HOUSE BILL ANALYSIS

                 SSB 6565

Title:  An act relating to insurance payments for insureds who are victims of domestic abuse.

Brief Description:  Regulating insurance payments of insureds who are victims of domestic abuse.

Sponsors:  Senate Committee on Financial Institutions, Insurance & Housing (originally sponsored by Senators Hale, Prentice, Winsley, Franklin, Long, Roach, Haugen, Stevens, Spanel, Wood, Rasmussen, T. Sheldon, Loveland, Benton, Johnson, Thibaudeau, McDonald, B. Sheldon, Snyder, Anderson, Oke and Goings).

HOUSE COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE

Meeting Date:  February 23, 1998

Bill Analysis Prepared by:  Charlie Gavigan, Counsel (786-7340)

Background:  Insurance is a contract between the insurance company and the insured person or persons.  The insurance company promises to pay the insured or his or her beneficiary if a certain event occurs, typically an accident or chance occurrence.  The insured pays premiums for this benefit.  Insurance seeks to distribute the risk of economic loss on as many persons as feasible who are subject to the same kind of risk. Insurance companies cannot discriminate against an applicant or customer on the basis of gender, marital status, or the presence of a sensory, mental, or physical handicap.

Generally, the insurance contract determines under what circumstances claims are paid. Sometimes certain conditions or exclusions that deny coverage may not be allowed by statute or the courts.  Intentional acts by an insured person typically are not covered; some policies allow some benefits be paid to innocent co-insureds, while other policies deny any benefits to all persons insured under the policy.  In 1997, the insurance commissioner issued a technical advisory indicating that all innocent co-insureds had to be protected under fire policies.

Summary of Bill:   An insurance company cannot deny or refuse an application, refuse to issue or renew a policy, charge a higher rate, or cancel a policy on the basis that the person is, was, or may be the victim of domestic abuse.  Insurance forms for fire policies that are now filed or will be filed with the insurance commissioner after the effective date of this act may exclude coverage for the intentional or fraudulent acts of any insured person, except for an otherwise-covered loss caused by an act of domestic abuse against an innocent co-insured by another insured if the innocent co-insured files a police report and cooperates with the investigation.  Payment of benefits under these circumstances may be limited to the person's insurable interest less payments made to a mortgagee.

Domestic abuse is defined as the threat of or actual physical harm or assault.  It also includes sexual assault of one family or household member by another, stalking as defined in the criminal code of one family or household member by another family or household member, or intentionally or recklessly damaging property so as to intimidate or attempt to control the behavior of another household member.

  Appropriation:  None.

Fiscal Note:  Requested.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Rulemaking Authority:  No specific authority.