BILL REQ. #:  H-4541.1 

READ FIRST TIME 01/21/10.   

     AN ACT Relating to insurance; and amending RCW 48.02.060, 48.38.010, 48.66.045, 48.155.010, 48.102.011, and 48.155.020.

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

Sec. 1   RCW 48.02.060 and 2009 c 335 s 1 are each amended to read as follows:
     (1) The commissioner has the authority expressly conferred upon him or her by or reasonably implied from the provisions of this code.
     (2) The commissioner ((shall)) must execute his or her duties and ((shall)) must enforce the provisions of this code.
     (3) The commissioner may:
     (a) Make reasonable rules for effectuating any provision of this code, except those relating to his or her election, qualifications, or compensation. Rules are not effective prior to their being filed for public inspection in the commissioner's office.
     (b) Conduct investigations to determine whether any person has violated any provision of this code.
     (c) Conduct examinations, investigations, hearings, in addition to those specifically provided for, useful and proper for the efficient administration of any provision of this code.
     (4) When the governor proclaims a state of emergency under RCW 43.06.010(12), the commissioner may issue an order that addresses any or all of the following matters related to insurance policies issued in this state:
     (a) Reporting requirements for claims;
     (b) Grace periods for payment of insurance premiums and performance of other duties by insureds;
     (c) Temporary postponement of cancellations and ((renewals)) nonrenewals; and
     (d) Medical coverage to ensure access to care.
     (5) An order by the commissioner under subsection (4) of this section may remain effective for not more than sixty days unless the commissioner extends the termination date for the order for an additional period of not more than thirty days. The commissioner may extend the order if, in the commissioner's judgment, the circumstances warrant an extension. An order of the commissioner under subsection (4) of this section is not effective after the related state of emergency is terminated by proclamation of the governor under RCW 43.06.210. The order must specify, by line of insurance:
     (a) The geographic areas in which the order applies, which must be within but may be less extensive than the geographic area specified in the governor's proclamation of a state of emergency and must be specific according to an appropriate means of delineation, such as the United States postal service zip codes or other appropriate means; and
     (b) The date on which the order becomes effective and the date on which the order terminates.
     (6) The commissioner may adopt rules that establish general criteria for orders issued under subsection (4) of this section and may adopt emergency rules applicable to a specific proclamation of a state of emergency by the governor.
     (7) The rule-making authority set forth in subsection (6) of this section does not limit or affect the rule-making authority otherwise granted to the commissioner by law.

Sec. 2   RCW 48.38.010 and 1998 c 284 s 1 are each amended to read as follows:
     The commissioner may grant a certificate of exemption to any insurer or educational, religious, charitable, or scientific institution conducting a charitable gift annuity business:
     (1) Which is organized and operated exclusively as, or for the purpose of aiding, an educational, religious, charitable, or scientific institution which is organized as a nonprofit organization without profit to any person, firm, partnership, association, corporation, or other entity;
     (2) Which possesses a current tax exempt status under the laws of the United States;
     (3) Which serves such purpose by issuing charitable gift annuity contracts only for the benefit of such educational, religious, charitable, or scientific institution;
     (4) Which appoints the insurance commissioner as its true and lawful attorney upon whom may be served lawful process in any action, suit, or proceeding in any court, which appointment ((shall be)) is irrevocable, ((shall)) binds the insurer or institution or any successor in interest, ((shall)) remains in effect as long as there is in force in this state any contract made or issued by the insurer or institution, or any obligation arising therefrom, and ((shall)) must be processed in accordance with RCW 48.05.210;
     (5) Which is fully and legally organized and qualified to do business and has been actively doing business under the laws of the state of its domicile for a period of at least three years prior to its application for a certificate of exemption;
