| State of Washington | 60th Legislature | 2008 Regular Session |
Read first time 01/18/08. Referred to Committee on Financial Institutions Insurance.
AN ACT Relating to insurance producers; amending RCW 48.03.020, 48.05.140, 48.05.180, 48.05.465, 48.13.220, 48.14.020, 48.14.040, 48.14.095, 48.15.080, 48.15.140, 48.15.160, 48.18.100, 48.18.180, 48.18.220, 48.18.240, 48.18.289, 48.18.292, 48.18.543, 48.18A.035, 48.18A.060, 48.20.013, 48.20.042, 48.20.072, 48.21A.040, 48.23.380, 48.23.420, 48.23A.040, 48.23A.070, 48.23A.080, 48.24.080, 48.25.140, 48.30.100, 48.30.140, 48.30.150, 48.30.157, 48.30.170, 48.30.200, 48.30.240, 48.30.260, 48.30.270, 48.31.111, 48.31.141, 48.36A.310, 48.36A.330, 48.41.060, 48.43.105, 48.43.335, 48.44.011, 48.44.020, 48.44.164, 48.44.230, 48.46.023, 48.46.170, 48.46.243, 48.46.260, 48.46.340, 48.50.070, 48.56.020, 48.56.080, 48.62.121, 48.62.151, 48.66.055, 48.66.120, 48.76.090, 48.84.050, 48.84.060, 48.92.040, 48.92.090, 48.92.095, 48.92.120, 48.94.005, 48.94.040, 48.97.005, 48.97.015, 48.97.020, 48.97.025, 48.97.900, 48.98.010, 48.98.015, 48.98.020, 48.98.030, 48.99.030, 48.115.001, 48.115.005, 48.115.010, 48.115.015, 48.115.020, 48.115.025, 48.115.030, 48.115.035, 48.115.040, 48.120.005, 48.120.010, 48.125.030, 48.135.010, 51.12.020, and 70.47.015; reenacting and amending RCW 82.04.260; adding a new section to chapter 48.20 RCW; adding a new section to chapter 48.23A RCW; and providing an effective date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 48.03.020 and 1947 c 79 s .03.02 are each amended to
read as follows:
For the purpose of ascertaining its condition, or compliance with
this code, the commissioner may as often as he or she deems advisable
examine the accounts, records, documents, and transactions of:
(1) Any insurance ((agent, solicitor, broker or adjuster))
producer, adjuster, or title insurance agent.
(2) Any person having a contract under which he or she enjoys in
fact the exclusive or dominant right to manage or control a stock or
mutual insurer.
(3) Any person holding the shares of capital stock or policyholder
proxies of a domestic insurer for the purpose of control of its
management either as voting trustee or otherwise.
(4) Any person engaged in or proposing to be engaged in or
assisting in the promotion or formation of a domestic insurer, or an
insurance holding corporation, or a stock corporation to finance a
domestic mutual insurer or the production of its business, or a
corporation to be attorney-in-fact for a domestic reciprocal insurer.
Sec. 2 RCW 48.05.140 and 1973 1st ex.s. c 152 s 1 are each
amended to read as follows:
The commissioner may refuse, suspend, or revoke an insurer's
certificate of authority, in addition to other grounds therefor in this
code, if the insurer:
(1) Fails to comply with any provision of this code other than
those for violation of which refusal, suspension, or revocation is
mandatory, or fails to comply with any proper order or regulation of
the commissioner.
(2) Is found by the commissioner to be in such condition that its
further transaction of insurance in this state would be hazardous to
policyholders and the people in this state.
(3) Refuses to remove or discharge a director or officer who has
been convicted of any crime involving fraud, dishonesty, or like moral
turpitude.
(4) Usually compels claimants under policies either to accept less
than the amount due them or to bring suit against it to secure full
payment of the amount due.
(5) Is affiliated with and under the same general management, or
interlocking directorate, or ownership as another insurer which
transacts insurance in this state without having a certificate of
authority therefor, except as is permitted by this code.
(6) Refuses to be examined, or if its directors, officers,
employees or representatives refuse to submit to examination or to
produce its accounts, records, and files for examination by the
commissioner when required, or refuse to perform any legal obligation
relative to the examination.
