OFFICE OF THE
[Filed December 2, 2020, 9:06 a.m., effective January 2, 2021]
Effective Date of Rule: Thirty-one days after filing.
Purpose: The rule clarifies solvency and financial requirements of service contract providers and protection product guarantee providers, forms of a parental guarantee, the filings these entities submit to the commissioner, and the correction of outdated statutory citations.
Citation of Rules Affected by this Order: New WAC 284-110-010, 284-110-020 and 284-110-030; and amending WAC 284-20C-005.
Adopted under notice filed as WSR 20-21-079 on October 19, 2020.
A final cost-benefit analysis is available by contacting Tabba Alam, P.O. Box 40260, Olympia, WA 98504-0260, phone 360-725-7170, fax 360-586-3109, TTY 360-586-0241 or 360-725-7087, email email@example.com, website www.insurance.wa.gov.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at the Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's own Initiative: New 3, Amended 1, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 3, Amended 1, Repealed 0.
Date Adopted: December 2, 2020.
AMENDATORY SECTION(Amending WSR 13-12-038, filed 5/30/13, effective 7/1/13)
WAC 284-20C-005Definitions that apply to this chapter.
The definitions in this section apply throughout this chapter:
(1) "Complete filing" means a package of information containing motor vehicle service contracts, supporting information, documents and exhibits.
(2) "Contract" means a service contract covering motor vehicles, as described in chapter 48.110
RCW. Under this definition:
(a) "Motor vehicle" means the same as in RCW 48.110.020
(7), and only includes vehicles that are self-propelled by a motor; and
(b) "Service contract" means the same as in RCW 48.110.020
(3) "Date filed" means the date a complete motor vehicle service contract filing has been received and accepted by the commissioner.
(4) "Filer" means a person, organization or other entity that files motor vehicle service contracts with the commissioner.
(5) "Objection letter" means correspondence sent by the commissioner to the filer that:
(a) Requests clarification, documentation or other information;
(b) Explains errors or omissions in the filing; or
(c) Disapproves a motor vehicle service contract under RCW 48.110.073
(6) "SERFF" means the System for Electronic Rate and Form Filing. SERFF is a proprietary National Association of Insurance Commissioners (NAIC) computer-based application that allows filers to create and submit rate, rule and form filings electronically to the commissioner.
(7) "Service contract provider" or "provider" means the same as in RCW 48.110.020
(8) "Type of insurance" means a specific type of insurance listed in the Uniform Property and Casualty Product Coding Matrix published by the NAIC and available at www.naic.org.
Chapter 284-110 WAC
SERVICE CONTRACTS AND
PROTECTION PRODUCT GUARANTEES
The definitions in this section apply throughout this chapter.
(1) "Most recent financial statements" means a partial fiscal year financial statement to include year-end totals, if available. For start-up applicants, formed less than one fiscal year, partial fiscal year financial statements shall include the months from formation to current.
(2) "Statutory accounting principles" means the current year accounting practices and procedures manual as adopted by the national association of insurance commissioners. Service contract providers and protection product guarantee providers must follow all statement of statutory accounting principles with a type of issue of "common area" and "property and casualty." Any permitted accounting practices from a domiciliary state regulator shall not be used in determining minimum net worth. Only service contract providers relying on RCW 48.110.050
(2)(a) or 48.110.075
(2)(a) may elect to use statutory accounting principles.
(3) "Material changes or additions" as referred to in RCW 48.110.030
(6) and 48.110.055
(7) means the following:
(a) Any financial condition where the registrant, or its parent company if applicable, fails to maintain the net worth requirements under RCW 48.110.030
(2)(c)(i) and (ii) and 48.110.055
(b) The information referred to in RCW 48.110.030
(2)(a) and (b).
(c) Change of financial responsibility or faithful performance requirements under RCW 48.110.050
(2)(a) through (c).
(d) The information referred to in RCW 48.110.055
(2)(b) through (3)(d).
WAC 284-110-020Certified financial statement.
(1) RCW 48.110.030
permit service contract providers and protection product guarantee providers to submit financial statements certified as accurate by two or more officers of the service contract provider or protection product guarantee provider in lieu of audited financial statements in certain circumstances. Certified financial statements must include all the financial statements, notes, and information that accurately present the financial position of the provider at the report date. Management is responsible for the preparation and fair presentation of these financial statements in conformity with the accounting practices prescribed or permitted under chapter 48.110
RCW and this chapter.
(2) Only service contract providers and protection product guarantee providers filing certified financial statements must use the prescribed certification of financial statements form that is available on the commissioner's website.
WAC 284-110-030Parental guarantee.
Service contract providers relying on RCW 48.110.050
(2)(c) to demonstrate financial responsibility or assure faithful performance must use the prescribed parental guarantee form that is available on the commissioner's website.