     (6) Which has and maintains minimum unrestricted net assets of five hundred thousand dollars. "Unrestricted net assets" means the excess of total assets over total liabilities that are neither permanently restricted nor temporarily restricted by donor-imposed stipulations;
     (7) Which files with the insurance commissioner its application for a certificate of exemption showing:
     (a) Its name, location, and organization date;
     (b) The kinds of charitable annuities it proposes to offer;
     (c) A statement of the financial condition, management, and affairs of the organization and any affiliate thereof, as that term is defined in RCW 48.31B.005, on a form satisfactory to, or furnished by the insurance commissioner;
     (d) ((Such)) Other documents, stipulations, or information as the insurance commissioner may reasonably require to evidence compliance with the provisions of this chapter;
     (8) Which subjects itself and any affiliate thereof, as that term is defined in RCW 48.31B.005, to periodic examinations conducted under chapter 48.03 RCW as may be deemed necessary by the insurance commissioner;
     (9) Which files with the insurance commissioner for the commissioner's advance approval a copy of any policy or contract form to be offered or issued to residents of this state. The grounds for disapproval of the policy or contract form ((shall be those)) are set forth in RCW 48.18.110; and
     (10) Which:
     (a) Files with the insurance commissioner ((on or before March 1 of each)) annually, within sixty days of the end of its fiscal year a ((copy of its annual statement prepared pursuant to the laws of its state of domicile)) report of its current financial condition, management, and affairs, on a form and in a manner prescribed by the commissioner, as well as such other financial material as may be requested, including the annual statement or other such financial materials as may be requested relating to any affiliate, as that term is defined in RCW 48.31B.005; ((and))
     (b) ((Coincident with the filing of its annual statement, pays an annual filing fee of twenty-five dollars plus five dollars for each charitable gift annuity contract written for residents of this state during the previous calendar year; and
     (c) Which includes on or)) Attaches to the ((first page of the annual statement)) report of its current financial condition the statement of a qualified actuary setting forth the actuary's opinion relating to annuity reserves and other actuarial items for the fiscal year covered by the report. "Qualified actuary" as used in this subsection means a member in good standing of the American academy of actuaries or a person who has otherwise demonstrated actuarial competence to the satisfaction of the insurance regulatory official of the domiciliary state; and
     (c) On or before March 1st of each year, pays an annual filing fee of twenty-five dollars plus five dollars for each charitable gift annuity contract written for residents of this state during its fiscal year ending on or before December 31st of the previous calendar year.

Sec. 3   RCW 48.66.045 and 2009 c 161 s 5 are each amended to read as follows:
     (1) Every issuer of a medicare supplement insurance policy or certificate providing coverage to a resident of this state issued on or after January 1, 1996, and before June 1, 2010, ((shall)) must:
     (a) Unless otherwise provided for in RCW 48.66.055, issue coverage under its standardized benefit plans B, C, D, E, F, G, K, and L without evidence of insurability to any resident of this state who is eligible for both medicare hospital and physician services by reason of age or by reason of disability or end-stage renal disease, if the medicare supplement policy replaces another medicare supplement standardized benefit plan policy or certificate B, C, D, E, F, G, K, or L, or other more comprehensive coverage than the replacing policy; and
     (b) Unless otherwise provided for in RCW 48.66.055, issue coverage under its standardized plans A, H, I, and J without evidence of insurability to any resident of this state who is eligible for both medicare hospital and physician services by reason of age or by reason of disability or end-stage renal disease, if the medicare supplement policy replaces another medicare supplement policy or certificate which is the same standardized plan as the replaced policy. After December 31, 2005, plans H, I, and J may be replaced only by the same plan if that plan has been modified to remove outpatient prescription drug coverage.
