SENATE BILL REPORT

SB 5196

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

Providing civil immunity for certain actions relating to insurance.

Senate Committee on Financial Institutions

Senate Hearing Date(s):January 27, 1987; February 5, 1987

Majority Report:  That Substitute Senate Bill No. 5196 be substituted therefor, and the substitute bill do pass.

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

Senate Staff:Phil Sorensen (786-7470)

                  February 5, 1987

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS, FEBRUARY 5, 1987

BACKGROUND:

The Insurance Commissioner has a consumer protection division which investigates complaints against the insurance industry, when those complaints are made by a named individual.  However, a large number of complaints remain uninvestigated each year because they are made anonymously.  The fear of civil reprisal against the complainant by either the company or the individual named in the complaint is viewed as a main reason for anonymity.  Apparently similar fears exist when the National Association of Insurance Commissioners meets annually to discuss general problems and complaints within the insurance industry.  There, too, specific problems areas and individuals are discussed, but generally only by those commissioners and employees from states already having statutory immunity in existence.

SUMMARY:

Individuals who, without malice, provide information to the Insurance Commissioner or to law enforcement personnel regarding harmful practices and conditions within the insurance industry shall be immune from civil action for defamation, or any other relevant tort.  The bill extends the immunity to the Insurance Commissioner, the National Association of Insurance Commissioners, and their respective agents and employees.  Publication and discussion of specific consumer complaints is permitted, provided the publication or discussion takes place without malice and in good faith.  The act supplements any current statutory and common law privileges and immunities enjoyed by anyone acting pursuant to this bill.

EFFECT OF PROPOSED SUBSTITUTE:

Immunity from civil action is available to individuals providing information required by, requested by, or useful to either the Commissioner or the National Association of Insurance Commissioners, unless actual malice, fraud or bad faith is shown.  The immunity granted for reports made to law enforcement personnel has been deleted.

Fiscal Note:      none requested

Senate Committee - Testified: Scott Jarvis, Insurance Commissioner's Office