AN ACT Relating to the
disclosure of material transactions of insurance companies, certified health
plans, health service contractors, and health maintenance organizations; adding
new sections to chapter 48.05 RCW; adding new sections to chapter 48.43 RCW;
adding new sections to chapter 48.44 RCW; adding new sections to chapter 48.46
RCW; and adding a new section to chapter 42.17 RCW.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec.
1. (1) Every insurer
domiciled in this state shall file a report with the commissioner disclosing
material acquisitions and dispositions of assets or material nonrenewals,
cancellations, or revisions of ceded reinsurance agreements unless these
acquisitions and dispositions of assets or material nonrenewals, cancellations,
or revisions of ceded reinsurance agreements have been submitted to the
commissioner for review, approval, or information purposes under other
provisions of this title or other requirements.
(2) The report required
in subsection (1) of this section is due within fifteen days after the end of
the calendar month in which any of the transactions occur.
(3) One complete copy
of the report, including any exhibits or other attachments filed as part of the
report, shall be filed with the:
(a) Commissioner; and
(b) National
association of insurance commissioners.
(4) All reports
obtained by or disclosed to the commissioner under this section and sections 2
through 6 of this act are exempt from public inspection and copying and are not
subject to subpoena. These reports shall not be made public by the
commissioner, the national association of insurance commissioners, or any other
person, except to insurance departments of other states, without the prior written
consent of the insurer to which it pertains unless the commissioner, after
giving the insurer that would be affected by disclosure notice and a hearing
under chapter 48.04 RCW, determines that the interest of policyholders,
shareholders, or the public will be served by the publication, in which event
the commissioner may publish all or any part of the report in the manner he or
she deems appropriate.
NEW SECTION. Sec.
2. No acquisitions or
dispositions of assets need be reported under section 1 of this act if the
acquisitions or dispositions are not material. For purposes of sections 1
through 6 of this act, a material acquisition, or the aggregate of any series
of related acquisitions during any thirty-day period; or disposition, or the
aggregate of any series of related dispositions during any thirty-day period is
an acquisition or disposition that is nonrecurring and not in the ordinary
course of business and involves more than five percent of the reporting
insurer's total assets as reported in its most recent statutory statement filed
with the commissioner.
NEW SECTION. Sec.
3. (1) Asset acquisitions
subject to sections 1 through 6 of this act include every purchase, lease,
exchange, merger, consolidation, succession, or other acquisition other than
the construction or development of real property by or for the reporting
insurer or the acquisition of materials for such a purpose.
(2) Asset dispositions
subject to sections 1 through 6 of this act include every sale, lease,
exchange, merger, consolidation, mortgage, hypothecation, abandonment,
destruction, other disposition, or assignment, whether the assignment is for
the benefit of creditors or otherwise.
NEW SECTION. Sec.
4. (1) The following
information is required to be disclosed in any report of a material acquisition
or disposition of assets:
(a) Date of the
transaction;
(b) Manner of
acquisition or disposition;
(c) Description of the
assets involved;
(d) Nature and amount
of the consideration given or received;
(e) Purpose of or
reason for the transaction;
(f) Manner by which the
amount of consideration was determined;
(g) Gain or loss
recognized or realized as a result of the transaction; and
(h) Names of the
persons from whom the assets were acquired or to whom they were disposed.
(2) Insurers are
required to report material acquisitions and dispositions on a nonconsolidated
basis unless the insurer is part of a consolidated group of insurers that
utilizes a pooling arrangement or one hundred percent reinsurance agreement
that affects the solvency and integrity of the insurer's reserves and such an
insurer ceded substantially all of its direct and assumed business to the
pool. An insurer has ceded substantially all of its direct and assumed
business to a pool if the insurer has less than one million dollars total
direct plus assumed written premiums during a calendar year that are not
subject to a pooling arrangement and the net income of the business not subject
to the pooling arrangement represents less than five percent of the insurer's
capital and surplus.
NEW SECTION. Sec.
