Z-1377               _______________________________________________

                                                   SENATE BILL NO. 4542

                        _______________________________________________

State of Washington                              49th Legislature                              1986 Regular Session

By Senators Moore, Conner, Granlund, Bauer, Bender, Fleming and Wojahn; by request of Governor, Joint Study Committee on Insurance Availability and Affordability

Read first time 1/15/86 and referred to Committee on Financial Institutions.

AN ACT Relating to fees to fund appropriations for the office of insurance commissioner; adding a new section to chapter 48.02 RCW; repealing RCW 48.14.015; providing an effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1.  A new section is added to chapter 48.02 RCW 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, and every health care service contractor and health maintenance organization registered to do business in this state.

          (b) "Receipts" means (i) 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 (ii) prepayments to health care service contractors and health maintenance organizations as set forth in RCW 48.44.010(3) and 48.46.020(1).

          (2) The annual cost of operating the office of insurance commissioner shall be determined by legislative appropriation.  A pro rata share of the cost shall be charged to all organizations.

          (3) The fee charged each organization shall be that portion of the cost of operating the insurance commissioner's office for the ensuing fiscal year represented by the organization's portion of the receipts collected or received by all organizations on business in this state during the previous calendar year:  PROVIDED, That the fee shall not exceed one-sixth of one percent of receipts:  PROVIDED FURTHER, That the minimum fee shall be one thousand dollars.

          (4) The commissioner shall annually, on or before June 1, calculate and bill each organization for the amount of its fee.  Fees shall be due and payable no later than June 15 of each year:  PROVIDED, That 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 fees within the time specified, the commissioner may use the fee factors for the prior year as the basis for the fees and, if necessary, the commissioner may impose supplemental fees to fully and properly charge the organizations.  The penalties for failure to pay fees when due shall be the same as the penalties for failure to pay taxes pursuant to RCW 48.14.060.  The fees required by this section are in addition to all other taxes and fees now imposed or that may be subsequently imposed.  The commissioner shall report fees to the legislative committees responsible for insurance and appropriations concurrent with notification to the organizations.

          (5) All moneys collected shall 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 carried forward in the insurance commissioner's regulatory account to the succeeding fiscal year and shall be used to reduce future fees.

NEW SECTION. Sec. 2.  Section 35, chapter 9, Laws of 1982 1st ex. sess. and RCW 48.14.015 are each repealed.

NEW SECTION. Sec. 3.     Section 1 of this act is necessary for the support of the state government and its existing public institutions because it allows the fees to be collected for the fiscal year beginning July 1, 1986, and shall take effect immediately.

NEW SECTION. Sec. 4.     Section 2 of this act shall be effective June 30, 1986.