SENATE BILL REPORT
SB 5893
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 Senate Committee On:
Financial Institutions, Housing & Insurance, February 18, 2009
Title: An act relating to actions by insurance companies against violators.
Brief Description: Concerning actions by insurance companies against violators.
Sponsors: Senators Berkey, Benton, Hobbs, Schoesler and Shin.
Brief History:
Committee Activity: Financial Institutions, Housing & Insurance: 2/17/09, 2/18/09 [DPS].
SENATE COMMITTEE ON FINANCIAL INSTITUTIONS, HOUSING & INSURANCE |
Majority Report: That Substitute Senate Bill No. 5893 be substituted therefor, and the substitute bill do pass.
Signed by Senators Berkey, Chair; Hobbs, Vice Chair; Franklin, McDermott, Parlette and Schoesler.
Staff: Philip Brady (786-7460)
Background: National studies show that more than 10 percent of insurance claims are fraudulent, costing insurance companies millions of dollars and the average household $200 to $300 in increased insurance premiums each year. Between its formation in 2006 and a September 2008 report, the Special Investigations Unit in the Office of the Insurance Commissioner has discovered almost $1.8 million in insurance fraud in Washington.
Since 2006 insurance companies that are the victims of a crime are also considered victims for the purposes of any restitution imposed by a court as a part of a criminal penalty.
Summary of Bill (Recommended Substitute): Insurance companies that are the victims of a crime have a cause of action against the convicted defendant. They may recover compensatory damages and reasonable investigation and litigation expenses, including attorneys’ fees.
EFFECT OF CHANGES MADE BY FINANCIAL INSTITUTIONS, HOUSING & INSURANCE COMMITTEE (Recommended Substitute): Technical changes were made to conform with the House version of the bill.
Appropriation: None.
Fiscal Note: Not requested.
Committee/Commission/Task Force Created: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.
Staff Summary of Public Testimony on Original Bill: PRO: Insurers should be able to recover investigation costs under existing law, but judges have not been allowing them to recover those costs. Washington has passed a series of fraud statutes, and this is the final missing piece.
Persons Testifying: PRO: Jessica Duble-Harbin, Farmer's Insurance; Jean Leonard, State Farm Insurance; Mel Sorensen, Property Casualty Insurers.