BP BHEAD INT S [atlas:bill]

AN ACT Relating to automobile clubs; adding a new chapter to Title 48 RCW; and prescribing penalties.

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

NEW SECTION. Sec. 1. This chapter may be known and cited as the automobile club services act.

NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Automobile club" means any person who in consideration of dues, assessments, or periodic payments of money, promises its members or subscribers to assist them in matters relating to travel and the operation, use, and maintenance of a motor vehicle and the supplying of services that may include such services as community traffic safety service, travel and touring service, theft or reward service, map service, towing service, emergency road service, bail bond service, legal fee reimbursement service in the defense of traffic offenses, and the participation in an accident and sickness or death insurance benefit program.

(2) "Person" means any person, firm, partnership, corporation, or association that conducts an automobile club service business within the state.

(3) "Commissioner" means the insurance commissioner.

(4) "Club agent" means any person other than the automobile club itself, who acts or aids in any manner in the solicitation, delivery, or negotiation of any service contract or of the renewal or continuance of that service contract. However, any person performing only work of a clerical nature in the office of the automobile club is not a club agent.

(5) "Service contract" means any agreement whereby an automobile club, for a consideration, promises to render, furnish, or procure specified services or promises to reimburse club members for those services.

NEW SECTION. Sec. 3. Automobile clubs furnishing bail bond service and accident and sickness or death insurance benefits to its members shall purchase such insurance from a company licensed and authorized to sell such coverages in the state.

NEW SECTION. Sec. 4. An automobile club that offers its members any of the services referred to in section 2 of this act shall not render any automobile club service prior to being licensed by the commissioner. The annual license fee shall be determined annually by the commissioner.

NEW SECTION. Sec. 5. An automobile club licensed by the commissioner shall file a statement appointing the commissioner its agent for the service of process.

NEW SECTION. Sec. 6. An automobile club licensed under this chapter shall file a bond in the amount of one hundred thousand dollars with the state treasurer.

NEW SECTION. Sec. 7. An automobile club shall, with its application for original license, and annually before April 1st, file with the commissioner a true statement of its financial condition, transactions, and its affairs as of the preceding December 31st. The statement shall contain such information as required by the commissioner, and shall be verified by the oaths of at least two of the automobile club's principal officers and the statement of financial condition shall be certified by a certified public accountant within the six previous six months, as presenting fairly, in accordance with generally accepted accounting principles, the financial position of the automobile club. The commissioner may suspend or revoke the license of any automobile club failing to file its annual statement when due or during any extension of time that the commissioner for good cause may grant.

NEW SECTION. Sec. 8. A license may be refused, or a license duly issued may be suspended or revoked, or the renewal thereof refused by the commissioner if, after notice and hearings the commissioner finds that the applicant for, or holder of, the license:

(1) Has violated any provision of this chapter;

(2) Is in such a financial condition that its further transaction of automobile club service in the state would be hazardous to its members and the automobile club service-buying public;

(3) Is insolvent;

(4) Has refused or refuses to remove or discharge, or terminate its relationship with a director or officer who has been convicted of any crime involving fraud or dishonesty;

(5) Customarily, or in the regular course of business, compels claimants under its service contract either to accept less than the amount due them or fewer services or compels them to bring suit in order to secure full payment of the amount or all of the services due;

(6) Conducts its business outside this state in a manner that it unjustly discriminates against or prejudices the interests of the people of this state;

(7) Is affiliated with and is under the same general management or interlocking directorate or ownership as another automobile club that transacts business in this state but does not have a license issued under this chapter;

(8) Has exceeded, or exceeds, its charter powers;

(9) Has refused, or refuses, to be examined, or if its directors, managing officers, employees, or representatives refuse to submit to examination by the commissioner when required by the commissioner, or refuse to perform any legal obligation relative to such examination;

(10) Maintains, through its employees, a policy of misrepresenting to the public its service contracts; or

(11) Fails to issue service contracts to its members.

NEW SECTION. Sec. 9. A service contract shall not be executed, issued, or delivered in this state until the contract has been filed with the commissioner. The service contract may be in the form of a written agreement between the automobile club and the member or it may consist of a completed application, a membership card, and a written description of services to be rendered by the automobile club. A service contract shall not be executed, issued, or delivered in this state unless it contains the following:

(1) The exact corporate or other name of the club;

(2) The location of its home office and its usual place of business in the state, if any, giving street number and city;

(3) A provision that the contract may be canceled at any time by given written notice thereof by either the club or the holder, and that the holder is, if the dues or membership fee has been paid, entitled to a refund of the unused portion of the consideration paid for such contract, calculated on a pro rata basis over the period of the contract, without any deductions, except that the automobile club may make a reasonable minimum charge;

(4) A provision plainly specifying the services promised, that the holder is not required to pay any sum, in addition to the amount specified in the contract for any services specified, the territory wherein such services are to be rendered, the effective date of the contract, and the first renewal date; and

(5) A statement on the first page of the service contract in not less than fourteen-point type stating: "This is not an automobile liability insurance contract."

NEW SECTION. Sec. 10. Every automobile club licensed by the commissioner shall, within thirty days of the date of employment of a club agent to sell memberships in the automobile club to the public, file with the commissioner a notice of such employment. This notice shall include an application completed by the club agent and verified by him or her and shall contain the information required by the commissioner, and also contain proof satisfactory to the commissioner that such applicant is of good reputation and that he or she has received training from the club or is otherwise qualified in the field of automobile club service contracts. Upon termination of any club agent's employment by an automobile club, the automobile club shall within thirty days thereafter notify the commissioner of such termination. Notifications and applications shall be upon such forms as the commissioner may prescribe. The registration fee for club agents shall be determined annually by the commissioner.

NEW SECTION. Sec. 11. The commissioner may suspend, revoke, or refuse to renew any club agent's registration, if it is found that the club agent:

(1) Has violated any of the provisions of this chapter;

(2) Has misappropriated or converted to private use, or has illegally withheld, moneys required to be held in a fiduciary capacity;

(3) Has materially misrepresented the terms or effects of any contract or has engaged in any fraudulent transaction;

(4) Has shown himself or herself to be incompetent, untrustworthy, or a source of injury and loss to the automobile club service-buying public; or

(5) Has been convicted of a crime involving fraud or dishonesty.

NEW SECTION. Sec. 12. Sections 1 through 11 of this act constitute a new chapter in Title 48 RCW.