Z-1379.2  _______________________________________________

 

                         SENATE BILL 6527

          _______________________________________________

 

State of Washington   57th Legislature        2002 Regular Session

 

By Senators Keiser, Winsley, Deccio, Gardner and Rasmussen; by request of Insurance Commissioner

 

Read first time 01/21/2002.  Referred to Committee on Labor, Commerce & Financial Institutions.

Applying for a license or solicitation permit from the insurance commissioner.


    AN ACT Relating to the process of applying for a license or solicitation permit from the insurance commissioner; amending RCW 48.06.040, 48.17.090, 48.15.070, 48.56.030, and 48.102.015; and declaring an emergency.

 

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

 

    Sec. 1.  RCW 48.06.040 and 1967 c 150 s 6 are each amended to read as follows:

    To apply for a solicitation permit the person shall:

    (1) File with the commissioner a request ((therefor)) showing((,)):

    (a) Name, type, and purpose of insurer, corporation, or syndicate proposed to be formed;

    (b) Names, addresses, fingerprints for submission to the Washington state patrol, the federal bureau of investigation, and any governmental agency or entity authorized to receive this information for a state and national criminal history background check, and business records of each person associated or to be associated in the formation of the proposed insurer, corporation, or syndicate;

    (c) Full disclosure of the terms of all understandings and agreements existing or proposed among persons so associated relative to the proposed insurer, corporation, or syndicate, or the formation thereof;

    (d) The plan according to which solicitations are to be made; and

    (e) ((such)) Additional information as the commissioner may reasonably require.

    (2) File with the commissioner((,)):

    (a) Original and copies in triplicate of proposed articles of incorporation, or syndicate agreement; or, if the proposed insurer is a reciprocal, original and duplicate of the proposed subscribers' agreement and attorney in fact agreement;

    (b) Original and duplicate copy of any proposed bylaws;

    (c) Copy of any security proposed to be issued and copy of application or subscription agreement ((therefor)) for that security;

    (d) Copy of any insurance contract proposed to be offered and copy of application ((therefor)) for that contract;

    (e) Copy of any prospectus, advertising, or literature proposed to be used; and

    (f) Copy of proposed form of any escrow agreement required.

    (3) Deposit with the commissioner the fees required by law to be paid for the application including fees associated with the state and national criminal history background check, for filing of the articles of incorporation of an insurer, for filing the subscribers' agreement and attorney in fact agreement if the proposed insurer is a reciprocal, for the solicitation permit, if granted, and for filing articles of incorporation with the secretary of state.

 

    Sec. 2.  RCW 48.17.090 and 2001 c 56 s 1 are each amended to read as follows:

    (1) Application for ((any such)) a license to be an agent, broker, solicitor, or adjuster shall be made to the commissioner upon forms ((as prescribed and)) furnished by the commissioner.  As a part of or in connection with any such application, the applicant shall furnish information concerning his or her identity, including fingerprints for submission to the Washington state patrol, the federal bureau of investigation, and any governmental agency or entity authorized to receive this information for a state and national criminal history background check, personal history, experience, business record, purposes, and other pertinent facts, as the commissioner may reasonably require.

    (2) Persons resident in the United States but not in Washington may apply for such a license on a form prepared by the national association of insurance commissioners or others, if those forms are approved by the commissioner by rule.  An applicant shall also furnish any other information required to be submitted but not provided for in that form.

    (3) Any person willfully misrepresenting any fact required to be disclosed in any such application shall be liable to penalties as provided by this code.

    (4) If in the process of verifying fingerprints under subsection (1) of this section, business records, or other information the commissioner's office incurs fees or charges from another governmental agency or from a business firm, the amount of such fees or charges shall be paid to the commissioner's office by the applicant ((and shall be considered the recovery of a previous expenditure)).

 

    Sec. 3.  RCW 48.15.070 and 1994 c 131 s 3 are each amended to read as follows:

    Any individual while a resident of this state, or any firm or any corporation that has in its employ a qualified individual who is a resident of this state and who is authorized to exercise the powers of the firm or corporation, deemed by the commissioner to be competent and trustworthy, and while maintaining an office at a designated location in this state, may be licensed as a surplus line broker in accordance with this section.

