AN ACT Relating to financial institutions; amending RCW 48.17.060; and declaring an emergency.

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

Sec. 1. Section .17.06, chapter 79, Laws of 1947 as last amended by section 7, chapter 266, Laws of 1975 1st ex. sess. and RCW 48.17.060 are each amended to read as follows:

(1) No person shall in this state act as or hold himself out to be an agent, broker, solicitor, or adjuster unless then licensed therefor by this state.

(2) No agent, solicitor, or broker shall solicit or take applications for, procure, or place for others any kind of insurance for which he is not then licensed.

(3) This section shall not apply with respect to any person securing and forwarding information required for the purposes of group credit life and credit disability insurance in connection with an extension of credit and such other credit life or disability insurance lines as the commissioner shall determine, and where no commission or other compensation is payable on account of the securing and forwarding of such information: PROVIDED, That the reimbursement of a creditor's actual expenses for securing and forwarding information required for the purposes of such group insurance shall not be considered a commission or other compensation if such reimbursement does not exceed three dollars per certificate issued, or in the case of a monthly premium plan extending beyond twelve months, not to exceed three dollars per loan transaction revision per year.

(4) No agent, solicitor, or broker may solicit or take application for, procure, or place for others, sell, negotiate, effectuate, or service any policy or contract of insurance on the premises of a bank. No agent, solicitor, or broker may solicit, take application for, procure, place for others, sell, negotiate, effectuate, or service any policy or contract of insurance, on or off the premises of any bank, as an employee of, associate of, under contract with, retained by, owned by, or controlled by any bank.

(a) This subsection does not apply to (i) any insurance activity engaged in by any agent, solicitor, or broker, on or off the premises of any bank, on or before the effective date of this 1985 act, (ii) sales of insurance coverages which become available after the effective date of this 1985 act as long as those coverages insure against the same types of risks as, or are otherwise functionally equivalent to, coverages sold on the effective date of this 1985 act, (iii) sales of any insurance engaged in on or before the effective date of this 1985 act at a new location of the same bank, (iv) any insurance activity limited solely to supervising on behalf of insurance underwriters the activities of retail insurance agents who sell fidelity insurance and property and casualty insurance for the real and personal property used in the operations of a bank or its subsidiaries or affiliates or who sell group insurance that protects the employees of the bank or any of its subsidiaries or affiliates, and (v) sales of group or individual credit life, group or individual accident and health, mortgage life and disability insurance, and vendors' single interest insurance coverages before or after the effective date of this 1985 act.

(b) For the purposes of this subsection, no agent, solicitor, or broker may be prohibited from serving as an officer or director of a bank if the agent, solicitor, or broker complies with the provisions of this 1985 act, and all other applicable laws, and does not contribute to the bank any earnings, directly or indirectly, from his or her insurance activities.

(5) Any person violating this section shall be liable to a fine of not to exceed five hundred dollars and imprisonment for not to exceed six months for each instance of such violation. In addition, any person violating subsection (4) of this section shall have his or her license revoked.

(6) For the purposes of subsection (4) of this section, "bank" means any federally chartered bank, state chartered bank subject to chapter 30.04 RCW, bank holding company, or any subsidiary, affiliate, or foundation of the bank. This definition shall not include any bank that has been granted an exemption by the board of governors of the federal reserve system pursuant to section (4)(c)(8) of the federal bank holding company act of 1956, as amended, any financial institution acting under the authority of the federal comptroller of the currency pursuant to 12 U.S.C. Sec. 1 et seq. and 12 U.S.C. Sec. 24(7) 93 as further delineated by 12 C.F.R. Sec. 5.34, or any bank that neither owns more than ten percent of the capital stock nor exercises effective control of a bank that is licensed or authorized to transact business in this state.

(7) For the purposes of subsection (4) of this section "premises" means the real and personal property of a bank, open to the public, used to conduct the business normally associated with the bank.

NEW SECTION. Sec. 2. 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. 3. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect immediately.