BP BHEAD INT S

AN ACT Relating to the simplification and improved clarity of property and casualty insurance policies; and adding new sections to chapter 48.18 RCW.

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

NEW SECTION. Sec. 1. (1) The purpose of this act is to establish minimum standards to make property and casualty insurance policies easier to read.

(2) This act is not intended to increase risk, impede flexibility, or stifle innovation in the development of policy forms or content.

NEW SECTION. Sec. 2. As used in sections 3 through 8 of this act, the following definitions apply:

(1) "Casualty insurance" does not include accident and health or disability insurance.

(2) "Policy" or "policy form" means any written contract or billing of property or casualty insurance delivered or issued for delivery in this state by or on behalf of any insurer licensed in this state.

NEW SECTION. Sec. 3. (1) Sections 2 through 8 of this act applies to all policies with effective dates on or after the implementation date established for these policies under section 4 of this act.

(2) No other statute of this state setting simplification standards for language or format applies to any policy.

(3) Sections 2 through 8 of this act does not apply to policies in manuscript form or to the following kinds of insurance;

(a) Ocean marine;

(b) Surety and financial institution bonds;

(d) Commercial aviation.

(4) Any non-English policy is in compliance with section 5 of this act if it was translated from an English-language policy that complies with section 5 of this act.

NEW SECTION. Sec. 4. (1)(a) In addition to any other requirements of law, the commissioner shall by rule specify the date or dates by which personal lines policies must comply with section 5 of this act. The date or dates, if any, established by the commissioner for compliance may not be less than eighteen months or more than thirty-six months from the effective date of the rule.

(b) As used in this section, "personal lines policies" means policies that are:

(i) Solely used to provide homeowners insurance, dwelling fire insurance on one to four family units, or individual fire insurance on dwelling contents; or

(ii) Principally used to provide primary insurance on private passenger nonfleet automobiles individually owned and used for personal or family needs.

(2) In addition to any other requirements of law, the commissioner may by rule specify which policies, other than personal lines policies, must comply with section 5 of this act. The date or dates, if any, established by the commissioner for compliance may not be less than forty-eight months from the effective date of this act or twenty-four months from the effective date of the rule establishing the dates, whichever is later.

NEW SECTION. Sec. 5. All property and casualty policies that, under section 4 of this act, must comply with this section shall be simplified, taking into consideration the following factors:

(1) Use of simple sentence structure and short sentences;

(2) Use of commonly understood words;

(3) Avoidance of technical legal terms wherever possible;

(4) Minimal reference to other sections or provisions of the policy;

(5) Organization of text; and

(6) Legibility.

NEW SECTION. Sec. 6. An insurer may comply with sections 4 and 5 of this act for not more than twelve months following the implementation date established by the commissioner by providing to the policyholder an outline of coverage or a brochure instead of a simplified policy. This outline or brochure must comply with section 5 of this act.

NEW SECTION. Sec. 7. (1) The commissioner may adopt rules implementing sections 4 and 5 of this act.

(2) The commissioner has sole authority to enforce sections 1 through 8 of this act or seek remedies for violations.

NEW SECTION. Sec. 8. (1) The requirements of any other laws that specify the language or content of any policy may be met by providing a policy that complies with section 5 of this act. However, it must provide protection which, considered as a whole, is not less favorable to the insured than is required by those other laws.

(2) Policies issued to comply with section 5 of this act need not be countersigned by a licensed resident agent.

NEW SECTION. Sec. 9. Sections 1 through 8 of this act may be known and cited as the property and casualty insurance policy simplification act.

NEW SECTION. Sec. 10. Sections 1 through 9 of this act are each added to chapter 48.18 RCW.