(7) Fails to pay any final judgment rendered against it in this
state upon any policy, bond, recognizance, or undertaking issued or
guaranteed by it, within thirty days after the judgment became final or
within thirty days after time for taking an appeal has expired, or
within thirty days after dismissal of an appeal before final
determination, whichever date is the later.
(8) Is found by the commissioner, after investigation or upon
receipt of reliable information, to be managed by persons, whether by
its directors, officers, or by any other means, who are incompetent or
untrustworthy or so lacking in insurance company managerial experience
as to make a proposed operation hazardous to the insurance-buying
public; or that there is good reason to believe it is affiliated
directly or indirectly through ownership, control, reinsurance or other
insurance or business relations, with any person or persons whose
business operations are or have been marked, to the detriment of
policyholders or stockholders or investors or creditors or of the
public, by bad faith or by manipulation of assets, or of accounts, or
of reinsurance.
(9) Does business through ((agents or brokers)) insurance producers
or title insurance agents in this state or in any other state who are
not properly licensed under applicable laws and duly enacted
regulations adopted pursuant thereto.
Sec. 3 RCW 48.05.180 and 1947 c 79 s .05.18 are each amended to
read as follows:
Upon the suspension, revocation or refusal of an insurer's
certificate of authority, the commissioner shall give notice thereof to
the insurer and shall likewise suspend, revoke or refuse the authority
of its appointed insurance producers or title insurance agents to
represent it in this state and give notice thereof to ((the)) these
insurance producers or title insurance agents.
Sec. 4 RCW 48.05.465 and 1995 c 83 s 8 are each amended to read
as follows:
(1) All RBC reports, to the extent the information is not required
to be set forth in a publicly available annual statement schedule, and
RBC plans, including the results or report of any examination or
analysis of an insurer and any corrective order issued by the
commissioner, with respect to any domestic insurer or foreign insurer
that are filed with the commissioner constitute information that might
be damaging to the insurer if made available to its competitors, and
therefore shall be kept confidential by the commissioner. This
information shall not be made public or be subject to subpoena, other
than by the commissioner and then only for the purpose of enforcement
actions taken by the commissioner.
(2) The comparison of an insurer's total adjusted capital to any of
its RBC levels is a regulatory tool that may indicate the need for
possible corrective action with respect to the insurer, and is not a
means to rank insurers generally. Therefore, except as otherwise
required under the provisions of RCW 48.05.430 through ((48.05.490))
48.05.485, the making, publishing, disseminating, circulating, or
placing before the public, or causing, directly or indirectly to be
made, published, disseminated, circulated, or placed before the public,
in a newspaper, magazine, or other publication, or in the form of a
notice, circular, pamphlet, letter, or poster, or over any radio or
television station, or in any other way, an advertisement,
announcement, or statement containing an assertion, representation, or
statement with regard to the RBC levels of any insurer, or of any
component derived in the calculation, by any insurer, insurance
producer, title insurance agent, ((broker,)) or other person engaged in
any manner in the insurance business would be misleading and is
therefore prohibited. However, if any materially false statement with
respect to the comparison regarding an insurer's total adjusted capital
to its RBC levels, or any of them, or an inappropriate comparison of
any other amount to the insurer's RBC levels is published in any
written publication and the insurer is able to demonstrate to the
commissioner with substantial proof the falsity of such statement, or
the inappropriateness, as the case may be, then the insurer may publish
an announcement in a written publication if the sole purpose of the
announcement is to rebut the materially false statement.
(3) The RBC instructions, RBC reports, adjusted RBC reports, RBC
plans, and revised RBC plans are solely for use by the commissioner in
monitoring the solvency of insurers and the need for possible
corrective action with respect to insurers and shall not be used by the
commissioner for ratemaking nor considered or introduced as evidence in
any rate proceeding nor used by the commissioner to calculate or derive
any elements of an appropriate premium level or rate of return for any
line of insurance that an insurer or any affiliate is authorized to
write.
Sec. 5 RCW 48.13.220 and 1982 c 218 s 3 are each amended to read
as follows:
(1) After satisfying the requirements of RCW 48.13.260, an insurer
may invest any of its funds in common shares of stock in solvent United
States corporations that qualify as a sound investment; except, that as
to life insurers such investments shall further not aggregate an amount
in excess of fifty percent of the insurer's surplus over its minimum
required surplus.
