Effective Date of Rule: Thirty-one days after filing.
Purpose: Chapter 31, Laws of 2011 (HB 1694) amended RCW 48.15.040 and 48.15.090 to comply with a portion of the Dodd-Frank Wall Street Reform Act. Also, these amendments changed the affidavit of due diligence to a certification. This rule amends the existing rules to comport with these statutory changes and makes clear that the payment of premium taxes is based upon the year in which the surplus line business was transacted, not when the surplus line broker files the certification of due diligence.
Citation of Existing Rules Affected by this Order: Repealing WAC 284-15-090; and amending WAC 284-15-020, 284-15-030, and 284-15-050.
Statutory Authority for Adoption: RCW 48.02.060, 48.15.040(4), and 48.15.090(2).
Adopted under notice filed as WSR 12-01-107 on December 21, 2011.
A final cost-benefit analysis is available by contacting Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, phone (360) 725-7036, fax (360) 586-3109, e-mail email@example.com.
Number of Sections Adopted in Order to Comply with Federal Statute: New 1, Amended 1, Repealed 1; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 1, Amended 3, Repealed 1.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 2, Amended 3, Repealed 1.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 1, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 2, Amended 3, Repealed 1.
Date Adopted: January 31, 2012.
AMENDATORY SECTION(Amending Matter No. R 2008-04, filed 7/2/08, effective 8/2/08)
WAC 284-15-020 Surplus line broker -- Solvent insurer required. (1) A surplus line broker must not knowingly place surplus line insurance with financially unsound insurers. Foreign ((
and alien)) insurers must meet or exceed the minimum
financial and other conditions required by RCW 48.15.090 (( and
(2) A surplus line broker must substantiate the financial
condition of ((
an)) a foreign unauthorized insurer before
placing insurance with the insurer. The broker must also
maintain evidence of the financial condition of the insurer
for at least five years.
(a) If)) (3) A surplus line broker may place(( s))
insurance with an alien unauthorized insurer shown on the
National Association of Insurance Commissioners (NAIC)
Quarterly Listing of Alien Insurers (( dated within three
months after placement of the risk, it will be deemed that the
insurer meets the financial requirements of RCW 48.15.090 and
WAC 284-15-090 and that the financial condition of the insurer
is)). The financial condition of an insurer named on the
listing is deemed to be adequately documented.
(b) If a surplus line broker places insurance with an
alien unauthorized insurer that is not shown on the NAIC
Quarterly Listing of Alien Insurers, the broker must maintain
information for at least five years adequate to show that the
requirements of subsection (1) of this section have been met
or exceeded. This documentation shall include at least the
(i) A copy of the unauthorized insurer's most recent available annual financial statement, in English with United States dollar equivalents;
(ii) Any other information obtained by the broker that verifies the financial condition of the alien unauthorized insurer; and
(iii) The current NAIC annual statement or its equivalent on file for any alien unauthorized insurer used.))
[Statutory Authority: RCW 48.02.060, 48.15.040(4), 48.15.073(2), and 48.15.160(2). 08-14-169 (Matter No. R 2008-04), § 284-15-020, filed 7/2/08, effective 8/2/08. Statutory Authority: RCW 48.02.060. 81-03-082 (Order R 81-1), § 284-15-020, filed 1/21/81.]
(2) Every insurance contract, including those evidenced
by a binder, procured and delivered on or after January 1,
2012, as a surplus line coverage ((
pursuant to)) under chapter 48.15 RCW (( shall)) must have a conspicuous statement
(( stamped)) upon its face, which (( shall)) must be initialed
by or bear the name of the surplus line broker who procured
it, as follows:
[Statutory Authority: RCW 48.02.060. 06-12-077 (Matter No. R 2006-04), § 284-15-030, filed 6/6/06, effective 7/7/06; 81-03-082 (Order R 81-1), § 284-15-030, filed 1/21/81.]
(1) Policy or certificate number;
(2) Premium, including any policy fee;
(3) Name and license number of the filing surplus line broker;
(4) Name and address of referring insurance producer (if any);
(5) Name(s) of unauthorized insurer(s);
(6) Name and address of insured;
(7) Binding or effective date, whichever is later;
(8) Brief statement of coverages (common terms may be used); and
(9) Other information as required by the commissioner.
(1))) (a) A detailed letter explaining the need to
waive the financial requirements;
(2))) (b) Documentation of the financial condition of
the proposed insurer as reported in its annual statement as of
the end of the preceding calendar year;
(3))) (c) Summary information showing the number of
years the company has been writing the specific line of
(4))) (d) A written (( acknowledgement)) acknowledgment
signed by the proposed insured confirming all of the
(a))) (i) The insured has been informed that the
coverage will be issued by an insurer (or insurers) that is
not an authorized insurer in the state of Washington;
(b))) (ii) The insured understands that financial
requirements for surplus line insurers must be waived by all
parties concerned to enable this coverage to be obtained; and
(c))) (iii) The insured understands that there is no
protection for the insured under the Washington Insurance
Guaranty Association because the coverage will be issued by an
(5))) (e) For accounts requiring a multiplicity of
insurers, in lieu of the requirements in (( subsections (2)))
(b) and (( (3))) (c) of this (( section)) subsection, the
commissioner may accept certification from a surplus line
broker that the broker has investigated the financial
condition of the prospective insurers and is satisfied that
they are capable of underwriting the specified risks. Records
and documents supporting the broker's certification must be
maintained by the broker for the term of the policies and as
long thereafter as a claim may be litigated, but in no case
less than five years after completion of the transaction.
(2) In no event will the commissioner waive the financial requirements when the insurer's capital and surplus is less than four million five hundred thousand dollars.
[Statutory Authority: RCW 48.02.060, 48.15.040(4), 48.15.073(2), and 48.15.160(2). 08-14-169 (Matter No. R 2008-04), § 284-15-050, filed 7/2/08, effective 8/2/08. Statutory Authority: RCW 48.02.060. 89-03-060 (Order R 89-2), § 284-15-050, filed 1/17/89; 81-03-082 (Order R 81-1), § 284-15-050, filed 1/21/81.]
The following section of the Washington Administrative Code is repealed:
|WAC 284-15-090||Financial requirements for unauthorized foreign and alien insurers increased.|