    (1) Application to the commissioner for the license shall be made on forms furnished by the commissioner.  As part of, or in connection with, this application, the applicant shall furnish information concerning his or her identity, including fingerprints for submission to the Washington state patrol, the federal bureau of investigation, and any governmental agency or entity authorized to receive this information for a state and national criminal history background check; personal history; experience; business records; purposes; and other pertinent information, as the commissioner may reasonably require.

    (2) The license shall expire if not timely renewed.  Surplus line brokers licenses shall be valid for the time period established by the ((commission)) commissioner unless suspended or revoked at an earlier date.

    (3) Prior to issuance of license the applicant shall file with the commissioner a bond in favor of the state of Washington in the penal sum of twenty thousand dollars, with authorized corporate sureties approved by the commissioner, conditioned that he or she will conduct business under the license in accordance with the provisions of this chapter and that he or she will promptly remit the taxes provided by RCW 48.15.120.  The licensee shall maintain such bond in force for as long as the license remains in effect.

    (4) Every applicant for a surplus line broker's license or for the renewal of a surplus line broker's license shall file with the application or request for renewal a bond in favor of the people of the state of Washington, executed by an authorized  corporate surety approved by the commissioner, in the amount of one hundred thousand dollars and shall be the bonding requirement for new licensees.  The licensee shall maintain such bond in force while so licensed.  The bond may be continuous in form, and total aggregate liability on the bond may be limited to the amount stated in the bond.  The bond shall be contingent on the accounting by the surplus line broker to any person requesting such broker to obtain insurance, for moneys or premiums collected in connection therewith.  A bond issued in accordance with RCW 48.17.250 or with this subsection will satisfy the requirements of both RCW 48.17.250 and this subsection if the limit of liability is not less than the greater of the requirement of RCW 48.17.250 or the requirement of this subsection.

    (5) Any bond issued pursuant to subsection (3) or (4) of this section shall remain in force until the surety is released from liability by the commissioner, or until the bond is canceled by the surety.  Without prejudice to any liability accrued prior to such cancellation, the surety may cancel the bond upon thirty days' advance notice in writing filed with the commissioner.

    (6) If in the process of verifying fingerprints under subsection (1) of this section, business records, or other information the commissioner's office incurs fees or charges from another governmental agency or from a business firm, the amount of the fees or charges shall be paid to the commissioner's office by the applicant.

    (7) For the purposes of this section, a "qualified individual" is a natural person who has met all the requirements that must be met by an individual surplus line broker.

 

    Sec. 4.  RCW 48.56.030 and 1969 ex.s. c 190 s 3 are each amended to read as follows:

    (1) No person shall engage in the business of financing insurance premiums in the state without first having obtained a license as a premium finance company from the commissioner.  Any person who shall engage in the business of financing insurance premiums in the state without obtaining a license as provided hereunder shall, upon conviction, be guilty of a misdemeanor and shall be subject to the penalties provided in this chapter.

    (2)(a) Application to the commissioner for the license shall be made on forms furnished by the commissioner.  As part of, or in connection with, this application, the applicant and, at the commissioner's discretion, any or all stockholders, directors, partners, officers, and employees of the business shall furnish information concerning his or her identity, including fingerprints for submission to the Washington state patrol, the federal bureau of investigation, and any governmental agency or entity authorized to receive this information for a state and national criminal history background check; personal history; experience; business records; purposes; and other pertinent information, as the commissioner may reasonably require.

    (b) The annual license fee shall be one hundred dollars.  Licenses may be renewed from year to year as of the first day of May of each year upon payment of the fee of one hundred dollars.  The fee for ((said)) the license shall be paid to the insurance commissioner.

