AN ACT Relating to insurance; and amending RCW 48.02.160, 48.04.140, 48.07.150, 48.14.010, 48.14.040, 48.17.150, 48.17.230, 48.17.490, 48.17.540, 48.30.157, and 48.30.260.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Section .02.16, chapter 79, Laws of 1947 and RCW 48.02.160 are each amended to read as follows:

The commissioner shall:

(1) Obtain and publish for the use of courts and appraisers throughout the state, tables showing the average expectancy of life and values of annuities and of life and term estates.

(2) Disseminate information concerning the insurance laws of this state.

(3) Provide assistance to members of the public in obtaining information and in resolving complaints involving insurers and other licensees.

Sec. 2. Section .04.14, chapter 79, Laws of 1947 and RCW 48.04.140 are each amended to read as follows:

(1) The taking of an appeal shall not stay any action taken or proposed to be taken by the commissioner under the order appealed from unless a stay is granted by the court at a hearing held as part of the proceedings on appeal.

(2) A stay shall not be granted by the court in any case where the granting of a stay would tend to injure the public interest. In granting a stay, the court may require of the person taking the appeal such security or other conditions as it deems proper.

(((3) If the order appealed from is one suspending, revoking, or refusing to renew an agent's, broker's, solicitor's or adjuster's license, the appellant by filing a bond with the clerk of the court, subject to approval of the court, in the sum of five hundred dollars, conditioned to pay all costs that may be awarded against him, may, if filed prior to the effective date of such order, supersede the order appealed from until the final determination of the appeal.))

Sec. 3. Section .07.15, chapter 79, Laws of 1947 and RCW 48.07.150 are each amended to read as follows:

(1) No domestic insurer shall knowingly solicit insurance business in any reciprocating state in which it is not then licensed as an authorized insurer.

(2) This section shall not prohibit advertising through publications and radio broadcasts originating outside such reciprocating state, if the insurer is licensed in a majority of the states in which such advertising is disseminated, and if such advertising is not specifically directed to residents of such reciprocating state.

(3) This section shall not prohibit insurance, covering persons or risks located in a reciprocating state, under contracts solicited and issued in states in which the insurer is then licensed. Nor shall it prohibit insurance effectuated by the insurer as an unauthorized insurer in accordance with the laws of the reciprocating state. Nor shall it prohibit renewal or continuance in force, with or without modification, of contracts otherwise lawful and which were not originally executed in violation of this section.

(4) A "reciprocating" state, as used herein, is one under the laws of which a similar prohibition is imposed upon and is enforced against insurers domiciled in that state.

(5) The commissioner shall suspend or revoke the certificate of authority of a domestic insurer found by him, after a hearing, to have violated this section.

Sec. 4. Section .14.01, chapter 79, Laws of 1947 as last amended by section 1, chapter 111, Laws of 1981 and RCW 48.14.010 are each amended to read as follows:

(1) The commissioner shall collect in advance the following fees:

@i2@56!tp1(a) For filing charter documents:

@i6(i) Original charter documents, bylaws or record of organization of insurers, or certified copies thereof, required to be filed!w× !tr$250.00

@i6(ii) Amended charter documents, or certified copy thereof, other than amendments of bylaws!w× !tr$!sc ,00110.00

@i6(iii) No additional charge or fee shall be required for filing any of such documents in the office of the secretary of state.

@i2@56(b) Certificate of authority:

@i6(i) Issuance!w× !tr$!sc ,00125.00

@i6(ii) Renewal!w× !tr$!sc ,00125.00

@i2@56(c) Annual statement of insurer, filing!w× !tr$!sc ,00120.00

@i2@56(d) Organization or financing of domestic insurers and affiliated corporations:

@i6(i) Application for solicitation permit, filing!w× !tr$100.00

@i6(ii) Issuance of solicitation permit!w× !tr$!sc ,00125.00

@i2@56(e) Agents' licenses:

@i6(i) Agent's qualification licenses each year!w× !tr$!sc ,00125.00

@i6(ii)

Filing of appointment of each such agent, each year!w× !tr$!sc ,00110.00

@i6(iii) Limited license issued pursuant to RCW 48.17.190, each year!w× !tr$!sc ,00110.00

@i6

@i2@56(f) Brokers' licenses:

@i6(i) Broker's license, each year!w× !tr$!sc ,00150.00

@i6(ii) Surplus line broker, each year!w× !tr$100.00

@i6

@i2@56(g) Solicitors' license, each year!w× !tr$!sc ,00110.00

@i2@56(h) Adjusters' licenses:

@i6(i) Independent adjuster, each year!w× !tr$!sc ,00125.00

@i6(ii) Public adjuster, each year!w× !tr$!sc ,00125.00

@i2@56(i) Resident general agent's license, each year!w× !tr$!sc ,00125.00

@i2@56(j) Examination for license, each examination:

@i6((~~(i) Application processing fee for first examination for license!w~~× ~~!tr$!sc ,0025.00~~

~~@i6(ii) Broker's license!w~~× ~~!tr$!sc ,00150.00~~

~~@i6(iii)~~)) All ((~~other~~)) examinations, except examinations administered by an independent testing service, the fees for which are to be approved by the commissioner and collected directly by and retained by such independent testing service!w× !tr$!sc ,00110.00

@i2@56(k) Miscellaneous services:

@i6(i) Filing other documents!w× !tr$!sc ,0025.00

@i6(ii) Commissioner's certificate under seal!w× !tr$!sc ,0025.00

@i6(iii) Copy of documents filed in the commissioner's office, reasonable charge therefor as determined by the commissioner.

