SENATE BILL REPORT

                           SHB 1855

  AS REPORTED BY COMMITTEE ON LABOR & COMMERCE, APRIL 2, 1993

Brief Description:  Enabling accreditation of the insurance commissioner.

SPONSORS: House Committee on Financial Institutions & Insurance (originally sponsored by Representatives Zellinsky, Kessler and R. Meyers; by request of Insurance Commissioner)

HOUSE COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE

HOUSE COMMITTEE ON APPROPRIATIONS

SENATE COMMITTEE ON LABOR & COMMERCE

Majority Report:  Do pass as amended. 

     Signed by Senators Moore, Chairman; Prentice, Vice Chairman; Fraser, McAuliffe, Pelz, Vognild, and Wojahn.

Minority Report:  Do not pass. 

     Signed by Senators Amondson, Barr, Newhouse, and Prince.

Staff:  Benson Porter (786‑7470)

Hearing Dates: March 22, 1993; April 2, 1993

BACKGROUND:

The National Association of Insurance Commissioners (NAIC) coordinates the insurance regulatory activities of the states.  In this role, the NAIC has established model statutes and regulations for adoption by each state.  Some of these models concern financial regulation standards for the supervision of insurance companies.  The NAIC will be reviewing each state's insurance statutes and regulations and accrediting those that meet these financial regulation standards.  Currently, 19 states have been accredited by the NAIC.

After January 1, 1994, states that have received NAIC accreditation will reject the financial solvency examinations of insurance companies conducted by non-accredited states.  Insurance companies chartered in non-accredited states may be refused authority to sell insurance in accredited states or may be subject to re-examination by the accredited state.

SUMMARY:

The Washington insurance code is amended to conform to the NAIC's recommended financial regulation standards and regulatory statutes. The amendments address the following areas:  insurance holding companies, insurance broker controlled property and casualty insurance companies, reinsurance intermediaries, managing general agents, insurance company examination procedures, insurer capital and surplus requirements, limitations upon individual insurance company exposure to individual risks, valuation of insurance company investments, receivership, liquidation and rehabilitation of insurance companies, insurance company liabilities and reserves, and regulation of risk retention and risk purchasing groups.

SUMMARY OF PROPOSED SENATE AMENDMENT:

The Washington Life and Disability Insurance Guaranty Association may be activated when an insurer is placed under an order of rehabilitation or conservation.  In addition, a technical correction is made.

Appropriation:  none

Revenue:  none

Fiscal Note:  requested

TESTIMONY FOR:

This bill will enable the Insurance Commissioner's office to become accredited by the NAIC.  This certification will benefit the consumers and insurers of this state.

TESTIMONY AGAINST:  None

TESTIFIED:  John Woodall, Insurance Commissioner's office (pro)