(2) The insurer shall not invest in or loan upon the security of
more than ten percent of the outstanding common shares of any one such
corporation, subject further to the aggregate investment limitation of
RCW 48.13.030.
(3) The limitations of subsection (2) of this section shall not
apply to investment in the securities of any subsidiary corporations of
the insurer which are engaged or organized to engage exclusively in one
or more of the following businesses:
(a) Acting as an insurance producer or title insurance agent for
its parent or for any of its parent's insurer subsidiaries or
affiliates;
(b) Investing, reinvesting, or trading in securities or acting as
a securities broker or dealer for its own account, that of its parent,
any subsidiary of its parent, or any affiliate or subsidiary;
(c) Rendering management, sales, or other related services to any
investment company subject to the Federal Investment Company Act of
1940, as amended;
(d) Rendering investment advice;
(e) Rendering services related to the functions involved in the
operation of an insurance business including, but not limited to,
actuarial, loss prevention, safety engineering, data processing,
accounting, claims appraisal, and collection services;
(f) Acting as administrator of employee welfare benefit and pension
plans for governments, government agencies, corporations, or other
organizations or groups;
(g) Ownership and management of assets which the parent could
itself own and manage: PROVIDED, That the aggregate investment by the
insurer and its subsidiaries acquired pursuant to this paragraph shall
not exceed the limitations otherwise applicable to such investments by
the parent;
(h) Acting as administrative agent for a government instrumentality
which is performing an insurance function or is responsible for a
health or welfare program;
(i) Financing of insurance premiums;
(j) Any other business activity reasonably ancillary to an
insurance business;
(k) Owning one or more subsidiary (i) insurers to the extent
permitted by this chapter, or (ii) businesses specified in paragraphs
(a) through (k) of this subsection inclusive, or (iii) other businesses
the stock of which is eligible under RCW 48.13.240 or 48.13.250, or any
combination of such insurers and businesses.
(4) No acquisition of a majority of the total outstanding common
shares of any corporation shall be made pursuant to this section unless
a notice of intention of such proposed acquisition shall have been
filed with the commissioner not less than ninety days, or such shorter
period as may be permitted by the commissioner, in advance of such
proposed acquisition, nor shall any such acquisition be made if the
commissioner at any time prior to the expiration of the notice period
finds that the proposed acquisition is contrary to law, or determines
that such proposed acquisition would be contrary to the best interests
of the parent insurer's policyholders or of the people of this state.
The following shall be the only factors to be considered in making the
foregoing determination:
(a) The availability of the funds or assets required for such
acquisition;
(b) The fairness of any exchange of stock, assets, cash, or other
consideration for the stock or assets to be received;
(c) The impact of the new operation on the parent insurer's surplus
and existing insurance business and the risks inherent in the parent
insurer's investment portfolio and operations;
(d) The fairness and adequacy of the financing proposed for the
subsidiary;
(e) The likelihood of undue concentration of economic power;
(f) Whether the effect of the acquisition may be substantially to
lessen competition in any line of commerce in insurance or to tend to
create a monopoly therein; and
(g) Whether the acquisition might result in an excessive
proliferation of subsidiaries which would tend to unduly dilute
management effectiveness or weaken financial strength or otherwise be
contrary to the best interests of the parent insurer's policyholders or
of the people of this state. At any time after an acquisition, the
commissioner may order its disposition if he or she finds, after notice
and hearing, that its continued retention is hazardous or prejudicial
to the interests of the parent insurer's policyholders. The contents
of each notice of intention of a proposed acquisition filed hereunder
and information pertaining thereto shall be kept confidential, shall
not be subject to subpoena, and shall not be made public unless after
notice and hearing the commissioner determines that the interests of
policyholders, stockholders, or the public will be served by the
publication thereof.
(5) A domestic insurance company may, provided that it maintains
books and records which separately account for such business, engage
directly in any business referred to in paragraphs (d), (e), (h), and
(j) of subsection (3) of this section either to the extent necessarily
or properly incidental to the insurance business the insurer is
authorized to do in this state or to the extent approved by the
commissioner and subject to any limitations he or she may prescribe for
the protection of the interests of the policyholders of the insurer
after taking into account the effect of such business on the insurer's
existing insurance business and its surplus, the proposed allocation of
the estimated cost of such business, and the risks inherent in such
business as well as the relative advantages to the insurer and its
policyholders of conducting such business directly instead of through
a subsidiary.