(2) All fees so collected shall be remitted by the commissioner to the state treasurer not later than the first business day following, and shall be placed to the credit of the general fund: PROVIDED, That fees for examinations administered by an independent testing service which are approved by the commissioner pursuant to subsection (1)(j)((~~(iii)~~)) of this section ((~~may~~)) shall be collected directly by such independent testing service and retained by it.

Sec. 5. Section .14.04, chapter 79, Laws of 1947 as amended by section 21, chapter 190, Laws of 1949 and RCW 48.14.040 are each amended to read as follows:

(1) If pursuant to the laws of any other state or country, any taxes, ((~~fines, penalties,~~)) licenses, fees, deposits, or other obligations or prohibitions, in the aggregate, or additional to or at a net rate in excess of any such taxes, ((~~fines, penalties,~~)) licenses, fees, deposits or other obligations or prohibitions imposed by the laws of this state upon like foreign or alien insurers and their agents and solicitors, are imposed on insurers of this state and their agents doing business in such other state or country, a like rate, obligation or prohibition may be imposed by the commissioner, as to any item or combination of items involved, upon all insurers of such other state or country and their agents doing business in this state, so long as such laws remain in force or are so applied.

(2) For the purposes of this section, an alien insurer((,)) may be deemed to be domiciled in the state wherein it has established its principal office or agency in the United States. If no such office or agency has been established, the domicile of the alien insurer shall be deemed to be the country under the laws of which it is formed.

Sec. 6. Section .17.15, chapter 79, Laws of 1947 as last amended by section 7, chapter 269, Laws of 1979 ex. sess. and RCW 48.17.150 are each amended to read as follows:

(1) To qualify for an agent's or broker's license an applicant must otherwise comply with this code therefor and must

(a) be eighteen years of age or over, if an individual;

(b) be a bona fide resident of and actually reside in this state, or if a corporation, be other than an insurer and maintain a lawfully established place of business in this state, except as provided in RCW 48.17.330;

(c) be empowered to be an agent or broker, as the case may be, under its members' agreement, if a firm, or by its articles of incorporation, if a corporation;

(d) complete such minimum educational requirements for the issuance of an agent's license for the kinds of insurance specified in RCW 48.17.210 as may be required by regulation issued by the commissioner;

(e) successfully pass any examination as required under RCW 48.17.110;

(f) be a trustworthy person;

(g) ((~~not intend to use or use the license for the purpose principally of writing controlled business, as defined in RCW 48.17.080;~~

~~(h)~~)) if for an agent's license, be appointed as its agent by one or more authorized insurers, subject to issuance of the license; and

((~~(i)~~)) (h) if for broker's license, have had at least two years experience either as an agent, solicitor, adjuster, general agent, broker, or as an employee of insurers or representatives of insurers, and special education or training of sufficient duration and extent reasonably to satisfy the commissioner that he possesses the competence necessary to fulfill the responsibilities of broker.

(2) The commissioner shall by regulation establish minimum continuing education requirements for the renewal or reissuance of a license to an agent or a broker: PROVIDED, That the commissioner shall require that continuing education courses will be made available on a state-wide basis in order to ensure that persons residing in all geographical areas of this state will have a reasonable opportunity to attend such courses. The continuing education requirements shall be appropriate to the license for the kinds of insurance specified in RCW 48.17.210: PROVIDED FURTHER, That the continuing education requirements may be waived by the commissioner for good cause shown.

(3) If the commissioner finds that the applicant is so qualified and that the license fee has been paid, he shall issue the license. Otherwise, the commissioner shall refuse to issue the license.

Sec. 7. Section .17.23, chapter 79, Laws of 1947 and RCW 48.17.230 are each amended to read as follows:

A licensed agent appointed by an insurer as to life or disability insurances may, if with the knowledge and consent of such insurer, place any portion of a life or disability risk which has been rejected by such insurer, with other authorized insurers without being licensed as to such other insurers. Any agent so placing rejected business becomes the agent for the company issuing the insurance with respect to that business just as if it had appointed such person as its agent.

Sec. 8. Section .17.49, chapter 79, Laws of 1947 and RCW 48.17.490 are each amended to read as follows:

(1) No agent, general agent, solicitor, or broker shall compensate or offer to compensate in any manner any person other than an agent, general agent, solicitor, or broker, licensed in this or any other state or province, for procuring or in any manner helping to procure applications for or to place insurance in this state. This provision shall not prohibit the payment of compensation not contingent upon volume of business transacted, in the form of salaries to the regular employees of such agent, general agent, solicitor or broker, or the payment for services furnished by an unlicensed person who does not participate in the transaction of insurance in any way requiring licensing as an agent, solicitor, broker, or adjuster and who is not compensated on any basis dependent upon a sale of insurance being made.