5. (1) No nonrenewals,
cancellations, or revisions of ceded reinsurance agreements need be reported
under section 1 of this act if the nonrenewals, cancellations, or revisions are
not material. For purposes of sections 1 through 6 of this act, a material
nonrenewal, cancellation, or revision is one that affects:
(a) More than fifty
percent of a property and casualty insurer's total ceded written premium;
(b) More than fifty
percent of the property and casualty insurer's total ceded indemnity and loss
adjustment reserves;
(c) More than fifty
percent of a nonproperty and casualty insurer's total reserve credit taken for
business ceded, on an annualized basis, as indicated in the insurer's most
recent annual statement;
(d) More than ten
percent of an insurer's total cession when it is replaced by one or more
unauthorized reinsurers; or
(e) Previously
established collateral requirements, when they have been reduced or waived as
respects one or more unauthorized reinsurers representing collectively more
than ten percent of a total cession.
(2) However, a filing
is not required if:
(a) A property and
casualty insurer's total ceded written premium represents, on an annualized
basis, less than ten percent of its total written premium for direct and
assumed business; or
(b) A nonproperty and
casualty insurer's total reserve credit taken for business ceded represents, on
an annualized basis, less than ten percent of the statutory reserve requirement
prior to any cession.
NEW SECTION. Sec.
6. (1) The following is
required to be disclosed in any report of a material nonrenewal, cancellation,
or revision of ceded reinsurance agreements:
(a) The effective date
of the nonrenewal, cancellation, or revision;
(b) The description of
the transaction with an identification of the initiator;
(c) The purpose of or
reason for the transaction; and
(d) If applicable, the
identity of the replacement reinsurers.
(2) Insurers are
required to report all material nonrenewals, cancellations, or revisions of ceded
reinsurance agreements on a nonconsolidated basis unless the insurer is part of
a consolidated group of insurers that utilizes a pooling arrangement or one
hundred percent reinsurance agreement that affects the solvency and integrity
of the insurer's reserves and the insurer ceded substantially all of its direct
and assumed business to the pool. An insurer has ceded substantially all of
its direct and assumed business to a pool if the insurer has less than one
million dollars total direct plus assumed written premiums during a calendar
year that are not subject to a pooling arrangement and the net income of the
business not subject to the pooling arrangement represents less than five
percent of the insurer's capital and surplus.
NEW SECTION. Sec.
7. (1) Every certified
health plan domiciled in this state shall file a report with the commissioner
disclosing material acquisitions and dispositions of assets or material
nonrenewals, cancellations, or revisions of ceded reinsurance agreements unless
these acquisitions and dispositions of assets or material nonrenewals,
cancellations, or revisions of ceded reinsurance agreements have been submitted
to the commissioner for review, approval, or information purposes under other
provisions of this title or other requirements.
(2) The report required
in subsection (1) of this section is due within fifteen days after the end of
the calendar month in which any of the transactions occur.
(3) One complete copy
of the report, including any exhibits or other attachments filed as part of the
report, shall be filed with the:
(a) Commissioner; and
(b) National
association of insurance commissioners.
(4) All reports
obtained by or disclosed to the commissioner under this section and sections 8
through 12 of this act are exempt from public inspection and copying and shall
not be subject to subpoena. These reports shall not be made public by the
commissioner, the national association of insurance commissioners, or any other
person, except to insurance departments of other states, without the prior
written consent of the certified health plan to which it pertains unless the
commissioner, after giving the certified health plan that would be affected by
disclosure notice and a hearing under chapter 48.04 RCW, determines that the
interest of policyholders, subscribers, shareholders, or the public will be
served by the publication, in which event the commissioner may publish all or
any part of the report in the manner he or she deems appropriate.
NEW SECTION. Sec.
8. No acquisitions or
dispositions of assets need be reported pursuant to section 7 of this act if
the acquisitions or dispositions are not material. For purposes of sections 7 through
12 of this act, a material acquisition, or the aggregate of any series of
related acquisitions during any thirty-day period; or disposition, or the
aggregate of any series of related dispositions during any thirty-day period is
an acquisition or disposition that is nonrecurring and not in the ordinary
course of business and involves more than five percent of the reporting
certified health plan's total assets as reported in its most recent statutory
statement filed with the commissioner.
NEW SECTION. Sec.
9. (1) Asset acquisitions
subject to sections 7 through 12 of this act include every purchase, lease,
exchange, merger, consolidation, succession, or other acquisition other than
the construction or development of real property by or for the reporting
certified health plan or the acquisition of materials for such purpose.
