BILL REQ. #: Z-1051.1
| State of Washington | 61st Legislature | 2010 Regular Session |
Prefiled 01/07/10. Read first time 01/11/10. Referred to Committee on Financial Institutions & Insurance.
AN ACT Relating to insurance; amending RCW 48.02.060, 48.38.010, 48.66.045, 48.155.010, 4.28.080, 48.05.200, 48.05.215, 48.10.170, 48.15.150, 48.17.380, 48.36A.350, 48.94.010, 48.102.011, 48.102.021, 48.110.030, 48.110.055, and 48.155.020; adding a new section to chapter 48.02 RCW; and repealing RCW 48.05.210.
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)) section 6 of this act;
(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)) Attaches to the ((
(c) Which includes on orfirst 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 4.28.080 and 1997 c 380 s 1 are each amended to read
as follows:
Service made in the modes provided in this section ((shall be)) are
taken and held to be personal service. The summons ((shall)) must be
served by delivering a copy thereof, as follows:
(1) If the action be against any county in this state, to the
county auditor or, during normal office hours, to the deputy auditor,
or in the case of a charter county, summons may be served upon the
agent, if any, designated by the legislative authority.
(2) If against any town or incorporated city in the state, to the
mayor, city manager, or, during normal office hours, to the mayor's or
city manager's designated agent or the city clerk thereof.
(3) If against a school or fire district, to the superintendent or
commissioner thereof or by leaving the same in his or her office with
an assistant superintendent, deputy commissioner, or business manager
during normal business hours.
(4) If against a railroad corporation, to any station, freight,
ticket or other agent thereof within this state.
(5) If against a corporation owning or operating sleeping cars, or
hotel cars, to any person having charge of any of its cars or any agent
found within the state.
(6) If against a domestic insurance company, to any agent
authorized by such company to solicit insurance within this state.
(7)(a) If against ((a)) an authorized foreign or alien insurance
company, as provided in ((chapter 48.05)) RCW 48.05.200.
(b) If against an unauthorized insurer, as provided in RCW
48.05.215 and 48.15.150.
(c) If against a reciprocal insurer, as provided in RCW 48.10.170.
(d) If against a nonresident surplus line broker, as provided in
RCW 48.15.073.
(e) If against a nonresident insurance producer or title insurance
agent, as provided in RCW 48.17.173.
(f) If against a nonresident adjuster, as provided in RCW
48.17.380.
(g) If against a fraternal benefit society, as provided in RCW
48.36A.350.
(h) If against a nonresident reinsurance intermediary, as provided
in RCW 48.94.010.
(i) If against a nonresident life settlement provider, as provided
in RCW 48.102.011.
(j) If against a nonresident life settlement broker, as provided in
RCW 48.102.021.
(k) If against a service contract provider, as provided in RCW
48.110.030.
(l) If against a protection product guarantee provider, as provided
in RCW 48.110.055.
(m) If against a discount plan organization, as provided in RCW
48.155.020.
(8) If against a company or corporation doing any express business,
to any agent authorized by said company or corporation to receive and
deliver express matters and collect pay therefor within this state.
(9) If the suit be against a company or corporation other than
those designated in ((the preceding subdivisions)) subsections (1)
through (8) of this section, to the president or other head of the
company or corporation, the registered agent, secretary, cashier or
managing agent thereof or to the secretary, stenographer or office
assistant of the president or other head of the company or corporation,
registered agent, secretary, cashier or managing agent.
(10) If the suit be against a foreign corporation or nonresident
joint stock company, partnership or association doing business within
this state, to any agent, cashier or secretary thereof.
(11) If against a minor under the age of fourteen years, to
((such)) the minor personally, and also to his or her father, mother,
guardian, or if there be none within this state, then to any person
having the care or control of ((such)) the minor, or with whom he or
she resides, or in whose service he or she is employed, if such there
be.
(12) If against any person for whom a guardian has been appointed
for any cause, then to ((such)) the guardian.
(13) If against a foreign or alien steamship company or steamship
charterer, to any agent authorized by ((such)) the company or charterer
to solicit cargo or passengers for transportation to or from ports in
the state of Washington.