(2) No such licensee shall be promised or allowed any compensation on account of the procuring of applications for or the placing of kinds of insurance which he himself is not then licensed to procure or place.

(3) The commissioner shall suspend or revoke the licenses of all licensees participating in any violation of this section.

Sec. 9. Section .17.54, chapter 79, Laws of 1947 as last amended by section 8, chapter 181, Laws of 1982 and RCW 48.17.540 are each amended to read as follows:

(1) The commissioner may revoke or refuse to renew any license issued under this chapter, or any surplus line broker's license, immediately and without hearing, upon sentencing of the licensee for conviction of a felony by final judgment of any court of competent jurisdiction, if the facts giving rise to such conviction demonstrate the licensee to be untrustworthy to maintain any such license.

(2) The commissioner may suspend, revoke, or refuse to renew any such license:

(a) By order given to the licensee not less than fifteen days prior to the effective date thereof, subject to the right of the licensee to have a hearing as provided in RCW 48.04.010; or

(b) By an order on hearing made as provided in RCW 34.04.120 effective not less than ten days after date of the giving of the order, subject to the right of the licensee to appeal to the superior court.

(3) The commissioner may temporarily suspend such license by order given to the licensee not less than three days prior to the effective date thereof, provided the order contains a notice of revocation and includes a finding that the public safety or welfare imperatively requires emergency action. Such suspension shall continue only until proceedings for revocation are concluded. The commissioner also may temporarily suspend such license in cases where proceedings for revocation are pending if he or she finds that the public safety or welfare imperatively requires emergency action.

Sec. 10. Section 10, chapter 199, Laws of 1979 ex. sess. as amended by section 154, chapter 3, Laws of 1983 and RCW 48.30.157 are each amended to read as follows:

Notwithstanding the provisions of RCW 48.30.140, 48.30.150, and 48.30.155, the commissioner may permit an agent or broker to enter into reasonable arrangements with insureds and prospective insureds to charge a reduced fee in situations where services that are charged for are provided beyond the scope of services customarily provided in connection with the solicitation and procurement of insurance, so that an overall charge to an insured or prospective insured is reasonable taking into account receipt of commissions and fees and their relation, proportionally, to the value of the total work performed.

Sec. 11. Section 20, chapter 193, Laws of 1957 as last amended by section 2, chapter 6, Laws of 1984 and RCW 48.30.260 are each amended to read as follows:

(1) Every debtor or borrower, when property insurance of any kind is required in connection with the debt or loan, shall have reasonable opportunity and choice in the selection of the agent, broker, and insurer through whom such insurance is to be placed; but only if the insurance is properly provided for the protection of the creditor or lender not later than at commencement of risk as to such property as respects such creditor or lender, and in the case of renewal of insurance, only if the renewal policy, or a proper binder therefor containing a brief description of the coverage bound and the identity of the insurer in which the coverage is bound, is delivered to the creditor or lender not later than thirty days prior to the renewal date.

(2) Every person who lends money or extends credit and who solicits insurance on real and personal property must explain to the borrower in prominently displayed writing that the insurance related to such loan or credit extension may be purchased from an insurer or agent of the borrower's choice, subject only to the lender's right to reject a given insurer or agent as provided in subsection (3)(b) of this section.

(3) No person who lends money or extends credit may:

(a) Solicit insurance for the protection of ((~~real~~)) property, after a person indicates interest in securing a ((~~real estate~~)) loan or credit extension, until such person has received a commitment from the lender as to a loan or credit extension;

(b) Unreasonably reject a contract of insurance furnished by the borrower for the protection of the property securing the credit or lien. A rejection shall not be deemed unreasonable if it is based on reasonable standards, uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an insurer. Such standards shall not discriminate against any particular type of insurer, nor shall such standards call for rejection of an insurance contract because the contract contains coverage in addition to that required in the credit transaction;

(c) Require that any borrower, mortgagor, purchaser, insurer, broker, or agent pay a separate charge, in connection with the handling of any contract of insurance required as security for a loan ((~~on real estate~~)), or pay a separate charge to substitute the insurance policy of one insurer for that of another. This subsection does not include the interest which may be charged on premium loans or premium advancements in accordance with the terms of the loan or credit document;

(d) Use or disclose, without the prior written consent of the borrower, mortgagor, or purchaser taken at a time other than the making of the loan or extension of credit, information relative to a contract of insurance which is required by the credit transaction, for the purpose of replacing such insurance;

(e) Require any procedures or conditions of duly licensed agents, brokers, or insurers not customarily required of those agents, brokers, or insurers affiliated or in any way connected with the person who lends money or extends credit; or

(f) Require property insurance in an amount in excess of the amount which could reasonably be expected to be paid under the policy, or combination of policies, in the event of a loss.

(4) Nothing contained in this section shall prevent a person who lends money or extends credit from placing insurance on real or personal property in the event the mortgagor, borrower, or purchaser has failed to provide required insurance in accordance with the terms of the loan or credit document.

(5) Nothing contained in this section shall apply to credit life or credit disability insurance.