SENATE BILL REPORT

SB 5195

BYSenators Moore, Bender and Metcalf; by request of Insurance Commissioner

Revising provisions on insurance.

Senate Committee on Financial Institutions

Senate Hearing Date(s):January 27, 1987

Majority Report:  Do pass.

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

Senate Staff:Phil Sorensen (786-7470)

                  February 27, 1987

AS PASSED SENATE, FEBRUARY 27, 1987

BACKGROUND:

An agent, broker, solicitor or adjuster of insurance subject to an order suspending, revoking or refusing to issue a license, generally has that order stayed by posting a $500 bond prior to the effective date of the order.  If the bond is filed in a timely manner, courts have granted the stay on an almost automatic basis.

The retaliatory provision of the Insurance Code enables Washington to assess insurers from other states the amount of taxes and fees the other states would charge a Washington insurer doing business in that state.  Currently, fines and penalties for the failure to make timely payments of these taxes and fees are assessed to those out of state insurers, however, it is not clear how enforceable those fines and penalties are.

The disciplinary portion of the Insurance Code permits the Commission to temporarily suspend a license during a revocation proceeding in the event that the public safety and welfare requires immediate action.

SUMMARY:

Several substantive changes to the Insurance Code are made.  First, the posting of a $500 bond no longer guarantees a stay of a court's order to revoke, suspend, or refusal to issue a license.  The court has clear discretion to determine whether the public's interest is injured by issuing such a stay.

Second, the retaliatory provision for collecting premium taxes on out of state insurers no longer includes "fines and penalties" in its calculation.  "Fines and penalties" are a separate assessment, in addition to the retaliatory taxes and fees charged to the out of state insurer. 

Third, the Commissioner is given the authority to suspend a license not only during the revocation proceeding, but also while that proceeding is pending. 

Technical changes, clarification of meaning, deletion of obsolete language and the recognition of practices within the industry are included.

Fiscal Note:      none requested

Senate Committee - Testified: Scott Jarvis, Ins. Dept.