H-2000 _______________________________________________
SUBSTITUTE HOUSE BILL NO. 2088
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C 228 L 89
State of Washington 51st Legislature 1989 Regular Session
By House Committee on Financial Institutions & Insurance (originally sponsored by Representatives Zellinsky, Winsley and Dellwo)
Read first time 2/24/89.
AN ACT Relating to acceptance of fees by persons in a domestic insurer's holding company system; and amending RCW 48.07.130.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. Section .07.13, chapter 79, Laws of 1947 as amended by section 5, chapter 339, Laws of 1981 and RCW 48.07.130 are each amended to read as follows:
(1) No person having any authority in the investment or disposition of the funds of a domestic insurer and no officer or director of an insurer shall accept, except for the insurer, or be the beneficiary of any fee, brokerage, gift, commission, or other emolument because of any sale of insurance or of any investment, loan, deposit, purchase, sale, payment, or exchange made by or for the insurer, or be pecuniarily interested therein in any capacity; except, that such a person may procure a loan from the insurer direct upon approval by two-thirds of its directors and upon the pledge of securities eligible for the investment of the insurer's funds under this code.
(2) This section does not prohibit a life insurer from making a policy loan to such person on a life insurance contract issued by it and in accordance with the terms thereof.
(3) The
commissioner may((, by regulations from time to time, define and))
permit additional exceptions to the prohibition contained in subsection (1) of
this section ((solely)) to enable payment of reasonable compensation to
a director who is not otherwise an officer or employee of the insurer, or to a
corporation or firm in which the director is interested, for necessary services
performed or sales or purchases made to or for the insurer in the ordinary
course of the insurer's business and in the usual private professional or business
capacity of such director or such corporation or firm.
In addition, the commissioner may permit exceptions to the prohibitions contained in subsection (1) of this section where the payment of a fee, brokerage, gift, commission, or other emolument is fully disclosed to the insurer's officers and directors and is reasonable in relation to the service performed.