Passed by the House March 10, 2009 Yeas 96 Nays 0 FRANK CHOPP ________________________________________ Speaker of the House of Representatives Passed by the Senate April 8, 2009 Yeas 46 Nays 0 BRAD OWEN ________________________________________ President of the Senate		CERTIFICATE I, Barbara Baker, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is SUBSTITUTE HOUSE BILL 1565 as passed by the House of Representatives and the Senate on the dates hereon set forth. BARBARA BAKER ________________________________________ Chief Clerk
Approved April 21, 2009, 2:42 p.m. CHRISTINE GREGOIRE ________________________________________ Governor of the State of Washington		FILED April 22, 2009 Secretary of State State of Washington

AN ACT Relating to business continuity plans for domestic insurers; amending RCW 48.07.160, 48.07.170, 48.07.180, 48.07.190, and 48.07.200; adding new sections to chapter 48.07 RCW; and providing an effective date.

Sec. 1 RCW 48.07.160 and 1963 c 195 s 25 are each amended to read as follows:
It is desirable for the general welfare and in particular for the welfare of insurance beneficiaries, policyholders, claimants, subscribers, and others that the business of domestic insurers be continued notwithstanding the event of a local, state, or national emergency. The purpose of this section ((~~and~~)), RCW 48.07.170 through 48.07.200, and section 6 of this act is to facilitate the continued operation of domestic insurers in the event that a local, state, or national emergency is ((~~caused by an attack on the United States which is~~)) so disruptive of normal business and commerce ((~~in this state~~)) as to make it impossible or impracticable for a domestic insurer to conduct its business in accord with applicable provisions of law, its bylaws, or its charter. When used in this section ((~~and~~)), RCW 48.07.170 through 48.07.200, and section 6 of this act the word "insurer" ((~~includes a fraternal benefit society~~)) means the same as defined in RCW 48.01.053.

Sec. 2 RCW 48.07.170 and 1963 c 195 s 26 are each amended to read as follows:
The board of directors of any domestic insurer may at any time adopt emergency bylaws, subject to repeal or change by action of those having power to adopt regular bylaws for such insurer, which shall be operative during such a local, state, or national emergency and which may, notwithstanding any different provisions of the regular bylaws, or of the applicable statutes, or of such insurer's charter, make any provision that may be reasonably necessary for the operation of such insurer during the period of such emergency.

Sec. 3   RCW 48.07.180 and 1963 c 195 s 27 are each amended to read as follows:
     In the event that the board of directors of a domestic insurer has not adopted emergency bylaws, the following provisions shall become effective upon the occurrence of such a local, state, or national emergency as ((~~above~~)) described in this chapter:
     (1) Three directors shall constitute a quorum for the transaction of business at all meetings of the board.
     (2) Any vacancy in the board may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director.
     (3) If there are no surviving directors, but at least three vice presidents of such insurer survive, the three vice presidents with the longest term of service shall be the directors and shall possess all of the powers of the previous board of directors and such powers as are granted ((~~herein~~)) in this chapter or by subsequently enacted legislation. By majority vote, such emergency board of directors may elect other directors. If there are not at least three surviving vice presidents, the commissioner or duly designated person exercising the powers of the commissioner shall appoint three persons as directors who shall include any surviving vice presidents and who shall possess all of the powers of the previous board of directors and such powers as are granted ((~~herein~~)) in this chapter or by subsequently enacted legislation, and these persons by majority vote may elect other directors.

Sec. 4 RCW 48.07.190 and 1963 c 195 s 28 are each amended to read as follows:
At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of such a local, state, or national emergency and in the event of the death or incapacity of the president, the secretary, or the treasurer of such insurer, such officers, or any of them, shall be succeeded in the office by the person named or described in a succession list adopted by the board of directors. Such list may be on the basis of named persons or position titles, shall establish the order of priority and may prescribe the conditions under which the powers of the office shall be exercised.

Sec. 5 RCW 48.07.200 and 1963 c 195 s 29 are each amended to read as follows:
At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of such a local, state, or national emergency the principal office and place of business of such insurer shall be at such location as is named or described in the resolution. Such resolution may provide for alternate locations and establish an order of preference.

NEW SECTION. Sec. 6 A new section is added to chapter 48.07 RCW to read as follows:
Each domestic insurer must create and maintain a written business continuity plan identifying procedures relating to a local, state, or national emergency or significant business disruption.

NEW SECTION. Sec. 7 A new section is added to chapter 48.07 RCW to read as follows:
After considering relevant standards adopted by the national association of insurance commissioners, other states, and other regulatory authorities that regulate financial institutions, the commissioner shall adopt, by rule, standards for insurers and insurance producers to follow for business continuity planning.