SHB 3006 - H AMD 988

By Representative L. Thomas

Strike everything after the enacting clause and insert the following:

ANEW SECTION. Sec. 1. (1)(a) The legislature finds that wrap-up insurance policies are used in the private sector and are allowed in several states for public projects. These policies reduce the cost of the project by having one insurance policy covering all the contractors working on a project, rather than having a separate policy for every separate contractor. This is a more effective way of addressing financial risk in a large project. Currently, wrap-up insurance policies on public projects are not allowed; however, the legislature finds that this prohibition should be reconsidered because wrap-up policies could save money and be more efficient on large public construction projects. The legislature finds that there are unresolved issues to be further addressed before legislation authorizing wrap-up insurance policies for public projects should be enacted. The legislature intends to study this issue during the 1998 interim and consider recommendations for legislation in the 1999 session.

(b) The legislature also finds that the wrap-up insurance policy described in this section shall not apply to industrial insurance under title 51 RCW. The department of labor and industries can provide some joint coverages under current industrial insurance law, and keeping industrial insurance separate is necessary to maintain the integrity of that system.

(2) The house financial institutions and insurance committee and the senate financial institutions, insurance and housing committee shall jointly study wrap-up insurance policies and recommend whether they should be authorized for public construction projects in Washington state. The chairs of the two committees shall oversee the study and, with the other legislators involved in the study group, make recommendations. If the recommendations include authorizing wrap-up insurance policies for public projects, the study group shall develop a bill for consideration in the 1999 legislative session.

(3) The two committee chairs shall organize a study group that includes the voluntary participation of the insurance industry, contractors, state agencies, particularly the department of general administration and the office of the insurance commissioner, the governor=s office, and local governments likely to have large public construction projects. The ranking minority members of each committee shall also participate in the study group. In addition, four other legislators, one from each of the major caucuses in the legislature, shall also be part of the study group. The speaker of the house and the president of the senate shall formally approve and appoint the legislative members to the study group.

(4) The house office of program research and senate committee services shall staff the study group.

(5) The recommendations of the study group are due by December 31, 1998. This section expires January 1, 1999.@

Correct the title.

EFFECT: Replaces the bill with a study. The chairs of the two committees in the legislature dealing with insurance coordinate a study group including the insurance industry, contractors, state agencies, local governments, the governor=s office, and legislators. There are 8 legislators in the study group, 2 from each caucus in each body. The study group is to recommend whether wrap-up insurance policies should be authorized for public projects; if the answer is yes, the study group is to draft a bill for consideration in the 1999 Session. The study group expires January 1, 1999.