BILL REQ. #:  H-0863.1 

Read first time 01/24/2005.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to a competitive industrial insurance system; and creating a new section.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that most states use competition to maximize efficiency in their workers' compensation programs. Private sector competition in providing workers' compensation insurance has been effective in reducing premium costs, maximizing program efficiency, and creating innovative safety programs to protect all workers. Therefore, the purposes of this act are to:
     (a) Create an efficient and cost-effective industrial insurance system for the benefit of both employers and workers by introducing competition into the system through a choice of insurance carriers from whom employers may purchase industrial insurance;
     (b) Provide workers the benefits of safety systems developed by both private enterprise and by government;
     (c) Improve the state's economic climate by providing the private sector with the opportunity to engage in the industrial insurance business under government regulation;
     (d) Eliminate a government monopoly with respect to choices for small employers; and
     (e) Eliminate Washington's state-run industrial insurance fund.
     (2) By December 1, 2005, the insurance commissioner must prepare, and report to the appropriate committees of the legislature, a plan for the sale of the industrial insurance state fund to a private sector, for-profit or nonprofit entity by July 1, 2007. The plan must include at least the following elements:
     (a) Conditions for the sale:
     (i) An investment banking firm must find that the sale price is fair;
     (ii) An actuarial firm must find that the assets sold are adequate to cover the liabilities assumed by the buyer;
     (iii) The state investment board must find that the sale price is among the highest and is from a qualified bidder;
     (iv) The buyer must agree to hold the state harmless from the state fund's liabilities;
     (v) The buyer must agree to provide insurance to all employers that request insurance; and
     (vi) The buyer must agree to operate, for at least five years, at no more than its direct cost plus a reasonable overhead.
     (b) Use of sale proceeds:
     (i) The sale proceeds must be deposited into a trust fund for the benefit of Washington parks; and
     (ii) The Washington parks trust fund must be managed by the legislature for investment in state park infrastructure and physical restoration.
     (c) Recommendations for the appointment by the governor of a competitive industrial insurance commission to prepare legislation necessary to implement a private sector competitive industrial insurance system by July 1, 2007. This legislation must be reported to the appropriate committees of the legislature by December 1, 2006.