Sec. 6 RCW 48.14.020 and 1986 c 296 s 1 are each amended to read
as follows:
(1) Subject to other provisions of this chapter, each authorized
insurer except title insurers shall on or before the first day of March
of each year pay to the state treasurer through the commissioner's
office a tax on premiums. Except as provided in subsection (2) of this
section, such tax shall be in the amount of two percent of all
premiums, excluding amounts returned to or the amount of reductions in
premiums allowed to holders of industrial life policies for payment of
premiums directly to an office of the insurer, collected or received by
the insurer during the preceding calendar year other than ocean marine
and foreign trade insurances, after deducting premiums paid to
policyholders as returned premiums, upon risks or property resident,
situated, or to be performed in this state. For the purposes of this
section the consideration received by an insurer for the granting of an
annuity shall not be deemed to be a premium.
(2) In the case of insurers which require the payment by their
policyholders at the inception of their policies of the entire premium
thereon in the form of premiums or premium deposits which are the same
in amount, based on the character of the risks, regardless of the
length of term for which such policies are written, such tax shall be
in the amount of two percent of the gross amount of such premiums and
premium deposits upon policies on risks resident, located, or to be
performed in this state, in force as of the thirty-first day of
December next preceding, less the unused or unabsorbed portion of such
premiums and premium deposits computed at the average rate thereof
actually paid or credited to policyholders or applied in part payment
of any renewal premiums or premium deposits on one-year policies
expiring during such year.
(3) Each authorized insurer shall with respect to all ocean marine
and foreign trade insurance contracts written within this state during
the preceding calendar year, on or before the first day of March of
each year pay to the state treasurer through the commissioner's office
a tax of ninety-five one-hundredths of one percent on its gross
underwriting profit. Such gross underwriting profit shall be
ascertained by deducting from the net premiums (i.e., gross premiums
less all return premiums and premiums for reinsurance) on such ocean
marine and foreign trade insurance contracts the net losses paid (i.e.,
gross losses paid less salvage and recoveries on reinsurance ceded)
during such calendar year under such contracts. In the case of
insurers issuing participating contracts, such gross underwriting
profit shall not include, for computation of the tax prescribed by this
subsection, the amounts refunded, or paid as participation dividends,
by such insurers to the holders of such contracts.
(4) The state does hereby preempt the field of imposing excise or
privilege taxes upon insurers or their ((agents)) appointed insurance
producers, other than title insurers, and no county, city, town or
other municipal subdivision shall have the right to impose any such
taxes upon such insurers or ((their agents)) these insurance producers.
(5) If an authorized insurer collects or receives any such premiums
on account of policies in force in this state which were originally
issued by another insurer and which other insurer is not authorized to
transact insurance in this state on its own account, such collecting
insurer shall be liable for and shall pay the tax on such premiums.
Sec. 7 RCW 48.14.040 and 2007 c 153 s 4 are each amended to read
as follows:
(1) If pursuant to the laws of any other state or country, any
taxes, licenses, fees, deposits, or other obligations or prohibitions,
in the aggregate, or additional to or at a net rate in excess of any
such taxes, licenses, fees, deposits or other obligations or
prohibitions imposed by the laws of this state upon like foreign or
alien insurers and their ((agents and solicitors)) appointed insurance
producers or title insurance agents, are imposed on insurers of this
state and their ((agents)) appointed insurance producers or title
insurance agents doing business in such other state or country, a like
rate, obligation or prohibition may be imposed by the commissioner, as
to any item or combination of items involved, upon all insurers of such
other state or country and their ((agents)) appointed insurance
producers or title insurance agents doing business in this state, so
long as such laws remain in force or are so applied.
(2) For the purposes of this section, an alien insurer may be
deemed to be domiciled in the state wherein it has established its
principal office or agency in the United States. If no such office or
agency has been established, the domicile of the alien insurer shall be
deemed to be the country under the laws of which it is formed.
