WSR 11-09-047

PROPOSED RULES

OFFICE OF

INSURANCE COMMISSIONER

[ Insurance Commissioner Matter No. R 2011-05 -- Filed April 18, 2011, 6:46 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 11-06-064.

Title of Rule and Other Identifying Information: Reporting statistical data.

Hearing Location(s): Insurance Commissioner's Office, TR 120, 5000 Capitol Boulevard, Tumwater, WA 98504-02555 [98504-0255], on May 26, 2011, at 10:00 a.m.

Date of Intended Adoption: May 27, 2011.

Submit Written Comments to: Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, e-mail jimt@oic.wa.gov, fax (360) 586-3109, by May 25, 2011.

Assistance for Persons with Disabilities: Contact Lorrie [Lorie] Villaflores by May 25, 2011, TTY (360) 586-0241 or (360) 725-7087.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rule would amend WAC 284-24B-040 to permit the commissioner to waive the requirement that data be reported to a statistical agent in specified lines of insurance.

Reasons Supporting Proposal: RCW 48.19.370 provides that the commissioner shall promulgate rules and statistical plans for the reporting of loss and countrywide expense experience to assist the commissioner in determining whether rating systems filed by insurers comply with rate standards. For some lines of insurance, the information is of limited value in relation to the cost to the insurer of reporting the data to a statistical agent in specified lines of insurance.

Statutory Authority for Adoption: RCW 48.02.060 and 48.19.370.

Statute Being Implemented: RCW 48.19.370.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Mike Kreidler, insurance commissioner, governmental.

Name of Agency Personnel Responsible for Drafting: Jim Tompkins, P.O. Box 40528 [40258], Olympia, WA 98504-0258, (360) 725-7036; Implementation and Enforcement: Beth Berendt, P.O. Box 40255, Olympia, WA 98504-0255, (360) 725-7117.

No small business economic impact statement has been prepared under chapter 19.85 RCW. This proposed rule amendment allows the commissioner to determine that loss and expense data does not need to be collected for particular lines of insurance and to then waive the requirement that insurers within those lines of insurance must report loss and expense experience as a condition of transacting the business of insurance. Making such a determination and waiving the insurer reporting requirements will not result in any extra cost or loss of revenue for a small insurer. As a result no small business economic impact statement is required.

A cost-benefit analysis is not required under RCW 34.05.328. This proposed rule amendment allows the commissioner to determine that loss and expense data does not need to be collected for particular lines of insurance and to then waive the requirement that insurers within those lines of insurance must report loss and expense experience as a condition of transacting the business of insurance. This proposed rule amendment sets forth the agency's interpretation of a statutory provision it administers and does not subject a person to a penalty or sanction as a result of this interpretation; as a result this proposed rule amendment falls within the statutory category of an "interpretive rule." Under RCW 34.05.328 an interpretive rule is explicitly differentiated from being considered a significant legislative rule; therefore the cost-benefit analysis required for significant legislative rule making is not required for this rule.

April 18, 2011

Mike Kreidler

Insurance Commissioner

OTS-3929.2


AMENDATORY SECTION(Amending Matter No. R 2005-02, filed 6/15/06, effective 7/16/06)

WAC 284-24B-040   Insurers must report statistical experience.   (1) Under RCW 48.19.370(4), the commissioner may designate certain rating organizations or other entities as statistical agents to gather, compile, and report insurance statistical data.

(2) RCW 48.19.370 says each insurer must report loss and expense experience to the commissioner. As a condition of transacting the business of insurance under RCW 48.05.040, each insurer must:

(a) Report its insurance statistical data to a statistical agent designated by the commissioner in accordance with the statistical plans filed with the commissioner by the statistical agent under WAC 284-24B-060;

(b) Comply with the reporting requirements and data quality procedures in the NAIC Statistical Handbook; and

(c) Adopt edit and audit procedures to screen and check data for reasonableness and accuracy.

(3) So the commissioner may assure compliance with this chapter, each insurer filing rates under chapter 48.19 RCW must include the name of its statistical agent for that line of insurance.

(4) If the commissioner determines that loss and expense data do not need to be collected for a particular line of insurance, the commissioner may waive the requirements of subsections (2) and (3) of this section.

[Statutory Authority: RCW 48.02.060, 48.19.370. 06-13-035 (Matter No. R 2005-02), 284-24B-040, filed 6/15/06, effective 7/16/06.]

Washington State Code Reviser's Office