SENATE BILL REPORT
SHB 2416
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
Senate Hearing Date(s):February 22, 1990; February 23, 1990
Majority Report: Do pass.
Signed by Senators von Reichbauer, Chairman; Johnson, Vice Chairman; Fleming, McMullen, Moore, Rasmussen, Smitherman.
Senate Staff:Walt Corneille (786-7416)
February 23, 1990
AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE, FEBRUARY 23, 1990
BACKGROUND:
The Administrative Procedure Act supersedes the Insurance Code's provisions requiring hearings within 30 days of a demand for a hearing. The Administrative Procedure Act requires a hearing within 90 days of a demand for a hearing.
A nonresident or resident 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 alternative procedures for insurance company appointment of agents within licensed firms or corporations. Similar authority is not permitted for appointment of agents within 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 Procedure Act.
Last year the Legislature passed two separate measures amending the same section of the code governing the treatment of alcoholism and drug addiction. The double amendment created a definition of an approved treatment program and an approved treatment facility. This creates confusion in the provisions of the Insurance Code which mandates coverage for the treatment of chemical dependency which refer only to treatment by an approved facility.
Insurance companies, agents and brokers may not give to insureds or prospective insureds any goods, prizes, or merchandise exceeding $5 in value for promotional purposes.
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:
The Insurance Code provisions governing administrative hearings is amended to permit a hearing concerning temporary license suspension within 30 days rather than 90 days under the Administrative Procedure Act.
Only residents who held an agent's license 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 within a sole proprietorship.
Nonresident agents may have offices within Washington.
Insurance Code provisions governing service of process are amended to conform to the Administrative Procedure Act.
Insurance Code provisions referencing statutes governing alcoholism and drug treatment refer to approved treatment programs or facilities.
The amount that insurers, agents, and brokers may expend for promotional purposes on 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 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 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 convicted of a misdemeanor.
Submitting a false claim of $1500 or more to an insurance company is punishable as a class C felony.
The Insurance Code provision requiring adjustors to report facts supporting a fraudulent fire loss to the Insurance Commissioner is repealed. The Insurance Commissioner is no longer the State Fire Marshal.
Appropriation: none
Revenue: none
Fiscal Note: none requested
Senate Committee - Testified: Scott Jarvis, Insurance Department (pro); Basil Badley, AIA (pro)