WSR 12-12-066

PROPOSED RULES

OFFICE OF

INSURANCE COMMISSIONER

[ Insurance Commissioner Matter No. R 2012-10 -- Filed June 5, 2012, 12:50 p.m. ]

     Original Notice.

     Preproposal statement of inquiry was filed as WSR 12-09-083.

     Title of Rule and Other Identifying Information: Postponing the transition date for title insurers to file their rates with the commissioner and delaying the filing of title agent financial data with their title insurers for the calendar year 2011.

     Hearing Location(s): Insurance Commissioner's Office, TR 120, 5000 Capitol Boulevard, Tumwater, WA 98504-0255, on July 12, 2012, at 10:00 a.m.

     Date of Intended Adoption: July 13, 2012.

     Submit Written Comments to: Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, e-mail jimt@oic.wa.gov, fax (360) 586-3109, by July 11, 2012.

     Assistance for Persons with Disabilities: Contact Lorrie [Lorie] Villaflores by July 11, 2012, TTY (360) 586-0241 or (360) 725-7087.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rule will amend WAC 284-29A-030 to postpone by one year the date: Upon which title insurers must file their rates with the commissioner under RCW 48.29.147 and when rate filings must be made under RCW 48.29.147 rather than RCW 48.29.140. Also, the proposed rule postpones the filing of the title agent report under WAC 284-29A-030 for the calendar year 2011 to April 1, 2013, rather than April 1, 2012.

     Reasons Supporting Proposal: Following the adoption of WAC 284-29A-110, the National Association of Insurance Commissioners (NAIC) task force on title insurance statistical reporting, after working with the title insurance industry, adopted a guideline for title insurance agents to report financial data to insurance commissioners. The commissioner is considering amending the current rules, which require title insurance agents to submit data to the insurance company(s), to adopt the NAIC guideline. In an effort to avoid unnecessary administrative filings under the current rules, the proposed rule postpones the current requirement for title insurance agents to submit the data to the title insurance company(s) and postpones the change to the prior approval system in order to implement the NAIC guideline.

     Statutory Authority for Adoption: RCW 48.02.060 and 48.29.140.

     Statute Being Implemented: RCW 48.29.143 and 48.29.147.

     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: Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, (360) 725-7036; Implementation and Enforcement: Beth Berendt, P.O. Box 40255, Olympia, WA 98504-0255, (360) 725-7117.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. Because this rule simply postpones for one year the transition date to the new rate approval system, it does not require title insurers or title agents to incur new costs. Also, since this rule simply postpones the filing of the title agent data report to its insurers for the calendar year 2011 from April 1, 2012, to April 1, 2013, it does not require title insurers or title agents to incur new costs. Therefore, no small business economic impact statement is required.

     A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, phone (360) 725-7036, fax (360) 586-3109, e-mail jimt@oic.wa.gov.

June 5, 2012

Mike Kreidler

Insurance Commissioner

OTS-4679.1


AMENDATORY SECTION(Amending Matter No. R 2011-07, filed 7/27/11, effective 8/27/11)

WAC 284-29A-030   Transition to prior approval system.   (1) On and after January 1, ((2013)) 2014, all rates used in Washington state must be filed and approved under RCW 48.29.147.

     (2) Title insurers must submit the rate filings required under RCW 48.29.147 and subsection (1) of this section to the commissioner by September 1, ((2012)) 2013, for rates to be effective on January 1, ((2013)) 2014. This rule allows the commissioner time to take final action on rates filed under this chapter before the effective date of January 1, ((2013)) 2014.

     (3) Rates filed under RCW 48.29.140(2) must not be used for commitments issued on or after January 1, ((2013)) 2014.

[Statutory Authority: RCW 48.02.060 and 48.29.140. 11-16-031 (Matter No. R 2011-07), § 284-29A-030, filed 7/27/11, effective 8/27/11. Statutory Authority: RCW 48.02.060 and 48.29.005. 10-15-092 (Matter No. R 2009-01), § 284-29A-030, filed 7/20/10, effective 8/20/10.]


AMENDATORY SECTION(Amending Matter No. R 2009-01, filed 7/20/10, effective 8/20/10)

WAC 284-29A-110   Title insurance agents must report data to title insurers.   (1) Each title insurance agent must report premium, policy count, and expense data annually to each title insurer for which it produces business in the state of Washington by April 1st of each year, except as provided in subsection (4) of this section. These data must be reported following the instructions published by the commissioner on the commissioner's web site at www.insurance.wa.gov. These instructions, called the Title Insurance Agent Annual Report, are incorporated into this chapter by reference.

     (2) Each annual report required by this section must include:

     (a) The following premium and policy count data:

     (i) Title insurance premiums for all of the agent's business; and

     (ii) Title insurance premiums produced for the title insurer to which the report is sent.

     (iii) Number of policies issued by all of the title insurers with which the agent does business; and

     (iv) Number of policies issued by the title insurer to which the report is sent.

     (b) The following expense data related to issuing title insurance policies and commitments for all of the agent's business, excluding all expenses related to escrow and other activities not directly related to title insurance:

     (i) Employees' salaries and wages;

     (ii) Owners' and partners' salaries and wages representing reasonable compensation for personal services actually performed by owners and partners;

     (iii) Employee benefits;

     (iv) Rent;

     (v) Insurance;

     (vi) Legal expense;

     (vii) Licenses, taxes, and fees;

     (viii) Title plant expense and maintenance;

     (ix) Office supplies;

     (x) Depreciation;

     (xi) Automobile expense;

     (xii) Communication expense;

     (xiii) Education expense;

     (xiv) Bad debts;

     (xv) Interest expense;

     (xvi) Employee travel and lodging;

     (xvii) Loss and loss adjustment expense;

     (xviii) Accounting and auditing expense;

     (xix) Public relations expense; and

     (xx) Other specifically identified expenses.

     (c) An explanation that:

     (i) Describes how expenses are allocated between the title operations and escrow or other operations of the title insurance agent; and

     (ii) Demonstrates that the expenses described in WAC 284-29A-070(2) have been excluded.

     (d) The estimated average cost to issue a title insurance commitment.

     (3) If a title insurer does not receive a report required under this section by April 1st of each year, the title insurer must notify the commissioner by April 15th. This notice must include the name of the agent that did not send the report on time.

     (4) For the 2011 calendar year report, each title agent must submit the report to the title insurer(s) on or before April 1, 2013.

[Statutory Authority: RCW 48.02.060 and 48.29.005. 10-15-092 (Matter No. R 2009-01), § 284-29A-110, filed 7/20/10, effective 8/20/10.]

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