011 are each amended to read as follows:
     The commissioner ((shall)) must purchase at the expense of the state, and in the manner provided by law((:
     (1))), printing, books, reports, furniture, equipment, and supplies as he or she deems necessary to the proper discharge of his or her duties under this code.
     (((2) "Convention form" insurers' annual statement blanks, which he or she may purchase from any printer manufacturing the forms for the various states.))

Sec. 3   RCW 48.02.190 and 2009 c 161 s 1 are each amended to read as follows:
     (1) As used in this section:
     (a) "Organization" means every insurer, as defined in RCW 48.01.050, having a certificate of authority to do business in this state, every health care service contractor, as defined in RCW 48.44.010, every health maintenance organization, as defined in RCW 48.46.020, or self-funded multiple employer welfare arrangement, as defined in RCW 48.125.010, registered to do business in this state. "Class one" organizations ((shall)) consist of all insurers as defined in RCW 48.01.050. "Class two" organizations ((shall)) consist of all organizations registered under provisions of chapters 48.44 and 48.46 RCW. "Class three" organizations ((shall)) consist of self-funded multiple employer welfare arrangements as defined in RCW 48.125.010.
     (b)(i) "Receipts" means (A) net direct premiums consisting of direct gross premiums, as defined in RCW 48.18.170, paid for insurance written or renewed upon risks or property resident, situated, or to be performed in this state, less return premiums and premiums on policies not taken, dividends paid or credited to policyholders on direct business, and premiums received from policies or contracts issued in connection with qualified plans as defined in RCW 48.14.021, and (B) prepayments to health care service contractors, as defined in RCW 48.44.010, health maintenance organizations, as defined in RCW 48.46.020, or participant contributions to self-funded multiple employer welfare arrangements, as defined in RCW 48.125.010, less experience rating credits, dividends, prepayments returned to subscribers, and payments for contracts not taken.
     (ii) Participant contributions, under chapter 48.125 RCW, used to determine the receipts in this state under this section ((shall be)) are determined in the same manner as premiums taxable in this state are determined under RCW 48.14.090.
     (c) "Regulatory surcharge" means the fees imposed by this section.
     (2) The annual cost of operating the office of insurance commissioner ((shall be)) is determined by legislative appropriation. A pro rata share of the cost ((shall be)) is charged to all organizations as a regulatory surcharge. Each class of organization ((shall)) must contribute a sufficient amount to the insurance commissioner's regulatory account to pay the reasonable costs, including overhead, of regulating that class of organization.
     (3) The regulatory surcharge ((shall be)) is calculated separately for each class of organization. The regulatory surcharge collected from each organization ((shall be)) is that portion of the cost of operating the insurance commissioner's office, for that class of organization, for the ensuing fiscal year that is represented by the organization's portion of the receipts collected or received by all organizations within that class on business in this state during the previous calendar year. However, the regulatory surcharge must not exceed one-eighth of one percent of receipts and the minimum regulatory surcharge ((shall be)) is one thousand dollars.
     (4) The commissioner ((shall)) must annually, on or before ((June)) July 1st, calculate and bill each organization for the amount of the regulatory surcharge. The regulatory surcharge ((shall be)) is due and payable no later than ((June)) July 15th of each year. However, if the necessary financial records are not available or if the amount of the legislative appropriation is not determined in time to carry out such calculations and bill such regulatory surcharge within the time specified, the commissioner may use the regulatory surcharge factors for the prior year as the basis for the regulatory surcharge and, if necessary, the commissioner may impose supplemental fees to fully and properly charge the organizations. Any organization failing to pay the regulatory surcharges by ((June 30th shall)) July 31st must pay the same penalties as the penalties for failure to pay taxes when due under RCW 48.14.060. The regulatory surcharge required by this section is in addition to all other taxes and fees now imposed or that may be subsequently imposed.
     (5) All moneys collected ((shall)) must be deposited in the insurance commissioner's regulatory account in the state treasury which is hereby created.
     (6) Unexpended funds in the insurance commissioner's regulatory account at the close of a fiscal year ((shall be)) are carried forward in the insurance commissioner's regulatory account to the succeeding fiscal year and ((shall be)) are used to reduce future regulatory surcharges.
     (7)(a) Each insurer may annually collect regulatory surcharges remitted in preceding years by means of a policyholder surcharge on premiums charged for all kinds of insurance. The recoupment ((shall be)) is at a uniform rate reasonably calculated to collect the regulatory surcharge remitted by the insurer.
     (b) If an insurer fails to collect the entire amount of the recoupment in the first year under this section, it may repeat the recoupment procedure provided for in this subsection (7) in succeeding years until the regulatory surcharge is fully collected or a de minimis amount remains uncollected. Any such de minimis amount may be collected as provided in (d) of this subsection.
     (c) The amount and nature of any recoupment ((shall)) must be separately stated on either a billing or policy declaration sent to an insured. The amount of the recoupment must not be considered a premium for any purpose, including the premium tax or agents' commissions.
     (d) An insurer may elect not to collect the regulatory surcharge from its insured. In such a case, the insurer may recoup the regulatory surcharge through its rates, if the following requirements are met:
     (i) The insurer remits the amount of surcharge not collected by election under this subsection; and
     (ii) The surcharge is not considered a premium for any purpose, including the premium tax or agents' commission.

Sec. 4   RCW 48.03.060 and 2004 c 260 s 23 are each amended to read as follows:
     (1) Examinations within this state of any insurer or self-funded multiple employer welfare arrangement as defined in RCW 48.125.010 domiciled or having its home offices in this state, other than a title insurer, made by the commissioner or the commissioner's examiners and employees ((shall)) must, except as to fees, mileage, and expense incurred as to witnesses, be at the expense of the state.
     (2) Every other examination, whatsoever, or any part of the examination of any person domiciled or having its home offices in this state requiring travel and services outside this state, ((shall)) must be made by the commissioner or by examiners designated by the commissioner and ((shall)) must be at the expense of the person examined; but a domestic insurer ((shall)) must not be liable for the compensation of examiners employed by the commissioner for such services outside this state.
     (3) When making an examination under this chapter, the commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals and specialists as examiners, the cost of which ((shall)) must be borne by the person who is the subject of the examination, except as provided in subsection (1) of this section.
     (4) The person examined and liable ((therefor shall)) must reimburse the state upon presentation of an itemized statement ((thereof,)) for the actual travel expenses of the commissioner's examiners, their reasonable living expense allowance, and their per diem compensation, including salary and the employer's cost of employee benefits, at a reasonable rate approved by the commissioner, incurred on account of the examination. Per diem salary and expenses for employees examining insurers domiciled outside the state of Washington ((shall)) must be established by the commissioner on the basis of the national association of insurance commissioner's recommended salary and expense schedule for zone examiners, or the salary schedule established by the ((Washington)) state director of personnel ((resources board)), and the expense schedule established by the office of financial management, whichever is higher. A domestic title insurer ((shall)) must pay the examination expense and costs to the commissioner as itemized and billed by the commissioner.
     The commissioner or the commissioner's examiners ((shall)) must not receive or accept any additional emolument on account of any examination.
     (5) Nothing contained in this chapter limits the commissioner's authority to terminate or suspend any examination in order to pursue other legal or regulatory action under the insurance laws of this state. Findings of fact and conclusions made pursuant to any examination are prima facie evidence in any legal or regulatory action.