     (2)(a) Unless otherwise provided for in RCW 48.66.055, every issuer of a medicare supplement insurance policy or certificate providing coverage to a resident of this state issued on or after June 1, 2010, ((shall)) must issue coverage under its standardized plans B, C, D, ((E,)) F, F with high deductible, G, K, L, M, or N without evidence of insurability to any resident of this state who is eligible for both medicare hospital and physician services by reason of age or by reason of disability or end-stage renal disease, if the medicare supplement policy or certificate replaces another medicare supplement policy or certificate or other more comprehensive coverage; and
     (b) Unless otherwise provided for in RCW 48.66.055, issue coverage under its standardized plan A without evidence of insurability to any resident of this state who is eligible for both medicare hospital and physician services by reason of age or by reason of disability or end- stage renal disease, if the medicare supplement policy or certificate replaces another standardized plan A medicare supplement policy or certificate.
     (3) Every issuer of a medicare supplement insurance policy or certificate providing coverage to a resident of this state issued on or after January 1, 1996, ((shall)) must set rates only on a community-rated basis. Premiums ((shall)) must be equal for all policyholders and certificate holders under a standardized medicare supplement benefit plan form, except that an issuer may vary premiums based on spousal discounts, frequency of payment, and method of payment including automatic deposit of premiums and may develop no more than two rating pools that distinguish between an insured's eligibility for medicare by reason of:
     (a) Age; or
     (b) Disability or end-stage renal disease.

Sec. 4   RCW 48.155.010 and 2009 c 175 s 3 are each amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
     (2) "Commissioner" means the Washington state insurance commissioner.
     (3)(a) "Control" or "controlled by" or "under common control with" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person.
     (b) Control exists when any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person. A presumption of control may be rebutted by a showing made in the manner provided by RCW 48.31B.005(2) and 48.31B.025(11) that control does not exist in fact. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.
     (4)(a) "Discount plan" means a business arrangement or contract in which a person or organization, in exchange for fees, dues, charges, or other consideration, provides or purports to provide discounts to its members on charges by providers for health care services.
     (b) "Discount plan" does not include:
     (i) A plan that does not charge a membership or other fee to use the plan's discount card;
     (ii) A patient access program as defined in this chapter;
     (iii) A medicare prescription drug plan as defined in this chapter; or
     (iv) A discount plan offered by a health carrier authorized under chapter 48.20, 48.21, 48.44, or 48.46 RCW.
     (5)(a) "Discount plan organization" means a person that, in exchange for fees, dues, charges, or other consideration, provides or purports to provide access to discounts to its members on charges by providers for health care services. "Discount plan organization" also means a person or organization that contracts with providers, provider networks, or other discount plan organizations to offer discounts on health care services to its members. This term also includes all persons that determine the charge to or other consideration paid by members.
     (b) "Discount plan organization" does not mean:
     (i) Pharmacy benefit managers;
     (ii) Health care provider networks, when the network's only involvement in discount plans is contracting with the plan to provide discounts to the plan's members;
     (iii) Marketers who market the discount plans of discount plan organizations which are licensed under ((to)) this chapter as long as all written communications of the marketer in connection with a discount plan clearly identify the licensed discount plan organization as the responsible entity; or
     (iv) Health carriers, if the discount on health care services is offered by a health carrier authorized under chapter 48.20, 48.21, 48.44, or 48.46 RCW.
     (6) "Health care facility" or "facility" has the same meaning as in RCW 48.43.005(15).
     (7) "Health care provider" or "provider" has the same meaning as in RCW 48.43.005(16).
     (8) "Health care provider network," "provider network," or "network" means any network of health care providers, including any person or entity that negotiates directly or indirectly with a discount plan organization on behalf of more than one provider to provide health care services to members.
     (9) "Health care services" has the same meaning as in RCW 48.43.005(17).
     (10) "Health carrier" or "carrier" has the same meaning as in RCW 48.43.005(18).
     (11) "Marketer" means a person or entity that markets, promotes, sells, or distributes a discount plan, including a contracted marketing organization and a private label entity that places its name on and markets or distributes a discount plan pursuant to a marketing agreement with a discount plan organization.
