AN ACT
Relating to the licensure of insurance companies; amending RCW 48.05.340 and
48.15.090; providing an effective date; and declaring an emergency.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
48.05.340 and 1982 c 181 s 3 are each amended to read as follows:
(1)
Subject to RCW 48.05.350 and 48.05.360 to qualify for authority to transact any
one kind of insurance as defined in chapter 48.11 RCW or combination of kinds
of insurance as shown below, a foreign or alien insurer, whether stock or
mutual, or a domestic insurer hereafter formed shall possess and thereafter
maintain unimpaired paid-in capital stock, if a stock insurer, or unimpaired
surplus if a mutual insurer, and shall possess when first so authorized
additional funds in surplus as follows:
Paid-in
capital
Kind
or kinds stock or Additional
of
insurance basic surplus surplus
Life
................................$((1,000,000)) $((1,000,000))
2,000,000
2,000,000
Disability
.......................... ((1,000,000)) ((1,000,000))
2,000,000 2,000,000
Life and
disability ................. ((1,200,000)) ((1,200,000))
2,400,000 2,400,000
Property
............................ ((1,000,000)) ((1,000,000))
2,000,000 2,000,000
Marine
& transportation ............. ((1,000,000)) ((1,000,000))
2,000,000 2,000,000
General
casualty .................... ((1,200,000)) ((1,200,000))
2,400,000 2,400,000
Vehicle
............................. ((1,000,000)) ((1,000,000))
2,000,000 2,000,000
Surety
.............................. ((1,000,000)) ((1,000,000))
2,000,000 2,000,000
Any two of
the following kinds of
insurance:
Property, marine &
transportation, general
casualty, vehicle, surety,
disability
...................... ((1,500,000)) ((1,500,000))
3,000,000 3,000,000
Multiple
lines (all insurances
except
life and title
insurance)
...................... ((1,500,000)) ((1,500,000))
3,000,000 3,000,000
Title (in
accordance with the
provisions
of chapter 48.29
RCW)
(2)
Capital and surplus requirements are based upon all the kinds of insurance
transacted by the insurer wherever it may operate or propose to operate,
whether or not only a portion of such kinds are to be transacted in this state.
(3) An
insurer holding a certificate of authority to transact insurance in this state
immediately prior to July 1, ((1980)) 1991, may continue to be
authorized to transact the same kinds of insurance as long as it is otherwise
qualified for such authority and thereafter maintains unimpaired the amount of
paid-in capital stock, if a stock insurer, or basic surplus, if a mutual or
reciprocal insurer, and special surplus as required of it under laws in force
immediately prior to such effective date; and any proposed domestic insurer
which is in process of formation or financing under a solicitation permit which
is outstanding immediately prior to July 1, ((1980)) 1991, shall,
if otherwise qualified therefor, be authorized to transact any kind or kinds of
insurance upon the basis of the capital and surplus requirements of such an
insurer under the laws in force immediately prior to such effective date((:
PROVIDED, That any applicable action pending from the period between June 8,
1967, and July 1, 1980, shall be governed by this section as then in effect)).
The requirements for paid-in capital stock, basic surplus, and special
surplus that were in effect immediately before the effective date of this
section, apply to any completed application for a certificate of authority from
a foreign or alien insurer that is on file with the commissioner on the
effective date of this section.
Sec.
2. RCW
48.15.090 and 1980 c 102 s 4 are each amended to read as follows:
(1) A
surplus line broker shall not knowingly place surplus line insurance with
insurers unsound financially. The surplus line broker shall ascertain
the financial condition of the unauthorized insurer, and maintain written
evidence thereof, before placing insurance therewith. The surplus line
broker shall not so insure with:
(a)
Any foreign insurer having less than six million dollars of
capital and surplus or ((combined capital funds than the minimum amounts
required for an admitted multiple line insurer in accordance with RCW 48.05.340
as now or hereafter amended, and in the case of an alien insurer, there must be
on file with the commissioner a copy of a trust agreement, certified by the
trustee, evidencing a subsisting trust deposit of not less than one-half of a
like amount by such insurer with a bank or trust company in the United States,
and which deposit is held for the protection of United States policyholders.
Such trust account shall consist of cash or other assets acceptable to the
commissioner and shall have an expiration date which at no time shall be less
than five years hence)) substantially equivalent capital funds, of which
not less than one million five hundred thousand dollars is capital; or
(b)
Any alien insurer having less than six million dollars of capital and surplus
or substantially equivalent capital funds. By January 1, 1992, this
requirement shall be increased to twelve million five hundred thousand
dollars. By January 1, 1993, this requirement shall be further increased to
fifteen million dollars. Such alien insurers must have in force in the United
States an irrevocable trust account, in a qualified United States financial
institution, on behalf of United States policyholders of not less than two
million five hundred thousand dollars and consisting of cash, securities,
letters of credit, or of investments of substantially the same character and
quality as those which are eligible investments for the capital and statutory
reserves of admitted insurers authorized to write like kinds of insurance in
this state. There must be on file with the commissioner a copy of the trust,
certified by the trustee, evidencing a subsisting trust deposit having an
expiration date which at no time shall be less than five years after the date
of creation of the trust. Such trust fund shall be included in the calculation
of the insurer's capital and surplus or its equivalents; or
(c)
Any unincorporated group of individual insurers maintaining a trust fund of
less than fifty million dollars as security to the full amount thereof for all
policyholders in the United States of each member of the group, and such trust
shall likewise comply with the terms and conditions established in (b) of this
subsection for an alien insurer; or
(d)
Any insurance exchange created by the laws of an individual state, maintaining
capital and surplus, or substantially equivalent capital funds of less than
fifty million dollars in the aggregate. For insurance exchanges which maintain
funds for the protection of all insurance exchange policyholders, each
individual syndicate shall maintain minimum capital and surplus, or the
substantial equivalent thereof, of not less than six million dollars. In the
event the insurance exchange does not maintain funds for the protection of all
insurance exchange policyholders, each individual syndicate shall meet the
minimum capital and surplus requirements of (a) of this subsection.
(2)
The commissioner may, by rule ((and regulation,)):
(a)
Increase the financial requirements under subsection (1) of this section by not
more than one million dollars in any twelve-month period, but in no case may
the requirements exceed fifteen million dollars; or
(b)
Prescribe the terms under which the foregoing financial requirements may be
waived in circumstances where insurance cannot be otherwise procured on risks
located in this state.
(((2)))
(3) For any violation of this section the surplus line broker may
be fined not less than one hundred dollars or more than five thousand dollars,
((his)) and in addition to or in lieu thereof the surplus line
broker's license may be revoked, suspended, or nonrenewed.
NEW
SECTION. Sec. 3. This
act is necessary for the immediate preservation of the public peace, health, or
safety, or support of the state government and its existing public
institutions, and shall take effect July 1, 1991.