(14) If against a self-insurance program regulated by chapter 48.62
RCW, as provided in chapter 48.62 RCW.
(15) In all other cases, to the defendant personally, or by leaving
a copy of the summons at the house of his or her usual abode with some
person of suitable age and discretion then resident therein.
(16) In lieu of service under subsection (15) of this section,
where the person cannot with reasonable diligence be served as
described, the summons may be served as provided in this subsection,
and ((shall be)) are deemed complete on the tenth day after the
required mailing: By leaving a copy at his or her usual mailing
address with a person of suitable age and discretion who is a resident,
proprietor, or agent thereof, and by thereafter mailing a copy by
first-class mail, postage prepaid, to the person to be served at his or
her usual mailing address. For the purposes of this subsection, "usual
mailing address" ((shall)) does not include a United States postal
service post office box or the person's place of employment.
NEW SECTION. Sec. 6 A new section is added to chapter 48.02 RCW
to read as follows:
(1) Legal process against a person: (a) For whom the commissioner
has been appointed attorney for service of process, or (b) who may be
served by service of process upon the commissioner, must be served upon
the commissioner either by a person competent to serve a summons, or by
registered mail. At the time of service the plaintiff must pay to the
commissioner ten dollars, taxable as costs in the action.
(2) As soon as practicable, the commissioner must send by mail,
electronic means, or other means reasonably calculated to give notice
a copy of the process to the person on whose behalf he or she has been
served.
(3) The commissioner must keep a record of the day and hour of
service upon him or her of all legal process.
(4) Proceedings must not be had against the person, and the person
must not be required to appear, plead, or answer until the expiration
of forty days after the date of service upon the commissioner.
(5) The commissioner may adopt rules to implement this section.
Sec. 7 RCW 48.05.200 and 1985 c 264 s 3 are each amended to read
as follows:
(1) Each authorized foreign or alien insurer ((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
insurer. Service of legal process against ((such)) the insurer can be
had only by service upon the commissioner, except actions upon
contractor bonds pursuant to RCW 18.27.040, where service may be upon
the department of labor and industries.
(2) With the appointment the insurer ((shall)) must designate ((by
name and address)) the person to whom the commissioner ((shall)) must
forward legal process so served upon him or her. The insurer may
change ((such)) the person by filing a new designation.
(3) 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 insurer, and ((shall)) remains in effect as long
as there is in force in this state any contract made by the insurer or
liabilities or duties arising therefrom.
(4) The service of process must be accomplished and processed in
the manner prescribed under section 6 of this act.
Sec. 8 RCW 48.05.215 and 1981 c 339 s 4 are each amended to read
as follows:
(1) Any foreign or alien insurer not ((thereunto)) authorized by
the commissioner, whether it be a surplus lines insurer operating under
chapter 48.15 RCW or not, who, by mail or otherwise, solicits insurance
business in this state or transacts insurance business in this state as
defined by RCW 48.01.060, thereby submits itself to the jurisdiction of
the courts of this state in any action, suit or proceeding instituted
by or on behalf of an insured, beneficiary or the commissioner arising
out of ((such)) the unauthorized solicitation of insurance business,
including, but not limited to, an action for injunctive relief by the
commissioner.
(2) In any ((such)) action, suit, or proceeding instituted by or on
behalf of an insured or beneficiary, service of legal process against
((such)) the unauthorized foreign or alien insurer ((may be made by
service of duplicate copies of legal process on the commissioner by a
person competent to serve a 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. The commissioner shall forthwith mail
one of the copies of the process, by registered mail with return
receipt requested, to the defendant at its last known principal place
of business)) must be accomplished and processed in the manner
prescribed in section 6 of this act. The defendant insurer ((shall
have)) has forty days from the date of the service on the commissioner
within which to plead, answer or otherwise defend the action.