Sec. 5   RCW 48.05.200 and 1985 c 264 s 3 are each amended to read as follows:
     (1) Each authorized foreign or alien insurer ((shall)) must appoint the commissioner as its attorney to receive service of, and upon whom ((shall)) must be served, all legal process issued against it in this state upon causes of action arising within this state. Service upon the commissioner as attorney ((shall)) constitutes service upon the insurer. Service of legal process against ((such)) the insurer can be had only by service upon the commissioner, except actions upon contractor bonds pursuant to RCW 18.27.040, where service may be upon the department of labor and industries.
     (2) With the appointment the insurer ((shall)) must designate by name, e-mail address, and address the person to whom the commissioner ((shall)) must forward legal process so served upon him or her. The insurer may change ((such)) the person by filing a new designation.
     (3) The insurer must keep the designation, address, and e-mail address filed with the commissioner current.
     (4) The appointment of the commissioner as attorney ((shall be)) is irrevocable, ((shall)) binds any successor in interest or to the assets or liabilities of the insurer, and ((shall)) remains in effect as long as there is in force in this state any contract made by the insurer or liabilities or duties arising therefrom.
     (5) The service of process must be accomplished and processed in the manner prescribed under RCW 48.02.200.

Sec. 6   RCW 48.05.215 and 1981 c 339 s 4 are each amended to read as follows:
     (1) Any foreign or alien insurer not ((thereunto)) authorized by the commissioner, whether it be a surplus lines insurer operating under chapter 48.15 RCW or not, who, by mail or otherwise, solicits insurance business in this state or transacts insurance business in this state as defined by RCW 48.01.060, thereby submits itself to the jurisdiction of the courts of this state in any action, suit, or proceeding instituted by or on behalf of an insured, beneficiary or the commissioner arising out of ((such)) an unauthorized solicitation of insurance business, including, but not limited to, an action for injunctive relief by the commissioner.
     (2) In any ((such)) action, suit, or proceeding instituted by or on behalf of an insured or beneficiary, service of legal process against ((such)) an unauthorized foreign or alien insurer ((may be made by service of duplicate copies of legal process on the commissioner by a person competent to serve a summons or by registered mail. At the time of service the plaintiff shall pay to the commissioner ten dollars, taxable as costs in the action. The commissioner shall forthwith mail one of the copies of the process, by registered mail with return receipt requested, to the defendant at its last known principal place of business)) must be accomplished and processed in the manner prescribed under RCW 48.02.200. The defendant insurer ((shall have)) has forty days from the date of the service on the commissioner within which to plead, answer, or otherwise defend the action.
     (3) In any such action, suit, or proceeding by the commissioner, service of legal process against ((such)) an unauthorized foreign or alien insurer may be made by personal service of legal process upon any officer of such insurer at its last known principal place of business outside the state of Washington. The summons upon ((such)) an unauthorized foreign or alien insurer ((shall)) must contain the same requisites and be served in like manner as personal summons within the state of Washington; except, the insurer ((shall have)) has forty days from the date of ((such)) personal service within which to plead, answer, or otherwise defend the action.

Sec. 7   RCW 48.10.170 and 2009 c 549 s 7042 are each amended to read as follows:
     (1) ((A certificate of authority shall not be issued to a domestic)) Each authorized reciprocal insurer ((unless prior thereto the attorney has executed and filed with the commissioner the insurer's irrevocable authorization of the commissioner to receive legal process issued in this state against the insurer upon any cause of action arising within this state.
     (2) The provisions of RCW 48.05.210 shall apply to service of such process upon the commissioner.
     (3))) must appoint the commissioner as its attorney to receive service of, and upon whom service must be served, all legal process issued against it in this state upon causes of action arising within this state. Service upon the commissioner as attorney constitutes service upon the insurer.
     (2) With the appointment the insurer must designate the person to whom the commissioner must forward legal process so served upon him or her.
     (3) The appointment of the commissioner as attorney is irrevocable, binds any successor in interest or to the assets or liabilities of the insurer, and remains in effect as long as there is in force in this state any contract made by the insurer or liabilities or duties arising under that contract.
     (4) The service of process must be accomplished and processed in the manner prescribed under RCW 48.02.200.
     (5) In lieu of service on the commissioner, legal process may be served upon a domestic reciprocal insurer by serving the insurer's attorney at his or her principal offices.
     (((4))) (6) Any judgment against the insurer based upon legal process so served ((shall be)) is binding upon each of the insurer's subscribers as their respective interests may appear and in an amount not exceeding their respective contingent liabilities.

