AN ACT Relating to insurance unfair practices and frauds; amending RCW 48.30.140, 48.30.150, and 48.30.155; adding a new section to chapter 48.30 RCW; and providing an effective date.

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

Sec. 1. Section .30.14, chapter 79, Laws of 1947 as last amended by section 14, chapter 264, Laws of 1985 and RCW 48.30.140 are each amended to read as follows:

(1) Except to the extent provided for in an applicable filing with the commissioner then in effect, no insurer, general agent, agent, broker, or solicitor shall, as an inducement to insurance, or after insurance has been effected, directly or indirectly, offer, promise, allow, give, set off, or pay to the insured or to any employee of the insured, any rebate, discount, abatement, or reduction of premium or any part thereof named in any insurance contract, or any commission thereon, or earnings, profits, dividends, or other benefit, or any other valuable consideration or inducement whatsoever which is not expressly provided for in the policy.

(2) Subsection (1) of this section shall not apply as to commissions paid to a licensed agent, general agent, broker, or solicitor for insurance placed on his or her own property or risks.

(3) This section shall not apply to the allowance by any marine insurer, or marine insurance agent, general agent, broker, or solicitor, to any insured, in connection with marine insurance, of such discount as is sanctioned by custom among marine insurers as being additional to the agent's or broker's commission.

(4) This section shall not apply to advertising or promotional programs conducted by insurers, agents, or brokers whereby prizes, goods, wares, or merchandise, not exceeding ((~~five~~)) twenty-five dollars in value per person in the aggregate in any twelve month period, are given to all insureds or prospective insureds under similar qualifying circumstances.

(5) Notwithstanding the provisions of this section: (a) An insurer, general agent, agent, or broker may waive all or part of the commission to be earned from the sale of an insurance policy to a charitable, civic, or commercial enterprise organization; and (b) the commissioner may approve programs sponsored by insurers, agents, or brokers that are primarily designed to promote the public health and safety.

Sec. 2. Section .30.15, chapter 79, Laws of 1947 as last amended by section 4, chapter 119, Laws of 1975-'76 2nd ex. sess. and RCW 48.30.150 are each amended to read as follows:

No insurer, general agent, agent, broker, solicitor, or other person shall, as an inducement to insurance, or in connection with any insurance transaction, provide in any policy for, or offer, or sell, buy, or offer or promise to buy or give, or promise, or allow to the insured or prospective insured or to any other person on his behalf in any manner whatsoever:

(1) Any shares of stock or other securities issued or at any time to be issued on any interest therein or rights thereto; or

(2) Any special advisory board contract, or other contract, agreement, or understanding of any kind, offering, providing for, or promising any profits or special returns or special dividends; or

(3) Any prizes, goods, wares, or merchandise of an aggregate value in excess of ((~~five~~)) twenty-five dollars.

This section shall not be deemed to prohibit the sale or purchase of securities as a condition to or in connection with surety insurance insuring the performance of an obligation as part of a plan of financing found by the commissioner to be designed and operated in good faith primarily for the purpose of such financing, nor shall it be deemed to prohibit the sale of redeemable securities of a registered investment company in the same transaction in which life insurance is sold.

Sec. 3. Section 19, chapter 193, Laws of 1957 and RCW 48.30.155 are each amended to read as follows:

No ((~~life or disability~~)) insurer, agent, or broker shall directly or indirectly participate in any plan to offer or effect any kind or kinds of insurance in this state as an inducement to the purchase by the public of any goods, securities, commodities, services or subscriptions to publications. This section shall not apply to group or blanket insurance issued pursuant to this code.

NEW SECTION. Sec. 4. A new section is added to chapter 48.30 RCW to read as follows:

Upon request of a policyholder or prospective policyholder, and prior to the sale or renewal of any insurance policy, no insurer, agent, broker, or solicitor shall fail to disclose to the policyholder or prospective policyholder, the commission and any fees to be paid by the insurer for, and to be earned by, the agent, broker or solicitor from the sale of the policy.

NEW SECTION. Sec. 5. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 6. The commissioner shall adopt all rules necessary to implement this act and this act shall take effect on October 1, 1986.