BILL REQ. #: H-1644.1
State of Washington | 62nd Legislature | 2011 Regular Session |
READ FIRST TIME 02/16/11.
AN ACT Relating to regulating insurance rates; and amending RCW 48.02.120, 48.19.035, 48.19.040, and 48.29.147.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 48.02.120 and 1985 c 264 s 2 are each amended to read
as follows:
(1) The commissioner shall preserve in permanent form records of
his or her proceedings, hearings, investigations, and examinations, and
shall file such records in his or her office.
(2)(a) The records of the commissioner and insurance filings in his
or her office shall be open to public inspection, except as otherwise
provided by this code and (b) of this subsection.
(b) Rate filings for individual and small group health benefit
plans shall be open to public inspection on the effective date set
forth in the filing.
(((3) Actuarial formulas, statistics, and assumptions submitted in
support of a rate or form filing by an insurer, health care service
contractor, or health maintenance organization or submitted to the
commissioner upon his or her request shall be withheld from public
inspection in order to preserve trade secrets or prevent unfair
competition.))
Sec. 2 RCW 48.19.035 and 2004 c 86 s 1 are each amended to read
as follows:
(1) For the purposes of this section:
(a) "Affiliate" has the same meaning as defined in RCW
48.31B.005(1).
(b) "Consumer" means an individual policyholder or applicant for
insurance.
(c) "Credit history" means any written, oral, or other
communication of any information by a consumer reporting agency bearing
on a consumer's creditworthiness, credit standing, or credit capacity
that is used or expected to be used, or collected in whole or in part,
for the purpose of serving as a factor in determining personal
insurance premiums or eligibility for coverage.
(d) "Insurance score" means a number or rating that is derived from
an algorithm, computer application, model, or other process that is
based in whole or in part on credit history.
(e) "Personal insurance" means:
(i) Private passenger automobile coverage;
(ii) Homeowner's coverage, including mobile homeowners,
manufactured homeowners, condominium owners, and renter's coverage;
(iii) Dwelling property coverage;
(iv) Earthquake coverage for a residence or personal property;
(v) Personal liability and theft coverage;
(vi) Personal inland marine coverage; and
(vii) Mechanical breakdown coverage for personal auto or home
appliances.
(2)(a) Credit history shall not be used to determine personal
insurance rates, premiums, or eligibility for coverage unless the
insurance scoring models are filed with the commissioner. Insurance
scoring models include all attributes and factors used in the
calculation of an insurance score. RCW 48.02.120 and 48.19.040(5)
((does)) do not apply to any information filed under this subsection,
and the information shall be withheld from public inspection and kept
confidential by the commissioner. All information filed under this
subsection shall be considered trade secrets ((under RCW
48.02.120(3))). Information filed under this subsection may be made
public by the commissioner for the sole purpose of enforcement actions
taken by the commissioner.
(b) Each insurer that uses credit history or an insurance score to
determine personal insurance rates, premiums, or eligibility for
coverage must file all rates and rating plans for that line of coverage
with the commissioner. This requirement applies equally to a single
insurer and two or more affiliated insurers. RCW 48.19.040(5) applies
to information filed under this subsection except that any eligibility
rules or guidelines shall be withheld from public inspection ((under
RCW 48.02.120(3))) from the date that the information is filed and
after it becomes effective.
(3) Insurers shall not use the following types of credit history to
calculate a personal insurance score or determine personal insurance
premiums or rates:
(a) The absence of credit history or the inability to determine the
consumer's credit history, unless the insurer has filed actuarial data
segmented by demographic factors in a manner prescribed by the
commissioner that demonstrates compliance with RCW 48.19.020;
(b) The number of credit inquiries;
(c) Credit history or an insurance score based on collection
accounts identified with a medical industry code;
(d) The initial purchase or finance of a vehicle or house that adds
a new loan to the consumer's existing credit history, if evident from
the consumer report; however, an insurer may consider the bill payment
history of any loan, the total number of loans, or both;
(e) The consumer's use of a particular type of credit card, charge
card, or debit card; or
(f) The consumer's total available line of credit; however, an
insurer may consider the total amount of outstanding debt in relation
to the total available line of credit.
(4) If a consumer is charged higher premiums due to disputed credit
history, the insurer shall rerate the policy retroactive to the
effective date of the current policy term. As rerated, the consumer
shall be charged the same premiums they would have been charged if
accurate credit history was used to calculate an insurance score. This
subsection applies only if the consumer resolves the dispute under the
process set forth in the fair credit reporting act and notifies the
insurer in writing that the dispute has been resolved.
(5) The commissioner may adopt rules to implement this section.
(6) This section applies to all personal insurance policies issued
or renewed on or after June 30, 2003.
