FINAL BILL REPORT
SHB 2416
C 3 L 90 E1
BYHouse Committee on Financial Institutions & Insurance (originally sponsored by Representatives Dellwo, Chandler, Zellinsky, Anderson, Nutley and Winsley; by request of Insurance Commissioner)
Changing multiple insurance statutes.
House Committe on Financial Institutions & Insurance
Senate Committee on Financial Institutions & Insurance
SYNOPSIS AS ENACTED
BACKGROUND:
The Administrative Procedures Act supersedes the Insurance Code's provisions requiring hearings within 30 days of a demand for a hearing. The Administrative Procedures Act requires a hearing within 90 days of a demand for a hearing.
An applicant for an agent's license need not pass an exam to obtain the license if the applicant held an agent's license for the two year period immediately preceding the date of application.
The Insurance Code permits the insurance commissioner to adopt regulations establishing procedures for insurance company appointment of agents within licensed firms or corporations. Similar rule-making authority is not expressly given the commissioner with respect to the appointment of agents by a sole proprietorship.
The Insurance Code makes no provision for nonresident agent offices within the state of Washington.
The Insurance Code procedures for service of process are inconsistent with the recently enacted Administrative Procedures Act.
Last year the Legislature passed two separate measures amending the same statute governing treatment of alcoholism and drug addiction. These unreconciled double amendments create confusion in the portion of the Insurance Code that refers to the treatment statute.
Insurance companies, agents, and brokers may not give to insureds or prospective insureds any goods, prizes, or merchandise exceeding $5 in value.
The insurance commissioner is required to revoke the license of any insurance agent or broker found guilty of the misdemeanor offense of making a false or fraudulent statement in an application for insurance.
The Insurance Code classifies the submission of false claims to an insurance company as a gross misdemeanor offense.
Insurance adjustors who investigate fire losses are required to report any facts supporting a claim of fraud to the insurance commissioner.
SUMMARY:
A variety of amendments are made to the state's insurance laws.
The provisions governing administrative hearings are amended to require a hearing concerning temporary license suspension within 30 days, rather than within the 90 days allowed under the Administrative Procedures Act.
Only applicants who held an agent's license as a Washington resident during the two years preceding application for a license may avoid the agent's license exam.
The commissioner is authorized to adopt procedures governing the appointment of agents by a sole proprietorship insurance company.
Nonresident agents may have offices within Washington.
Insurance Code provisions governing service of process are amended to conform to the Administrative Procedures Act.
Insurance Code provisions referencing statutes governing alcoholism and drug treatment are amended to conform to the changes made in these statutes.
The value of gifts that insurers, agents, and brokers may give to insureds or prospective insureds is increased from $5 to $25.
A binder evidencing application for insurance may be used as proof of insurance in credit transactions.
The insurance commissioner is authorized, but no longer required, to revoke the license of an agent or broker found guilty of a misdemeanor charge of making a fraudulent statement in an application of insurance. The commissioner may also revoke the agent's or broker's license for making a false or fraudulent statement in an application for insurance whether or not the agent or broker is subsequently convicted of a misdemeanor.
The submission of a false claim to an insurance company is punishable as a class C felony if the value of the claim exceeds $1,500.
The Insurance Code provisions requiring adjustors to report facts supporting a fraudulent fire loss to the insurance commissioner is repealed.
VOTES ON FINAL PASSAGE:
House 97 0
First Special Session
House 96 0
Senate 48 1
EFFECTIVE:July 1, 1990