     (12) "Medicare prescription drug plan" means a plan that provides a medicare part D prescription drug benefit in accordance with the requirements of the federal medicare prescription drug improvement and modernization act of 2003.
     (13) "Member" means any individual who pays fees, dues, charges, or other consideration for the right to receive the benefits of a discount plan, but does not include any individual who enrolls in a patient access program.
     (14) "Patient access program" means a voluntary program sponsored by a pharmaceutical manufacturer, or a consortium of pharmaceutical manufacturers, that provides free or discounted health care products for no additional consideration directly to low-income or uninsured individuals either through a discount card or direct shipment.
     (15) "Person" means an individual, a corporation, a governmental entity, a partnership, an association, a joint venture, a joint stock company, a trust, an unincorporated organization, any similar entity, or any combination of the persons listed in this subsection.
     (16)(a) "Pharmacy benefit manager" means a person that performs pharmacy benefit management for a covered entity.
     (b) For purposes of this subsection, a "covered entity" means an insurer, a health care service contractor, a health maintenance organization, or a multiple employer welfare arrangement licensed, certified, or registered under the provisions of this title. "Covered entity" also means a health program administered by the state as a provider of health coverage, a single employer that provides health coverage to its employees, or a labor union that provides health coverage to its members as part of a collective bargaining agreement.

Sec. 5   RCW 48.102.011 and 2009 c 104 s 3 are each amended to read as follows:
     (1) A person, wherever located, ((shall)) may not act as a provider with an owner who is a resident of this state or if there is more than one owner on a single policy and one of the owners is a resident of this state, without first having obtained a license from the commissioner.
     (2) An application for a provider license ((shall)) must be made to the commissioner by the applicant on a form prescribed by the commissioner, and the application ((shall)) must be accompanied by a licensing fee in the amount of two hundred fifty dollars((, which shall be deposited to the insurance commissioner's regulatory account under RCW 48.02.190)) for deposit into the general fund.
     (3) All provider licenses ((shall)) continue in force until suspended, revoked, or not renewed. A license ((shall be)) is subject to renewal annually on the first day of July upon application of the provider and payment of a renewal fee of two hundred fifty dollars((, which shall be deposited to the insurance commissioner's regulatory account under RCW 48.02.190)) for deposit into the general fund. If not so renewed, the license ((shall)) automatically expires on the renewal date.
     (a) If the renewal fee is not received by the commissioner prior to the expiration date, the provider ((shall)) must pay to the commissioner in addition to the renewal fee, a surcharge as follows:
     (i) For the first thirty days or part thereof delinquency the surcharge is fifty percent of the renewal fee;
     (ii) For the next thirty days or part thereof delinquency the surcharge is one hundred percent of the renewal fee;
     (b) If the renewal fee is not received by the commissioner after sixty days but prior to twelve months after the expiration date the payment of the renewal fee ((shall be)) is for reinstatement of the license and the provider ((shall)) must pay to the commissioner the renewal fee and a surcharge of two hundred percent.
     (4) Subsection (3)(a) and (b) of this section does not exempt any person from any penalty provided by law for transacting a life settlement business without a valid and subsisting license.
     (5) The applicant ((shall)) must provide ((such)) information as the commissioner may require on forms prescribed by the commissioner. The commissioner has the authority, at any time, to require ((such)) an applicant to fully disclose the identity of its stockholders, partners, officers, and employees, and the commissioner may, in the exercise of the commissioner's sole discretion, refuse to issue ((such)) a license in the name of any person if not satisfied that any officer, employee, stockholder, or partner thereof who may materially influence the applicant's conduct meets the standards of this chapter.
     (6) A license issued to a partnership, corporation, or other entity authorizes all members, officers, and designated employees to act as a licensee under the license, if those persons are named in the application and any supplements to the application.
