PERMANENT RULES
INSURANCE COMMISSIONER
Effective Date of Rule: Thirty-one days after filing.
Purpose: To expand the Washington essential property inspection and placement program (FAIR plan) to all counties within Washington state.
Citation of Existing Rules Affected by this Order: Amending WAC 284-19-020, 284-19-050, and 284-19-060.
Statutory Authority for Adoption: RCW 48.02.060.
Adopted under notice filed as WSR 06-11-177 on May 24, 2006.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 3, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 3, Repealed 0.
Date Adopted: July 10, 2006.
Mike Kreidler
Insurance Commissioner
OTS-8695.1
AMENDATORY SECTION(Amending Matter No. R 98-10, filed
6/16/98, effective 7/17/98)
WAC 284-19-020
Purposes of program.
The purposes of the
program are:
(1) To assure stability in the property insurance market of this state.
(2) To encourage maximum use, in obtaining essential property insurance, of the available, normal insurance market provided by authorized insurers.
(3) To make essential property insurance available where it cannot be obtained through the normal insurance market, subject to the conditions stated in this chapter.
(4) To encourage the improvement of the condition of
properties located in ((the urban areas of)) the state of
Washington and to further orderly community development.
(5) To establish a FAIR plan (fair access to insurance requirements), an industry placement facility and a joint reinsurance association for the equitable distribution and placement of risks among insurers in the manner and subject to the conditions stated in this chapter.
[Statutory Authority: RCW 48.02.060. 98-13-095 (Matter No. R 98-10), § 284-19-020, filed 6/16/98, effective 7/17/98; Order R-69-1, § 284-19-020, filed 1/28/69.]
(2) "Essential property insurance" means the coverage against direct loss to real and tangible personal property at a fixed location that is provided in the standard fire policy and extended coverage endorsement, and shall include also the perils of vandalism and malicious mischief and such additional lines of property insurance as may be designated by the commissioner. Essential property insurance specifically includes insurance against direct loss to property which is being constructed or rehabilitated (builder's risk coverage). It does not include automobile insurance or insurance on farm or manufacturing risks.
(3) "Industry placement facility" (referred to as the
facility) means the organization formed by insurers to assist
applicants ((in urban areas)) in securing essential property
insurance and to administer the FAIR plan and the joint
reinsurance association.
(4) "Inspection bureau" means the Washington Surveying and Rating Bureau.
(((5) "Urban area" includes the following municipalities
and counties and such additional counties, municipalities, and
definitive political subdivisions as may be added by the
commissioner:))
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(6))) (5) "Premiums written" means gross direct premiums
(excluding that portion of premiums on risks ceded to the
joint reinsurance association) charged during the second
preceding calendar year with respect to property in this state
on all policies of property insurance and property insurance
components of all multiperil policies, as defined and computed
by the facility, less return premiums, dividends paid or
credited to policyholders, or the unused or unabsorbed
portions of premium deposits.
(((7))) (6) A "service insurer" means any company
designated by the facility and approved by the commissioner to
issue policies under this program.
(((8))) (7) "Commissioner" means the commissioner of
insurance of the state of Washington.
[Statutory Authority: RCW 48.02.060. 98-13-095 (Matter No. R 98-10), § 284-19-050, filed 6/16/98, effective 7/17/98; Order R-73-2, § 284-19-050, filed 3/30/73; Order R-70-1, § 284-19-050, filed 7/31/70; Order R-69-1, § 284-19-050, filed 1/28/69.]
(2) The owner of the building need not be present for a tenant to obtain an inspection, but the inspection bureau must be provided full access to the property for which insurance is sought.
(3) An inspection report shall be made for each property inspected. The report shall cover pertinent structural and occupancy features as well as the general condition of the building and surrounding structures. A representative photograph of the property may be taken during the inspection.
(4) During the inspection, the inspector shall point out features of structure and occupancy to the applicant or a representative of the applicant, if present, and shall indicate those features which may result in condition charges if the risk is accepted. The inspector has no authority to advise whether the facility will provide the coverage.
(5) The report shall include a rate make-up statement, including any condition charges or surcharges imposed by inspection or under the program, or under any substandard rating plan approved by the commissioner. A copy of the inspection report shall be made available to the applicant or the applicant's agent upon request.
[Statutory Authority: RCW 48.02.060. 98-13-095 (Matter No. R 98-10), § 284-19-060, filed 6/16/98, effective 7/17/98; Order R-69-1, § 284-19-060, filed 1/28/69.]