H-1846              _______________________________________________

                                                    HOUSE BILL NO. 997

                        _______________________________________________

State of Washington                              50th Legislature                              1987 Regular Session

By Representatives Grimm, Walk, Wang, Madsen, Rasmussen, Gallagher, Ebersole, Pruitt and Meyers

Read first time 2/18/87 and referred to Committee on Ways & Means.

AN ACT Relating to state reinsurance of tideland and river bed titles which may be subject to Indian ownership claims; adding a new section to chapter 48.29 RCW; and creating a new section.

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

NEW SECTION. Sec. 1.     The legislature finds the state has conveyed tidelands or former tidelands or lands formerly lying beneath navigable waters of this state to persons or entities who, together with their successors, in good faith have relied on the integrity of the state and the validity of the title and ownership of such lands conveyed by the state.  Indian tribes and members of such tribes have asserted claims that the original title of this state to such lands is invalid.  Owners of such lands are unable to bring suit to clear title because sovereign immunity is accorded such claimants.  To support and stabilize the certainty of title, to protect the values of such property and the property taxes dependent thereon, and to promote the economy, commerce, and jobs which depend on such property, the legislature hereby creates and adopts a title reinsurance program covering property affected by such claims.

NEW SECTION. Sec. 2.  A new section is added to chapter 48.29 RCW to read as follows:

          (1) The commissioner may reinsure any company qualified to transact title insurance business in this state with respect to title insurance policies issued after the effective date of this section to any person, or to any political subdivision of this state, which guarantee or insure, in whole or in part, title to tidelands or former tidelands or lands formerly lying beneath navigable waters of this state against any claim of an ownership interest in or to such property derived from the claimant's status as a federally recognized Indian tribe or membership in such tribe.  The additional reinsurance premium charged the insured shall not exceed a maximum of twenty-five percent more than the applicable rate shown on the schedule of premium rates then in effect for such title insurer.

          (2) The commissioner shall create a reinsurance fund to enable him to carry out the provisions of this section.  Moneys appropriated by the legislature to carry out the provisions of this section, and all moneys received from premiums or other recoveries shall be deposited to the credit of the reinsurance fund.  Payment of losses, settlements, judgments and all liabilities incurred by the state under this section shall be made from the fund.  The commissioner may deposit, invest, or reinvest all or any part of the fund as public funds in a qualified investment depository as provided in chapter 39.50 RCW.  Interest and benefits accruing from such deposits or investments shall be to the credit of the fund.

          (3) In addition to the administration of this section, the commissioner may issue such policies, rules, and regulations as the commissioner deems proper.  The commissioner may adjust and pay losses, compromise, and settle claims, and pay the amount of any judgment rendered against the state in any suit or the amount of any settlement agreed upon in respect of any claim under insurance authorized by this section.  The commissioner may prescribe and change forms and policies, and fix, adjust, and change the amounts insured and, subject to the maximum additional rate provided in subsection (1) of this section, may change the rates or premium provided for in this section.

          (4) The commissioner may, and whenever the commissioner finds it practical to do so shall, appoint domestic companies authorized to do title insurance business in this state to act as the commissioner's underwriting agent.  The commissioner may allow such companies a fair and reasonable compensation for servicing insurance written by such companies as underwriting agent for the commissioner.  The services of such underwriting agents may be utilized in adjustment of claims under insurance provided by this section, but no claims shall be paid unless and until it has been approved by the commissioner.  Compensation to such underwriting companies may include an allowance for expenses reasonably incurred by such agent, but the allowance shall not include any payment by such agent on account of solicitation for or stimulation of insurance business.

          (5) The commissioner may appoint and prescribe the duties of such number of experts in title insurance as the commissioner deems necessary under this section.

          (6) Upon disagreement as to a loss insured under this section, suit may be maintained against the state as an action affecting title to real property and this remedy shall be exclusive of any other action by reason of the same subject matter.  All persons having, or claiming, or who might have an interest in such insurance may be made parties to such action.  Any person having an insurable interest in property which qualifies for reinsurance under this section may obtain additional insurance in an amount in excess of the amount insured with the commissioner, and in that event, the commissioner shall not be entitled to the benefit of such additional insurance.