(3) In any such action, suit, or proceeding by the commissioner,
service of legal process against ((such)) the unauthorized foreign or
alien insurer may be made by personal service of legal process upon any
officer of such insurer at its last known principal place of business
outside the state of Washington. The summons upon ((such)) the
unauthorized foreign or alien insurer ((shall)) must contain the same
requisites and be served in like manner as personal summons within the
state of Washington; except, the insurer ((shall have)) has forty days
from the date of ((such)) personal service within which to plead,
answer, or otherwise defend the action.
Sec. 9 RCW 48.10.170 and 2009 c 549 s 7042 are each amended to
read as follows:
(1) ((A certificate of authority shall not be issued to a
domestic)) Each authorized reciprocal insurer ((unless prior thereto
the attorney has executed and filed with the commissioner the insurer's
irrevocable authorization of the commissioner to receive legal process
issued in this state against the insurer upon any cause of action
arising within this state.)) must appoint the commissioner as its
attorney to receive service of, and upon whom 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
constitutes service upon the insurer.
(2) The provisions of RCW 48.05.210 shall apply to service of such
process upon the commissioner
(2) With the appointment the insurer must designate the person to
whom the commissioner must forward legal process so served upon him or
her.
(3) The appointment of the commissioner as attorney is irrevocable,
binds any successor in interest or to the assets or liabilities of the
insurer, and remains in effect as long as there is in force in this
state any contract made by the insurer or liabilities or duties arising
therefrom.
(4) The service of process must be accomplished and processed in
the manner prescribed in section 6 of this act.
(((3))) (5) In lieu of service on the commissioner, legal process
may be served upon a domestic reciprocal insurer by serving the
insurer's attorney at his or her principal offices.
(((4))) (6) Any judgment against the insurer based upon legal
process so served ((shall be)) is binding upon each of the insurer's
subscribers as their respective interests may appear and in an amount
not exceeding their respective contingent liabilities.
Sec. 10 RCW 48.15.150 and 1979 ex.s. c 199 s 4 are each amended
to read as follows:
(1) An unauthorized insurer ((shall)) must be sued, upon any cause
of action arising in this state under any contract issued by it as a
surplus line contract, ((pursuant to)) under this chapter, in the
superior court of the county in which the cause of action arose.
(2) ((Service of legal process against the insurer may be made in
any such action by service upon the commissioner of duplicate copies of
such legal process either by a person competent to serve a summons or
by registered mail or certified mail with return receipt requested. At
the time of such service the plaintiff shall pay to the commissioner
ten dollars, taxable as costs in the action. The commissioner shall
forthwith mail the documents of process served, or a true copy thereof,
to the insurer at its principal place of business last known to the
commissioner, or to the person designated by the insurer for that
purpose in the most recent document filed with the commissioner, on
forms prescribed by the commissioner, by prepaid registered or
certified mail with return receipt requested. The insurer shall have
forty days from the date of service upon the commissioner within which
to plead, answer, or otherwise defend the action. Upon service of
process upon the commissioner in accordance with this provision, the
court shall be deemed to have jurisdiction in personam of the insurer.)) An unauthorized insurer issuing ((
(3)such)) a policy ((shall
be)) under this chapter is deemed thereby to have authorized service of
process against it in the manner ((and to the effect as provided in
this)) prescribed in section 6 of this act. Any such policy ((shall))
must contain a provision designating the commissioner as the person
upon whom service of process may be made.
(3) The insurer has forty days from the date of the service upon
the commissioner within which to plead, answer, or otherwise defend the
action. Upon service of process upon the commissioner in accordance
with this section, the court is deemed to have jurisdiction in personam
of the insurer.
Sec. 11 RCW 48.17.380 and 2009 c 162 s 23 are each amended to
read as follows:
(1) Application for a license to be an adjuster ((shall)) must be
made to the commissioner upon forms furnished by the commissioner. As
a part of or in connection with the application, an individual
applicant ((shall)) must furnish information concerning his or her
identity, including fingerprints for submission to the Washington state
patrol, the federal bureau of investigation, and any governmental
agency or entity authorized to receive this information for a state and
national criminal history background check, personal history,
experience, business record, purposes, and other pertinent facts, as
the commissioner may reasonably require. If, in the process of
verifying fingerprints, business records, or other information, the
commissioner's office incurs fees or charges from another governmental
agency or from a business firm, the amount of the fees or charges must
be paid to the commissioner's office by the applicant.
