AN ACT
Relating to extending the pollution liability insurance agency; amending RCW
70.148.050 and 70.148.900; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE
OF THE STATE OF WASHINGTON:
Sec.
1. RCW
70.148.050 and 1990 c 64 s 6 are each amended to read as follows:
The
director has the following powers and duties:
(1) To
design and from time to time revise a reinsurance contract providing coverage
to an insurer meeting the requirements of this chapter. Before initially
entering into a reinsurance contract, the director shall provide a report to
the chairs of the senate ways and means, senate financial institutions, house
of representatives revenue, and house of representatives financial institutions
committees and shall include an actuarial report describing the various
reinsurance methods considered by the director and describing each method's
costs. In designing the reinsurance contract the director shall consider
common insurance industry reinsurance contract provisions and shall design the
contract in accordance with the following guidelines:
(a)
The contract shall provide coverage to the insurer for the liability risks of
owners and operators of underground storage tanks for third party bodily injury
and property damage and corrective action that are underwritten by the insurer.
(b) In
the event of an insolvency of the insurer, the reinsurance contract shall
provide reinsurance payable directly to the insurer or to its liquidator,
receiver, or successor on the basis of the liability of the insurer in
accordance with the reinsurance contract. In no event may the program be
liable for or provide coverage for that portion of any covered loss that is the
responsibility of the insurer whether or not the insurer is able to fulfill the
responsibility.
(c)
The total limit of liability for reinsurance coverage shall not exceed one
million dollars per occurrence and two million dollars annual aggregate for
each policy underwritten by the insurer less the ultimate net loss retained by
the insurer as defined and provided for in the reinsurance contract.
(d)
Disputes between the insurer and the insurance program shall be settled through
arbitration.
(2) To
design and implement a structure of periodic premiums due the director from the
insurer that takes full advantage of revenue collections and projected revenue
collections to ensure affordable premiums to the insured consistent with sound
actuarial principles.
(3) To
periodically review premium rates for reinsurance to determine whether revenue
appropriations supporting the program can be reduced without substantially
increasing the insured's premium costs.
(4) To
solicit bids from insurers and select an insurer to provide pollution liability
insurance to owners and operators of underground storage tanks for third party
bodily injury and property damage and corrective action.
(5) To
monitor the activities of the insurer to ensure compliance with this chapter
and protect the program from excessive loss exposure resulting from claims
mismanagement by the insurer.
(6) To
monitor the success of the program and periodically make such reports and
recommendations to the legislature as the director deems appropriate, and to
annually publish a financial report on the pollution liability insurance
program trust account showing, among other things, administrative and other
expenses paid from the fund.
(7) To
annually report the financial and loss experience of the insurer as to policies
issued under the program and the financial and loss experience of the program
to the legislature.
(8) To
evaluate the effects of the program upon the private market for liability
insurance for owners and operators of underground storage tanks and make
recommendations to the legislature on the necessity for continuing the program
to ensure availability of such coverage.
(9) To
enter into contracts with public and private agencies to assist the director in
his or her duties to design, revise, monitor, and evaluate the program and to
provide technical or professional assistance to the director.
(10)
To examine the affairs, transactions, accounts, records, documents, and assets
of insurers as the director deems advisable.
Sec.
2. RCW
70.148.900 and 1989 c 383 s 13 are each amended to read as follows:
This
chapter shall expire June 1, ((1995)) 2001.
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 immediately.
