AN ACT Relating to discrimination in insurance; adding a new chapter to Title 48 RCW; prescribing penalties; providing an effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1. Unless the context clearly requires otherwise the definitions in this section apply throughout this chapter.

(1) "AIDS" means acquired immune deficiency syndrome as defined by the centers for disease control of the United States public health service.

(2) "ARC" means AIDS-related complex as defined by the centers for disease control of the United States public health service or, during any period when the centers for disease control have not issued a definition, by the Washington state board of health.

(3) "HTLV-III" means human T-lymphotropic virus, type-III.

(4) "Insurer" means any individual, partnership, corporation, association, fraternal benefit association, nonprofit health service plan, health maintenance organization, or other business entity that issues, amends, or renews individual or group health, disability, or life insurance policies or contracts, including health maintenance organization membership agreements, in this state.

NEW SECTION. Sec. 2. This chapter applies to the practices and procedures employed by insurers and their agents and employees in making determinations about an individual or group policy or contract of health, disability, or life insurance, or an individual or group health maintenance agreement.

NEW SECTION. Sec. 3. (1) An insurer or health maintenance organization may not deny, cancel, or refuse to renew insurance coverage or a health maintenance agreement, or alter benefits covered or expenses reimbursable, because an individual has tested positive on any test to screen for the presence of any probable causative agent of AIDS, ARC, or the HTLV-III infection, including, but not limited to, a test to screen for the presence of any antibody to the HTLV-III virus, or because an individual has declined to take such a test.

(2)(a) In determining whether to issue, cancel, or renew insurance coverage or a health maintenance agreement, an insurer or health maintenance organization may not use age, marital status, geographic area of residence, occupation, sex, sexual orientation, or any similar factor or combination of factors for the purpose of seeking to predict whether any individual may in the future develop AIDS or ARC.

(b) In determining rates, premiums, dues, assessments, benefits covered, or expenses reimbursable, or in any other aspect of insurance or health maintenance organization marketing or coverage, an insurer or health maintenance organization may not use age, marital status, geographic area of residence, occupation, sex, sexual orientation, or any similar factor or combination of factors for the purpose of seeking to predict whether any individual may in the future develop AIDS or ARC.

(3) No health or disability insurance policy or contract or health maintenance agreement may contain any exclusion, reduction, other limitation of coverage, deductibles, or coinsurance provisions related to the care and treatment of AIDS, ARC, HTLV-III infection, or any illness or disease arising from these medical conditions, unless the provisions apply generally to all benefits under the policy, contract, or agreement.

(4) No life insurance policy or contract may contain any exclusion, reduction, or other limitation of of benefits related to AIDS, ARC, HTLV-III infection, or any disease arising from these medical conditions, as a cause of death.

NEW SECTION. Sec. 4. (1) In addition to the prohibitions set forth in section 3 of this act, an insurer or health maintenance organization, during the period of five years from the effective date of this section, may not:

(a) Require or request any individual, directly or indirectly, to take any test to screen for the presence of any probable causative agent of AIDS, ARC, or the HTLV-III infection, including, but not limited to, a test to screen for the presence of any antibody to the HTLV-III virus;

(b) Require or request any individual, directly or indirectly, to disclose whether he or she has taken such a test, or to provide or authorize disclosure of the results of the test, if taken by the individual; or

(c) Consider in the determination of rates, premiums, dues, or assessments whether any individual has taken such a test, or the results of the test, if taken by the individual.

(2)(a) Following the period of five years from the effective date of this section, an insurer or health maintenance organization may apply to the commissioner for permission to increase rates, premiums, dues, or assessments, or impose a surcharge, for individuals who test positive for exposure to the probable causative agent of AIDS. An insurer or health maintenance organization, in its application, shall identify the test it proposes to use to identify exposure to the probable causative agent of AIDS.

(b)(i) The commissioner, upon receipt of an application described in (a) of this subsection, shall first request the state board of health to determine whether the test proposed by the applicant is reliable and accurate in identifying exposure to the probable causative agent of AIDS.

(ii) If the state board of health determines that the test is not reliable and accurate, the commissioner shall deny the application.

(iii) If the state board of health determines that the test is reliable and accurate, the commissioner shall review the application further and may approve the proposed increase or surcharge if he or she determines that it is fair, reasonable, nondiscriminatory, and related to actual experience or based on sound actuarial principles applied to analyses of a substantial amount of scientific data collected over a period of years.

(iv) Upon approval of an application for an increase or surcharge, an insurer or health maintenance organization may subsequently request or require individuals to take the test specified in its application and may impose the surcharge or increased rates, premiums, dues, or assessments upon those who test positive and those who decline to take the test.

NEW SECTION. Sec. 5. (1) Nothing in this chapter may be construed as preventing or restricting insurers or health maintenance organizations, or their agents or employees, from following standard procedures for determining the insurability of or establishing the rates or premiums for new applicants diagnosed by a licensed physician as having AIDS, if the procedures:

(a) Apply in the same manner to all other new applicants within the same category of insurance;

(b) Are justified on the basis of actuarial evidence; and

(2) An insurer or health maintenance organization may request or require a new applicant to take a test otherwise prohibited by this chapter if:

(a) The test is administered by a licensed physician as a required element of a diagnosis of AIDS; and

(b) Other symptoms of AIDS, as specified by the centers for disease control of the United States public health service, are present to the degree that a licensed physician determines that administration of the test is medically indicated.

NEW SECTION. Sec. 6. No insurer or health maintenance organization may request or require an individual to take a test or series of tests pursuant to section 4 or 5 of this act unless:

(1) The insurer or health maintenance organization agrees not to disclose the fact of the testing or the test results to any person except as required by law or as authorized by the individual in writing; and

(2) The individual provides his or her informed consent by signing and dating a statement of agreement, which identifies the specific test or tests to be performed and identifies the person or persons to whom disclosure is authorized.

NEW SECTION. Sec. 7. An insurer or health maintenance organization may contest the validity of a policy, contract, or agreement that was issued, amended, or renewed in a period in which the determination provided in section 4(2) of this act is not in effect for a period of up to three years from the date of issuance, amendment, or renewal, if the basis for contesting the validity is that the insured or the consumer under a health maintenance agreement knowingly failed or refused to disclose to the insurer or health maintenance organization that he or she had AIDS at the time of issuance, amendment, or renewal.

NEW SECTION. Sec. 8. (1) Any practice that circumvents or contravenes or results in a circumvention or contravention of this chapter or rules issued under it is a violation of this chapter.

(2) Each day that a violation continues shall constitute a separate violation.

(3) An insurer or health maintenance organization, or its agent or employee, who violates this chapter or rules issued under it shall be subject to a civil penalty of not less than one thousand dollars or more than ten thousand dollars per violation in the case of insurers and health maintenance organizations, and not less than fifty dollars or more than three hundred dollars in the case of agents or employees.

(4) Any person injured by a violation of this chapter or rules issued under it may bring an action for damages and other appropriate relief in lieu of pursuing administrative remedies.

NEW SECTION. Sec. 9. The commissioner shall issue proposed rules, within ninety days of the effective date of this section, to implement this chapter.

NEW SECTION. Sec. 10. This chapter may be cited as the prohibition of discrimination in the provision of insurance act.

NEW SECTION. Sec. 11. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 12. Sections 1 through 11 of this act shall constitute a new chapter in Title 48 RCW.

NEW SECTION. Sec. 13. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect July 1, 1987.