     (7) Upon the filing of an application for a provider's license and the payment of the license fee, the commissioner ((shall)) must make an investigation of each applicant and may issue a license if the commissioner finds that the applicant:
     (a) Has provided a detailed plan of operation;
     (b) Is competent and trustworthy and intends to transact its business in good faith;
     (c) Has a good business reputation and has had experience, training, or education so as to be qualified in the business for which the license is applied;
     (d)(i) Has demonstrated evidence of financial responsibility in a form and in an amount prescribed by the commissioner by rule.
     (ii) The commissioner may ask for evidence of financial responsibility at any time the commissioner deems necessary;
     (e) If the applicant is a legal entity, is formed or organized pursuant to the laws of this state, is a foreign legal entity authorized to transact business in this state, or provides a certificate of good standing from the state of its domicile; and
     (f) Has provided to the commissioner an antifraud plan that meets the requirements of RCW 48.102.140 and includes:
     (i) A description of the procedures for detecting and investigating possible fraudulent acts and procedures for resolving material inconsistencies between medical records and insurance applications;
     (ii) A description of the procedures for reporting fraudulent insurance acts to the commissioner;
     (iii) A description of the plan for antifraud education and training of its underwriters and other personnel; and
     (iv) A written description or chart outlining the arrangement of the antifraud personnel who are responsible for the investigation and reporting of possible fraudulent insurance acts and investigating unresolved material inconsistencies between medical records and insurance applications.
     (8)(a) A nonresident provider ((shall)) must appoint the commissioner as its attorney to receive service of, and upon whom ((shall)) must be served, all legal process issued against it in this state upon causes of action arising within this state. Service upon the commissioner as attorney ((shall)) constitutes service upon the provider. Service of legal process against the provider can be had only by service upon the commissioner.
     (b) With the appointment the provider ((shall)) must designate the person to whom the commissioner ((shall)) must forward legal process so served upon him or her. The provider may change the person by filing a new designation.
     (c) The appointment of the commissioner as attorney ((shall be)) is irrevocable, ((shall)) binds any successor in interest or to the assets or liabilities of the provider, and ((shall)) remains in effect as long as there is in this state any contract made by the provider or liabilities or duties arising therefrom.
     (d) Duplicate copies of legal process against a provider for whom the commissioner is attorney shall be served upon him or her either by a person competent to serve summons, or by registered mail. At the time of service the plaintiff shall pay to the commissioner ten dollars, taxable as costs in the action.
     (e) The commissioner shall immediately send one of the copies of the process, by registered mail with return receipt requested, to the person designated for the purpose by the provider in its most recent designation filed with the commissioner.
     (f) The commissioner shall keep a record of the day and hour of service upon him or her of all legal process. Proceedings shall not be had against the provider, and the provider shall not be required to appear, plead, or answer until the expiration of forty days after the date of service upon the commissioner.
     (9) A provider may not use any person to perform the functions of a broker unless the person is authorized to act as a broker under this chapter.
     (10) A provider ((shall)) must provide to the commissioner new or revised information about officers, stockholders, partners, directors, members, or designated employees within thirty days of the change.

Sec. 6   RCW 48.155.020 and 2009 c 175 s 5 are each amended to read as follows:
     (1) Before conducting discount plan business to which this chapter applies, a person ((shall)) must obtain a license from the commissioner to operate as a discount plan organization.