    (3) The person to whom the license or the renewal ((thereof)) may be issued shall file sworn answers, subject to the penalties of perjury, to such interrogatories as the commissioner may require.  The commissioner shall have authority, at any time, to require the applicant ((fully)) to disclose fully the identity of all stockholders, directors, partners, officers, and employees and ((he)) may, in his or her discretion, refuse to issue or renew a license in the name of any firm, partnership, or corporation if he ((is not satisfied)) or she finds that any officer, employee, stockholder, or partner ((thereof)) who may materially influence the applicant's conduct ((meets)) does not meet the standards of this chapter.

    (4) This section shall not apply to any savings and loan association, bank, trust company, ((small loan company,)) consumer loan company, industrial loan company or credit union authorized to do business in this state but RCW 48.56.080 through 48.56.130 and any rules ((promulgated)) adopted by the commissioner pertaining to such sections shall be applicable to such organizations, if otherwise eligible, under all premium finance transactions wherein an insurance policy, other than a life or disability insurance policy, or any rights thereunder is made the security or collateral for the repayment of the debt, however, neither this section nor the provisions of this chapter shall be applicable to the inclusion of insurance in a retail installment transaction or to insurance purchased in connection with a real estate transaction, mortgage, deed of trust, or other security instrument or an insurance company authorized to do business in this state unless the insurance company elects to become a licensee.

    (5) If in the process of verifying fingerprints under subsection (2) of this section, business records, or other information the commissioner's office incurs fees or charges from another governmental agency or from a business firm, the amount of the fees or charges shall be paid to the commissioner's office by the applicant.

 

    Sec. 5.  RCW 48.102.015 and 1995 c 161 s 3 are each amended to read as follows:

    (1) The commissioner may suspend, revoke, or refuse to issue or renew the license of any viatical settlement broker or viatical settlement provider if the commissioner finds that:

    (a) There was any misrepresentation, intentional or otherwise, in the application for the license or for renewal of a license;

    (b) The applicant for, or holder of any such license, is or has been subject to a final administrative action for being, or is otherwise shown to be, untrustworthy or incompetent to act as either a viatical settlement broker or a viatical settlement provider;

    (c) The applicant for, or holder of any such license, demonstrates a pattern of unreasonable payments to viators;

    (d) The applicant for, or holder of any such license, has been convicted of a felony or of any criminal misdemeanor of which criminal fraud is an element; or

    (e) The applicant for, or holder of any such license, has violated any provision of this title.

    (2) The commissioner may ((from time to time)) require an applicant or the holder of any license issued under this chapter to supply current information on the identity or capacity of stockholders, partners, officers, and employees, including but not limited to the following:  Fingerprints, personal history, business experience, business records, and any other information which the commissioner may require.  If required, the applicant or licensee shall furnish his or her fingerprints for submission to the Washington state patrol, the federal bureau of investigation, and any governmental agency or entity authorized to receive this information for a state and national criminal history background check.

    (3) Before the commissioner suspends or revokes any license issued under this chapter, ((or refuses to issue any such license,)) the commissioner shall conduct a hearing, if the applicant or licensee requests this in writing.  The hearing shall be in accordance with chapters 34.05 and 48.04 RCW.

    (4) After a hearing or with the consent of any party licensed under this chapter and in addition to or in lieu of the suspension, revocation, or refusal to renew any license under this chapter, the commissioner may levy a fine upon the viatical settlement provider in an amount not more than ten thousand dollars, for each violation of this chapter.  The order levying the fine shall specify the period within which the fine shall be fully paid, and that period shall not be less than fifteen nor more than thirty days from the date of the order.  Upon failure to pay the fine when due, the commissioner may revoke the license if not already revoked, and the fine may be recovered in a civil action brought in behalf of the commissioner by the attorney general.  Any fine so collected shall be deposited into the general fund.

    (5) If in the process of verifying fingerprints under subsection (2) of this section, business records, or other information the commissioner's office incurs fees or charges from another governmental agency or from a business firm, the amount of the fees or charges shall be paid to the commissioner's office by the applicant or licensee.

 

    NEW SECTION.  Sec. 6.  This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.

 


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