CERTIFICATION OF ENROLLMENT

 

                   SUBSTITUTE HOUSE BILL 2720

 

 

                               

 

                   Chapter 209, Laws of 1992

                         (partial veto)

 

                        52nd Legislature

                      1992 Regular Session

 

 

WORKERS' COMPENSATION COVERAGE FOR LONGSHORE AND HARBOR WORKERS

 

 

                    EFFECTIVE DATE:  4/2/92

Passed by the House March 12, 1992

  Yeas 95   Nays 2

 

 

 

                  JOE KING

Speaker of the

       House of Representatives

 

Passed by the Senate March 12, 1992

  Yeas 42   Nays 3

               CERTIFICATE

 

I, Alan Thompson, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is SUBSTITUTE HOUSE BILL 2720 as passed by the House of Representatives and the Senate on the dates hereon set forth.

 

 

 

               JOEL PRITCHARD

President of the Senate

              ALAN THOMPSON

                               Chief Clerk

 

 

Approved April 2, 1992, with the exception of section 5, which is vetoed. Place Style On Codes above, and Style Off Codes below.

                                     FILED          

 

                April 2, 1992 - 11:57 a.m.

 

 

 

               BOOTH GARDNER

Governor of the State of Washington

                        Secretary of State

                       State of Washington


                  _______________________________________________

 

                            SUBSTITUTE HOUSE BILL 2720

                  _______________________________________________

 

                    AS RECOMMENDED BY THE CONFERENCE COMMITTEE

 

                     Passed Legislature - 1992 Regular Session

 

State of Washington              52nd Legislature             1992 Regular Session

 

By House Committee on Financial Institutions & Insurance (originally sponsored by Representatives R. Meyers, Paris, Anderson, Hargrove, Miller, H. Sommers, Winsley, Jones, Basich, J. Kohl, Belcher and Orr)

 

Read first time 02/07/92.  Studying longshore and harbor workers' insurance needs.


     AN ACT Relating to longshore and harbor workers' compensation act insurance; adding new sections to chapter 48.22 RCW; adding a new section to chapter 48.15 RCW; creating a new section; providing an expiration date; and declaring an emergency.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

 

     NEW SECTION.  Sec. 1.      The legislature finds and declares that the continued existence of a strong and healthy maritime industry in this state is threatened by the unavailability and excessive cost of workers' compensation coverage required by the United States longshoreman's and harbor worker's compensation act.  The legislature, therefore, acting under its authority to protect industry and employment in this state hereby establishes a commission to devise and implement both a near and long-term solution to this problem, for the purpose of maintaining employment for Washington workers and a vigorous maritime industry.

 

     NEW SECTION.  Sec. 2.  A new section is added to chapter 48.22 RCW to read as follows:

     (1) Before July 1, 1992, the commissioner shall adopt rules establishing a reasonable plan to insure that workers' compensation coverage as required by the United States longshoreman's and harbor worker's compensation act, 33 U.S.C. Secs. 901 through 950, and maritime employer's liability coverage incidental to the workers' compensation coverage is available to those unable to purchase it through the normal insurance market.  This plan shall require the participation of all authorized insurers writing primary and excess workers' compensation insurance or reinsurance and the Washington state industrial insurance fund as defined in RCW 51.08.175 which is authorized to participate in the plan and to make payments in support of the plan in accordance with this section.  Any underwriting losses incurred by the plan shall be shared by plan participants in accordance with the following ratios:  The state industrial insurance fund, fifty percent; authorized insurers writing United States longshoreman's and harbor workers' compensation insurance, forty-eight percent; and authorized insurers writing excess workers' compensation insurance or reinsurance, two percent.

     (2) The Washington state industrial insurance fund shall obtain or provide coverage for the plan created under subsection (1) of this section on an excess of loss basis that would cover plan losses exceeding the net earned and retained premiums written including investment income of the plan as negotiated between the state fund and the plan.  If such coverage is not provided by July 1, 1992, or if the commissioner determines that the premium to be charged for such coverage would result in unaffordable rates for coverage provided by the plan, the industrial insurance fund shall be relieved of responsibility for obtaining or providing excess of loss coverage.  In considering whether excess of loss coverage premiums would result in unaffordable rates for workers' compensation coverage provided by the plan, the commissioner shall compare the resulting plan rates to those provided under any similar pool or plan of other states in existence prior to July 1, 1992.