Sec. 8   RCW 48.14.0201 and 2009 c 479 s 41 are each amended to read as follows:
     (1) As used in this section, "taxpayer" means a health maintenance organization as defined in RCW 48.46.020, a health care service contractor as defined in RCW 48.44.010, or a self-funded multiple employer welfare arrangement as defined in RCW 48.125.010.
     (2) Each taxpayer ((shall)) must pay a tax on or before the first day of March of each year to the state treasurer through the insurance commissioner's office. The tax ((shall)) must be equal to the total amount of all premiums and prepayments for health care services collected or received by the taxpayer under RCW 48.14.090 during the preceding calendar year multiplied by the rate of two percent. For tax purposes, the reporting of premiums and prepayments must be on a written basis or on a paid-for basis consistent with the basis required by the annual statement.
     (3) Taxpayers ((shall)) must prepay their tax obligations under this section. The minimum amount of the prepayments ((shall be)) is the percentages of the taxpayer's tax obligation for the preceding calendar year recomputed using the rate in effect for the current year. For the prepayment of taxes due during the first calendar year, the minimum amount of the prepayments ((shall be)) is the percentages of the taxpayer's tax obligation that would have been due had the tax been in effect during the previous calendar year. The tax prepayments ((shall)) must be paid to the state treasurer through the commissioner's office by the due dates and in the following amounts:
     (a) On or before June 15, forty-five percent;
     (b) On or before September 15, twenty-five percent;
     (c) On or before December 15, twenty-five percent.
     (4) For good cause demonstrated in writing, the commissioner may approve an amount smaller than the preceding calendar year's tax obligation as recomputed for calculating the health maintenance organization's, health care service contractor's, self-funded multiple employer welfare arrangement's, or certified health plan's prepayment obligations for the current tax year.
     (5) Moneys collected under this section ((shall be)) are deposited in the general fund.
     (6) The taxes imposed in this section do not apply to:
     (a) Amounts received by any taxpayer from the United States or any instrumentality thereof as prepayments for health care services provided under Title XVIII (medicare) of the federal social security act.
     (b) Amounts received by any taxpayer from the state of Washington as prepayments for health care services provided under:
     (i) The medical care services program as provided in RCW 74.09.035; or
     (ii) The Washington basic health plan on behalf of subsidized enrollees as provided in chapter 70.47 RCW((; or
     (iii) The medicaid program on behalf of elderly or clients with disabilities as provided in chapter 74.09 RCW when these prepayments are received prior to July 1, 2009, and are associated with a managed care contract program that has been implemented on a voluntary demonstration or pilot project basis)).
     (c) Amounts received by any health care service contractor, as defined in RCW 48.44.010, as prepayments for health care services included within the definition of practice of dentistry under RCW 18.32.020.
     (d) Participant contributions to self-funded multiple employer welfare arrangements that are not taxable in this state.
     (7) Beginning January 1, 2000, the state ((does hereby)) preempts the field of imposing excise or privilege taxes upon taxpayers and no county, city, town, or other municipal subdivision ((shall have)) has the right to impose any such taxes upon such taxpayers. This subsection ((shall be)) is limited to premiums and payments for health benefit plans offered by health care service contractors under chapter 48.44 RCW, health maintenance organizations under chapter 48.46 RCW, and self-funded multiple employer welfare arrangements as defined in RCW 48.125.010. The preemption authorized by this subsection ((shall)) must not impair the ability of a county, city, town, or other municipal subdivision to impose excise or privilege taxes upon the health care services directly delivered by the employees of a health maintenance organization under chapter 48.46 RCW.
     (8)(a) The taxes imposed by this section apply to a self-funded multiple employer welfare arrangement only in the event that they are not preempted by the employee retirement income security act of 1974, as amended, 29 U.S.C. Sec. 1001 et seq. The arrangements and the commissioner ((shall)) must initially request an advisory opinion from the United States department of labor or obtain a declaratory ruling from a federal court on the legality of imposing state premium taxes on these arrangements. Once the legality of the taxes has been determined, the multiple employer welfare arrangement certified by the insurance commissioner must begin payment of these taxes.
     (b) If there has not been a final determination of the legality of these taxes, then beginning on the earlier of (i) the date the fourth multiple employer welfare arrangement has been certified by the insurance commissioner, or (ii) April 1, 2006, the arrangement ((shall)) must deposit the taxes imposed by this section into an interest bearing escrow account maintained by the arrangement. Upon a final determination that the taxes are not preempted by the employee retirement income security act of 1974, as amended, 29 U.S.C. Sec. 1001 et seq., all funds in the interest bearing escrow account ((shall)) must be transferred to the state treasurer.
     (9) The effect of transferring contracts for health care services from one taxpayer to another taxpayer is to transfer the tax prepayment obligation with respect to the contracts.
     (10) On or before June 1st of each year, the commissioner ((shall)) must notify each taxpayer required to make prepayments in that year of the amount of each prepayment and ((shall)) must provide remittance forms to be used by the taxpayer. However, a taxpayer's responsibility to make prepayments is not affected by failure of the commissioner to send, or the taxpayer to receive, the notice or forms.

Sec. 9   RCW 48.15.150 and 1979 ex.s. c 199 s 4 are each amended to read as follows:
     (1) For any cause of action arising in this state under any contract issued as a surplus line contract under this chapter, an unauthorized insurer ((shall)) must be sued((, upon any cause of action arising in this state under any contract issued by it as a surplus line contract, pursuant to this chapter,)) in the superior court of the county in which the cause of action arose.
     (2) ((Service of legal process against the insurer may be made in any such action by service upon the commissioner of duplicate copies of such legal process either by a person competent to serve a summons or by registered mail or certified mail with return receipt requested. At the time of such service the plaintiff shall pay to the commissioner ten dollars, taxable as costs in the action. The commissioner shall forthwith mail the documents of process served, or a true copy thereof, to the insurer at its principal place of business last known to the commissioner, or to the person designated by the insurer for that purpose in the most recent document filed with the commissioner, on forms prescribed by the commissioner, by prepaid registered or certified mail with return receipt requested. The insurer shall have forty days from the date of service upon the commissioner within which to plead, answer, or otherwise defend the action. Upon service of process upon the commissioner in accordance with this provision, the court shall be deemed to have jurisdiction in personam of the insurer.
     (3))) An unauthorized insurer issuing ((such)) a policy ((shall be deemed thereby to have)) under this chapter has authorized service of process against it in the manner ((and to the effect as provided in this section)) prescribed under RCW 48.02.200. Any ((such)) policy ((shall)) must contain a provision designating the commissioner as the person upon whom service of process may be made.
     (3) The insurer has forty days from the date of the service upon the commissioner within which to plead, answer, or otherwise defend the action. Upon service of process upon the commissioner in accordance with this section, the court has jurisdiction in personam of the insurer.

Sec. 10   RCW 48.17.380 and 2009 c 162 s 23 are each amended to read as follows:
     (1) Application for a license to be an adjuster ((shall)) must be made to the commissioner upon forms furnished by the commissioner. As a part of or in connection with the application, an individual applicant ((shall)) must furnish information concerning his or her identity, including fingerprints for submission to the Washington state patrol, the federal bureau of investigation, and any governmental agency or entity authorized to receive this information for a state and national criminal history background check, personal history, experience, business record, purposes, and other pertinent facts, as the commissioner may reasonably require. If, in the process of verifying fingerprints, business records, or other information, the commissioner's office incurs fees or charges from another governmental agency or from a business firm, the amount of the fees or charges must be paid to the commissioner's office by the applicant.
     (2) Any person willfully misrepresenting any fact required to be disclosed in any application shall be liable to penalties as provided by this code.
     (3) The commissioner ((shall)) licenses as an adjuster only an individual or business entity which has otherwise complied with this code ((therefor)) and the individual or responsible officer of the business entity has furnished evidence satisfactory to the commissioner that the individual or responsible officer of the business entity is qualified as follows:
     (a) Is eighteen or more years of age;
     (b) Is a bona fide resident of this state, or is a resident of a state which will permit residents of this state to act as adjusters in such other state;
     (c) Is a trustworthy person;
     (d) Has had experience or special education or training with reference to the handling of loss claims under insurance contracts, of sufficient duration and extent reasonably to make the individual or responsible officer of the business entity competent to fulfill the responsibilities of an adjuster;
     (e) Has successfully passed any examination as required under this chapter;
     (f) If for a public adjuster's license, has filed the bond required by RCW 48.17.430;
     (g) If a nonresident business entity, has designated an individual licensed adjuster responsible for the business entity's compliance with the insurance laws and rules of this state.
     (4)(a) Each licensed nonresident adjuster, by application for and issuance of a license, has appointed the commissioner as the adjuster's attorney to receive service of legal process against the adjuster in this state upon causes of action arising within this state. Service upon the commissioner as attorney constitutes effective legal service on the adjuster.
     (b) The appointment of the commissioner as attorney is irrevocable, binds any successor in interest or to the assets or liabilities of the adjuster, and remains in effect for as long as there could be any cause of action against the adjuster arising out of the adjuster's transactions in this state. The service of process must be accomplished and processed in the manner prescribed under RCW 48.02.200.
     (5) The commissioner may require any documents reasonably necessary to verify the information contained in an application and may, from time to time, require any licensed adjuster to produce the information called for in an application for a license.

