WSR 07-09-101

PREPROPOSAL STATEMENT OF INQUIRY

OFFICE OF

INSURANCE COMMISSIONER

[ Insurance Commissioner Matter No. R 2007-02 -- Filed April 18, 2007, 11:03 a.m. ]

Subject of Possible Rule Making: Market conduct oversight.

Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 48.02.060, ESSB 5717.

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: Section 7(4) of ESSB 5717 requires the adoption by rule of procedures manuals and data call formats to be used in the market conduct oversight process.

Section 6(3) of ESSB 5717 identifies general classes of information to be used in the market conduct oversight process. This rule will provide more specific identification of documents and information most likely to be accessed in the market conduct oversight process.

Section 6(2) of ESSB 5717 requires regulated entities to file market conduct annual statements with the commissioner. This rule identifies the form and instructions to be used to make those annual statement filings.

Section 6 (3)(c) of ESSB 5717 requires the adoption by rule of a process for insurer complaint verification before complaint data can be uploaded to NAIC or used in market conduct oversight activities after July 1, 2007.

Section 14(3) of ESSB 5717 requires the adoption of a rule establishing a mediation process to resolve insurer disputes arising from market conduct oversight activities.

These rules individually and as a whole are expected to provide uniformity and consistency. The expected uniformity and consistency will be not only in Washington specific market conduct oversight activity but also between Washington and other states.

A significant by-product of the rules should be reduced cost for both insurers and the office of insurance commissioner (OIC), and more efficient use of resources by insurers and OIC.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: None.

Process for Developing New Rule: Interested parties will be asked to participate in a series of meetings to refine and improve rules drafted by OIC staff. Interested parties wishing to participate in meetings to discuss rule content should provide an indication of interest by e-mail to JimO@OIC.WA.GOV.

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 May 21, 2007, to Kacy Scott, P.O. Box 40260, Olympia, WA 98504-0260, e-mail Kacys@oic.wa.gov, fax (360) 586-3109.

April 18, 2007

Mike Kreidler

Insurance Commissioner

Washington State Code Reviser's Office