| Passed by the Senate March 11, 2003 YEAS 49 BRAD OWEN ________________________________________ President of the Senate Passed by the House April 16, 2003 YEAS 97 FRANK CHOPP ________________________________________ Speaker of the House of Representatives | I, Milton H. Doumit, Jr., Secretary of the Senate of the State of Washington, do hereby certify that the attached is SUBSTITUTE SENATE BILL 5641 as passed by the Senate and the House of Representatives on the dates hereon set forth. MILTON H. DOUMIT JR. ________________________________________ Secretary | |
| Approved May 12, 2003. GARY LOCKE ________________________________________ Governor of the State of Washington | May 12, 2003 - 4:29 p.m. Secretary of State State of Washington |
| State of Washington | 58th Legislature | 2003 Regular Session |
READ FIRST TIME 02/24/03.
AN ACT Relating to civil and criminal penalties for the unlawful transaction of insurance or health coverage; amending RCW 48.01.080, 48.15.020, 48.17.060, 48.44.015, 48.44.060, 48.46.027, and 48.46.420; reenacting and amending RCW 9.94A.515 and 9.94A.515; adding a new section to chapter 48.15 RCW; adding new sections to chapter 48.17 RCW; adding a new section to chapter 48.44 RCW; adding a new section to chapter 48.46 RCW; prescribing penalties; providing an effective date; and providing an expiration date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 48.01.080 and 1947 c 79 s .01.08 are each amended to
read as follows:
((Violation of)) Except as otherwise provided in this code, any
person violating any provision of this code is ((punishable by a fine
of)) guilty of a gross misdemeanor and will, upon conviction, be fined
not less than ten dollars nor more than one thousand dollars, or ((by
imprisonment)) imprisoned for not more than one year, or both ((fine
and imprisonment)), in addition to any other penalty or forfeiture
provided herein or otherwise by law.
Sec. 2 RCW 48.15.020 and
1992 c 149 s 1 are each amended to read
as follows:
(1) An insurer ((not thereunto)) that is not authorized by the
commissioner ((shall)) may not solicit insurance business in this
state((, nor)) or transact insurance business in this state, except as
provided in this chapter.
(2)(a) ((No)) A person ((shall)) may not, in this state, represent
an unauthorized insurer except as provided in this chapter. This
((provision shall)) subsection does not apply to any adjuster or
attorney at law representing ((such)) an unauthorized insurer from time
to time in this state in his or her professional capacity.
(b) A person, other than a duly licensed surplus line broker acting
in good faith under his or her license, who makes a contract of
insurance in this state, directly or indirectly, on behalf of an
unauthorized insurer, without complying with the provisions of this
chapter, is personally liable for the performance of such contract.
(3) Each violation of subsection (2) of this section ((shall))
constitutes a separate offense punishable by a fine of not more than
twenty-five thousand dollars, and the commissioner, at the
commissioner's discretion, may order replacement of policies improperly
placed with an unauthorized insurer with policies issued by an
authorized insurer. Violations may result in suspension or revocation
of a license.
NEW SECTION. Sec. 3 A new section is added to chapter 48.15 RCW
to read as follows:
(1) As used in this section, "person" has the same meaning as in
RCW 48.01.070.
(2) For the purpose of this section, an act is committed in this
state if it is committed, in whole or in part, in the state of
Washington, or affects persons or property within the state and relates
to or involves an insurance contract.
(3) Any person who knowingly violates RCW 48.15.020(1) is guilty of
a class B felony punishable under chapter 9A.20 RCW.
(4) Any criminal penalty imposed under this section is in addition
to, and not in lieu of, any other civil or administrative penalty or
sanction otherwise authorized under state law.
(5)(a) If the commissioner has cause to believe that any person has
violated the provisions of RCW 48.15.020(1), the commissioner may:
(i) Issue and enforce a cease and desist order in accordance with
the provisions of RCW 48.02.080; and/or
(ii) Assess a civil penalty of not more than twenty-five thousand
dollars for each violation, after providing notice and an opportunity
for a hearing in accordance with chapters 34.05 and 48.04 RCW.
(b) Upon failure to pay a civil penalty when due, the attorney
general may bring a civil action on behalf of the commissioner to
recover the unpaid penalty. Any amounts collected by the commissioner
must be paid to the state treasurer for the account of the general
fund.
Sec. 4 RCW 48.17.060 and 1995 c 214 s 1 are each amended to read
as follows:
(1) ((No)) A person ((shall in this state)) may not act as or hold
himself or herself out to be an agent, broker, solicitor, or adjuster
in this state unless ((then)) licensed ((therefor by this state)) by
the commissioner.
(2) ((No)) An agent, solicitor, or broker ((shall)) may not solicit
or take applications for, procure, or place for others any kind of
insurance for which he or she is not then licensed.