     (2) Except as provided in subsection (3) of this section, each application for a license to operate as a discount plan organization:
     (a) Must be in a form prescribed by the commissioner and verified by an officer or authorized representative of the applicant; and
     (b) Must demonstrate, set forth, or be accompanied by the following:
     (i) The two hundred fifty dollar application fee, which must be deposited into the general fund;
     (ii) A copy of the organization documents of the applicant, such as the articles of incorporation, including all amendments;
     (iii) A copy of the applicant's bylaws or other enabling documents that establish organizational structure;
     (iv) The applicant's federal identification number, business address, and mailing address;
     (v)(A) A list of names, addresses, official positions, and biographical information of the individuals who are responsible for conducting the applicant's affairs, including all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the officers, contracted management company personnel, and any person or entity owning or having the right to acquire ten percent or more of the voting securities of the applicant; and
     (B) A disclosure in the listing of the extent and nature of any contracts or arrangements between any individual who is responsible for conducting the applicant's affairs and the discount plan organization, including all possible conflicts of interest;
     (vi) A complete biographical statement, on forms prescribed by the commissioner, with respect to each individual identified under (b)(v) of this subsection;
     (vii) A statement generally describing the applicant, its facilities and personnel, and the health care services for which a discount will be made available under the discount plan;
     (viii) A copy of the form of all contracts made or to be made between the applicant and any health care providers or health care provider networks regarding the provision of health care services to members and discounts to be made available to members;
     (ix) A copy of the form of any contract made or arrangement to be made between the applicant and any individual listed in (b)(v) of this subsection;
     (x) A list identifying by name, address, telephone number, and e-mail address all persons who will market each discount plan offered by the applicant. If the person who will market a discount plan is an entity, only the entity must be identified. This list must be maintained and updated within sixty days of any change in the information. An updated list must be sent to the commissioner as part of the discount plan organization's renewal application under (b)(vii) of this subsection;
     (xi) A copy of the form of any contract made or to be made between the applicant and any person, corporation, partnership, or other entity for the performance on the applicant's behalf of any function, including marketing, administration, enrollment, and subcontracting for the provision of health care services to members and discounts to be made available to members;
     (xii) A copy of the applicant's most recent financial statements audited by an independent certified public accountant, except that, subject to the approval of the commissioner, an applicant that is an affiliate of a parent entity that is publicly traded and that prepares audited financial statements reflecting the consolidated operations of the parent entity may submit the audited financial statement of the parent entity and a written guaranty that the minimum capital requirements required under RCW 48.155.030 will be met by the parent entity instead of the audited financial statement of the applicant;
     (xiii) A description of the proposed methods of marketing including, but not limited to, describing the use of marketers, use of the internet, sales by telephone, electronic mail, or facsimile machine, and use of salespersons to market the discount plan benefits;
     (xiv) A description of the member complaint procedures which must be established and maintained by the applicant;
     (xv) The name and address of the applicant's Washington statutory agent for service of process, notice, or demand or, if not domiciled in this state, a power of attorney duly executed by the applicant, appointing the commissioner and duly authorized deputies as the true and lawful attorney of the applicant in and for this state upon whom all law process in any legal action or proceeding against the discount plan organization on a cause of action arising in this state may be served; and
     (xvi) Any other information the commissioner may reasonably require.
     (3)(a) Upon application to and approval by the commissioner and payment of the applicable fees, a discount plan organization that holds a current license or other form of authority from another state to operate as a discount plan organization, at the commissioner's discretion, may not be required to submit the information required under subsection (2) of this section in order to obtain a license under this section if the commissioner is satisfied that the other state's requirements, at a minimum, are equivalent to those required under subsection (2) of this section or the commissioner is satisfied that the other state's requirements are sufficient to protect the interests of the residents of this state.
     (b) Whenever the discount plan organization loses its license or other form of authority in that other state to operate as a discount plan organization, or is the subject of any disciplinary administrative proceeding related to the organization's operating as a discount plan organization in that other state, the discount plan organization ((shall)) must immediately notify the commissioner.
     (4) After the receipt of an application filed under subsection (2) or (3) of this section, the commissioner ((shall)) must review the application and notify the applicant of any deficiencies in the application.
     (5)(a) Within ninety days after the date of receipt of a completed application, the commissioner ((shall)) must:
     (i) Issue a license if the commissioner is satisfied that the applicant has met the following:
     (A) The applicant has fulfilled the requirements of this section and the minimum capital requirements in accordance with RCW 48.155.030; and
     (B) The persons who own, control, and manage the applicant are competent and trustworthy and possess managerial experience that would make the proposed operation of the discount plan organization beneficial to discount plan members; or
     (ii) Disapprove the application and state the grounds for disapproval.
