H-1735              _______________________________________________

                                                    HOUSE BILL NO. 897

                        _______________________________________________

State of Washington                              49th Legislature                              1985 Regular Session

By Representative Sanders

Read first time 2/8/85 and referred to Committee on Financial Institutions & Insurance.

AN ACT Relating to insurance claims; adding a new section to chapter 48.30 RCW; and prescribing penalties.

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

NEW SECTION. Sec. 1.  A new section is added to chapter 48.30 RCW to read as follows:

          (1) Unless otherwise provided by law, an insurer shall promptly pay every insurance claim.  A claim shall be overdue if not paid within thirty days after the insurer is furnished written notice of the fact of a covered loss and of the amount of the loss.  If such written notice is not furnished to the insurer as to the entire claim, any partial amount supported by written notice is overdue if not paid within thirty days after such written notice is furnished to the insurer.  Any part or all of the remainder of the claim that is subsequently supported by written notice is overdue if not paid within thirty days after written notice is furnished to the insurer.  Any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer  is not responsible for the payment, notwithstanding that written notice has been furnished to the insurer.  For the purpose of calculating the extent to which any claim is overdue, payment shall be treated as being made on the date a draft or other valid instrument which is equivalent to payment was placed in the United States mail in a properly addressed, postpaid envelope, or, if not so posted, on the date of delivery.  All overdue payments shall bear simple interest at the rate of eighteen percent per year.

          (2) Notwithstanding subsection (1) of this section, the payment of a claim shall not be overdue until thirty days after the insurer receives the proof of loss required under the policy or equivalent evidence of such loss.  The payment of a claim shall not be overdue during any period in which the insurer is unable to pay such claim because there is no recipient who is legally able to give a valid release for such payment, or in which the insurer is unable to determine who is entitled to receive such payment, if the insurer has promptly notified the claimant of such inability and has offered in good faith to  promptly pay said claim upon determination of who is entitled to receive such payment.

          (3) This section applies to the following classes of claims:

          (a) Residents:  The claim of a policyholder or an insured under a policy or annuity who at the time of the insured event or of the liquidation order was a resident of this state;

          (b) Certain nonresidents:  The claim is made under a life or disability insurance policy or annuity contract and issued by a domestic insurer, whether or not the claimant is a resident of this state;

          (c) Owners of property interests:  The claim of a person having an insurable interest in or related to property which was situated in this state at the time of the insured event;

          (d) Third party claimants:  A claim under a liability insurance policy, if:

          (i) Either the insured or the third party claimant was a resident of this state at the time of the insured event;

          (ii) The claim is for bodily or other personal injuries suffered in this state or by a person who suffered the injuries while a resident of this state; or

          (iii) The claim is for damage to property situated in this state at the time the damage occurred; or

          (e) Assignees:  The claim of a direct or indirect assignee, other than an insurer, of a person who except for the assignment could have claimed under (a), (b), (c), or (d) of this subsection.