PREPROPOSAL STATEMENT OF INQUIRY
Subject of Possible Rule Making: The insurance commissioner is considering the adoption of rules that would require life and disability insurers and fraternal benefit societies to submit specimen copies of life, long-term care, annuity and disability products used and marketed in Washington state, when such products combine components approved by Interstate Insurance Product Regulation Commission (commission) with Washington state approved components.
Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 48.02.060 (3)(a).
Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: Chapter 48.130 RCW establishes Washington state as a member of the Interstate Insurance Product Regulation Commission (commission). All forms of life, disability income and long-term care insurance policies and annuity contracts approved by the commission may be used in Washington without further approval by the office of insurance commissioner (OIC). RCW 48.18.110 requires policy forms other than commission-approved forms to be filed with and approved by the insurance commissioner prior to sale in this state.
The commission is contemplating adopting filing procedures known as the "Interstate Insurance Product Regulation Commission Operating Procedure for the Filing and Approval of Product Filings" that would allow insurers to mix commission-approved forms with state-approved forms. After these standards are adopted by the commission, life and disability insurers or fraternal benefit societies will be permitted to file policy forms with the commission for sale in this state that may be combined with policy forms already approved by the insurance commissioner. The combined state-commission forms may not be acceptable based on Washington law and may contain provisions that are "inconsistent, ambiguous, unfair, inequitable or misleading," or may contain exceptions or conditions that "unreasonably affect the risk purported to be assumed."
The insurance commissioner is considering the adoption of rules that would require insurers and fraternal benefit societies to submit informational specimen copies of the combined products that are made up of state-approved and commission-approved form components. These specimen copies will be used by OIC staff to address consumer and market place issues as they arise, and to confirm that the combinations do not contain provisions that are inconsistent, ambiguous, unfair, inequitable or misleading, or contain exceptions or conditions that unreasonably affect the risk purported to be assumed.
Rules also might be adopted that clarify that the insurance commissioner retains authority to prohibit the use of a state-commission combination form if the certification of compliance to the commission made by the insurer is found to be incorrect.
Process for Developing New Rule: OIC will have discussions with interested parties, and exchange drafts of possible rules.
Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Please submit written comments by June 26, 2007, to Kacy Scott, P.O. Box 40255, Olympia, WA 98504-0255, e-mail Kacys@oic.wa.gov, fax (360) 586-3109.
May 23, 2007