(2) Asset dispositions
subject to sections 7 through 12 of this act include every sale, lease,
exchange, merger, consolidation, mortgage, hypothecation, abandonment,
destruction, other disposition, or assignment, whether for the benefit of
creditors or otherwise.
NEW SECTION. Sec.
10. (1) The following
information is required to be disclosed in any report of a material acquisition
or disposition of assets:
(a) Date of the
transaction;
(b) Manner of
acquisition or disposition;
(c) Description of the
assets involved;
(d) Nature and amount
of the consideration given or received;
(e) Purpose of or
reason for the transaction;
(f) Manner by which the
amount of consideration was determined;
(g) Gain or loss
recognized or realized as a result of the transaction; and
(h) Names of the
persons from whom the assets were acquired or to whom they were disposed.
(2) Certified health
plans are required to report material acquisitions and dispositions on a
nonconsolidated basis unless the certified health plan is part of a
consolidated group of insurers that utilizes a pooling arrangement or one
hundred percent reinsurance agreement that affects the solvency and integrity
of the certified health plan's reserves and such certified health plan ceded
substantially all of its direct and assumed business to the pool. A certified
health plan has ceded substantially all of its direct and assumed business to a
pool if the certified health plan has less than one million dollars total
direct plus assumed written premiums during a calendar year that are not
subject to a pooling arrangement and the net income of the business not subject
to the pooling arrangement represents less than five percent of the certified
health plan's net worth.
NEW SECTION. Sec.
11. (1) No nonrenewals,
cancellations, or revisions of ceded reinsurance agreements need be reported
under section 7 of this act if the nonrenewals, cancellations, or revisions are
not material. For purposes of sections 7 through 12 of this act, a material
nonrenewal, cancellation, or revision is one that affects:
(a) More than fifty
percent of a certified health plan's total reserve credit taken for business
ceded, on an annualized basis, as indicated in the certified health plan's most
recent annual statement;
(b) More than ten
percent of a certified health plan's total cession when it is replaced by one
or more unauthorized reinsurers; or
(c) Previously
established collateral requirements, when they have been reduced or waived as
respects one or more unauthorized reinsurers representing collectively more
than ten percent of a total cession.
(2) However, a filing
is not required if the certified health plan's total reserve credit taken for
business ceded represents, on an annualized basis, less than ten percent of the
statutory reserve requirement prior to any cession.
NEW SECTION. Sec.
12. (1) The following is
required to be disclosed in any report of a material nonrenewal, cancellation,
or revision of ceded reinsurance agreements:
(a) The effective date
of the nonrenewal, cancellation, or revision;
(b) The description of
the transaction with an identification of the initiator;
(c) The purpose of or
reason for the transaction; and
(d) If applicable, the
identity of the replacement reinsurers.
(2) Certified health
plans are required to report all material nonrenewals, cancellations, or
revisions of ceded reinsurance agreements on a nonconsolidated basis unless the
certified health plan is part of a consolidated group of insurers which
utilizes a pooling arrangement or one hundred percent reinsurance agreement that
affects the solvency and integrity of the certified health plan's reserves and
the certified health plan ceded substantially all of its direct and assumed
business to the pool. A certified health plan has ceded substantially all of
its direct and assumed business to a pool if the certified health plan has less
than one million dollars total direct plus assumed written premiums during a
calendar year that are not subject to a pooling arrangement and the net income
of the business not subject to the pooling arrangement represents less than
five percent of the certified health plan's net worth.
NEW SECTION. Sec.
13. (1) Every health care
service contractor domiciled in this state shall file a report with the
commissioner disclosing material acquisitions and dispositions of assets or
material nonrenewals, cancellations, or revisions of ceded reinsurance
agreements unless these acquisitions and dispositions of assets or material
nonrenewals, cancellations, or revisions of ceded reinsurance agreements have
been submitted to the commissioner for review, approval, or information
purposes under other provisions of this title or other requirements.
(2) The report required
in subsection (1) of this section is due within fifteen days after the end of
the calendar month in which any of the transactions occur.
(3) One complete copy
of the report, including any exhibits or other attachments filed as part of the
report, shall be filed with the:
(a) Commissioner; and
(b) National association
of insurance commissioners.
