S-2281               _______________________________________________

                                         SUBSTITUTE SENATE BILL NO. 5447

                        _______________________________________________

State of Washington                              50th Legislature                              1987 Regular Session

By Senate Committee on Financial Institutions & Insurance (originally sponsored by  Senators Halsan, Metcalf, Bottiger and Vognild)

Read first time 3/5/87.

AN ACT Relating to insurance policy cancellation; and amending RCW 48.18.290.

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

        Sec. 1.  Section .18.29, chapter 79, Laws of 1947 as last amended by section 1, chapter 287, Laws of 1986 and RCW 48.18.290 are each amended to read as follows:

          (1) Cancellation by the insurer of any policy which by its terms is cancellable at the option of the insurer, or of any binder based on such policy, may be effected as to any interest only upon compliance with ((either or both of the following)) (a) and (b) or (c) of this subsection:

          (a) Unless cancellation is due to reasons set forth in chapter 48.53 RCW, nonpayment of premiums, fraud, misrepresentation, or a material change in the condition affecting the risk, cancellation of a policy by the insurer shall not occur more than sixty days after the policy has been in effect;

(b) Written notice of such cancellation, accompanied by the actual reason therefor, must be actually delivered or mailed to the insured and to his or her representative in charge of the subject of the insurance not less than ((forty-five)) twenty days prior to the effective date of the cancellation except for cancellation of insurance policies for nonpayment of premiums, fraud, misrepresentation, or a material change in the condition affecting the risk, which notice shall be not less than ten days prior to such date and except for cancellation of fire insurance policies under chapter 48.53 RCW, which notice shall not be less than five days prior to such date;

          (((b))) (c) Like notice of not less than ((forty-five)) twenty days must also be so delivered or mailed to each mortgagee, pledgee, or other person shown by the policy to have an interest in any loss which may occur thereunder.

          (2) The mailing of any such notice shall be effected by depositing it in a sealed envelope, directed to the addressee at his or her last address as known to the insurer or as shown by the insurer's records, with proper prepaid postage affixed, in a letter depository of the United States post office.  The insurer shall retain in its records any such item so mailed, together with its envelope, which was returned by the post office upon failure to find, or deliver the mailing to, the addressee.

          (3) The affidavit of the individual making or supervising such a mailing, shall constitute prima facie evidence of such facts of the mailing as are therein affirmed.

          (4) The portion of any premium paid to the insurer on account of the policy, unearned because of the cancellation and in amount as computed on the pro rata basis, must be actually paid to the insured or other person entitled thereto as shown by the policy or by any endorsement thereon, or be mailed to the insured or such person as soon as possible, and no later than ((forty-five)) twenty days after the date of notice of cancellation to the insured for homeowners', dwelling fire, and private passenger auto.  Any such payment may be made by cash, or by check, bank draft, or money order.

          (5) This section shall not apply to contracts of life or disability insurance without provision for cancellation prior to the date to which premiums have been paid, or to contracts of insurance procured under the provisions of chapter 48.15 RCW.