BILL REQ. #: S-4015.2
| State of Washington | 61st Legislature | 2010 Regular Session |
READ FIRST TIME 01/22/10.
AN ACT Relating to nonresident surplus line brokers and insurance producers; amending RCW 48.15.070, 48.15.073, 48.17.173, and 48.17.250; adding a new section to chapter 48.02 RCW; and providing an effective date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 48.15.070 and 2009 c 162 s 3 are each amended to read
as follows:
Any individual while a resident of this state, or any firm ((or
any)), corporation, or other business entity that has in its employ a
qualified individual who is a resident of this state and who is
authorized to exercise the powers of the firm or corporation, deemed by
the commissioner to be competent and trustworthy, and while maintaining
an office at a designated location in this state, may be licensed as a
surplus line broker in accordance with this section.
(1) Application to the commissioner for the license ((shall)) must
be made on forms furnished by the commissioner. As part of, or in
connection with, this application, the 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 records;
purposes; and other pertinent information, 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 ((shall)) must be paid
to the commissioner's office by the applicant.
(2) Every resident surplus line broker licensed under this chapter
must maintain a bond in favor of the state of Washington in the penal
sum of twenty thousand dollars, with authorized corporate sureties
approved by the commissioner, conditioned that the licensee will
conduct business under the license in accordance with the provisions of
this chapter and that the licensee will promptly remit the taxes
provided by RCW 48.15.120. The licensee ((shall)) must maintain such
bond in force for as long as the license remains in effect.
(3) Every resident surplus line broker licensed under this chapter
must maintain in force while so licensed a bond in favor of the people
of the state of Washington or a named insured such that the people of
the state are covered by the bond, executed by an authorized corporate
surety approved by the commissioner, in the amount of two thousand five
hundred dollars, or five percent of the premiums from placement of
coverage with surplus line insurers in the previous calendar year,
whichever is greater, but not to exceed one hundred thousand dollars
total aggregate liability. The bond may be continuous in form, and
total aggregate liability on the bond may be limited to the required
amount of the bond. The bond ((shall)) must be contingent on the
accounting by the resident surplus line broker to any person requesting
the broker to obtain insurance, for moneys or premiums collected in
connection therewith. A bond issued in accordance with RCW 48.17.250
or with this subsection will satisfy the requirements of both RCW
48.17.250 and this subsection if the limit of liability is not less
than the greater of the requirement of RCW 48.17.250 or the requirement
of this subsection.
(4) Authorized surplus line brokers of a business entity may meet
the requirements of subsection (3) of this section with a bond in the
name of the business entity, continuous in form, and in the amount set
forth in subsection (3) of this section.
(5) Surplus line brokers may meet the requirements of this section
with a bond in the name of an association. The association must have
been in existence for five years, have common membership, and have been
formed for a purpose other than obtaining a bond. An individual
surplus line broker remains responsible for assuring that a bond is in
effect and is for the correct amount.
(6) Members of an association may meet the requirements of
subsection (3) of this section with a bond in the name of the
association that is continuous in form and in the amounts set forth in
subsection (3) of this section for each participating member.
(7) The surety may cancel the bond and be released from further
liability thereunder upon thirty days' written notice in advance to the
principal. The cancellation does not affect any liability incurred or
accrued under the bond before the termination of the thirty-day period.
(8) Failure to have and maintain the bonds required under
subsections (2) and (3) of this section is grounds for revocation of a
license under RCW 48.15.140.
(9) If a party injured under the terms of the bond required under
subsection (3) of this section requests the surplus line broker to
provide the name of the surety and the bond number, the surplus line
broker must provide the information within three working days after
receiving the request.
(10) All records relating to the bonds required by this section
must be kept available and open to the inspection of the commissioner
at any business time.
(11) A surplus line broker's license expires if not timely renewed.
Surplus line broker licenses are valid for the time period established
by the commissioner unless suspended or revoked at an earlier date.
(12) Subject to the right of the commissioner to suspend, revoke,
or refuse to renew any surplus line broker's license as provided in
this title, the license may be renewed into another like period by
filing with the commissioner by any means acceptable to the
commissioner on or before the expiration date a request, by or on
behalf of the licensee, for the renewal accompanied by payment of the
renewal fee as specified in RCW 48.14.010.