(2) Any person willfully misrepresenting any fact required to be
disclosed in any application shall be liable to penalties as provided
by this code.
(3) The commissioner ((shall)) licenses as an adjuster only an
individual or business entity which has otherwise complied with this
code therefor and the individual or responsible officer of the business
entity has furnished evidence satisfactory to the commissioner that the
individual or responsible officer of the business entity is qualified
as follows:
(a) Is eighteen or more years of age;
(b) Is a bona fide resident of this state, or is a resident of a
state which will permit residents of this state to act as adjusters in
such other state;
(c) Is a trustworthy person;
(d) Has had experience or special education or training with
reference to the handling of loss claims under insurance contracts, of
sufficient duration and extent reasonably to make the individual or
responsible officer of the business entity competent to fulfill the
responsibilities of an adjuster;
(e) Has successfully passed any examination as required under this
chapter;
(f) If for a public adjuster's license, has filed the bond required
by RCW 48.17.430;
(g) If a nonresident business entity, it has designated an
individual licensed adjuster responsible for the business entity's
compliance with the insurance laws and rules of this state.
(4)(a) Each licensed nonresident adjuster, by application for and
issuance of a license, is deemed to have appointed the commissioner as
the adjuster's attorney to receive service of legal process against the
adjuster in this state upon causes of action arising within this state.
Service upon the commissioner as attorney constitutes effective legal
service on the adjuster.
(b) The appointment of the commissioner as attorney is irrevocable,
binds any successor in interest or to the assets or liabilities of the
adjuster, and remains in effect for as long as there could be any cause
of action against the adjuster arising out of the adjuster's
transactions in this state. The service of process must be
accomplished and processed in the manner prescribed in section 6 of
this act.
(5) The commissioner may require any documents reasonably necessary
to verify the information contained in an application and may, from
time to time, require any licensed adjuster to produce the information
called for in an application for a license.
Sec. 12 RCW 48.36A.350 and 1987 c 366 s 35 are each amended to
read as follows:
(1) Every society authorized to do business in this state ((shall:)) must appoint the commissioner
as its attorney to receive service of, and upon whom 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
constitutes service upon the society.
(a) Appoint in writing the commissioner and each successor in
office to be its true and lawful attorney upon whom all lawful process
in any action or proceeding against it shall be served;
(b) Agree in writing that any lawful process against it which is
served on the commissioner shall be of the same legal force and
validity as if served upon the society; and
(c) Agree that the authority shall continue in force so long as any
liability remains outstanding in this state.
Copies of such appointment, certified by said commissioner, shall
be deemed sufficient evidence thereof and shall be admitted in evidence
with the same force and effect as the original.
(2) Service shall only be made upon the commissioner, or if absent,
upon the person in charge of the commissioner's office. It shall be
made in duplicate and shall constitute sufficient service upon the
society. When legal process against a society is served upon the
commissioner, the commissioner shall forward one of the duplicate
copies by registered mail, prepaid, directed to the secretary or
corresponding officer. No service shall require a society to file its
answer, pleading, or defense in less than forty days from the date of
mailing the copy of the service to a society. Legal process shall not
be served upon a society except in the manner provided in this section.
At the time of serving any process upon the commissioner, the plaintiff
or complainant in the action shall pay to the commissioner the fee
established pursuant to RCW 48.05.210
(2) With the appointment the society must designate the person to
whom the commissioner must forward legal process so served upon him or
her.
(3) The appointment of the commissioner as attorney is irrevocable,
binds any successor in interest or to the assets or liabilities of the
society, and remains in effect as long as there is in force in this
state any contract made by the society or liabilities or duties arising
therefrom.
(4) The service of process must be accomplished and processed in
the manner prescribed in section 6 of this act.