Sec. 11   RCW 48.36A.350 and 1987 c 366 s 35 are each amended to read as follows:
     (1) Every society authorized to do business in this state ((shall:
     (a) Appoint in writing the commissioner and each successor in office to be its true and lawful attorney upon whom all lawful process in any action or proceeding against it shall be served;
     (b) Agree in writing that any lawful process against it which is served on the commissioner shall be of the same legal force and validity as if served upon the society; and
     (c) Agree that the authority shall continue in force so long as any liability remains outstanding in this state.
     Copies of such appointment, certified by said commissioner, shall be deemed sufficient evidence thereof and shall be admitted in evidence with the same force and effect as the original.
     (2) Service shall only be made upon the commissioner, or if absent, upon the person in charge of the commissioner's office. It shall be made in duplicate and shall constitute sufficient service upon the society. When legal process against a society is served upon the commissioner, the commissioner shall forward one of the duplicate copies by registered mail, prepaid, directed to the secretary or corresponding officer. No service shall require a society to file its answer, pleading, or defense in less than forty days from the date of mailing the copy of the service to a society. Legal process shall not be served upon a society except in the manner provided in this section. At the time of serving any process upon the commissioner, the plaintiff or complainant in the action shall pay to the commissioner the fee established pursuant to RCW 48.05.210.)) must appoint the commissioner as its attorney to receive service of, and upon whom must be served, all legal process issued against it in this state upon causes of action arising within this state. Service upon the commissioner as attorney constitutes service upon the society.
     (2) With the appointment the society must designate the person to whom the commissioner must forward legal process so served upon him or her.
     (3) The appointment of the commissioner as attorney is irrevocable, binds any successor in interest or to the assets or liabilities of the society, and remains in effect as long as there is in force in this state any contract made by the society or liabilities or duties arising therefrom.
     (4) The service of process must be accomplished and processed in the manner prescribed under RCW 48.02.200.

Sec. 12   RCW 48.85.030 and 1995 1st sp.s. c 18 s 78 are each amended to read as follows:
     (1) The insurance commissioner shall adopt rules defining the criteria that qualified long-term care partnership insurance policies must meet to satisfy the requirements of this chapter. The rules shall ((provide that all)) incorporate any requirements set forth by chapter 48.83 RCW and the deficit reduction act of 2005 for qualified long-term care partnership insurance policies purchased for the purposes of this chapter((:
     (a) Be guaranteed renewable;
     (b) Provide coverage for nursing home care and provide coverage for an alternative plan of care benefit as defined by the commissioner;
     (c) Provide optional coverage for home and community-based services. Such home and community-based services shall be included in the coverage unless rejected in writing by the applicant;
     (d) Provide automatic inflation protection or similar coverage for any policyholder through the age of seventy-nine and made optional at age eighty to protect the policyholder from future increases in the cost of long-term care;
     (e) Not require prior hospitalization or confinement in a nursing home as a prerequisite to receiving long-term care benefits; and
     (f) Contain at least a six-month grace period that permits reinstatement of the policy or contract retroactive to the date of termination if the policy or contract holder's nonpayment of premiums arose as a result of a cognitive impairment suffered by the policy or contract holder as certified by a physician)).
     (2) Insurers offering long-term care policies for the purposes of this chapter shall demonstrate to the satisfaction of the insurance commissioner that they:
     (a) Have procedures to provide notice to each purchaser of the long-term care consumer education program;
     (b) ((Offer case management services;
     (c))) Have procedures that provide for the keeping of individual policy records and procedures for the explanation of coverage and benefits identifying those payments or services available under the policy that meet the purposes of this chapter;
     (((d))) (c) Agree to provide the insurance commissioner((, on or before September 1 of each year, an)) any required annual report containing information derived from the long-term care partnership long-term care insurance uniform data set as specified by the office of the insurance commissioner.

Sec. 13   RCW 48.94.010 and 2005 c 274 s 317 are each amended to read as follows:
     (1) No person, firm, association, or corporation may act as a reinsurance intermediary-broker in this state if the person, firm, association, or corporation maintains an office either directly or as a member or employee of a firm or association, or an officer, director, or employee of a corporation:
     (a) In this state, unless the person, firm, association, or corporation is a licensed reinsurance intermediary-broker in this state; or
     (b) In another state, unless the person, firm, association, or corporation is a licensed reinsurance intermediary-broker in this state or another state having a regulatory scheme substantially similar to this chapter.
     (2) No person, firm, association, or corporation may act as a reinsurance intermediary-manager:
     (a) For a reinsurer domiciled in this state, unless the person, firm, association, or corporation is a licensed reinsurance intermediary-manager in this state;
     (b) In this state, if the person, firm, association, or corporation maintains an office either directly or as a member or employee of a firm or association, or an officer, director, or employee of a corporation in this state, unless the person, firm, association, or corporation is a licensed reinsurance intermediary-manager in this state;
     (c) In another state for a nondomestic reinsurer, unless the person, firm, association, or corporation is a licensed reinsurance intermediary-manager in this state or another state having a substantially similar regulatory scheme.
     (3) The commissioner may require a reinsurance intermediary-manager subject to subsection (2) of this section to:
     (a) File a bond in an amount and from an insurer acceptable to the commissioner for the protection of the reinsurer; and
     (b) Maintain an errors and omissions policy in an amount acceptable to the commissioner.
     (4)(((a))) The commissioner may issue a reinsurance intermediary license to a person, firm, association, or corporation who has complied with the requirements of this chapter. Any such license issued to a firm or association authorizes all the members of the firm or association and any designated employees to act as reinsurance intermediaries under the license, and all such persons may be named in the application and any supplements to it. Any such license issued to a corporation authorizes all of the officers, and any designated employees and directors of it, to act as reinsurance intermediaries on behalf of the corporation, and all such persons must be named in the application and any supplements to it.
     (((b) If the applicant for a reinsurance intermediary license is a nonresident, the applicant, as a condition precedent to receiving or holding a license, shall designate the commissioner as agent for service of process in the manner, and with the same legal effect, provided for by this title for designation of service of process upon unauthorized insurers, and also shall furnish the commissioner with the name and address of a resident of this state upon whom notices or orders of the commissioner or process affecting the nonresident reinsurance intermediary may be served. The licensee shall promptly notify the commissioner in writing of every change in its designated agent for service of process, but the change does not become effective until acknowledged by the commissioner.))
     (5)(a) Each licensed nonresident reinsurance intermediary must appoint the commissioner as the reinsurance intermediary's attorney to receive service of legal process issued against the reinsurance intermediary in this state upon causes of action arising within this state. Service upon the commissioner as attorney constitutes effective legal service upon the reinsurance intermediary.
     (b) With the appointment the reinsurance intermediary must designate the person to whom the commissioner must forward legal process so served upon him or her.
     (c) The appointment is irrevocable, binds any successor in interest or to the assets or liabilities of the reinsurance intermediary, and remains in effect for as long as there could be any cause of action against the reinsurance intermediary arising out of the reinsurance intermediary's insurance transactions in this state.
     (d) The service of process must be accomplished and processed in the manner prescribed under RCW 48.02.200.
     (6) The commissioner may refuse to issue a reinsurance intermediary license if, in his or her judgment, the applicant, anyone named on the application, or a member, principal, officer, or director of the applicant, is not trustworthy, or that a controlling person of the applicant is not trustworthy to act as a reinsurance intermediary, or that any of the foregoing has given cause for revocation or suspension of the license, or has failed to comply with a prerequisite for the issuance of such license. Upon written request, the commissioner will furnish a summary of the basis for refusal to issue a license, which document is privileged and not subject to chapter 42.56 RCW.
     (((6))) (7) Licensed attorneys-at-law of this state when acting in their professional capacity as such are exempt from this section.