(3) This section ((shall)) does not apply with respect to any
person securing and forwarding information required for the purposes of
group credit life and credit disability insurance or credit casualty
insurance against loss or damage resulting from failure of debtors to
pay their obligations in connection with an extension of credit and
such other credit life and disability insurance or credit casualty
insurance against loss or damage resulting from failure of debtors to
pay their obligations as the commissioner shall determine, and where no
commission or other compensation is payable on account of the securing
and forwarding of such information. However, the reimbursement of a
creditor's actual expenses for securing and forwarding information
required for the purposes of such group insurance ((shall)) will not be
considered a commission or other compensation if such reimbursement
does not exceed three dollars per certificate issued, or in the case of
a monthly premium plan extending beyond twelve months, not to exceed
three dollars per loan transaction revision per year.
(((4) Any person violating this section shall be liable to a fine
of not to exceed five hundred dollars and imprisonment for not to
exceed six months for each instance of such violation.))
NEW SECTION. Sec. 5 A new section is added to chapter 48.17 RCW
to read as follows:
(1) As used in this section, "person" has the same meaning as in
RCW 48.01.070.
(2) For the purpose of this section, an act is committed in this
state if it is committed, in whole or in part, in the state of
Washington, or affects persons or property within the state and relates
to or involves an insurance contract, health care services contract, or
health maintenance agreement.
(3) Any person who knowingly violates RCW 48.17.060(1) is guilty of
a class B felony punishable under chapter 9A.20 RCW.
(4) Any person who knowingly violates RCW 48.17.060(2) is guilty of
a class B felony punishable under chapter 9A.20 RCW.
(5) Any criminal penalty imposed under this section is in addition
to, and not in lieu of, any other civil or administrative penalty or
sanction otherwise authorized under state law.
(6)(a) If the commissioner has cause to believe that any person has
violated the provisions of RCW 48.17.060 (1) or (2), the commissioner
may:
(i) Issue and enforce a cease and desist order in accordance with
the provisions of RCW 48.02.080;
(ii) Suspend or revoke a license; and/or
(iii) Assess a civil penalty of not more than twenty-five thousand
dollars for each violation, after providing notice and an opportunity
for a hearing in accordance with chapters 34.05 and 48.04 RCW.
(b) Upon failure to pay a civil penalty when due, the attorney
general may bring a civil action on behalf of the commissioner to
recover the unpaid penalty. Any amounts collected by the commissioner
must be paid to the state treasurer for the account of the general
fund.
NEW SECTION. Sec. 6 A new section is added to chapter 48.17 RCW
to read as follows:
Any solicitor, agent, or broker soliciting, negotiating, or
procuring
an application for insurance or health care services in this
state must make a good faith effort to determine whether the entity
that is issuing the coverage is:
(1) Authorized to transact insurance or health coverage in this
state; or
(2) Conducting business through a surplus lines broker licensed
under chapter 48.15 RCW.
Sec. 7 RCW 48.44.015 and 1983 c 202 s 2 are each amended to read
as follows:
(1) ((No)) A person ((shall)) may not in this state, by mail or
otherwise, act as or hold himself or herself out to be a health care
service contractor, as defined in RCW 48.44.010 without first being
((duly)) registered ((therefor)) with the commissioner.
(2) The issuance, sale, or offer for sale in this state of
securities of its own issue by any health care service contractor
domiciled in this state other than the memberships and bonds of a
nonprofit corporation shall be subject to the provisions of chapter
48.06 RCW relating to obtaining solicitation permits the same as if
health care service contractors were domestic insurers.
(3) Any person violating any provision of subsection (((1) or)) (2)
of this section ((shall be liable to a fine of not to exceed)) is
guilty of a gross misdemeanor and will, upon conviction, be fined not
more than one thousand dollars ((and imprisonment for not to exceed))
or imprisoned for not more than six months, or both, for each
((instance of such)) violation.
NEW SECTION. Sec. 8 A new section is added to chapter 48.44 RCW
to read as follows:
(1) As used in this section, "person" has the same meaning as in
RCW 48.01.070.
(2) For the purpose of this section, an act is committed in this
state if it is committed, in whole or in part, in the state of
Washington, or affects persons or property within the state and relates
to or involves a health care services contract.
(3) Any person who knowingly violates RCW 48.44.015(1) is guilty of
a class B felony punishable under chapter 9A.20 RCW.
(4) Any criminal penalty imposed under this section is in addition
to, and not in lieu of, any other civil or administrative penalty or
sanction otherwise authorized under state law.
(5)(a) If the commissioner has cause to believe that any person has
violated the provisions of RCW 48.44.015(1), the commissioner may:
(i) Issue and enforce a cease and desist order in accordance with
the provisions of RCW 48.02.080; and/or
(ii) Assess a civil penalty of not more than twenty-five thousand
dollars for each violation, after providing notice and an opportunity
for a hearing in accordance with chapters 34.05 and 48.04 RCW.
(b) Upon failure to pay a civil penalty when due, the attorney
general may bring a civil action on behalf of the commissioner to
recover the unpaid penalty. Any amounts collected by the commissioner
must be paid to the state treasurer for the account of the general
fund.