(13) If the request and fee for renewal of a surplus line broker's
license are filed with the commissioner prior to expiration of the
existing license, the licensee may continue to act under the license,
unless sooner revoked or suspended, until the issuance of a renewal
license, or until the expiration of fifteen days after the commissioner
has refused to renew the license and has mailed notification of the
refusal to the licensee. If the request and fee for the license are
not received by the expiration date, the authority conferred by the
license ends on the expiration date.
(14) If the request for renewal of a surplus line broker's license
and payment of the fee are not received by the commissioner prior to
the expiration date, the applicant for renewal ((shall)) must pay to
the commissioner in addition to the renewal fee, a surcharge as
follows:
(a) For the first thirty days or part thereof of delinquency, the
surcharge is fifty percent of the renewal fee; and
(b) For the next thirty days or part thereof of delinquency, the
surcharge is one hundred percent of the renewal fee.
(15) If the request for renewal of a surplus line broker's license
and payment of the renewal fee are not received by the commissioner
after sixty days but prior to twelve months after the expiration date,
the application ((shall)) must be for reinstatement of the license and
the applicant for reinstatement ((shall)) must pay to the commissioner
the license fee and a surcharge of two hundred percent of the license
fee.
(16) Subsections (14) and (15) of this section do not exempt any
person from any penalty provided by law for transacting business
without a valid and subsisting license.
(17) An individual surplus line broker who allows his or her
license to lapse may, within twelve months after the expiration date,
reinstate the same license without the necessity of passing a written
examination.
(18) For the purposes of this section, a "qualified individual" is
a natural person who has met all the requirements that must be met by
an individual surplus line broker.
(19) 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 surplus line broker to
produce the information called for in an application for license.
Sec. 2 RCW 48.15.073 and 2009 c 162 s 4 are each amended to read
as follows:
(1) The commissioner may license as a surplus line broker a person
who is otherwise qualified under this code but who is not a resident of
this state, if by the laws of the state or province of his or her
residence or domicile a similar privilege is extended to residents of
this state.
(2) A person under subsection (1) of this section must meet the
same qualifications((, other than residency,)) as any other person
seeking to be licensed as a surplus line broker under this chapter,
except for residency, and is not required to submit fingerprints with
the license application for a background check. A person granted a
nonresident surplus line broker's license must ((have)) fulfill all the
same responsibilities as any other surplus line broker, except for
bonding, and is subject to the (a) commissioner's supervision as though
resident in this state and (b) rules adopted under this chapter.
(3) A nonresident surplus line broker's license((: (a) Expires and
(b) is subject to)) expires if not timely renewed. A nonresident
surplus line broker's license is valid for the time period established
by the commissioner unless suspended or revoked at an earlier date.
The request and fee for the renewal of the license is the same as the
renewal and fee requirements for ((renewal as)) a resident surplus line
broker licensed under RCW 48.15.070.
(4) Each licensed nonresident surplus line broker ((shall
appoint)), by application for and issuance of a license, is deemed to
have appointed the commissioner as the surplus line broker's attorney
to receive service of legal process issued against the surplus line
broker in this state upon causes of action arising within this state.
Service upon the commissioner as attorney constitutes effective legal
service upon the surplus line broker.
(a) The appointment of the commissioner as attorney is irrevocable,
binds any successor in interest or to the assets or liabilities of the
surplus line broker, and remains in effect for as long as there could
be any cause of action against the surplus line broker arising out of
the surplus line broker's insurance transactions in this state.
(b) ((Duplicate copies of legal process against a surplus line
broker shall be served upon the commissioner either by a person
competent to serve a summons, or through registered mail. At the time
of service the plaintiff shall pay to the commissioner ten dollars,
taxable as costs in the action.)) Service
of legal process must be accomplished and processed in the manner
prescribed in section 5 of this act.
(c) Upon receiving service, the commissioner shall immediately send
one of the copies of the process, by registered mail with return
receipt requested, to the defendant surplus line broker at the surplus
line broker's last address of record with the commissioner.