Sec. 14   RCW 48.102.011 and 2010 c 27 s 5 are each amended to read as follows:
     (1) A person, wherever located, may not act as a provider with an owner who is a resident of this state or if there is more than one owner on a single policy and one of the owners is a resident of this state, without first having obtained a license from the commissioner.
     (2) An application for a provider license must be made to the commissioner by the applicant on a form prescribed by the commissioner, and the application must be accompanied by a licensing fee in the amount of two hundred fifty dollars for deposit into the general fund.
     (3) All provider licenses continue in force until suspended, revoked, or not renewed. A license is subject to renewal annually on the first day of July upon application of the provider and payment of a renewal fee of two hundred fifty dollars for deposit into the general fund. If not so renewed, the license automatically expires on the renewal date.
     (a) If the renewal fee is not received by the commissioner prior to the expiration date, the provider must pay to the commissioner in addition to the renewal fee, a surcharge as follows:
     (i) For the first thirty days or part thereof delinquency the surcharge is fifty percent of the renewal fee;
     (ii) For the next thirty days or part thereof delinquency the surcharge is one hundred percent of the renewal fee;
     (b) If the renewal fee is not received by the commissioner after sixty days but prior to twelve months after the expiration date the payment of the renewal fee is for reinstatement of the license and the provider must pay to the commissioner the renewal fee and a surcharge of two hundred percent.
     (4) Subsection (3)(a) and (b) of this section does not exempt any person from any penalty provided by law for transacting a life settlement business without a valid and subsisting license.
     (5) The applicant must provide information as the commissioner may require on forms prescribed by the commissioner. The commissioner has the authority, at any time, to require an applicant to fully disclose the identity of its stockholders, partners, officers, and employees, and the commissioner may, in the exercise of the commissioner's sole discretion, refuse to issue a license in the name of any person if not satisfied that any officer, employee, stockholder, or partner thereof who may materially influence the applicant's conduct meets the standards of this chapter.
     (6) A license issued to a partnership, corporation, or other entity authorizes all members, officers, and designated employees to act as a licensee under the license, if those persons are named in the application and any supplements to the application.
     (7) Upon the filing of an application for a provider's license and the payment of the license fee, the commissioner must make an investigation of each applicant and may issue a license if the commissioner finds that the applicant:
     (a) Has provided a detailed plan of operation;
     (b) Is competent and trustworthy and intends to transact its business in good faith;
     (c) Has a good business reputation and has had experience, training, or education so as to be qualified in the business for which the license is applied;
     (d)(i) Has demonstrated evidence of financial responsibility in a form and in an amount prescribed by the commissioner by rule.
     (ii) The commissioner may ask for evidence of financial responsibility at any time the commissioner deems necessary;
     (e) If the applicant is a legal entity, is formed or organized ((pursuant to)) under the laws of this state, is a foreign legal entity authorized to transact business in this state, or provides a certificate of good standing from the state of its domicile; and
     (f) Has provided to the commissioner an antifraud plan that meets the requirements of RCW 48.102.140 and includes:
     (i) A description of the procedures for detecting and investigating possible fraudulent acts and procedures for resolving material inconsistencies between medical records and insurance applications;
     (ii) A description of the procedures for reporting fraudulent insurance acts to the commissioner;
     (iii) A description of the plan for antifraud education and training of its underwriters and other personnel; and
     (iv) A written description or chart outlining the arrangement of the antifraud personnel who are responsible for the investigation and reporting of possible fraudulent insurance acts and investigating unresolved material inconsistencies between medical records and insurance applications.
     (8)(a) A nonresident provider must appoint the commissioner as its attorney to receive service of, and upon whom must be served, all legal process issued against it in this state upon causes of action arising within this state. Service upon the commissioner as attorney constitutes service upon the provider. Service of legal process against the provider can be had only by service upon the commissioner.
     (b) With the appointment the provider must designate the person to whom the commissioner must forward legal process so served upon him or her. The provider may change the person by filing a new designation.
     (c) The appointment of the commissioner as attorney is irrevocable, binds any successor in interest or to the assets or liabilities of the provider, and remains in effect as long as there is in this state any contract made by the provider or liabilities or duties arising therefrom.
     (d) ((Duplicate copies of legal process against a provider for whom the commissioner is attorney shall be served upon him or her either by a person competent to serve summons, or by registered mail. At the time of service the plaintiff shall pay to the commissioner ten dollars, taxable as costs in the action.
     (e) The commissioner shall immediately send one of the copies of the process, by registered mail with return receipt requested, to the person designated for the purpose by the provider in its most recent designation filed with the commissioner.
     (f) The commissioner shall keep a record of the day and hour of service upon him or her of all legal process. Proceedings shall not be had against the provider, and the provider shall not be required to appear, plead, or answer until the expiration of forty days after the date of service upon the commissioner.)) The service of process must be accomplished and processed in the manner prescribed under RCW 48.02.200.
     (9) A provider may not use any person to perform the functions of a broker unless the person is authorized to act as a broker under this chapter.
     (10) A provider must provide to the commissioner new or revised information about officers, stockholders, partners, directors, members, or designated employees within thirty days of the change.

