SENATE BILL REPORT

HB 51

BYRepresentatives Lux, Winsley, P. King, Crane, Niemi, Wang, Brooks, Locke and Meyers;by request of Insurance Commissioner

Authorizing the continuation of the Washington Essential Property Insurance Inspection and Placement Program.

House Committe on Financial Institutions & Insurance

Senate Committee on Financial Institutions

Senate Hearing Date(s):March 24, 1987

Majority Report:  Do pass.

      Signed by Senators Moore, Chairman; Bender, Vice Chairman; Bottiger, Fleming, McDermott, Metcalf, von Reichbauer.

Senate Staff:Phil Sorensen (786-7470)

                  March 24, 1987

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS, MARCH 24, 1987

BACKGROUND:

To facilitate the acquisition of property insurance by business and property owners in high-risk areas, Congress created the Fair Access to Insurance Requirements (FAIR) Plan as part of the Urban Property Protection and Reinsurance Act of 1968.  The U.S. Department of Housing and Urban Development was directed to approve and oversee state supervised FAIR plans, such as the "Washington Essential Property Insurance Inspection and Placement Program" created in 1969.

The plan allows an insurance industry administrative group to review applications for property insurance and assign the high-risk property to a state authorized property insurer.  State regulations control the inspection of property,  the acceptance and rejection of applications, policy provisions, commissions and cancellations. 

Congress's termination of the Urban Property Protection and Reinsurance Act removed the commissioner's authority to maintain the FAIR Plan.

SUMMARY:

The commissioner is authorized to continue Washington's FAIR Plan.

Fiscal Note:      none requested

Senate Committee - Testified: June Mulcahy, Insurance Commissioner's Office