(d) The commissioner shall keep a record of the day and hour of
service upon the commissioner of all legal process. Proceedings may
not be had against the defendant surplus line broker and the defendant
is not required to appear, plead, or answer until the expiration of
forty days after the date of service upon the commissioner.
Sec. 3 RCW 48.17.173 and 2009 c 162 s 20 are each amended to read
as follows:
(1) Unless denied licensure under RCW 48.17.530, a nonresident
person ((shall)) must receive a nonresident producer license for the
line or lines of authority under RCW 48.17.170 which is substantially
equivalent to the line or lines of authority granted to the nonresident
person in the person's home state if:
(a) The person is currently licensed as a resident and in good
standing in the person's home state;
(b) The person has submitted the proper request for licensure and
has paid the fees required by RCW 48.14.010;
(c) The person has submitted or transmitted to the commissioner a
completed uniform application;
(d) The person's home state awards nonresident producer licenses to
residents of this state on the same basis; and
(e) A business entity, it has designated an individual licensed
insurance producer responsible for the business entity's compliance
with the insurance laws and rules of this state.
(2) An individual, as part of the request for licensure, ((shall))
must furnish information concerning the individual's 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. 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
((shall)) must be paid to the commissioner's office by the applicant.
(3) A nonresident business entity acting as a title insurance agent
is required to obtain a title insurance agent license. Application
((shall)) must be made to the commissioner on the uniform business
entity application, and the individual submitting the application
((shall)) must declare under penalty of refusal, suspension, or
revocation of the license that the statements made in the application
are true, correct, and complete to the best of the individual's
knowledge and belief. Before approving the application, the
commissioner must find that the business entity:
(a) Has paid the fees set forth in RCW 48.14.010;
(b) Maintains a lawfully established place of business in its home
state and holds a corresponding license issued by the state of its
principal place of business, and has complied with the laws of this
state governing the admission of foreign corporations;
(c) Is empowered to be a title agent under a members' agreement, if
a limited liability company, or by its articles of incorporation;
(d) Is appointed as an agent by one or more authorized title
insurance companies; ((and))
(e) Has complied with RCW 48.29.155 and 48.29.160; and
(f) Has designated an individual officer of the title insurance
agent to be responsible for the business entity's compliance with the
insurance laws and rules of this state.
(4) ((The commissioner shall waive any license application
requirements for a nonresident license applicant with a valid license
from the applicant's home state, except the requirements imposed by
this section, if the applicant's home state awards nonresident licenses
to residents of this state on the same basis.)) If the nonresident
insurance producer applicant (a) has a valid license from the
applicant's home state and (b) the applicant's home state awards
nonresident insurance producer licenses to residents of this state on
the same basis, the commissioner must waive any license application
requirements, except those imposed under this section.
(5) A nonresident insurance producer's satisfaction of the
nonresident insurance producer's home state's continuing education
requirements for licensed insurance producers ((shall)) constitutes
satisfaction of this state's continuing education requirements if the
nonresident producer's home state recognizes the satisfaction of its
continuing education requirements imposed upon producers from this
state on the same basis.
(6) ((The commissioner shall waive the requirement for providing
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, if the person possesses a valid
insurance producer's or surplus line broker's license from the person's
home state and the person's home state requires submission of
information concerning a person's identity, including fingerprints for
the licensure of its resident insurance producers or surplus line
brokers, respectively.)) The commissioner may verify the nonresident insurance
producer's licensing status through the producer database maintained by
the NAIC, its affiliates, or subsidiaries.
(7)
(((8))) (7) A nonresident insurance producer who moves from one
state to another state or a resident producer who moves from this state
to another state ((shall)) must file a change of address and provide
certification from the new resident state within thirty days of the
change of legal residence. No fee or license application is required.
(((9))) (8) A person licensed as a limited line credit insurance or
other type of limited lines insurance producer in the person's home
state and who complies with the requirements of subsection (1) of this
section ((shall)) must receive a nonresident limited lines insurance
producer license, under subsection (1) of this section, granting the
same scope of authority as granted under the license issued by the
insurance producer's home state. For the purpose of this subsection,
"limited lines insurance" is any authority granted by the home state
which restricts the authority of the license to the lines set out in
RCW 48.17.170(1) (g) or (h).
