_______________________________________________
SUBSTITUTE
HOUSE BILL 2720
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AS
RECOMMENDED BY THE CONFERENCE COMMITTEE
Passed
Legislature - 1992 Regular Session
State of Washington 52nd
Legislature 1992 Regular Session
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.
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."
