S-3971.1  _______________________________________________

                         SENATE BILL 6307

          _______________________________________________

State of Washington      54th Legislature     1996 Regular Session

By Senators Prentice, Winsley, Swecker, Franklin, Schow, Sheldon, Rasmussen, Bauer, Fraser, Oke and Fairley

Read first time 01/11/96.  Referred to Committee on Financial Institutions & Housing.

Assuring that unauthorized insurers have adequate surety before filing pleadings in certain legal proceedings.

    AN ACT Relating to unauthorized insurers; and adding a new section to chapter 48.05 RCW.

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

NEW SECTION. Sec. 1.  A new section is added to chapter 48.05 RCW to read as follows:

    (1) Before an unauthorized insurer files or causes to be filed a pleading in an action or proceeding instituted against it, the insurer must:

    (a) Procure a certificate of authority to engage in the business of insurance in this state; or

    (b) Deposit with the clerk of the court in which the action is pending cash or securities, or file with the clerk a bond with good and sufficient sureties, in an amount to be fixed by the court sufficient to secure the payment of a final judgment that may be rendered in such an action.  The court may in its discretion enter an order dispensing with the deposit or bond if the insurer makes a showing satisfactory to the court that:  (i) It maintains in a state of the United States funds or securities, in trust or otherwise, sufficient and available to satisfy any final judgment that may be entered in such an action or proceeding; and (ii) the insurer will pay a final judgment entered therein without requiring suit to be brought on the judgment in the state where those funds or securities are located.

    (2) The court in any action or proceeding in which service is made in the manner provided in RCW 48.05.200 through 48.05.215 or 48.15.150, in its discretion, may order a postponement if necessary to afford the defendant reasonable opportunity to comply with subsection (1) of this section, and to defend such an action.

    (3) Nothing in this section is to be construed to prevent an unauthorized insurer from filing a motion to quash or to set aside the service of process made in accordance with RCW 48.05.200 through 48.05.215, or 48.15.150 on the grounds that:

    (a) The unauthorized insurer has not done any of the acts under RCW 48.05.215; or

    (b) The person on whom service was made was not doing any of the acts under RCW 48.05.215.

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