Sec. 13 RCW 48.94.010 and 2005 c 274 s 317 are each amended to
read as follows:
(1) No person, firm, association, or corporation may act as a
reinsurance intermediary-broker in this state if the person, firm,
association, or corporation maintains an office either directly or as
a member or employee of a firm or association, or an officer, director,
or employee of a corporation:
(a) In this state, unless the person, firm, association, or
corporation is a licensed reinsurance intermediary-broker in this
state; or
(b) In another state, unless the person, firm, association, or
corporation is a licensed reinsurance intermediary-broker in this state
or another state having a regulatory scheme substantially similar to
this chapter.
(2) No person, firm, association, or corporation may act as a
reinsurance intermediary-manager:
(a) For a reinsurer domiciled in this state, unless the person,
firm, association, or corporation is a licensed reinsurance
intermediary-manager in this state;
(b) In this state, if the person, firm, association, or corporation
maintains an office either directly or as a member or employee of a
firm or association, or an officer, director, or employee of a
corporation in this state, unless the person, firm, association, or
corporation is a licensed reinsurance intermediary-manager in this
state;
(c) In another state for a nondomestic reinsurer, unless the
person, firm, association, or corporation is a licensed reinsurance
intermediary-manager in this state or another state having a
substantially similar regulatory scheme.
(3) The commissioner may require a reinsurance intermediary-manager
subject to subsection (2) of this section to:
(a) File a bond in an amount and from an insurer acceptable to the
commissioner for the protection of the reinsurer; and
(b) Maintain an errors and omissions policy in an amount acceptable
to the commissioner.
(4)(((a))) The commissioner may issue a reinsurance intermediary
license to a person, firm, association, or corporation who has complied
with the requirements of this chapter. Any such license issued to a
firm or association authorizes all the members of the firm or
association and any designated employees to act as reinsurance
intermediaries under the license, and all such persons may be named in
the application and any supplements to it. Any such license issued to
a corporation authorizes all of the officers, and any designated
employees and directors of it, to act as reinsurance intermediaries on
behalf of the corporation, and all such persons must be named in the
application and any supplements to it.
(((b) If the applicant for a reinsurance intermediary license is a
nonresident, the applicant, as a condition precedent to receiving or
holding a license, shall designate the commissioner as agent for
service of process in the manner, and with the same legal effect,
provided for by this title for designation of service of process upon
unauthorized insurers, and also shall furnish the commissioner with the
name and address of a resident of this state upon whom notices or
orders of the commissioner or process affecting the nonresident
reinsurance intermediary may be served. The licensee shall promptly
notify the commissioner in writing of every change in its designated
agent for service of process, but the change does not become effective
until acknowledged by the commissioner.))
(5)(a) Each licensed nonresident reinsurance intermediary must
appoint the commissioner as the reinsurance intermediary's attorney to
receive service of legal process issued against the reinsurance
intermediary in this state upon causes of action arising within this
state. Service upon the commissioner as attorney constitutes effective
legal service upon the reinsurance intermediary.
(b) With the appointment the reinsurance intermediary must
designate the person to whom the commissioner must forward legal
process so served upon him or her.
(c) The appointment is irrevocable, binds any successor in interest
or to the assets or liabilities of the reinsurance intermediary, and
remains in effect for as long as there could be any cause of action
against the reinsurance intermediary arising out of the reinsurance
intermediary's insurance transactions in this state.
(d) The service of process must be accomplished and processed in
the manner prescribed in section 6 of this act.
(6) The commissioner may refuse to issue a reinsurance intermediary
license if, in his or her judgment, the applicant, anyone named on the
application, or a member, principal, officer, or director of the
applicant, is not trustworthy, or that a controlling person of the
applicant is not trustworthy to act as a reinsurance intermediary, or
that any of the foregoing has given cause for revocation or suspension
of the license, or has failed to comply with a prerequisite for the
issuance of such license. Upon written request, the commissioner will
furnish a summary of the basis for refusal to issue a license, which
document is privileged and not subject to chapter 42.56 RCW.
(((6))) (7) Licensed attorneys-at-law of this state when acting in
their professional capacity as such are exempt from this section.
Sec. 14 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.)) The service of process must be
accomplished and processed in the manner prescribed in section 6 of
this act.
