Effective Date of Rule: Thirty-one days after filing.

     Purpose: This permanent rule corrects the definition of motor vehicle service contract reimbursement insurance in the regulation providing for suspension of filing requirements for large commercial accounts to match a law passed in 2006.

     Citation of Existing Rules Affected by this Order: Amending WAC 284-24-120.

     Statutory Authority for Adoption: RCW 48.02.060 and 48.19.080.

      Adopted under notice filed as WSR 07-04-103 on February 7, 2007.

     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.

     Date Adopted: April 16, 2007.

Mike Kreidler

Insurance Commissioner

OTS-9345.1

AMENDATORY SECTION(Amending Matter No. R 2003-04, filed 12/23/03, effective 1/23/04)

WAC 284-24-120   Suspension of rate filing requirements -- Large commercial accounts.   (1) Under RCW 48.19.080, the rate filing requirements in chapter 48.19 RCW are suspended with respect to large commercial property casualty accounts.

     (2) For purposes of this section, "large commercial property casualty account" means insurance coverage that:

     (a) Involves the lines of property and casualty insurance defined in RCW 48.11.040, 48.11.050, 48.11.060, 48.11.070, and/or 48.11.080; and

     (b) Is purchased by a business, not-for-profit organization, or public entity with enough insurance buying experience to negotiate with insurers in a largely unregulated environment and that meets any two of the following criteria:

     (i) Annual premiums of one hundred thousand dollars or more, excluding workers compensation insurance issued by the department of labor and industries and types of insurance listed in subsection (6) of this section;

     (ii) Net revenues or sales in excess of one hundred million dollars;

     (iii) More than two hundred employees;

     (iv) Net worth over fifty million dollars;

     (v) Is a not-for-profit organization or public entity with an annual budget or assets of at least forty-five million dollars;

     (vi) Is a municipality with a population over fifty thousand.

     (3) Before an insurer issues coverage in reliance on this section, the insurer or its agent shall notify the insured in writing that the rates have not been and will not be filed for the commissioner's approval.

     (4) Property rates used on large commercial property casualty accounts will not be audited by the Washington Insurance Examining Bureau under WAC 284-20-006.

     (5) The commissioner retains the right and ability to examine the rates used on large commercial property casualty accounts to ascertain whether they meet the requirements of RCW 48.19.020 and other statutes. The insurer shall maintain records supporting the rating and premium determination of each policy issued in reliance on this section. These records shall be retained by the insurer for a minimum of three years and made available at all reasonable times for the commissioner's examination.

     (6) Subsection (1) of this section does not apply to:

     (a) Professional liability insurance, including medical malpractice insurance;

     (b) Directors' and officers' liability insurance purchased by individuals;

     (c) ((Motor vehicle service contract reimbursement insurance, as defined in RCW 48.96.010(4); and)) Reimbursement insurance policies that reimburse service contract providers or protection product guarantee providers for contractual obligations assumed under a service contract or protection product guarantee; and

     (d) Master policies under which certificates of coverage are issued to individual consumers, households, businesses, or other organizations.

[Statutory Authority: RCW 48.02.060, 48.18.100(6), and 48.19.080. 04-01-175 (Matter No. R 2003-04), § 284-24-120, filed 12/23/03, effective 1/23/04. Statutory Authority: RCW 48.02.060, 48.18.100, 48.19.080. 02-02-068 (Order R 2001-09), § 284-24-120, filed 12/28/01, effective 12/31/01. Statutory Authority: RCW 48.02.060 and 48.19.080. 99-23-068 (Matter No. R 99-5), § 284-24-120, filed 11/15/99, effective 12/16/99.]

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