(((10))) (9) Each licensed nonresident insurance producer or title
insurance agent ((shall appoint)), by application for and issuance of
a license, is deemed to have appointed the commissioner as the
insurance producer's or title insurance agent's attorney to receive
service of legal process issued against the insurance producer or title
insurance agent in this state upon causes of action arising within this
state. Service upon the commissioner as attorney ((shall)) constitutes
effective legal service upon the insurance producer or title insurance
agent.
(a) The appointment ((shall be)) of the commissioner as attorney is
irrevocable, binds any successor in interest or to the assets or
liabilities of the insurance producer or title insurance agent, and
remains in effect for as long as there could be any cause of action
against the insurance producer or title insurance agent arising out of
the insurance producer's or title insurance agent's insurance
transactions in this state.
(b) ((Duplicate copies of such legal process against such insurance
producer or title insurance agent shall be served upon the commissioner
either by a person competent to serve a summons, or through registered
mail. At the time of such service the plaintiff shall pay to the
commissioner ten dollars, taxable as costs in the action.)) Service of legal process must be accomplished and processed
in the manner prescribed in section 5 of this act.
(c) Upon receiving such service, the commissioner shall forthwith
send one of the copies of the process, by registered mail with return
receipt requested, to the defendant insurance producer or title
insurance agent at the insurance producer's or title insurance agent's
last address of record with the commissioner.
(d) The commissioner shall keep a record of the day and hour of
service upon the commissioner of all such legal process. No
proceedings shall be had against the defendant insurance producer or
title insurance agent, and the defendant shall not be required to
appear, plead, or answer until the expiration of forty days after the
date of service upon the commissioner.
(11)
(10) 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 insurance producer or
title insurance agent to produce the information called for in an
application for license.
Sec. 4 RCW 48.17.250 and 2009 c 162 s 21 are each amended to read
as follows:
(1) Every resident insurance producer licensed under this chapter
on or after July 1, 2009, who places insurance either directly or
indirectly with an insurer with which the insurance producer is not
appointed as an agent must maintain in force while so licensed a bond
in favor of the people of the state of Washington or a named insured
such that the people of Washington are covered by the bond, executed by
an authorized corporate surety approved by the commissioner, in the
amount of two thousand five hundred dollars, or five percent of the
premiums brokered in the previous calendar year, whichever is greater,
but not to exceed one hundred thousand dollars total aggregate
liability. The bond may be continuous in form, and total aggregate
liability on the bond may be limited to the required amount of the
bond. The bond ((shall)) must be contingent on the accounting by the
resident insurance producer to any person requesting the resident
insurance producer to obtain insurance, for moneys or premiums
collected in connection therewith.
(2) Authorized insurance producers of a business entity may meet
the requirements of this section with a bond in the name of the
business entity, continuous in form, and in the amounts set forth in
subsection (1) of this section. Insurance producers may meet the
requirements of this section with a bond in the name of an association.
The association must have been in existence for five years, have common
membership, and have been formed for a purpose other than obtaining a
bond. An individual insurance producer remains responsible for
assuring that a bond is in effect and is for the correct amount.
(3) The surety may cancel the bond and be released from further
liability thereunder upon thirty days' written notice in advance to the
principal. The cancellation does not affect any liability incurred or
accrued under the bond before the termination of the thirty-day period.
(4) The insurance producer's license may be revoked if the
insurance producer acts without a bond that is required under this
section.
(5) If a party injured under the terms of the bond requests the
insurance producer to provide the name of the surety and the bond
number, the insurance producer must provide the information within
three working days after receiving the request.
(6) Members of an association may meet the requirements of this
section with a bond in the name of the association that is continuous
in form and in the amounts set forth in subsection (1) of this section
for each participating member.
(7) All records relating to the bond required by this section
((shall)) must be kept available and open to the inspection of the
commissioner at any business time.
NEW SECTION. Sec. 5 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 or make
available a copy of the process to the person on whose behalf he or she
has been served by mail, electronic means, or other means reasonably
calculated to give notice. The copy must be sent or made available in
a manner that is secure and with a receipt that is verifiable.
(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.
NEW SECTION. Sec. 6 This act takes effect July 26, 2010.