(4) All reports
obtained by or disclosed to the commissioner under this section and sections 14
through 18 of this act are exempt from public inspection and copying and shall
not be subject to subpoena. These reports shall not be made public by the
commissioner, the national association of insurance commissioners, or any other
person, except to insurance departments of other states, without the prior
written consent of the health care service contractor to which it pertains
unless the commissioner, after giving the health care service contractor that
would be affected by disclosure notice and a hearing under chapter 48.04 RCW,
determines that the interest of policyholders, subscribers, shareholders, or
the public will be served by the publication, in which event the commissioner
may publish all or any part of the report in the manner he or she deems
appropriate.
NEW SECTION. Sec.
14. No acquisitions or
dispositions of assets need be reported pursuant to section 13 of this act if
the acquisitions or dispositions are not material. For purposes of sections 13
through 18 of this act, a material acquisition, or the aggregate of any series
of related acquisitions during any thirty-day period; or disposition, or the
aggregate of any series of related dispositions during any thirty-day period is
an acquisition or disposition that is nonrecurring and not in the ordinary
course of business and involves more than five percent of the reporting health
care service contractor's total assets as reported in its most recent statutory
statement filed with the commissioner.
NEW SECTION. Sec.
15. (1) Asset acquisitions
subject to sections 13 through 18 of this act include every purchase, lease,
exchange, merger, consolidation, succession, or other acquisition other than
the construction or development of real property by or for the reporting health
care service contractor or the acquisition of materials for such purpose.
(2) Asset dispositions
subject to sections 13 through 18 of this act include every sale, lease,
exchange, merger, consolidation, mortgage, hypothecation, abandonment,
destruction, other disposition, or assignment, whether for the benefit of
creditors or otherwise.
NEW SECTION. Sec.
16. The following information
is required to be disclosed in any report of a material acquisition or
disposition of assets:
(1) Date of the
transaction;
(2) Manner of
acquisition or disposition;
(3) Description of the
assets involved;
(4) Nature and amount
of the consideration given or received;
(5) Purpose of or
reason for the transaction;
(6) Manner by which the
amount of consideration was determined;
(7) Gain or loss
recognized or realized as a result of the transaction; and
(8) Names of the
persons from whom the assets were acquired or to whom they were disposed.
NEW SECTION. Sec.
17. (1) No nonrenewals,
cancellations, or revisions of ceded reinsurance agreements need be reported
under section 13 of this act if the nonrenewals, cancellations, or revisions
are not material. For purposes of sections 13 through 18 of this act, a
material nonrenewal, cancellation, or revision is one that affects:
(a) More than fifty
percent of a health care service contractor's total reserve credit taken for
business ceded, on an annualized basis, as indicated in the health care service
contractor's most recent annual statement;
(b) More than ten
percent of a health care service contractor's total cession when it is replaced
by one or more unauthorized reinsurers; or
(c) Previously
established collateral requirements, when they have been reduced or waived as
respects one or more unauthorized reinsurers representing collectively more
than ten percent of a total cession.
(2) However, a filing
is not required if a health care service contractor's total reserve credit
taken for business ceded represents, on an annualized basis, less than ten percent
of the statutory reserve requirement prior to any cession.
NEW SECTION. Sec.
18. The following is required
to be disclosed in any report of a material nonrenewal, cancellation, or
revision of ceded reinsurance agreements:
(1) The effective date
of the nonrenewal, cancellation, or revision;
(2) The description of
the transaction with an identification of the initiator;
(3) The purpose of or
reason for the transaction; and
(4) If applicable, the
identity of the replacement reinsurers.
NEW SECTION. Sec.
19. (1) Every health
maintenance organization domiciled in this state shall file a report with the
commissioner disclosing material acquisitions and dispositions of assets or
material nonrenewals, cancellations, or revisions of ceded reinsurance
agreements unless these acquisitions and dispositions of assets or material
nonrenewals, cancellations, or revisions of ceded reinsurance agreements have
been submitted to the commissioner for review, approval, or information
purposes under other provisions of this title or other requirements.
(2) The report required
in subsection (1) of this section is due within fifteen days after the end of
the calendar month in which any of the transactions occur.
(3) One complete copy
of the report, including any exhibits or other attachments filed as part of the
report, shall be filed with the:
(a) Commissioner; and
(b) National
association of insurance commissioners.