(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. 15 RCW 48.102.021 and 2009 c 104 s 4 are each amended to
read as follows:
(1) Only a life insurance producer who has been duly licensed as a
resident insurance producer with a lifeline of authority in this state
or his or her home state for at least one year and is licensed as a
nonresident producer in this state is permitted to operate as a broker.
(2) Not later than thirty days from the first day of operating as
a broker, the life insurance producer ((shall)) must notify the
commissioner that he or she intends acting as a broker on a form
prescribed by the commissioner, pay a fee of one hundred dollars, and
if a nonresident producer appoint the commissioner as attorney for
service of process under subsection (6) of this section. Notification
((shall)) must include an acknowledgement by the life insurance
producer that he or she will operate as a broker in accordance with
this chapter.
(3) A person licensed as an attorney, certified public accountant,
or financial planner accredited by a nationally recognized
accreditation agency, who is retained to represent the owner, whose
compensation is not paid directly or indirectly by the provider or
purchaser, may negotiate life settlement contracts on behalf of the
owner without having to obtain a license as a broker.
(4) The authority to act as a broker ((shall)) continues in force
until suspended, revoked, or not renewed. The authority to act as a
broker ((shall)) automatically expires if not timely renewed. The
authority to act as a broker ((shall be)) is valid for a time period
coincident with the expiration date of the broker's insurance producer
license. The authority to act as a broker is renewable at that time,
upon payment of a renewal fee in the amount of one hundred dollars and
if the payment is received by the commissioner prior to the expiration
date, the broker's authority to act as a broker continues in effect.
(a) If the renewal fee is not received by the commissioner prior to
the expiration date, the broker ((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 of 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 payment of the renewal fee is not received by the
commissioner after sixty days the surcharge is two hundred percent of
the renewal fee.
(5) Subsection (4)(a) of this section does not exempt any person
from any penalty provided by law for transacting life settlement
business without the valid authority to act as a broker.
(6)(a) A nonresident broker ((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 broker. Service of
legal process against the broker can be had only by service upon the
commissioner.
(b) ((With the appointment the broker shall designate the person to
whom the commissioner shall forward legal process so served upon him or
her. The broker may change the person by filing a new designation.)) The appointment of the commissioner as attorney ((
(c)shall be))
is irrevocable, ((shall)) binds any successor in interest or to the
assets or liabilities of the broker, and ((shall)) remains in effect as
long as there is in this state any contract made by the broker or
liabilities or duties arising therefrom.
(((d) Duplicate copies of legal process against a broker 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.)) (c) The service of process must be
accomplished and processed in the manner prescribed in section 6 of
this act.
(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 broker 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 broker, and the broker shall not be required to appear,
plead, or answer until the expiration of forty days after the date of
service upon the commissioner
(7) A broker may not use any person to perform the functions of a
provider unless such a person holds a current, valid license as a
provider, and as provided in this chapter.
Sec. 16 RCW 48.110.030 and 2006 c 274 s 4 are each amended to
read as follows:
(1) A person may not act as, or offer to act as, or hold himself or
herself out to be a service contract provider in this state, nor may a
service contract be sold to a consumer in this state, unless the
service contract provider has a valid registration as a service
contract provider issued by the commissioner.
(2) Applicants to be a service contract provider must make an
application to the commissioner upon a form to be furnished by the
commissioner. The application must include or be accompanied by the
following information and documents:
(a) All basic organizational documents of the service contract
provider, including any articles of incorporation, articles of
association, partnership agreement, trade name certificate, trust
agreement, shareholder agreement, bylaws, and other applicable
documents, and all amendments to those documents;
(b) The identities of the service contract provider's executive
officer or officers directly responsible for the service contract
provider's service contract business, and, if more than fifty percent
of the service contract provider's gross revenue is derived from the
sale of service contracts, the identities of the service contract
provider's directors and stockholders having beneficial ownership of
ten percent or more of any class of securities;
(c) Audited annual financial statements or other financial reports
acceptable to the commissioner for the two most recent years which
prove that the applicant is solvent and any information the
commissioner may require in order to review the current financial
condition of the applicant. If the service contract provider is
relying on RCW 48.110.050(2)(c) to assure the faithful performance of
its obligations to service contract holders, then the audited financial
statements of the service contract provider's parent company must also
be filed;
(d) An application fee of two hundred fifty dollars, which
((shall)) must be deposited into the general fund; and
(e) Any other pertinent information required by the commissioner.
