WSR 11-02-048

PERMANENT RULES

OFFICE OF

INSURANCE COMMISSIONER

[ Insurance Commissioner Matter No. R 2010-06 -- Filed January 3, 2011, 7:33 a.m. , effective February 24, 2011 ]


Effective Date of Rule: February 24, 2011.

Purpose: The purpose of this new rule is to modify a recently adopted rule to ensure that insurers and the entities they contract with use their "legal name" when conducting insurance business so that consumers and the office [of] the insurance commissioner will be able to identify which insurer is involved in any insurance transaction.

Citation of Existing Rules Affected by this Order: Amending WAC 284-30-670.

Statutory Authority for Adoption: RCW 48.02.060.

Adopted under notice filed as WSR 10-22-082 on November 1, 2010.

Changes Other than Editing from Proposed to Adopted Version: WAC 284-30-670(4) "Existence of standards and procedures is not prima facie evidence of compliance"; and WAC 284-30-670(6) "situations" was added to the end of the sentence and (a) "When the specific insurer is known" was added to the beginning of the sentence.

A final cost-benefit analysis is available by contacting Kacy Scott, P.O. Box 40258, Olympia, WA 98504-0248, phone (360) 725-7041, fax (360) 586-3109, e-mail kacys@oic.wa.gov.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0.

Date Adopted: January 3, 2011.

Mike Kreidler

Insurance Commissioner

OTS-3425.6


AMENDATORY SECTION(Amending Matter No. R 2008-11, filed 6/2/10, effective 7/3/10)

WAC 284-30-670   Insurers must transact business in their legal name.   (1) Purpose and Scope. The purpose of this regulation is to adopt a long standing bulletin and a technical assistance advisory regarding the use of trade names, group names, logos or trademarks. The purpose of this regulation is also to set forth requirements to help ensure that a consumer knows the legal name of the insurer they are doing business with.

(2) Pursuant to RCW 48.30.010, the commissioner ((is adopting this regulation as an unfair practice for the following reasons:

(a) Many insurers fail or periodically fail to comply with the legal name requirement of RCW 48.05.190(1) when transacting insurance business.

(b) When a consumer seeks assistance from the commissioner, the legal name of the company must be determined. When the consumer is unable to provide the information, the commissioner's staff must research it, which unnecessarily wastes the commissioner's resources and delays the inquiry and resolution, posing a risk of harm to the consumer.

(c) Insurers will not accept a lawsuit from their insured if the paperwork does not identify the insurer correctly.

(2) The following definitions apply to this section:

(a))) has found and hereby defines it to be an unfair practice for an insurer to conduct its business in any name other than its own legal name as required by RCW 48.05.190. Unless consumers are aware of the insurer's legal name, a consumer's policy rights and legal rights may be compromised. In addition, when consumers seek the commissioner's assistance and are not aware of the insurer's legal name, the commissioner's staff must research it, which unnecessarily wastes the commissioner's resources and delays the inquiry and resolution, posing a risk of harm to the consumer.

(3) When used in this regulation, "legal name" of the insurer means the name displayed on the Washington state certificate of authority issued by the commissioner.

(((b) "Contracted entity" means an entity with which an insurer contracts to transact any aspect of the business of insurance, such as adjudicating claims, determining eligibility, or underwriting or marketing products on behalf of an insurer, and includes such entities as insurance producers, claims administrators, and managing general agents as defined in RCW 48.98.005(3).

(c) "Transacting business" includes insurance transaction, as defined in RCW 48.01.060.

(3) An insurer must identify itself by its legal name when:

(a) Transacting business with a consumer, insured, potential insured or claimant as defined in WAC 284-30-320(2); and

(b) Communicating orally, electronically, or in writing with the commissioner regarding an investigation, inquiry, enforcement matter or examination.)) (4) Each insurer must have standards and procedures to ensure that each consumer with whom they conduct an insurance transaction is informed of and can consistently identify the legal name of the insurer. Each insurer must provide the insurance commissioner with its standards and procedures and proof of its compliance upon request. The insurer must be able to show the legal name was provided when issuing policy documents, billing statements, and other written communications regarding policy services, underwriting, and claims and at the point during policy sales transactions when the company is determined.

(5) To assist the commissioner in identifying the legal name of the insurer, insurers' written communications ((with)) to the commissioner in response to any investigation, inquiry, enforcement matter or examination must ((also)) include the insurer's NAIC code.

(((4) Advertisements directed to insureds or potential insureds must clearly display the insurer's legal name and the location of its home office or principal office, as required by RCW 48.30.050.

(a) An advertisement by an insurance producer, licensee, or other marketing entity advertising an insurance product common to multiple insurers does not need to include the legal name of the insurer. The advertisement must include the insurance producer, licensee, or other marketing entity's name and address.

(b) Advertisements directed solely to insurance producers, providers, or other marketing entities, but not directed to insureds or potential insureds, are exempt from this subsection.

(5) Each single violation of this section by an insurer or its contracted entity may subject the insurer to all applicable provisions of Title 48 RCW, including, but not limited to, RCW 48.05.140 and 48.05.185.))

(6) This regulation does not bar the use of trade names, ((group names,)) logos ((or)), trademarks((. To be in compliance with RCW 48.05.190(1), when an insurer uses a trade name, group name, logo or trademark when conducting its business, the insurer must also identify itself by its legal name as required by this section.)) or group names that identify companies collectively, for brand identification or for general purposes, but an insurer must also provide its legal name in the following situations:

(a) When the specific insurer is known, in negotiations preliminary to the execution of an insurance contract;

(b) In the execution of an insurance contract;

(c) In the transaction of matters subsequent to the execution of an insurance contract and arising out of it.

(7) Violation of this regulation is not a violation for purposes of RCW 48.30.015(5).

[Statutory Authority: RCW 48.02.060. 10-12-100 (Matter No. R 2008-11), 284-30-670, filed 6/2/10, effective 7/3/10.]

Washington State Code Reviser's Office