     (b) In making a determination under (a) of this subsection, the commissioner may consider, for example, whether the applicant or an officer or manager of the applicant: (i) Is not financially responsible; (ii) does not have adequate expertise or experience to operate a medical discount plan organization; or (iii) is not of good character. Among the factors that the commissioner may consider in making the determination is whether the applicant or an affiliate or a business formerly owned or managed by the applicant or an officer or manager of the applicant has had a previous application for a license, or other authority, to operate as any entity regulated by the commissioner denied, revoked, suspended, or terminated for cause, or is under investigation for or has been found in violation of a statute or regulation in another jurisdiction within the previous five years.
     (6) Prior to licensure by the commissioner, each discount plan organization ((shall)) must establish an internet web site in order to conform to the requirements of RCW 48.155.070(2).
     (7)(a) A license is effective for up to one year, unless prior to its expiration the license is renewed in accordance with this subsection or suspended or revoked in accordance with subsection (8) of this section. Licenses issued or renewed on or after July 1, 2010, will be subject to renewal annually on July 1st. If not so renewed, the license will automatically expire on the renewal date.
     (b) At least ninety days before a license expires, the discount plan organization ((shall)) must submit:
     (i) A renewal application form; and
     (ii) A two hundred dollar renewal application fee for deposit into the general fund.
     (c) The commissioner ((shall)) must renew the license of each holder that meets the requirements of this chapter and pays the appropriate renewal fee required.
     (8)(a) The commissioner may suspend the authority of a discount plan organization to enroll new members or refuse to renew or revoke a discount plan organization's license if the commissioner finds that any of the following conditions exist:
     (i) The discount plan organization is not operating in compliance with this chapter;
     (ii) The discount plan organization does not have the minimum net worth as required under RCW 48.155.030;
     (iii) The discount plan organization has advertised, merchandised, or attempted to merchandise its services in such a manner as to misrepresent its services or capacity for service or has engaged in deceptive, misleading, or unfair practices with respect to advertising or merchandising;
     (iv) The discount plan organization is not fulfilling its obligations as a discount plan organization; or
     (v) The continued operation of the discount plan organization would be hazardous to its members.
     (b) If the commissioner has cause to believe that grounds for the nonrenewal, suspension, or revocation of a license exists, the commissioner ((shall)) must notify the discount plan organization in writing specifically stating the grounds for the refusal to renew or suspension or revocation and may also pursue a hearing on the matter under chapter 48.04 RCW.
     (c) When the license of a discount plan organization is nonrenewed, surrendered, or revoked, the discount plan organization ((shall)) must immediately upon the effective date of the order of revocation or, in the case of a nonrenewal, the date of expiration of the license, stop any further advertising, solicitation, collecting of fees, or renewal of contracts, and proceed to wind up its affairs transacted under the license.
     (d)(i) When the commissioner suspends a discount plan organization's authority to enroll new members, the suspension order must specify the period during which the suspension is to be in effect and the conditions, if any, that must be met by the discount plan organization prior to reinstatement of its license to enroll members.
     (ii) The commissioner may rescind or modify the order of suspension prior to the expiration of the suspension period.
     (iii) The license of a discount plan organization may not be reinstated unless requested by the discount plan organization. The commissioner ((shall)) may not grant the request for reinstatement if the commissioner finds that the circumstances for which the suspension occurred still exist or are likely to recur.
     (9) Each licensed discount plan organization ((shall)) must notify the commissioner immediately whenever the discount plan organization's license, or other form of authority to operate as a discount plan organization in another state, is suspended, revoked, or nonrenewed in that state.
     (10) A health care provider who provides discounts to his or her own patients without any cost or fee of any kind to the patient is not required to obtain and maintain a license under this chapter as a discount plan organization.