HOUSE BILL REPORT
ESB 6591
This analysis was prepared by non-partisan legislative staff for the use of legislative members in
their deliberations. This analysis is not a part of the legislation nor does it constitute a
statement of legislative intent.
As Reported by House Committee On:
Insurance, Financial Services & Consumer Protection
Title: An act relating to insurance producers.
Brief Description: Regulating insurance producers.
Sponsors: Senators Benton and Berkey; by request of Insurance Commissioner.
Brief History:
Insurance, Financial Services & Consumer Protection: 2/26/08 [DP].
Brief Summary of Engrossed Bill |
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HOUSE COMMITTEE ON INSURANCE, FINANCIAL SERVICES & CONSUMER PROTECTION
Majority Report: Do pass. Signed by 8 members: Representatives Kirby, Chair; Kelley, Vice Chair; Roach, Ranking Minority Member; Loomis, Rodne, Santos, Simpson and Smith.
Staff: Jon Hedegard (786-7127).
Background:
The Office of the Insurance Commissioner (OIC) licenses and regulates insurance agents,
brokers, and solicitors. An insurance agent is appointed by an insurer to solicit applications
for insurance on behalf of the insurer. If authorized to do so, an agent may enter into
insurance contracts and collect premiums on insurance. An insurance broker is a person who,
on behalf of an insured, for a fee, solicits, negotiates, or procures insurance for insureds. A
solicitor is authorized by an agent or broker to solicit applications and collect premiums for
an agent or broker.
In 2007 the Legislature passed Substitute Senate Bill 5715 and altered the regulatory
framework for insurance agents and brokers. Substitute Senate Bill 5715 was based largely
on the National Association of Insurance Commissioner's Producer Licensing Model Act.
Among the modifications to the oversight of agents and brokers are changes to the categories
of licenses, background checks, fees, and commissions. Another change was the replacement
of the terms "agent," "broker," and "solicitor," with the term "insurance producer." "Title
insurance agents" were not included in the scope of the term "producer." An insurance
producer is a person required to be licensed under the laws of the state to sell, solicit, or
negotiate insurance. A title insurance agent is a business entity licensed under the laws of
this state and appointed by an authorized title insurance company to sell, solicit, or negotiate
insurance on behalf of the title insurance company.
The effective date of Substitute Senate Bill 5715 is delayed until July 1, 2009.
Summary of Bill:
The words "agent," "broker," and "solicitor" are generally replaced with "producer" or
"insurance producer." "Title insurance agent" is added where the change from "agent" to
"producer" eliminated a title insurance agent from the scope of the provision.
Specific insurance policy forms do not have to be filed for approval of the Insurance
Commissioner if the only change in an approved form is a language change consistent with
this act. An insurer must change terminology on forms by the time the insurer uses up the
stock of existing forms or January 1, 2010, whichever is earlier.
Gender-specific references are changed to gender-neutral phrases. Other grammatical
changes are made.
Appropriation: None.
Fiscal Note: Not requested.
Effective Date: The bill takes effect on July 1, 2009.
Staff Summary of Public Testimony:
This bill follows the major reforms to insurance agent and broker licensing in last year's
legislation. This effort moves Washington to a more uniform standard and into greater
compliance with federal reciprocity requirements. Next year, there may be additional
legislation to continue the efforts to create greater uniformity and allow for more reciprocity.
This is a technical bill. The OIC worked on this with stakeholders on the issue. Substantive
changes were not allowed in this bill.
Persons Testifying: John Hamje, Office of the Insurance Commissioner; and Bill Stauffacher, Independent Insurance Agents and Brokers of Washington.