(3) For the purposes of this section, the regulatory surcharge
imposed by RCW 48.02.190 shall not be included in the calculation of
any retaliatory taxes, licenses, fees, deposits, or other obligations
or prohibitions imposed under this section.
Sec. 8 RCW 48.14.095 and 2003 c 341 s 3 are each amended to read
as follows:
(1) This section applies to any insurer or taxpayer, as defined in
RCW 48.14.0201, violating or failing to comply with RCW 48.05.030(1),
48.17.060 (((1) or (2))), 48.36A.290(1), 48.44.015(1), or 48.46.027(1).
(2) Except as provided in subsection (7) of this section, RCW
48.14.020, 48.14.0201, and 48.14.060 apply to insurers or taxpayers
identified in subsection (1) of this section.
(3) If an insurance contract, health care services contract, or
health maintenance agreement covers risks or exposures, or enrolled
participants only partially in this state, the tax payable is computed
on the portion of the premium that is properly allocated to a risk or
exposure located in this state, or enrolled participants residing in
this state.
(4) In determining the amount of taxable premiums under subsection
(3) of this section, all premiums, other than premiums properly
allocated or apportioned and reported as taxable premiums of another
state, that are written, procured, or received in this state, or that
are for a policy or contract negotiated in this state, are considered
to be written on risks or property resident, situated, or to be
performed in this state, or for health care services to be provided to
enrolled participants residing in this state.
(5) Insurance on risks or property resident, situated, or to be
performed in this state, or health coverage for the provision of health
care services for residents of this state, is considered to be
insurance procured, continued, renewed, or performed in this state,
regardless of the location from which the application is made, the
negotiations are conducted, or the premiums are remitted.
(6) Premiums on risks or exposures that are properly allocated to
federal waters or international waters or under the jurisdiction of a
foreign government are not taxable by this state.
(7) This section does not apply to premiums on insurance procured
by a licensed surplus line broker under chapter 48.15 RCW.
Sec. 9 RCW 48.15.080 and 1947 c 79 s .15.08 are each amended to
read as follows:
A licensed surplus line broker may accept and place surplus line
business for any insurance ((agent or broker)) producer licensed in
this state for the kind of insurance involved, and may compensate
((such agent or broker)) that insurance producer therefor.
Sec. 10 RCW 48.15.140 and 1980 c 102 s 6 are each amended to read
as follows:
(1) The commissioner may revoke, suspend, or refuse to renew any
surplus line broker's license:
(a) If the surplus line broker fails to file ((his)) the licensee's
annual statement or to remit the tax as required by this chapter; or
(b) If the surplus line broker fails to maintain an office in this
state, or to keep the records, or to allow the commissioner to examine
((his)) the licensee's records as required by this chapter; or
(c) For any of the causes for which ((a broker's)) an insurance
producer's license may be revoked under chapter 48.17 RCW.
(2) The commissioner may suspend or revoke any such license
whenever he or she deems suspension or revocation to be for the best
interests of the people of this state.
(3) The procedures provided by this code for the suspension or
revocation of ((general brokers')) insurance producers' licenses shall
be applicable to suspension or revocation of a surplus line broker's
license.
(4) ((No)) A surplus line broker whose license has been so revoked
shall not again be so licensed within one year thereafter, nor until
any fines or delinquent taxes owing by ((him)) the formal licensee have
been paid.
Sec. 11 RCW 48.15.160 and 1987 c 185 s 23 are each amended to
read as follows:
(1) The provisions of this chapter controlling the placing of
insurance with unauthorized insurers shall not apply to reinsurance or
to the following insurances when so placed by licensed ((agents or
brokers)) insurance producers of this state:
(a) Ocean marine and foreign trade insurances.
(b) Insurance on subjects located, resident, or to be performed
wholly outside of this state, or on vehicles or aircraft owned and
principally garaged outside this state.
(c) Insurance on operations of railroads engaged in transportation
in interstate commerce and their property used in such operations.
(d) Insurance of aircraft owned or operated by manufacturers of
aircraft, or of aircraft operated in schedule interstate flight, or
cargo of such aircraft, or against liability, other than workers'
compensation and employer's liability, arising out of the ownership,
maintenance or use of such aircraft.