Sec. 3 RCW 48.19.040 and 1994 c 131 s 8 are each amended to read
as follows:
(1) Every insurer or rating organization shall, before using, file
with the commissioner every classifications manual, manual of rules and
rates, rating plan, rating schedule, minimum rate, class rate, and
rating rule, and every modification of any of the foregoing which it
proposes. The insurer need not so file any rate on individually rated
risks as described in ((subdivision (1) of)) RCW 48.19.030(1); except
that any such specific rate made by a rating organization shall be
filed.
(2) Every such filing shall indicate the type and extent of the
coverage contemplated and must be accompanied by sufficient information
to permit the commissioner to determine whether it meets the
requirements of this chapter. An insurer or rating organization shall
offer in support of any filing:
(a) The experience or judgment of the insurer or rating
organization making the filing;
(b) An exhibit detailing the major elements of operating expense
for the types of insurance affected by the filing;
(c) An explanation of how investment income has been taken into
account in the proposed rates; and
(d) Any other information which the insurer or rating organization
deems relevant.
(3) If an insurer has insufficient loss experience to support its
proposed rates, it may submit loss experience for similar exposures of
other insurers or of a rating organization.
(4) Every such filing shall state its proposed effective date.
(5) A filing made pursuant to this chapter ((shall be exempt from
the provisions of RCW 48.02.120(3). However, the filing and all
supporting information accompanying it)) shall be open to public
inspection only after the filing becomes effective.
(6) Where a filing is required no insurer shall make or issue an
insurance contract or policy except in accordance with its filing then
in effect, except as is provided by RCW 48.19.090.
Sec. 4 RCW 48.29.147 and 2008 c 110 s 5 are each amended to read
as follows:
(1) Every title insurer shall, before using, file with the
commissioner every manual of title insurance rules and rates, rating
plan, rate schedule, minimum rate, class rate, and rating rule, and
every modification of any of the filings under this subsection which it
proposes.
(2) Every filing shall be accompanied by sufficient information to
permit the commissioner to determine whether the filing meets the
requirements of RCW 48.29.143.
(3) Data used to justify title insurance rates may not include
escrow income or expenses. The title insurance company shall include
a detailed explanation showing how expenses are allocated between the
title operations and escrow operations of the insurer or title
insurance agent.
(4) Every such filing shall state its proposed effective date.
(5) The commissioner shall review a filing as soon as reasonably
possible after it is received, to determine whether it meets the
requirements of RCW 48.29.143.
(6) The filing's proposed effective date shall be no earlier than
thirty days after the date on which the filing is received by the
commissioner. By giving notice to the insurer within this thirty days,
the commissioner may extend this waiting period for an additional
period not to exceed an additional fifteen days. The commissioner may,
upon application and for cause shown, waive part or all of the waiting
period with respect to a filing the commissioner has not disapproved.
If the commissioner does not disapprove the filing during the waiting
period, the filing takes effect on its proposed effective date.
(7) If within the waiting period or any extension thereof as
provided in subsection (6) of this section, the commissioner finds that
a filing does not meet the requirements of RCW 48.29.143 or the
requirements of subsections (2) through (4) of this section, the
commissioner shall disapprove the filing and shall give notice to the
insurer that the filing has been disapproved. This notice shall
specify the respect in which the commissioner finds the filing fails to
meet the requirements and shall state that the filing does not become
effective as proposed.
(8) If a filing is not disapproved by the commissioner within the
waiting period or any extension thereof, the filing becomes effective
as proposed.
(9) A filing made under this section ((is exempt from RCW
48.02.120(3). However, the filing)) and all supporting and
accompanying information ((accompanying it)) is open to public
inspection ((only)) after the filing becomes effective.
(10) A title insurer or title insurance agent shall not make or
issue a title insurance contract or policy, or use or collect any
premium on or after a date set by the commissioner by rule, which date
shall not be any earlier than January 1, 2010, except in accordance
with rates and rules filed with the commissioner as required by this
section.
(11) If at any time subsequent to the applicable review period
provided for in subsection (6) of this section, the commissioner has
reason to believe that a title insurer's rates do not meet the
requirements of RCW 48.29.143 or are otherwise contrary to law, or if
any person having an interest in the rates makes a written complaint to
the commissioner setting forth specific and reasonable grounds for the
complaint and requests a hearing, or if any insurer upon notice of the
commissioner's disapproval of a filing made under this section requests
a hearing, the commissioner shall hold a hearing within thirty days and
shall, in advance of it, give written notice of the hearing to all
parties in interest. The commissioner may, by issuing an order,
confirm, modify, change, or rescind any previous action, if it is
warranted by the facts shown at the hearing. The order shall not
affect any contract or policy made or issued prior to a reasonable
period of time, to be specified in the order, after the order is
issued.
(12) In any hearing regarding rates filed under this chapter the
burden shall be upon the title insurer to prove by a preponderance of
the evidence that the rates comply with RCW 48.29.143.