WSR 11-23-167

PROPOSED RULES

OFFICE OF

INSURANCE COMMISSIONER

[ Insurance Commissioner Matter No. R 2011-22 -- Filed November 22, 2011, 3:24 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 11-19-102.

Title of Rule and Other Identifying Information: WAC 284-30-500 (1)(b) Unfair practices with respect to vehicle insurance, "family" or "household" exclusion.

Hearing Location(s): OIC Tumwater Office, Training Room 120, 5000 Capitol Boulevard, Tumwater, WA, http://www.insurance.wa.gov/about/directions.shtml, on January 3, 2012, at 9:00 a.m.

Date of Intended Adoption: January 9, 2012.

Submit Written Comments to: Kacy Scott, P.O. Box 40258, Olympia, WA 98504-0258, e-mail kacys@oic.wa.gov, fax (360) 586-0139, by January 3, 2012.

Assistance for Persons with Disabilities: Contact Lorrie [Lorie] Villaflores by November 21, 2011, TTY (360) 586-0241 or (360) 725-7087.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of this proposed rule is to eliminate a conflict in WAC 284-30-500 (1)(b) with several court cases. This amendment will ensure that insured's policy limits for their family and household members are not reduced to the financial responsibility limits in RCW 46.29.090.

Reasons Supporting Proposal: Court rulings have found that the provision in WAC 284-30-500(1) is in direct conflict with public policy.

Statutory Authority for Adoption: RCW 48.02.060.

Statute Being Implemented: RCW 48.30.010.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Mike Kreidler, insurance commissioner, governmental.

Name of Agency Personnel Responsible for Drafting: Kacy Scott, P.O. Box 40258 [40255], Olympia, WA 98504-0248 [98504-0255], (360) 725-7041; Implementation: John Hamje, P.O. Box 40255 [40256], Olympia, WA 98504-0245 [98504-0256], (360) 725-7262; and Enforcement: Carol Sureau, P.O. Box 40255, Olympia, WA 98504-0245 [98504-0255], (360) 725-7050.

No small business economic impact statement has been prepared under chapter 19.85 RCW. There are no active domestic carriers in this market that qualify as small businesses.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Kacy Scott, P.O. Box 40255, Olympia, WA 98504-0255, phone (360) 725-7041, fax (360) 586-3109, e-mail kacys@oic.wa.gov.

November 22, 2011

Mike Kreidler

Insurance Commissioner

OTS-4430.2


AMENDATORY SECTION(Amending Matter No. R 2007-07, filed 9/19/07, effective 10/20/07)

WAC 284-30-500   Unfair practices with respect to vehicle insurance.   (1) The following practices by any insurer with respect to every vehicle liability insurance policy applicable to private passenger automobiles registered or principally garaged in this state are unfair and prohibited:

(a) Failing to provide, to any insured under such policy, liability limits at least as great as those required by RCW 46.29.090, as measured at the effective date of the applicable policy or its renewal;

(b) Denying or limiting liability coverage in such policy to less than the insured's policy limits ((required by RCW 46.29.090,)) solely because the injured person ((is related to the insured by blood or marriage, as, for example, through use of so-called "family" or "household" exclusions)) qualifies as an insured as defined in RCW 48.22.005 (5)(a);

(c) Denying or limiting liability coverage in such policy, with respect to injuries sustained by motorcycle passengers, to an amount below the bodily injury liability limits required by RCW 46.29.090, if the policy provides liability coverage for an insured's ownership, operation, or use of a motorcycle.

(2) With respect to vehicle insurance policies applicable to private passenger vehicles registered or principally garaged in this state, failing to provide a named insured an itemization of the premium costs for the coverages under the policy if there are identifiable separate premium charges for the coverages is unfair and prohibited. The required itemization must be given to a named insured no later than at the time of delivery of a policy and must accompany each offer to renew thereafter.

(3) It is an unfair practice for any insurer to consider traffic violations or accidents which occurred more than three years in the past, with respect to the acceptance, rejection, cancellation or nonrenewal of any insured under a private passenger automobile insurance policy, unless, because of the individual's violations, accidents or driving record during the three years immediately past, the earlier violations or accidents are significantly relevant to the individual's qualifications for insurance.

(4) For purposes of this section, the definition of a "private passenger automobile" is that set forth in RCW 48.18.297, and includes a motorcycle except as otherwise specifically provided in this section.

[Statutory Authority: RCW 48.02.060. 07-19-106 (Matter No. R 2007-07), 284-30-500, filed 9/19/07, effective 10/20/07. Statutory Authority: RCW 48.02.060, 48.44.050 and 48.46.200. 87-09-071 (Order R 87-5), 284-30-500, filed 4/21/87. Statutory Authority: RCW 48.02.060 (3)(a). 85-02-019 (Order R 84-8), 284-30-500, filed 12/27/84.]

Washington State Code Reviser's Office