HOUSE BILL REPORT

SHB 511

BYHouse Committee on Financial Institutions & Insurance (originally sponsored by Representatives Meyers, Niemi, Dellwo, Sprenkle, Lux, Sayan, Nutley, P. King, Braddock, Grant, Grimm, Crane and Wang)

Requiring motor vehicle liability insurance policies to provide personal injury protection benefits.

House Committe on Financial Institutions & Insurance

Majority Report:     Do pass with amendment.  (10)

     Signed by Representatives Lux, Chair; Zellinsky, Vice Chair; Anderson, Betrozoff,  Chandler, Crane, Dorn, Nutley, Silver and Winsley.

Minority Report:     Do not pass.  (1)

     Signed by Representative Day.

House Staff:John Conniff (786-7119)

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE

JANUARY 19, 1988

BACKGROUND:

Automobile insurance companies currently offer "personal injury protection" coverage which is a form of medical coverage that pays for the insured's medical expenses, loss of wages, and loss of services.  The benefits are provided without regard to fault in an accident and are provided subject to dollar limits and time limits.  For example, a typical coverage may provide up to ten thousand dollars of benefits for all costs incurred within one year of the automobile accident.

The insurance code does not contain an explicit provision authorizing the Insurance Commissioner to regulate such coverage nor does the code require insurers to offer such coverage to policyholders who wish to purchase such coverage.  Recently, the Commissioner issued regulations requiring insurers to offer greater limits of coverage to policyholders willing to pay for benefits.

SUMMARY:

BILL AS AMENDED:  Motor vehicle liability insurers must offer personal injury protection benefit coverage in every private passenger automobile insurance policy unless the named insured or spouse rejects such coverage in writing.  Motor vehicle liability policy and insured are defined.

Such coverage must provide at least two thousand dollars in benefits for funeral expenses, at least ten thousand dollars in benefits for loss of income, and at least five thousand dollars in benefits for the loss of the insured's services.  Such coverage need not be provided for commercial "umbrella" liability policies, and motorcycle policies and such coverage may not be "stacked" by the policyholder in order to double the coverage.

AMENDED BILL COMPARED TO SUBSTITUTE:  The effective date was changed from January 1, 1988 to January 1, 1989.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     Scott Jarvis, Insurance Commissioner's Office.

House Committee - Testified Against: Foster Cronyn, NAII and Washington Insurers; Jean Leonard, State Farm Insurance Company and Mike Kapphahn, Farmers Insurance Company.

House Committee - Testimony For:     The Commissioner's office does not have the full regulatory authority over personal injury protection coverage that is provided by this legislation.  Personal injury protection coverage should contain the same basic benefits no matter which insurer offers the coverage so that consumers are not misled.

House Committee - Testimony Against: Most auto insurers offer personal injury protection coverage and most policyholders accept such coverage.  Regulation of personal injury protection coverage would lead to litigation and would not add to consumer protection. The Commissioner has already adopted a regulation requiring additional amounts of coverage be offered.