AN ACT Relating to insurance; and adding a new chapter to Title 48 RCW.

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

NEW SECTION. Sec. 1. As used in this chapter, the following terms have the meanings indicated, unless the context clearly requires otherwise:

(1) "Board" means the insurance consumers board established under section 2 of this act.

(2) "Commissioner" means the insurance commissioner.

(3) "Company" means any company, corporation, group, or organization, however structured, that contracts with insurance consumers to provide indemnification for losses. "Company" does not include reinsurers.

(4) "Consumer" means any individual, group, or business that contracts with a company for indemnification from losses.

NEW SECTION. Sec. 2. There is hereby created the insurance consumers board to promote the interests of insurance consumers and to disseminate insurance information to consumers. The board shall consist of seven members as follows:

(1) The insurance commissioner;

(2) One member appointed by the insurance commissioner;

(3) One member appointed by the governor;

(4) Four members, one appointed by each of the majority and minority caucuses of the house of representatives and the senate.

No person who is or has been employed in any capacity by any group, individual, or organization that is part of or associated with the insurance industry shall be appointed to the board. No person who serves on the board shall accept any form of compensation or gratuity from any group, individual, or association that is part of or associated with the insurance industry while serving on the board or for a period of two years following termination of membership on the board.

NEW SECTION. Sec. 3. (1) The initial members of the board, other than the commissioner shall be appointed as follows:

(a) The members appointed by the commissioner and the governor shall be appointed for a period of two years commencing October 1, 1987; and

(b) Members appointed by legislative caucuses shall be appointed for a period of three years commencing October 1, 1987. Upon expiration of the initial appointments, members other than the commissioner shall be appointed to two-year terms. No person shall serve more than four years with the exception of the initial members appointed by legislative caucuses who may serve a maximum of five years.

(2) Members of the board who are not currently being compensated by public moneys, shall be compensated as provided in RCW 43.03.240 and reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 4. In addition to performing various duties specified elsewhere in this chapter, the board shall:

(1) Collect, analyze, and disseminate consumer-related insurance information;

(2) Advocate and promote the individual and collective interest as consumers in relation to the insurance industry, administrative agencies, the governor's office, the legislature, and any other groups or individuals;

(3) Research and analyze indemnification systems and recommend creation or modification of specific systems to elected officials, working closely with legislative and executive officials;

(4) In conjunction with the insurance commissioner, prepare an annual report to the governor, the legislature and the supreme court providing background information, statistics, analysis, and recommendations regarding the functions of indemnification systems in this state, both in a broad sense and with regard to specific categories of indemnification or insurance;

(5) Prepare and disseminate to the public informative brochures descirbing insurance matters of interest to consumers;

(6) Establish and publicize lists of sources of indemnification, rated according to compliance of their business practices with specific criteria established by the board. Criteria for ratings shall be based in part on statutory requirements as well as on considerations of consumers' best interest.

NEW SECTION. Sec. 5. The board may collect information from indemnification sources or groups, individuals, or associations that are part of or associated with the insurance industry, and any other information deemed necessary by the board.

In the event a request by the board for information is unanswered or only partially answered after ninety days from the receipt of the request by the person, group, company, or organization requested to provide the information, the board may issue a subpoena in order to obtain the specific information requested.

The board may retain such staff as are necessary to carry out its duties.

NEW SECTION. Sec. 6. (1) At the request of the board, a company shall include with every premium statement and with every insurance contract mailed or otherwise delivered to consumers an enclosure prepared by the board. The board shall furnish the form of the enclosure at least twenty-one days prior to the mailing. The company shall print the enclosure in sufficient quantity to ensure receipt by all consumers.

(2) The size of any enclosure shall be compatible with the company's mailing envelope.

(3) No company shall be required to mail or deliver more than four enclosures annually.

NEW SECTION. Sec. 7. (1) Every insurance contract sold or renewed that requires a total annual premium payment of two hundred dollars or more shall include a surcharge of fifty cents unless a purchaser opts in writing not to pay the surcharge.

(2) The company shall collect the surcharge at the time of contracting and, thereafter, once annually at the time of the first premium billing in each calendar year.

(3) The company shall pay to the commission the total amount of surcharges it collects along with, but separate from premium taxes payable under applicable law.

(4) The board shall draft a concise statement regarding the surcharge and its use. Every company shall include the board's statement on the front page of every insurance contract or billing statement assessing the surcharge along with a box for the purchaser to check to opt not to pay the surcharge and a line for the purchaser's signature. No option not to pay the surcharge is valid without the purchaser's signature.

NEW SECTION. Sec. 8. Sections 1 through 7 of this act shall constitute a new chapter in Title 48 RCW.