(3) ((The applicant shall appoint the commissioner as its attorney
to receive service of legal process in any action, suit, or proceeding
in any court. This appointment is irrevocable and shall bind the
service contract provider or any successor in interest, shall remain in
effect as long as there is in force in this state any contract or any
obligation arising therefrom related to residents of this state, and
shall be processed in accordance with RCW 48.05.210)) Each registered
service contract provider must appoint the commissioner as the service
contract provider's attorney to receive service of legal process issued
against the service contract provider in this state upon causes of
action arising within this state. Service upon the commissioner as
attorney constitutes effective legal service upon the service contract
provider.
(a) With the appointment the service contract provider must
designate the person to whom the commissioner must forward legal
process so served upon him or her.
(b) The appointment is irrevocable, binds any successor in interest
or to the assets or liabilities of the service contract provider, and
remains in effect for as long as there could be any cause of action
against the service contract provider arising out of any of the service
contract provider's contracts or obligations in this state.
(c) The service of process must be accomplished and processed in
the manner prescribed in section 6 of this act.
(4) The commissioner may refuse to issue a registration if the
commissioner determines that the service contract provider, or any
individual responsible for the conduct of the affairs of the service
contract provider under subsection (2)(b) of this section, is not
competent, trustworthy, financially responsible, or has had a license
as a service contract provider or similar license denied or revoked for
cause by any state.
(5) A registration issued under this section is valid, unless
surrendered, suspended, or revoked by the commissioner, or not renewed
for so long as the service contract provider continues in business in
this state and remains in compliance with this chapter. A registration
is subject to renewal annually on the first day of July upon
application of the service contract provider and payment of a fee of
two hundred dollars, which ((shall)) must be deposited into the general
fund. If not so renewed, the registration expires on the June 30th
next preceding.
(6) A service contract provider ((shall)) must keep current the
information required to be disclosed in its registration under this
section by reporting all material changes or additions within thirty
days after the end of the month in which the change or addition occurs.
Sec. 17 RCW 48.110.055 and 2006 c 274 s 17 are each amended to
read as follows:
(1) This section applies to protection product guarantee providers.
(2) A person ((shall)) may not act as, or offer to act as, or hold
himself or herself out to be a protection product guarantee provider in
this state, nor may a protection product be sold to a consumer in this
state, unless the protection product guarantee provider has:
(a) A valid registration as a protection product guarantee provider
issued by the commissioner; and
(b) Either demonstrated its financial responsibility or assured the
faithful performance of the protection product guarantee provider's
obligations to its protection product guarantee holders by insuring all
protection product guarantees under a reimbursement insurance policy
issued by an insurer holding a certificate of authority from the
commissioner or a risk retention group, as defined in 15 U.S.C. Sec.
3901(a)(4), as long as that risk retention group is in full compliance
with the federal liability risk retention act of 1986 (15 U.S.C. Sec.
3901 et seq.), is in good standing in its domiciliary jurisdiction, and
properly registered with the commissioner under chapter 48.92 RCW. The
insurance required by this subsection must meet the following
requirements:
(i) The insurer or risk retention group must, at the time the
policy is filed with the commissioner, and continuously thereafter,
maintain surplus as to policyholders and paid-in capital of at least
fifteen million dollars and annually file audited financial statements
with the commissioner; and
(ii) The commissioner may authorize an insurer or risk retention
group that has surplus as to policyholders and paid-in capital of less
than fifteen million dollars, but at least equal to ten million
dollars, to issue the insurance required by this subsection if the
insurer or risk retention group demonstrates to the satisfaction of the
commissioner that the company maintains a ratio of direct written
premiums, wherever written, to surplus as to policyholders and paid-in
capital of not more than three to one.