Sec. 15   RCW 48.102.021 and 2009 c 104 s 4 are each amended to read as follows:
     (1) Only a life insurance producer who has been duly licensed as a resident insurance producer with a lifeline of authority in this state or his or her home state for at least one year and is licensed as a nonresident producer in this state is permitted to operate as a broker.
     (2) Not later than thirty days from the first day of operating as a broker, the life insurance producer ((shall)) must notify the commissioner that he or she intends acting as a broker on a form prescribed by the commissioner, pay a fee of one hundred dollars, and if a nonresident producer appoint the commissioner as attorney for service of process under ((subsection (6) of this section)) RCW 48.02.200. Notification ((shall)) must include an acknowledgement by the life insurance producer that he or she will operate as a broker in accordance with this chapter.
     (3) A person licensed as an attorney, certified public accountant, or financial planner accredited by a nationally recognized accreditation agency, who is retained to represent the owner, whose compensation is not paid directly or indirectly by the provider or purchaser, may negotiate life settlement contracts on behalf of the owner without having to obtain a license as a broker.
     (4) The authority to act as a broker ((shall)) continues in force until suspended, revoked, or not renewed. The authority to act as a broker ((shall)) automatically expires if not timely renewed. The authority to act as a broker ((shall be)) is valid for a time period coincident with the expiration date of the broker's insurance producer license. The authority to act as a broker is renewable at that time, upon payment of a renewal fee in the amount of one hundred dollars and if the payment is received by the commissioner prior to the expiration date, the broker's authority to act as a broker continues in effect.
     (a) If the renewal fee is not received by the commissioner prior to the expiration date, the broker ((shall)) must pay to the commissioner in addition to the renewal fee, a surcharge as follows:
     (i) For the first thirty days or part thereof of delinquency the surcharge is fifty percent of the renewal fee;
     (ii) For the next thirty days or part thereof delinquency the surcharge is one hundred percent of the renewal fee;
     (b) If the payment of the renewal fee is not received by the commissioner after sixty days the surcharge is two hundred percent of the renewal fee.
     (5) Subsection (4)(a) of this section does not exempt any person from any penalty provided by law for transacting life settlement business without the valid authority to act as a broker.
     (6)(a) A nonresident broker ((shall)) must appoint the commissioner as its attorney to receive service of, and upon whom ((shall)) must be served, all legal process issued against it in this state upon causes of action arising within this state. Service upon the commissioner as attorney ((shall)) constitutes service upon the broker. Service of legal process against the broker can be had only by service upon the commissioner.
     (b) ((With the appointment the broker shall designate the person to whom the commissioner shall forward legal process so served upon him or her. The broker may change the person by filing a new designation.
     (c))) The appointment of the commissioner as attorney ((shall be)) is irrevocable, ((shall)) binds any successor in interest or to the assets or liabilities of the broker, and ((shall)) remains in effect as long as there is in this state any contract made by the broker or liabilities or duties arising therefrom.
     (((d) Duplicate copies of legal process against a broker for whom the commissioner is attorney shall be served upon him or her either by a person competent to serve summons, or by registered mail. At the time of service the plaintiff shall pay to the commissioner ten dollars, taxable as costs in the action.
     (e) The commissioner shall immediately send one of the copies of the process, by registered mail with return receipt requested, to the person designated for the purpose by the broker in its most recent designation filed with the commissioner.
     (f) The commissioner shall keep a record of the day and hour of service upon him or her of all legal process. Proceedings shall not be had against the broker, and the broker shall not be required to appear, plead, or answer until the expiration of forty days after the date of service upon the commissioner.)) (c) The service of process must be accomplished and processed in the manner prescribed in RCW 48.02.200.
     (7) A broker may not use any person to perform the functions of a provider unless such a person holds a current, valid license as a provider, and as provided in this chapter.

Sec. 16   RCW 48.110.030 and 2006 c 274 s 4 are each amended to read as follows:
     (1) A person may not act as, or offer to act as, or hold himself or herself out to be a service contract provider in this state, nor may a service contract be sold to a consumer in this state, unless the service contract provider has a valid registration as a service contract provider issued by the commissioner.
     (2) Applicants to be a service contract provider must make an application to the commissioner upon a form to be furnished by the commissioner. The application must include or be accompanied by the following information and documents:
     (a) All basic organizational documents of the service contract provider, including any articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement, bylaws, and other applicable documents, and all amendments to those documents;
     (b) The identities of the service contract provider's executive officer or officers directly responsible for the service contract provider's service contract business, and, if more than fifty percent of the service contract provider's gross revenue is derived from the sale of service contracts, the identities of the service contract provider's directors and stockholders having beneficial ownership of ten percent or more of any class of securities;
     (c) Audited annual financial statements or other financial reports acceptable to the commissioner for the two most recent years which prove that the applicant is solvent and any information the commissioner may require in order to review the current financial condition of the applicant. If the service contract provider is relying on RCW 48.110.050(2)(c) to assure the faithful performance of its obligations to service contract holders, then the audited financial statements of the service contract provider's parent company must also be filed;
     (d) An application fee of two hundred fifty dollars, which ((shall)) must be deposited into the general fund; and
     (e) Any other pertinent information required by the commissioner.
     (3) ((The applicant shall appoint the commissioner as its attorney to receive service of legal process in any action, suit, or proceeding in any court. This appointment is irrevocable and shall bind the service contract provider or any successor in interest, shall remain in effect as long as there is in force in this state any contract or any obligation arising therefrom related to residents of this state, and shall be processed in accordance with RCW 48.05.210.)) Each registered service contract provider must appoint the commissioner as the service contract provider's attorney to receive service of legal process issued against the service contract provider in this state upon causes of action arising within this state. Service upon the commissioner as attorney constitutes effective legal service upon the service contract provider.
     (a) With the appointment the service contract provider must designate the person to whom the commissioner must forward legal process so served upon him or her.
     (b) The appointment is irrevocable, binds any successor in interest or to the assets or liabilities of the service contract provider, and remains in effect for as long as there could be any cause of action against the service contract provider arising out of any of the service contract provider's contracts or obligations in this state.
     (c) The service of process must be accomplished and processed in the manner prescribed under RCW 48.02.200.
     (4) The commissioner may refuse to issue a registration if the commissioner determines that the service contract provider, or any individual responsible for the conduct of the affairs of the service contract provider under subsection (2)(b) of this section, is not competent, trustworthy, financially responsible, or has had a license as a service contract provider or similar license denied or revoked for cause by any state.
     (5) A registration issued under this section is valid, unless surrendered, suspended, or revoked by the commissioner, or not renewed for so long as the service contract provider continues in business in this state and remains in compliance with this chapter. A registration is subject to renewal annually on the first day of July upon application of the service contract provider and payment of a fee of two hundred dollars, which ((shall)) must be deposited into the general fund. If not so renewed, the registration expires on the June 30th next preceding.
     (6) A service contract provider ((shall)) must keep current the information required to be disclosed in its registration under this section by reporting all material changes or additions within thirty days after the end of the month in which the change or addition occurs.

