WSR 13-13-074 PROPOSED RULES
OFFICE OF
INSURANCE COMMISSIONER
[Insurance Commissioner Matter No. R 2012-27—Filed June 19, 2013, 9:17 a.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 12-22-068.
Title of Rule and Other Identifying Information: Procurement of unauthorized (surplus line) insurance.
Hearing Location(s): Insurance Commissioner's Office, TR 120, 5000 Capitol Boulevard, Tumwater, WA 98504-0255, on July 23, 2013, at 1:30 p.m.
Date of Intended Adoption: July 24, 2013.
Submit Written Comments to: Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, e-mail rulescoordinator@oic.wa.gov, fax (360) 586-3109, by July 22, 2013.
Assistance for Persons with Disabilities: Contact Lorie Villaflores by July 22, 2013, TTY (360) 586-0241 or (360) 725-7087.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: RCW 48.15.040 requires that any surplus line insurance must be procured through a licensed surplus line broker. This proposed rule identifies what activities constitute the "procurement" of surplus line insurance and clarifies that these activities must be performed by a licensed surplus line broker.
Reasons Supporting Proposal: RCW 48.15.040 requires that any surplus line insurance must be procured through a Washington licensed surplus line broker.
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 40258, Olympia, WA 98504-0258, (360) 725-7036; Implementation and Enforcement: John Hamje, P.O. Box 40256, Olympia, WA 98504-0256, (360) 725-7262.
No small business economic impact statement has been prepared under chapter 19.85 RCW. Proposed WAC 284-15-015 does three things:
(A) It provides a definition of the word "procured" as used in chapters 48.15 RCW and 284-15 WAC. This definition ("acts necessary to obtain insurance coverage") in this context is essentially a paraphrasing of the dictionary definition of procured: "to get possession of - obtain, especially with care and effort."
(B) It restates a key provision of RCW 48.15.040(1) for procuring surplus line coverage - that procurement must be through a surplus line broker if the person acquiring coverage from an unauthorized insurer is not a surplus lines broker.
(C) It effectively states that all of the provisions already existing in the RCW (and its related WAC) for surplus lines procurement must be carried out by a surplus lines broker, which paraphrases the statutory language and clear intent of the cited sections.
This proposed WAC addition therefore is a rule whose "content is explicitly and specifically dictated by statute" (RCW 34.05.328 (5)(b)(v)) and therefore does not require a cost-benefit analysis.
A cost-benefit analysis is not required under RCW 34.05.328. Proposed WAC 284-15-015 does three things:
(A) It provides a definition of the word "procured" as used in chapters 48.15 RCW and 284-15 WAC. This definition ("acts necessary to obtain insurance coverage") in this context is essentially a paraphrasing of the dictionary definition of procured: "to get possession of - obtain, especially with care and effort."
(B) It restates a key provision of RCW 48.15.040 (1) for procuring surplus line coverage - that procurement must be through a surplus line broker if the person acquiring coverage from an unauthorized insurer is not a surplus lines broker.
(C) It effectively states that all of the provisions already existing in the RCW (and its related WAC) for surplus lines procurement must be carried out by a surplus lines broker, which paraphrases the statutory language and clear intent of the cited sections.
This proposed WAC addition therefore is a rule whose "content is explicitly and specifically dictated by statute" (RCW 34.05.310 (4)(e)) and therefore does not require a small business economic impact statement under the provisions of RCW 19.85.025(3).
June 19, 2013
Mike Kreidler
Insurance Commissioner
NEW SECTION
WAC 284-15-015 Courtesy filing prohibited. (1) "Procured" as used in chapter 48.15 RCW and chapter 284-15 WAC means the act or acts necessary to obtain insurance coverage.
(2) A surplus line broker licensed under chapter 48.15 RCW must not assist a person in complying with the requirements of RCW 48.15.040 if the person: (a) Is not licensed under chapter 48.15 RCW; (b) Obtains insurance coverage from an unauthorized insurer; and (c) Fails to procure the insurance coverage through a surplus line broker licensed under chapter 48.15 RCW. This subsection applies without limitation to the services of a courtesy filer.
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