(2) ((Agents and brokers)) Insurance producers so placing any such
insurance with an unauthorized insurer shall keep a full and true
record of each such coverage in detail as required of surplus line
insurance under this chapter and shall meet the requirements imposed
upon a surplus line broker pursuant to RCW 48.15.090 and any
regulations adopted thereunder. The record shall be preserved for not
less than five years from the effective date of the insurance and shall
be kept available in this state and open to the examination of the
commissioner. The ((agent or broker)) insurance producer shall furnish
to the commissioner at the commissioner's request and on forms as
designated and furnished by him or her a report of all such coverages
so placed in a designated calendar year.
Sec. 12 RCW 48.18.100 and 2006 c 8 s 214 are each amended to read
as follows:
(1) No insurance policy form or application form where written
application is required and is to be attached to the policy, or printed
life or disability rider or endorsement form may be issued, delivered,
or used unless it has been filed with and approved by the commissioner.
This section does not apply to:
(a) Surety bond forms;
(b) Forms filed under RCW 48.18.103;
(c) Forms exempted from filing requirements by the commissioner
under RCW 48.18.103;
(d) Manuscript policies, riders, or endorsements of unique
character designed for and used with relation to insurance upon a
particular subject; or
(e) Contracts of insurance procured under the provisions of chapter
48.15 RCW.
(2) Every such filing containing a certification, in a form
approved by the commissioner, by either the chief executive officer of
the insurer or by an actuary who is a member of the American academy of
actuaries, attesting that the filing complies with Title 48 RCW and
Title 284 of the Washington Administrative Code, may be used by the
insurer immediately after filing with the commissioner. The
commissioner may order an insurer to cease using a certified form upon
the grounds set forth in RCW 48.18.110. This subsection does not apply
to certain types of policy forms designated by the commissioner by
rule.
(3) Except as provided in RCW 48.18.103, every filing that does not
contain a certification pursuant to subsection (2) of this section must
be made not less than thirty days in advance of issuance, delivery, or
use. At the expiration of the thirty days, the filed form shall be
deemed approved unless prior thereto it has been affirmatively approved
or disapproved by order of the commissioner. The commissioner may
extend by not more than an additional fifteen days the period within
which he or she may affirmatively approve or disapprove any form, by
giving notice of the extension before expiration of the initial thirty-day period. At the expiration of the period that has been extended,
and in the absence of prior affirmative approval or disapproval, the
form shall be deemed approved. The commissioner may withdraw any
approval at any time for cause. By approval of any form for immediate
use, the commissioner may waive any unexpired portion of the initial
thirty-day waiting period.
(4) The commissioner's order disapproving any form or withdrawing
a previous approval must state the grounds for disapproval.
(5) No form may knowingly be issued or delivered as to which the
commissioner's approval does not then exist.
(6) The commissioner may, by rule, exempt from the requirements of
this section any class or type of insurance policy forms if filing and
approval is not desirable or necessary for the protection of the
public.
(7) Every member or subscriber to a rating organization must adhere
to the form filings made on its behalf by the organization. Deviations
from the organization are permitted only when filed with the
commissioner in accordance with this chapter.
(8) Medical malpractice insurance form filings are subject to the
provisions of this section.
(9) Variable contract forms; disability insurance policy forms;
individual life insurance policy forms; life insurance policy
illustration forms; industrial life insurance contract, individual
medicare supplement insurance policy, and long-term care insurance
policy forms, which are amended solely to comply with the changes in
nomenclature required by RCW 48.18A.035, 48.20.013, 48.20.042,
48.20.072, 48.23.380, 48.23A.040, 48.23A.070, 48.25.140, 48.66.120, and
48.76.090 are exempt from this section.
Sec. 13 RCW 48.18.180 and 2007 c 153 s 2 are each amended to read
as follows:
(1) The premium stated in the policy shall be inclusive of all
fees, charges, premiums, or other consideration charged for the
insurance or for the procurement thereof.
(2) No insurer or its officer, employee, ((agent, solicitor))
appointed insurance producer, or other representative shall charge or
receive any fee, compensation, or consideration for insurance which is
not included in the premium specified in the policy.
(3) Each violation of this section is a gross misdemeanor.
(4) This section does not apply to:
(a) A fee paid to ((a broker)) an insurance producer by an insured
as provided in RCW 48.17.270; or
(b) A regulatory surcharge imposed by RCW 48.02.190.