Sec. 17   RCW 48.110.055 and 2006 c 274 s 17 are each amended to read as follows:
     (1) This section applies to protection product guarantee providers.
     (2) A person ((shall)) must not act as, or offer to act as, or hold himself or herself out to be a protection product guarantee provider in this state, nor may a protection product be sold to a consumer in this state, unless the protection product guarantee provider has:
     (a) A valid registration as a protection product guarantee provider issued by the commissioner; and
     (b) Either demonstrated its financial responsibility or assured the faithful performance of the protection product guarantee provider's obligations to its protection product guarantee holders by insuring all protection product guarantees under a reimbursement insurance policy issued by an insurer holding a certificate of authority from the commissioner or a risk retention group, as defined in 15 U.S.C. Sec. 3901(a)(4), as long as that risk retention group is in full compliance with the federal liability risk retention act of 1986 (15 U.S.C. Sec. 3901 et seq.), is in good standing in its domiciliary jurisdiction, and properly registered with the commissioner under chapter 48.92 RCW. The insurance required by this subsection must meet the following requirements:
     (i) The insurer or risk retention group must, at the time the policy is filed with the commissioner, and continuously thereafter, maintain surplus as to policyholders and paid-in capital of at least fifteen million dollars and annually file audited financial statements with the commissioner; and
     (ii) The commissioner may authorize an insurer or risk retention group that has surplus as to policyholders and paid-in capital of less than fifteen million dollars, but at least equal to ten million dollars, to issue the insurance required by this subsection if the insurer or risk retention group demonstrates to the satisfaction of the commissioner that the company maintains a ratio of direct written premiums, wherever written, to surplus as to policyholders and paid-in capital of not more than three to one.
     (3) Applicants to be a protection product guarantee provider ((shall)) must make an application to the commissioner upon a form to be furnished by the commissioner. The application ((shall)) must include or be accompanied by the following information and documents:
     (a) The names of the protection product guarantee provider's executive officer or officers directly responsible for the protection product guarantee provider's protection product guarantee business and their biographical affidavits on a form prescribed by the commissioner;
     (b) The name, address, and telephone number of any administrators designated by the protection product guarantee provider to be responsible for the administration of protection product guarantees in this state;
     (c) A copy of the protection product guarantee reimbursement insurance policy or policies;
     (d) A copy of each protection product guarantee the protection product guarantee provider proposes to use in this state;
     (e) Any other pertinent information required by the commissioner; and
     (f) A nonrefundable application fee of two hundred fifty dollars.
     (4) ((The applicant shall appoint the commissioner as its attorney to receive service of legal process in any action, suit, or proceeding in any court. This appointment is irrevocable and shall bind the protection product guarantee provider or any successor in interest, shall remain in effect as long as there is in force in this state any protection product guarantee or any obligation arising therefrom related to residents of this state, and shall be processed in accordance with RCW 48.05.210.)) Each registered protection product guarantee provider must appoint the commissioner as the protection product guarantee provider's attorney to receive service of legal process issued against the protection product guarantee provider in this state upon causes of action arising within this state. Service upon the commissioner as attorney constitutes effective legal service upon the protection product guarantee provider.
     (a) With the appointment the protection product guarantee provider must designate the person to whom the commissioner must forward legal process so served upon him or her.
     (b) The appointment is irrevocable, binds any successor in interest or to the assets or liabilities of the protection product guarantee provider, and remains in effect for as long as there could be any cause of action against the protection product guarantee provider arising out of any of the protection product guarantee provider's contracts or obligations in this state.
     (c) The service of process must be accomplished and processed in the manner prescribed under RCW 48.02.200.
     (5) The commissioner may refuse to issue a registration if the commissioner determines that the protection product guarantee provider, or any individual responsible for the conduct of the affairs of the protection product guarantee provider under subsection (3)(a) of this section, is not competent, trustworthy, financially responsible, or has had a license as a protection product guarantee provider or similar license denied or revoked for cause by any state.
     (6) A registration issued under this section is valid, unless surrendered, suspended, or revoked by the commissioner, or not renewed for so long as the protection product guarantee provider continues in business in this state and remains in compliance with this chapter. A registration is subject to renewal annually on the first day of July upon application of the protection product guarantee provider and payment of a fee of two hundred fifty dollars. If not so renewed, the registration expires on the June 30th next preceding.
     (7) A protection product guarantee provider ((shall)) must keep current the information required to be disclosed in its registration under this section by reporting all material changes or additions within thirty days after the end of the month in which the change or addition occurs.