(4) All reports
obtained by or disclosed to the commissioner under this section and sections 20
through 24 of this act are exempt from public inspection and copying and shall
not be subject to subpoena. These reports shall not be made public by the
commissioner, the national association of insurance commissioners, or any other
person, except to insurance departments of other states, without the prior
written consent of the health maintenance organization to which it pertains
unless the commissioner, after giving the health maintenance organization that
would be affected by disclosure notice and a hearing under chapter 48.04 RCW,
determines that the interest of policyholders, subscribers, shareholders, or
the public will be served by the publication, in which event the commissioner
may publish all or any part of the report in the manner he or she deems
appropriate.
NEW SECTION. Sec.
20. No acquisitions or
dispositions of assets need be reported pursuant to section 19 of this act if
the acquisitions or dispositions are not material. For purposes of sections 19
through 24 of this act, a material acquisition, or the aggregate of any series
of related acquisitions during any thirty-day period; or disposition, or the
aggregate of any series of related dispositions during any thirty-day period is
an acquisition or disposition that is nonrecurring and not in the ordinary
course of business and involves more than five percent of the reporting health
maintenance organization's total assets as reported in its most recent
statutory statement filed with the commissioner.
NEW SECTION. Sec.
21. (1) Asset acquisitions
subject to sections 19 through 24 of this act include every purchase, lease,
exchange, merger, consolidation, succession, or other acquisition other than
the construction or development of real property by or for the reporting health
maintenance organization or the acquisition of materials for such purpose.
(2) Asset dispositions
subject to sections 19 through 24 of this act include every sale, lease,
exchange, merger, consolidation, mortgage, hypothecation, abandonment,
destruction, other disposition, or assignment, whether for the benefit of
creditors or otherwise.
NEW SECTION. Sec.
22. The following information
is required to be disclosed in any report of a material acquisition or disposition
of assets:
(1) Date of the
transaction;
(2) Manner of
acquisition or disposition;
(3) Description of the
assets involved;
(4) Nature and amount
of the consideration given or received;
(5) Purpose of or
reason for the transaction;
(6) Manner by which the
amount of consideration was determined;
(7) Gain or loss
recognized or realized as a result of the transaction; and
(8) Names of the
persons from whom the assets were acquired or to whom they were disposed.
NEW SECTION. Sec.
23. (1) No nonrenewals,
cancellations, or revisions of ceded reinsurance agreements need be reported
under section 19 of this act if the nonrenewals, cancellations, or revisions
are not material. For purposes of sections 19 through 24 of this act, a
material nonrenewal, cancellation, or revision is one that affects:
(a) More than fifty
percent of a health maintenance organization's total reserve credit taken for
business ceded, on an annualized basis, as indicated in the health maintenance
organization's most recent annual statement;
(b) More than ten
percent of a health maintenance organization's total cession when it is
replaced by one or more unauthorized reinsurers; or
(c) Previously
established collateral requirements, when they have been reduced or waived as
respects one or more unauthorized reinsurers representing collectively more
than ten percent of a total cession.
(2) However, a filing
is not required if a health maintenance organization's total reserve credit
taken for business ceded represents, on an annualized basis, less than ten
percent of the statutory reserve requirement prior to any cession.
NEW SECTION. Sec.
24. The following is required
to be disclosed in any report of a material nonrenewal, cancellation, or
revision of ceded reinsurance agreements:
(1) The effective date
of the nonrenewal, cancellation or revision;
(2) The description of
the transaction with an identification of the initiator;
(3) The purpose of or
reason for the transaction; and
(4) If applicable, the
identity of the replacement reinsurers.
NEW SECTION. Sec.
25. A new section is added
to chapter 42.17 RCW to read as follows:
Information provided
under sections 1 through 24 of this act is exempt from disclosure under this
chapter.
NEW SECTION. Sec.
26. Sections 1 through 6 of
this act are each added to chapter 48.05 RCW.
NEW SECTION. Sec.
27. Sections 7 through 12 of
this act are each added to chapter 48.43 RCW.
NEW SECTION. Sec.
28. Sections 13 through 18 of
this act are each added to chapter 48.44 RCW.
NEW SECTION. Sec.
29. Sections 19 through 24 of
this act are each added to chapter 48.46 RCW.