Sec. 9 RCW 48.44.060 and 1947 c 268 s 6 are each amended to read
as follows:
Except as otherwise provided in this chapter, any person who
violates any of the provisions of this chapter ((shall be)) is guilty
of a gross misdemeanor.
Sec. 10 RCW 48.46.027 and 1983 c 202 s 9 are each amended to read
as follows:
(1) ((No)) A person ((shall)) may not in this state, by mail or
otherwise, act as or hold himself or herself out to be a health
maintenance organization as defined in RCW 48.46.020 without first
being ((duly)) registered ((therefor)) with the commissioner.
(2) The issuance, sale, or offer for sale in this state of
securities of its own issue by any health maintenance organization
domiciled in this state other than the memberships and bonds of a
nonprofit corporation ((shall be)) is subject to the provisions of
chapter 48.06 RCW relating to obtaining solicitation permits the same
as if health maintenance organizations were domestic insurers.
(3) Any person violating any provision of subsection (((1) or)) (2)
of this section ((shall be liable to a fine of not to exceed)) is
guilty of a gross misdemeanor and will, upon conviction, be fined not
more than one thousand dollars ((and imprisonment for not to exceed)),
or imprisoned for not more than six months, or both, for each
((instance of such)) violation.
NEW SECTION. Sec. 11 A new section is added to chapter 48.46 RCW
to read as follows:
(1) As used in this section, "person" has the same meaning as in
RCW 48.01.070.
(2) For the purpose of this section, an act is committed in this
state if it is committed, in whole or in part, in the state of
Washington, or affects persons or property within the state and relates
to or involves a health maintenance agreement.
(3) Any person who knowingly violates RCW 48.46.027(1) is guilty of
a class B felony punishable under chapter 9A.20 RCW.
(4) Any criminal penalty imposed under this section is in addition
to, and not in lieu of, any other civil or administrative penalty or
sanction otherwise authorized under state law.
(5)(a) If the commissioner has cause to believe that any person has
violated the provisions of RCW 48.46.027(1), the commissioner may:
(i) Issue and enforce a cease and desist order in accordance with
the provisions of RCW 48.02.080; and/or
(ii) Assess a civil penalty of not more than twenty-five thousand
dollars for each violation, after providing notice and an opportunity
for a hearing in accordance with chapters 34.05 and 48.04 RCW.
(b) Upon failure to pay a civil penalty when due, the attorney
general may bring a civil action on behalf of the commissioner to
recover the unpaid penalty. Any amounts collected by the commissioner
must be paid to the state treasurer for the account of the general
fund.
Sec. 12 RCW 48.46.420 and 1990 c 119 s 10 are each amended to
read as follows:
(1) Except as otherwise provided in this chapter, any health
maintenance organization which, or person who, violates any provision
of this chapter ((shall be)) is guilty of a gross misdemeanor.
(2) A health maintenance organization that fails to comply with the
net worth requirements of this chapter must cure that defect in
compliance with an order of the commissioner rendered in conformity
with
rules adopted pursuant to chapter 34.05 RCW. The commissioner is
authorized to take appropriate action to assure that the continued
operation of the health maintenance organization will not be hazardous
to its enrolled participants.
Sec. 13 RCW 9.94A.515 and 2002 c 340 s 2, 2002 c 324 s 2, 2002 c
290 s 2, 2002 c 253 s 4, 2002 c 229 s 2, 2002 c 134 s 2, and 2002 c 133
s 4 are each reenacted and amended to read as follows:
| TABLE 2 | ||
| CRIMES INCLUDED WITHIN EACH SERIOUSNESS LEVEL | ||
| XVI | ||
| XV | ||
| XIV | ||
| XIII | ||
| XII | ||
| XI | ||
| X | ||
| IX | ||
| VIII | ||
| VII | ||
| VI | ||
| V | ||
| IV | ||
| III | ||
| II | ||
| I | ||
Sec. 14 RCW 9.94A.515 and 2002 c 340 s 2, 2002 c 324 s 2, 2002 c
290 s 7, 2002 c 253 s 4, 2002 c 229 s 2, 2002 c 134 s 2, and 2002 c 133
s 4 are each reenacted and amended to read as follows:
| TABLE 2 | ||
| CRIMES INCLUDED WITHIN EACH SERIOUSNESS LEVEL | ||
| XVI | ||
| XV | ||
| XIV | ||
| XIII | ||
| XII | ||
| XI | ||
| X | ||
| IX | ||
| VIII | ||
| VII | ||
| VI | ||
| V | ||
| IV | ||
| III | ||
| Escape 2 (RCW 9A.76.120) | ||
| II | ||
| I | ||
NEW SECTION. Sec. 15 If any provision of this act or its
application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other
persons or circumstances is not affected.
NEW SECTION. Sec. 16 Section 13 of this act expires July 1,
2004.
NEW SECTION. Sec. 17 Section 14 of this act takes effect July 1,
2004.