Sec. 18   RCW 48.155.020 and 2010 c 27 s 6 are each amended to read as follows:
     (1) Before conducting discount plan business to which this chapter applies, a person must obtain a license from the commissioner to operate as a discount plan organization.
     (2) Except as provided in subsection (((3))) (4) of this section, each application for a license to operate as a discount plan organization:
     (a) Must be in a form prescribed by the commissioner and verified by an officer or authorized representative of the applicant; and
     (b) Must demonstrate, set forth, or be accompanied by the following:
     (i) The two hundred fifty dollar application fee, which must be deposited into the general fund;
     (ii) A copy of the organization documents of the applicant, such as the articles of incorporation, including all amendments;
     (iii) A copy of the applicant's bylaws or other enabling documents that establish organizational structure;
     (iv) The applicant's federal identification number, business address, and mailing address;
     (v)(A) A list of names, addresses, official positions, and biographical information of the individuals who are responsible for conducting the applicant's affairs, including all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the officers, contracted management company personnel, and any person or entity owning or having the right to acquire ten percent or more of the voting securities of the applicant; and
     (B) A disclosure in the listing of the extent and nature of any contracts or arrangements between any individual who is responsible for conducting the applicant's affairs and the discount plan organization, including all possible conflicts of interest;
     (vi) A complete biographical statement, on forms prescribed by the commissioner, with respect to each individual identified under (b)(v) of this subsection;
     (vii) A statement generally describing the applicant, its facilities and personnel, and the health care services for which a discount will be made available under the discount plan;
     (viii) A copy of the form of all contracts made or to be made between the applicant and any health care providers or health care provider networks regarding the provision of health care services to members and discounts to be made available to members;
     (ix) A copy of the form of any contract made or arrangement to be made between the applicant and any individual listed in (b)(v) of this subsection;
     (x) A list identifying by name, address, telephone number, and e-mail address all persons who will market each discount plan offered by the applicant. If the person who will market a discount plan is an entity, only the entity must be identified. This list must be maintained and updated within sixty days of any change in the information. An updated list must be sent to the commissioner as part of the discount plan organization's renewal application under (b)(vii) of this subsection;
     (xi) A copy of the form of any contract made or to be made between the applicant and any person, corporation, partnership, or other entity for the performance on the applicant's behalf of any function, including marketing, administration, enrollment, and subcontracting for the provision of health care services to members and discounts to be made available to members;
     (xii) A copy of the applicant's most recent financial statements audited by an independent certified public accountant, except that, subject to the approval of the commissioner, an applicant that is an affiliate of a parent entity that is publicly traded and that prepares audited financial statements reflecting the consolidated operations of the parent entity may submit the audited financial statement of the parent entity and a written guaranty that the minimum capital requirements required under RCW 48.155.030 will be met by the parent entity instead of the audited financial statement of the applicant;
     (xiii) A description of the proposed methods of marketing including, but not limited to, describing the use of marketers, use of the internet, sales by telephone, electronic mail, or facsimile machine, and use of salespersons to market the discount plan benefits;
     (xiv) A description of the member complaint procedures which must be established and maintained by the applicant;
     (xv) If domiciled in this state, the name and address of the applicant's Washington statutory agent for service of process, notice, or demand ((or, if not domiciled in this state, a power of attorney duly executed by the applicant, appointing the commissioner and duly authorized deputies as the true and lawful attorney of the applicant in and for this state upon whom all law process in any legal action or proceeding against the discount plan organization on a cause of action arising in this state may be served)); and
     (xvi) Any other information the commissioner may reasonably require.
     (3)(a) If the applicant is not domiciled in this state, the applicant must appoint the commissioner as the discount plan organization's attorney to receive service of legal process issued against the discount plan organization in this state upon causes of action arising within this state. Service upon the commissioner as attorney constitutes effective legal service upon the discount plan organization.
     (b) With the appointment the discount plan organization must designate by name, e-mail address, and address the person to whom the commissioner must forward legal process so served upon him or her. The discount plan organization may change the person by filing a new designation.
     (c) The discount plan organization must keep the designation, address, and e-mail address filed with the commissioner current.
     (d) The appointment is irrevocable, binds any successor in interest or to the assets or liabilities of the discount plan organization, and remains in effect for as long as there could be any cause of action against the discount plan organization arising out of the discount plan organization's transactions in this state.
     (e) The service of process must be accomplished and processed in the manner prescribed under RCW 48.02.200.
     (4)(a) Upon application to and approval by the commissioner and payment of the applicable fees, a discount plan organization that holds a current license or other form of authority from another state to operate as a discount plan organization, at the commissioner's discretion, may not be required to submit the information required under subsection (2) of this section in order to obtain a license under this section if the commissioner is satisfied that the other state's requirements, at a minimum, are equivalent to those required under subsection (2) of this section or the commissioner is satisfied that the other state's requirements are sufficient to protect the interests of the residents of this state.
     (b) Whenever the discount plan organization loses its license or other form of authority in that other state to operate as a discount plan organization, or is the subject of any disciplinary administrative proceeding related to the organization's operating as a discount plan organization in that other state, the discount plan organization must immediately notify the commissioner.
     (((4))) (5) After the receipt of an application filed under subsection (2) or (((3))) (4) of this section, the commissioner must review the application and notify the applicant of any deficiencies in the application.
     (((5))) (6)(a) Within ninety days after the date of receipt of a completed application, the commissioner must:
     (i) Issue a license if the commissioner is satisfied that the applicant has met the following:
     (A) The applicant has fulfilled the requirements of this section and the minimum capital requirements in accordance with RCW 48.155.030; and
     (B) The persons who own, control, and manage the applicant are competent and trustworthy and possess managerial experience that would make the proposed operation of the discount plan organization beneficial to discount plan members; or
     (ii) Disapprove the application and state the grounds for disapproval.
     (b) In making a determination under (a) of this subsection, the commissioner may consider, for example, whether the applicant or an officer or manager of the applicant: (i) Is not financially responsible; (ii) does not have adequate expertise or experience to operate a medical discount plan organization; or (iii) is not of good character. Among the factors that the commissioner may consider in making the determination is whether the applicant or an affiliate or a business formerly owned or managed by the applicant or an officer or manager of the applicant has had a previous application for a license, or other authority, to operate as any entity regulated by the commissioner denied, revoked, suspended, or terminated for cause, or is under investigation for or has been found in violation of a statute or regulation in another jurisdiction within the previous five years.
     (((6))) (7) Prior to licensure by the commissioner, each discount plan organization must establish an internet web site in order to conform to the requirements of RCW 48.155.070(2).
     (((7))) (8)(a) A license is effective for up to one year, unless prior to its expiration the license is renewed in accordance with this subsection or suspended or revoked in accordance with subsection (((8))) (9) of this section. Licenses issued or renewed on or after July 1, 2010, will be subject to renewal annually on July 1st. If not so renewed, the license will automatically expire on the renewal date.
     (b) At least ninety days before a license expires, the discount plan organization must submit:
     (i) A renewal application form; and
     (ii) A two hundred dollar renewal application fee for deposit into the general fund.
     (c) The commissioner must renew the license of each holder that meets the requirements of this chapter and pays the appropriate renewal fee required.
     (((8))) (9)(a) The commissioner may suspend the authority of a discount plan organization to enroll new members or refuse to renew or revoke a discount plan organization's license if the commissioner finds that any of the following conditions exist:
     (i) The discount plan organization is not operating in compliance with this chapter;
     (ii) The discount plan organization does not have the minimum net worth as required under RCW 48.155.030;
     (iii) The discount plan organization has advertised, merchandised, or attempted to merchandise its services in such a manner as to misrepresent its services or capacity for service or has engaged in deceptive, misleading, or unfair practices with respect to advertising or merchandising;
     (iv) The discount plan organization is not fulfilling its obligations as a discount plan organization; or
     (v) The continued operation of the discount plan organization would be hazardous to its members.
     (b) If the commissioner has cause to believe that grounds for the nonrenewal, suspension, or revocation of a license exists, the commissioner must notify the discount plan organization in writing specifically stating the grounds for the refusal to renew or suspension or revocation and may also pursue a hearing on the matter under chapter 48.04 RCW.
     (c) When the license of a discount plan organization is nonrenewed, surrendered, or revoked, the discount plan organization must immediately upon the effective date of the order of revocation or, in the case of a nonrenewal, the date of expiration of the license, stop any further advertising, solicitation, collecting of fees, or renewal of contracts, and proceed to wind up its affairs transacted under the license.
     (d)(i) When the commissioner suspends a discount plan organization's authority to enroll new members, the suspension order must specify the period during which the suspension is to be in effect and the conditions, if any, that must be met by the discount plan organization prior to reinstatement of its license to enroll members.
     (ii) The commissioner may rescind or modify the order of suspension prior to the expiration of the suspension period.
     (iii) The license of a discount plan organization may not be reinstated unless requested by the discount plan organization. The commissioner may not grant the request for reinstatement if the commissioner finds that the circumstances for which the suspension occurred still exist or are likely to recur.
     (((9))) (10) Each licensed discount plan organization must notify the commissioner immediately whenever the discount plan organization's license, or other form of authority to operate as a discount plan organization in another state, is suspended, revoked, or nonrenewed in that state.
     (((10))) (11) A health care provider who provides discounts to his or her own patients without any cost or fee of any kind to the patient is not required to obtain and maintain a license under this chapter as a discount plan organization.

NEW SECTION.  Sec. 19   RCW 48.05.210 (Service of process--Procedure) and 2009 c 549 s 7018, 1981 c 339 s 3, & 1947 c 79 s .05.21 are each repealed.