Sec. 14 RCW 48.18.220 and 1967 ex.s. c 12 s 2 are each amended to
read as follows:
Where an insurance producer, title insurance agent, or other
representative of an insurer receipts premium money at the time that
the insurance producer, title insurance agent, or representative
purports to bind coverage, the receipt shall state: (a) That it is a
binder, (b) a brief description of the coverage bound, and (c) the
identity of the insurer in which the coverage is bound. This section
does not apply as to life and disability insurances.
Sec. 15 RCW 48.18.240 and 1947 c 79 s .18.24 are each amended to
read as follows:
The commissioner may suspend or revoke the license of any insurance
producer or title insurance agent issuing or purporting to issue any
binder as to any insurer named therein as to which he or she is not
then authorized so to bind.
Sec. 16 RCW 48.18.289 and 2000 c 220 s 1 are each amended to read
as follows:
Whenever a notice of cancellation or nonrenewal or an offer to
renew is furnished to an insured in accord with any provision of this
chapter, a copy of such notice or offer shall be provided within five
working days to the insurance producer or title insurance agent on the
account ((or to the broker of record for the insured)). When possible,
the copy to the insurance producer or title insurance agent ((or
broker)) may be provided electronically.
Sec. 17 RCW 48.18.292 and 1985 c 264 s 19 are each amended to
read as follows:
(1) Each insurer shall be required to renew any contract of
insurance subject to RCW 48.18.291 unless one of the following
situations exists:
(a) The insurer gives the named insured at least twenty days'
notice in writing as provided for in RCW 48.18.291(1), that it proposes
to refuse to renew the insurance contract upon its expiration date; and
sets forth therein the actual reason for refusing to renew; or
(b) At least twenty days prior to its expiration date, the insurer
has communicated its willingness to renew in writing to the named
insured, and has included therein a statement of the amount of the
premium or portion thereof required to be paid by the insured to renew
the policy, including the amount by which the premium or deductibles
have changed from the previous policy period, and the date by which
such payment must be made, and the insured fails to discharge when due
his or her obligation in connection with the payment of such premium or
portion thereof; or
(c) The insured's ((agent or broker)) insurance producer has
procured other coverage acceptable to the insured prior to the
expiration of the policy period.
(2) Renewal of a policy shall not constitute a waiver or estoppel
with respect to grounds for cancellation which existed before the
effective date of such renewal.
(3) "Renewal" or "to renew" means the issuance and delivery by an
insurer of a contract of insurance replacing at the end of the contract
period a contract of insurance previously issued and delivered by the
same insurer, or the issuance and delivery of a certificate or notice
extending the term of a contract beyond its policy period or term:
PROVIDED, HOWEVER, That any contract of insurance with a policy period
or term of six months or less whether or not made continuous for
successive terms upon the payment of additional premiums shall for the
purpose of RCW 48.18.291 through 48.18.297 be considered as if written
for a policy period or term of six months: PROVIDED, FURTHER, That any
policy written for a term longer than one year or any policy with no
fixed expiration date, shall, for the purpose of RCW 48.18.291 through
48.18.297, be considered as if written for successive policy periods or
terms of one year.
(4) On and after January 1, 1980, no policy of insurance subject to
RCW 48.18.291 shall be issued for a policy period or term of less than
six months.
(5) No insurer shall refuse to renew the liability and/or collision
coverage of an automobile insurance policy on the basis that an insured
covered by the policy of the insurer has submitted one or more claims
under the comprehensive, road service, or towing coverage of the
policy. Nothing in this subsection shall prohibit the nonrenewal of
comprehensive, road service, or towing coverage on the basis of one or
more claims submitted by an insured.
Sec. 18 RCW 48.18.543 and 2003 c 116 s 1 are each amended to read
as follows:
(1) For the purposes of this section:
(a) "Licensee" means every insurance ((agent, broker, or
solicitor)) producer licensed under chapter 48.17 RCW.
(b) "Residential mortgage loan" means any loan primarily for
personal, family, or household use secured by a mortgage or deed of
trust on residential real estate upon which is constructed or intended
to be constructed a single-family dwelling or multiple family dwelling
of four or less units.
