| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Insurance, Financial Services & Consumer Protection Committee | |
SSB 5052
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.
Brief Description: Prohibiting interested third parties from processing insurance claims.
Sponsors: Senate Committee on Financial Institutions & Insurance (originally sponsored by Senators Eide, Roach, Franklin, Hobbs, Fairley, Kastama, Prentice, Jacobsen, Shin and Parlette).
Brief Summary of Substitute Bill |
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Hearing Date: 3/20/07
Staff: Sarah Beznoska (786-7109).
Background:
The insurance industry is regulated by the Insurance Commissioner (Commissioner), pursuant to
the statutory provisions set forth in Title 48 RCW.
A third-party administrator (TPA) is an entity that manages an insurance program for an
organization, and functions as an intermediary between an insurer and an insured. A TPA is
sometimes used by insurers with respect to insurance programs. A TPA typically processes
claims and may also collect premiums, solicit enrollees, and underwrite.
Under current insurance rules, an insurer generally must make a good faith effort to honor a
request for repairs to be made in a specific repair shop and cannot arbitrarily deny a request.
There are currently no state statutes related to the use of certain TPAs by insurers.
Summary of Bill:
A person has the right to choose any glass repair facility for the repair of a loss relating to motor
vehicle glass.
An insurer or its TPA that owns, in whole or in part, an automobile glass repair facility is
required, when processing a glass-only claim, to verbally inform the person making the claim of
the right to choose any glass repair facility and of the TPA's relationship to the insurer.
In addition, if an insurer or an insurer's TPA owns an interest in an automobile glass repair or
replacement facility, a notice must be posted in each of the automobile glass repair or
replacement facilities. The notice must state that the facility is owned in whole or in part by the
insurer or the insurer's TPA and that the consumer has a right to seek repairs at any automobile
glass repair or replacement facility.
The notice must be prominently posted, in not less than 18-point font, in a location where it is
likely to be seen and read by a customer. If the automobile glass repair or replacement facility is
mobile, the insurer or its TPA must verbally provide the notice prior to commencement of the
repair or replacement.
When a person makes a claim and the person's motor vehicle is repaired at an automobile glass
repair or replacement facility that is subject to the notice requirements, the person may file a
complaint with the Office of the Insurance Commissioner. A private right of action does not
exist.
Appropriation: None.
Fiscal Note: Requested on March 16, 2007.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.