SENATE BILL REPORT

                   SB 5428

                    As of January 30, 1995

Title:  An act relating to declinations or terminations of automobile insurance applications or policies.

Brief Description:  Restricting declinations or terminations for automobile insurance.

Sponsors:  Senators Fraser, Pelz, Fairley, Prentice and Kohl; by request of Insurance Commissioner.

Brief History:

Committee Activity:  Financial Institutions & Housing:  2/3/95.

SENATE COMMITTEE ON FINANCIAL INSTITUTIONS & HOUSING

Staff:  Erika Lim (786-7488)

Background:  Automobile insurance is mandatory and it must therefore be accessible.  An insurer may decline or terminate a policy during the application process, during the policy coverage period, or at the time for renewal. 

Summary of Bill:  When an insurer declines to issue a policy, it must state, in writing, its reasons for doing so.  Declination includes offering coverage with a company other than the one requested or offering coverage or rates substantially less favorable than requested.  An insurer is prohibited from declining or terminating a policy for the following reasons:  age, gender, marital status or sexual orientation; previous coverage through a residual market insurance mechanism; previous declination or termination; lack of prior insurance or concurrent insurance; credit history; any number of non-moving violations or a single traffic infraction; employment history; a single traffic accident within the previous three years; age of the vehicle; or number of years at a certain address. 

Appropriation:  None.

Fiscal Note:  Not requested.

Effective Date:  Ninety days after adjournment of session in which bill is passed.