HOUSE BILL REPORT

HB 780

BYRepresentatives Niemi, P. King, Meyers, Jacobsen, Lux and Dellwo

Creating insurance consumer board.

House Committe on Financial Institutions & Insurance

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (11)

     Signed by Representatives Lux, Chair; Zellinsky, Vice Chair; Crane, Day, Dellwo, Grimm, P. King, Meyers, Niemi, Nutley and Winsley.

Minority Report:     Do not pass.  (2)

     Signed by Representatives Betrozoff and Chandler.

House Staff:John Conniff (786-7119)

Rereferred House Committee on Ways & Means/Appropriations

Majority Report:     The substitute by Committee on Financial Institutions & Insurance as further amended by Committee on Ways & Means/Appropriations be substituted therefor and the substitute do pass.  (14)

     Signed by Representatives Locke, Chair; Braddock, Brekke, Bristow, Ebersole, Grant, Grimm, Hine, McMullen, Niemi, Peery, Sayan, H. Sommers and Sprenkle.

Minority Report:     Do not pass.  (9)

     Signed by Representatives Allen, Belcher, Fuhrman, Holland, McLean, Nealey, Silver, L. Smith and B. Williams.

House Staff:    Susan Kavanaugh (786-7145)

AS REPORTED BY COMMITTEE ON WAYS & MEANS/APPROPRIATIONS

MARCH 7, 1987

BACKGROUND:

The Insurance Commissioner is required by law to enforce the provisions of the insurance code.  Among these provisions are insurance rate review and enforcement of the unfair practices chapter of the insurance code.

As a method of enforcement, the commissioner operates a consumer protection division within the Office of the Commissioner.  In addition, the commissioner periodically publishes consumer information pamphlets to better inform the public of their insurance rights and to provide information regarding insurance products.

SUMMARY:

SUBSTITUTE BILL AS AMENDED:  The legislature finds that insurance consumers need an independent voice to advocate consumers' interests to the Legislature.  The legislature declares that the purpose of the act is to create a insurance consumers board to research and advocate change in laws that benefit consumers. The board is not intended to duplicate the Insurance Commissioner's consumer protection activities.

The Insurance Consumers Board is created and will consist of seven members, the commissioner or the commissioner's designee, and six members appointed by the governor. No member who serves on the board may be employed by the insurance industry while serving on the board.  Any staff hired by the board may not be employed by the insurance industry while serving the board or for one year following employment.

The board shall maintain appropriate offices and employ such staff as is necessary to accomplish its purposes. 

The board shall research and analyze consumer-related insurance issues and advocate on behalf of consumers.  However, the board is prohibited from becoming involved in the commissioner's rate review process. In addition, the board is required to file an annual report to the legislature regarding the activities and finances of the board.

The board will be funded through an assessment on all insurers, health care contractors, and health maintenance organizations authorized to do business in Washington.  Such assessment shall not exceed $300 per insured per year. Such assessments will be deposited to a separate account with the state treasurer and will be subject to legislative appropriation.

The board will cease to exist June 30, 1993 and is subject to the sunset review process.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The original bill is substantially rewritten.

AMENDED BILL COMPARED TO SUBSTITUTE BILL:  The $500,000 appropriation is removed.

CHANGES PROPOSED BY COMMITTEE ON WAYS & MEANS/APPROPRIATIONS:  Amendment proposed.

Revenue:   The bill has a revenue impact.

Fiscal Note:    Requested March 6, 1987.

Effective Date:The bill contains an emergency clause and takes effect immediately.

House Committee ‑ Testified For:     (Financial Institutions & Insurance)  None Presented.

(Ways & Means/Appropriations)  None Presented.

House Committee - Testified Against: (Financial Institutions & Insurance)  Basil Badley, American Insurance Association; and Hal Fosso, State Farm Insurance.

(Ways & Means/Appropriations)  None Presented.

House Committee - Testimony For:     (Financial Institutions & Insurance)  None Presented.

(Ways & Means/Appropriations)  None Presented.

House Committee - Testimony Against: (Financial Institutions & Insurance)  The commissioner employs staff to protect the consumer's interest. This board will increase costs to insurers and will not achieve any benefits not already achieved through the commissioner's office.

(Ways & Means/Appropriations)  None Presented.