HOUSE BILL REPORT

SHB 2933

BYHouse Committee on Local Government (originally sponsored by Representatives Ferguson, Haugen and Crane)

Studying local government self insurance pools.

House Committe on Local Government

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (13)

      Signed by Representatives Haugen, Chair; Cooper, Vice Chair; Ferguson, Ranking Republican Member; Horn, Kirby, Nealey, Nelson, Nutley, Phillips, Raiter, Rayburn, Wolfe and Zellinsky.

House Staff:Bill Lynch (786-7092)

AS PASSED HOUSE FEBRUARY 12, 1990

BACKGROUND:

Most municipal corporations are authorized under current law to establish self- insurance pools for liability and property insurance.  School districts are also allowed to establish self-funded plans for employees' loss of time and health benefits.  The State Auditor's Office has recently identified a number of potential problems in the operation of these self-insurance pools.  It is recommended that a study of these municipal self- insurance pools be conducted in order to prevent their potential collapse.

SUMMARY:

A joint select committee is created to study local government self insurance pools authorized by statute and report its findings and any recommendations for legislation to the Legislature by October 1, 1990.  The joint select committee consists of four senators and four representatives, two from each of the major caucuses.  The president of the Senate appoints the two Senate members and the speaker of the House appoints the two House members.

The study must include input from existing municipal insurance pools, various associations of local governments, the state risk manager, the Washington Chapter of the Public Risk Insurance Managers Association, the Office of the Superintendent of Public Instruction, the Department of Employment Security, the Department of Labor and Industries, the State Auditor, the State Actuary, and the Office of the Attorney General.

Fiscal Note:      Requested February 1, 1990.

House Committee ‑ Testified For:    Gary Alexander, Department of General Administration, Division of Risk Management; Jack Heinricher, State Auditor's Office; Jim Justin, Association of Washington Cities; Jim Boldt, Washington Certified Insurance Association; and Gary Lowe, Washington State Association of Counties.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    Some local units of government do not have the expertise to self-insure.  A recent collapse of a municipal insurance pool in another state illustrates the potential exposure of local governments and their employees.

House Committee - Testimony Against:      None.