FINAL BILL REPORT

SHB 2088

                                  C 228 L 89

BYHouse Committee on Financial Institutions & Insurance (originally sponsored by Representatives Zellinsky, Winsley and Dellwo)

Permitting persons in an insurer's holding company system to accept commissions.

House Committe on Financial Institutions & Insurance

Senate Committee on Financial Institutions & Insurance

SYNOPSIS AS ENACTED

BACKGROUND:

The insurance code prohibits persons having any authority over the investment of a domestic insurance company's funds from accepting any fee, brokerage, or commission for the handling of those funds.  Some insurance companies are part of a holding company that owns the insurer and other subsidiary companies that may provide banking or investment services.  The prohibition on accepting a fee or commission for investment services may preclude an employee or officer of a company owned by a holding company that also owns an insurance company from collecting a fee for investment services provided to the insurance company.

SUMMARY:

Any person in an insurance company's holding company system may accept a reasonable fee, brokerage, or commission for investment advisory, banking, or brokerage services provided for or on behalf of the insurer owned by the holding company.

The Insurance Commissioner may approve the payment of fees, commissions, or other compensation to persons having authority over insurance company funds where the compensation is fully disclosed to the insurance company's officers and directors and is reasonable in relation to the service performed.

VOTES ON FINAL PASSAGE:

      House 95   0

      Senate    47     0

EFFECTIVE:July 23, 1989