Z-509                 _______________________________________________

                                                    HOUSE BILL NO. 828

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State of Washington                              50th Legislature                              1987 Regular Session

By Representatives Zellinsky, Lux, Winsley and Wang

Read first time 2/11/87 and referred to Committee on Financial Institutions & Insurance.

AN ACT Relating to property and casualty insurance; adding new sections to chapter 48.22 RCW; and creating a new section.

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

NEW SECTION. Sec. 1.     Persons seeking to purchase coverage in various classes of property and casualty insurance have experienced major problems due to the lack of availability of such insurance.  The legislature finds that the availability of property and casualty insurance is critical to the economy of the state of Washington and its unavailability threatens to weaken the economy of the state and undermine the financial stability of its citizens.

          Sections 2 through 5 of this act are intended to assist in reducing the problems of property and casualty insurance unavailability by authorizing the commissioner to establish joint underwriting associations when the commissioner finds that a class or classes of property and/or casualty insurance is not generally available in the admitted market.

NEW SECTION. Sec. 2.  A new section is added to chapter 48.22 RCW to read as follows:

          Unless the context requires otherwise, the definitions in this section apply throughout sections 3 through 5 of this act.

          (1) "Association" means a joint underwriting association established under section 3 of this act.

          (2) "Casualty insurance" means those types of insurance set forth in RCW 48.11.070 but does not include liability insurance coverage for day-care operations, private passenger automobiles, environmental pollution hazards, or workers' compensation.

          (3) "Commissioner" means the insurance commissioner of the state of Washington.

          (4) "Property insurance" means those types of insurance set forth in RCW 48.11.040.

          (5) "Insurer" means those persons set forth in RCW 48.01.050.

NEW SECTION. Sec. 3.  A new section is added to chapter 48.22 RCW to read as follows:

          If the commissioner finds that a class or classes of property and/or casualty insurance is not reasonably available in this state from insurers possessing certificates of authority to do business in this state, the commissioner may establish such joint underwriting associations as are necessary to provide such class or classes of insurance through policies of insurance affording reasonable coverage.

NEW SECTION. Sec. 4.  A new section is added to chapter 48.22 RCW to read as follows:

          Any association established by the commissioner under section 3 of this act shall be comprised of all insurers possessing a certificate of authority permitting the sale in this state of any of the classes of property and/or casualty insurance to be provided by the association.  Exclusion or withdrawal from an association may be permitted by the commissioner upon a demonstration by the insurer of hardship threatening the financial solvency of the insurer.

NEW SECTION. Sec. 5.  A new section is added to chapter 48.22 RCW to read as follows:

          Any plan of operation established by the commissioner under section 3 of this act shall be designed to permit an association to operate as close to a break-even point as is practical.  The commissioner may require association members to pay, by reasonable assessments or fees, any costs or expenses of the association, to commence and continue operation, above the amount of premium received by the association.