SENATE BILL REPORT

HB 1729

As Reported By Senate Committee On:

Labor, Commerce & Financial Institutions, March 20, 2001

Title:  An act relating to licensing surplus line brokers.

Brief Description:  Licensing surplus line brokers.

Sponsors:  By Representatives Benson, Hatfield, McIntire, Cairnes, Roach, Simpson and Keiser.

Brief History:

Committee Activity:  Labor, Commerce & Financial Institutions:  3/19/01, 3/20/01 [DP].

SENATE COMMITTEE ON LABOR, COMMERCE & FINANCIAL INSTITUTIONS

Majority Report:  Do pass.

Signed by Senators Prentice, Chair; Gardner, Vice Chair; Deccio, Franklin, Rasmussen, Regala and Winsley.

Staff:  Dave Cheal (786‑7576)

Background:  A "surplus lines" insurer is an insurance company that does not have a certificate of authority issued by the Insurance Commissioner to transact business in the state, and may only operate under certain rules, specified by statute.  The insurance offered by such a broker must be of a type that is not available from other authorized insurers, and the broker must be licensed as a surplus lines broker.

Currently, an individual must be a resident of the state to be licensed as a surplus lines broker.

Summary of Bill:  The Insurance Commissioner is authorized to license a nonresident person as a surplus lines broker if he or she meets all other requirements of the law, and if his or her state or province of residence extends a similar privilege to Washington residents.  A nonresident surplus lines licensee is subject to the commissioner's supervision as though he or she were a resident of this state.

Appropriation:  None.

Fiscal Note:  Not requested.

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

Testimony For:  We should extend this privilege to nonresidents, in part so that Washington resident surplus line brokers can be licensed in other states.  Whether a broker is a resident or not does not affect the Insurance Commissioner's ability to supervise the broker's operation.

Testimony Against:  None.

Testified:  Kendel Lyman, Surplus Line Association of Washington (pro).