     (3) An applicant for plan insurance, a person insured under the plan, or an insurer, affected by a ruling or decision of the manager or committee designated to operate the plan may appeal to the commissioner for resolution of a dispute.  In adopting rules under this section, the commissioner shall require that the plan use generally accepted actuarial principles for rate making.

 

     NEW SECTION.  Sec. 3.  A new section is added to chapter 48.22 RCW to read as follows:

     Before April 15, 1992, the commissioner shall appoint a committee to provide assistance in drafting the rules required by section 2 of this act.  After July 1, 1992, the committee shall assist the commissioner in overseeing the operation of the plan.  The committee shall consist of at least eight members.  The commissioner and the director of the department of labor and industries shall be members.  The remaining members shall be selected to insure equal representation of authorized insurers writing primary or excess workers' compensation insurance, insurance producers, organized labor, and maritime employers.

 

     NEW SECTION.  Sec. 4.  A new section is added to chapter 48.22 RCW to read as follows:

     The committee appointed pursuant to section 3 of this act shall submit a report to the legislature no later than January 1, 1993, that examines all aspects of the United States longshoreman's and harbor worker's act, 22 U.S.C. Secs. 901 through 950, coverage, and incidental maritime liability coverage, as it applies to Washington workers and employers.  This study shall include but not be limited to the ability of private insurers to provide affordable coverage to eligible employers; whether the Washington state industrial insurance fund should participate in the plan adopted pursuant to section 2 of this act; whether there are methods that will satisfy the intent of chapter ..., Laws of 1992 (this act) that will not involve the Washington state industrial insurance fund; and the feasibility of requiring that this coverage be made directly available through the Washington state industrial insurance fund.The text of the following section has been vetoed by the Governor.  It is noted in bold italic.

 

   *

 

     NEW SECTION.  Sec. 5.  A new section is added to chapter 48.15 RCW to read as follows:

     An unauthorized insurer shall not solicit or provide federally required longshore and harbor workers' insurance on subjects located, resident, or to be performed within the state.

*Sec. 5 was vetoed, see message at end of chapter.

 

     NEW SECTION.  Sec. 6.      This act shall expire on July 1, 1993.

 

     NEW SECTION.  Sec. 7.      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 immediately.


     Passed the House March 12, 1992.

     Passed the Senate March 12, 1992.

Approved by the Governor April 2, 1992, with the exception of certain items which were vetoed.

     Filed in Office of Secretary of State April 2, 1992.


 

     Note: Governor's explanation of partial veto is as follows:

 

     "I am returning herewith, without my approval as to section 5, Substitute House Bill No. 2720 entitled:

 

"AN ACT Relating to longshore and harbor workers' compensation act insurance."

 

     The purpose of Substitute House Bill No. 2720 is to create a temporary insurance plan so that workers' compensation coverage, as required by the United States Longshoremen's and Harbor Worker's Compensation Act, is available in our state.

 

     Section 5 would close the Washington market to all but certain insurers.   If this section were to become law, it would further limit the availability of insurance, and it could limit the availability of reinsurance.  Section 5 could also lead to reciprocal actions by other states against Washington insurers and could violate federal statutes preempting state authority in this area.  Section 5 would be subject to likely court challenge and could place the temporary plan in jeopardy.

 

     While I am supportive of the need to retain the viability of our longshore and harbor workers' insurance, I believe this legislation is a poor solution to the potential loss of United States Longshoreman's and Harbor Worker's Compensation Act coverage.  The involvement of the state workers' compensation fund is inappropriately designed.

 

     However, I must sign the remainder of the bill into law since this is the only solution now certain to provide the necessary workers' compensation coverage to our maritime industry.  During the next year, a better solution needs to be found before the temporary plan expires.

 

     For these reasons, I have vetoed section 5 of Substitute House Bill No. 2720.

 

     With the exception of section 5, Substitute House Bill No. 2720 is approved."