(3) Applicants to be a protection product guarantee provider
((shall)) must make an application to the commissioner upon a form to
be furnished by the commissioner. The application ((shall)) must
include or be accompanied by the following information and documents:
(a) The names of the protection product guarantee provider's
executive officer or officers directly responsible for the protection
product guarantee provider's protection product guarantee business and
their biographical affidavits on a form prescribed by the commissioner;
(b) The name, address, and telephone number of any administrators
designated by the protection product guarantee provider to be
responsible for the administration of protection product guarantees in
this state;
(c) A copy of the protection product guarantee reimbursement
insurance policy or policies;
(d) A copy of each protection product guarantee the protection
product guarantee provider proposes to use in this state;
(e) Any other pertinent information required by the commissioner;
and
(f) A nonrefundable application fee of two hundred fifty dollars.
(4) ((The applicant shall appoint the commissioner as its attorney
to receive service of legal process in any action, suit, or proceeding
in any court. This appointment is irrevocable and shall bind the
protection product guarantee provider or any successor in interest,
shall remain in effect as long as there is in force in this state any
protection product guarantee or any obligation arising therefrom
related to residents of this state, and shall be processed in
accordance with RCW 48.05.210)) Each registered protection product
guarantee provider must appoint the commissioner as the protection
product guarantee provider's attorney to receive service of legal
process issued against the protection product guarantee provider in
this state upon causes of action arising within this state. Service
upon the commissioner as attorney constitutes effective legal service
upon the protection product guarantee provider.
(a) With the appointment the protection product guarantee provider
must designate the person to whom the commissioner must forward legal
process so served upon him or her.
(b) The appointment is irrevocable, binds any successor in interest
or to the assets or liabilities of the protection product guarantee
provider, and remains in effect for as long as there could be any cause
of action against the protection product guarantee provider arising out
of any of the protection product guarantee provider's contracts or
obligations in this state.
(c) The service of process must be accomplished and processed in
the manner prescribed in section 6 of this act.
(5) The commissioner may refuse to issue a registration if the
commissioner determines that the protection product guarantee provider,
or any individual responsible for the conduct of the affairs of the
protection product guarantee provider under subsection (3)(a) of this
section, is not competent, trustworthy, financially responsible, or has
had a license as a protection product guarantee provider or similar
license denied or revoked for cause by any state.
(6) A registration issued under this section is valid, unless
surrendered, suspended, or revoked by the commissioner, or not renewed
for so long as the protection product guarantee provider continues in
business in this state and remains in compliance with this chapter. A
registration is subject to renewal annually on the first day of July
upon application of the protection product guarantee provider and
payment of a fee of two hundred fifty dollars. If not so renewed, the
registration expires on the June 30th next preceding.
(7) A protection product guarantee provider ((shall)) must keep
current the information required to be disclosed in its registration
under this section by reporting all material changes or additions
within thirty days after the end of the month in which the change or
addition occurs.
Sec. 18 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))) (4) 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) If domiciled in this state, 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) If the applicant is not domiciled in this state, the
applicant must appoint the commissioner as the discount plan
organization's attorney to receive service of legal process issued
against the discount plan organization in this state upon causes of
action arising within this state. Service upon the commissioner as
attorney constitutes effective legal service upon the discount plan
organization.
(b) With the appointment the discount plan organization must
designate the person to whom the commissioner must forward legal
process so served upon him or her.
(c) The appointment is irrevocable, binds any successor in interest
or to the assets or liabilities of the discount plan organization, and
remains in effect for as long as there could be any cause of action
against the discount plan organization arising out of the discount plan
organization's transactions in this state.
(d) The service of process must be accomplished and processed in
the manner prescribed in section 6 of this act.
(4)(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))) (5) After the receipt of an application filed under
subsection (2) or (((3))) (4) of this section, the commissioner
((shall)) must review the application and notify the applicant of any
deficiencies in the application.
(((5))) (6)(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))) (7) 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))) (8)(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))) (9) 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))) (9)(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))) (10) 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))) (11) 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.
NEW SECTION. Sec. 19 RCW 48.05.210 (Service of process--Procedure) and 2009 c 549 s 7018, 1981 c 339 s 3, & 1947 c 79 s .05.21
are each repealed.