CERTIFICATION OF ENROLLMENT

 

                        SENATE BILL 5809

 

 

 

 

                        55th Legislature

                      1997 Regular Session

Passed by the Senate March 13, 1997

  YEAS 49   NAYS 0

 

 

 

President of the Senate

 

Passed by the House April 8, 1997

  YEAS 98   NAYS 0

             CERTIFICATE

 

I, Mike O=Connell, Secretary of the Senate of the State of Washington, do hereby certify that the attached is  SENATE BILL 5809 as passed by the Senate and the House of Representatives on the dates hereon set forth.

 

 

 

Speaker of the

      House of Representatives

                            Secretary

 

 

Approved Place Style On Codes above, and Style Off Codes below. 

                                FILED

          

 

 

Governor of the State of Washington

                   Secretary of State

                  State of Washington


          _______________________________________________

 

                         SENATE BILL 5809

          _______________________________________________

 

             Passed Legislature - 1997 Regular Session

 

State of Washington      55th Legislature     1997 Regular Session

 

By Senators Fraser, Hale, Winsley and Prentice

 

Read first time 02/13/97.  Referred to Committee on Financial Institutions, Insurance & Housing.

Requiring unauthorized insurers to be financially sound.


    AN ACT Relating to the financial condition of unauthorized insurers; amending RCW 48.15.090; and providing an effective date.

 

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

 

    Sec. 1.  RCW 48.15.090 and 1994 c 86 s 2 are each amended to read as follows:

    (1) A surplus line broker shall not knowingly place surplus line insurance with insurers unsound financially.  The surplus line broker shall ascertain the financial condition of the unauthorized insurer, and maintain written evidence thereof, before placing insurance therewith.  The surplus line broker shall not so insure with:

    (a) Any foreign insurer having less than six million dollars of capital and surplus or substantially equivalent capital funds, of which not less than one million five hundred thousand dollars is capital; or

    (b) Any alien insurer having less than six million dollars of capital and surplus or substantially equivalent capital funds.  By January 1, 1992, this requirement shall be increased to twelve million five hundred thousand dollars.  By January 1, 1993, this requirement shall be further increased to fifteen million dollars.

    Such alien insurers must have in force in the United States an irrevocable trust ((account)) fund, in a qualified United States financial institution, on behalf of United States policyholders of not less than ((two)) five million ((five)) four hundred thousand dollars and consisting of cash, securities, letters of credit, or of investments of substantially the same character and quality as those which are eligible investments for the capital and statutory reserves of admitted insurers authorized to write like kinds of insurance in this state.

    There must be on file with the commissioner a copy of the trust, certified by the trustee, evidencing a subsisting trust fund deposit having an expiration date which at no time shall be less than five years after the date of creation of the trust.  Such trust fund shall be included in the calculation of the insurer's capital and surplus or its equivalents; or

    (c) Any group including incorporated and individual insurers maintaining a trust fund of less than fifty million dollars as security to the full amount thereof for all policyholders in the United States of each member of the group, and such trust shall likewise comply with the terms and conditions established in (b) of this subsection for an alien insurer; or

    (d) Any insurance exchange created by the laws of an individual state, maintaining capital and surplus, or substantially equivalent capital funds of less than fifty million dollars in the aggregate.  For insurance exchanges which maintain funds for the protection of all insurance exchange policyholders, each individual syndicate shall maintain minimum capital and surplus, or the substantial equivalent thereof, of not less than six million dollars.  In the event the insurance exchange does not maintain funds for the protection of all insurance exchange policyholders, each individual syndicate shall meet the minimum capital and surplus requirements of (a) of this subsection.

    (2) The commissioner may, by rule:

    (a) Increase the financial requirements under subsection (1) of this section by not more than one million dollars in any twelve-month period, but in no case may the requirements exceed fifteen million dollars; or

    (b) Prescribe the terms under which the foregoing financial requirements may be waived in circumstances where insurance cannot be otherwise procured on risks located in this state.

    (3) For any violation of this section the surplus line broker may be fined not less than one hundred dollars or more than five thousand dollars, and in addition to or in lieu thereof the surplus line broker's license may be revoked, suspended, or nonrenewed.

 

    NEW SECTION.  Sec. 2.  This act takes effect June 1, 1998.

 


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