(c) "Single premium credit insurance" means credit insurance
purchased with a single premium payment at inception of coverage.
(2) An insurer or licensee may not issue or sell any single premium
credit insurance product in connection with a residential mortgage loan
unless:
(a) The term of the single premium credit insurance policy is the
same as the term of the loan;
(b) The debtor is given the option to buy credit insurance paid
with monthly premiums; and
(c) The single premium credit insurance policy provides for a full
refund of premiums to the debtor if the credit insurance is canceled
within sixty days of the date of the loan.
(3) This section does not apply to residential mortgage loans if:
(a) The loan amount does not exceed ten thousand dollars, exclusive
of fees;
(b) The repayment term of the loan does not exceed five years; and
(c) The term of the single premium credit insurance does not exceed
the repayment term of the loan.
Sec. 19 RCW 48.18A.035 and 1983 1st ex.s. c 32 s 7 are each
amended to read as follows:
(1) Every individual variable contract issued shall have printed on
its face or attached thereto a notice stating in substance that the
policy owner shall be permitted to return the policy within ten days
after it is received by the policy owner and to have the market value
of the assets purchased by its premium, less taxes and investment
brokerage commissions, if any, refunded, if, after examination of the
policy, the policy owner is not satisfied with it for any reason. An
additional ten percent penalty shall be added to any premium refund due
which is not paid within thirty days of return of the policy to the
insurer or ((agent)) insurance producer. If a policy owner pursuant to
such notice returns the policy to the insurer at its home or branch
office or to the ((agent)) insurance producer through whom it was
purchased, it shall be void from the beginning and the parties shall be
in the same position as if no policy had been issued.
(2) No later than January 1, 2010, or when the insurer has used all
of its existing paper variable contract forms which were in its
possession on July 1, 2009, whichever is earlier, the notice required
by subsection (1) of this section shall use the term insurance producer
in place of agent.
Sec. 20 RCW 48.18A.060 and 1994 c 92 s 502 are each amended to
read as follows:
No person shall be or act as an ((agent)) insurance producer for
the solicitation or sale of variable contracts except while duly
appointed and licensed under the insurance code as a ((life insurance
agent)) variable life and variable annuity products insurance producer
with respect to the insurer, and while duly licensed as a security
salesman or securities broker under a license issued by the director of
financial institutions pursuant to the securities act of this state;
except that any person who participates only in the sale or offering
for sale of variable contracts which fund corporate plans meeting the
requirements for qualification under sections 401 or 403 of the United
States internal revenue code need not be licensed pursuant to the
securities act of this state.
Sec. 21 RCW 48.20.013 and 1983 1st ex.s. c 32 s 9 are each
amended to read as follows:
Every individual disability insurance policy issued after January
1, 1968, except single premium nonrenewable policies, shall have
printed on its face or attached thereto a notice stating in substance
that the person to whom the policy is issued shall be permitted to
return the policy within ten days of its delivery to the purchaser and
to have the premium paid refunded if, after examination of the policy,
the purchaser is not satisfied with it for any reason. An additional
ten percent penalty shall be added to any premium refund due which is
not paid within thirty days of return of the policy to the insurer or
((agent)) insurance producer. If a policy holder or purchaser pursuant
to such notice, returns the policy to the insurer at its home or branch
office or to the ((agent)) insurance producer through whom it was
purchased, it shall be void from the beginning and the parties shall be
in the same position as if no policy had been issued.
Sec. 22 RCW 48.20.042 and 1951 c 229 s 5 are each amended to read
as follows:
There shall be a provision as follows:
ENTIRE CONTRACTS; CHANGES: This policy, including the endorsements
and attached papers, if any, constitutes the entire contract of
insurance. No change in this policy shall be valid until approved by
an executive officer of the insurer and unless such approval be
endorsed hereon or attached hereto. No ((agent)) insurance producer
has authority to change this policy or to waive any of its provisions.
Sec. 23 RCW 48.20.072 and 1951 c 229 s 8 are each amended to read
as follows:
There shall be a provision as follows:
REINSTATEMENT: If any renewal premium be not paid within the time
granted the insured for payment, a subsequent acceptance of premium by
the insurer or by any ((agent)) insurance producer duly authorized by
the insurer to accept such premium, without requiring in connection
therewith an application for reinstatement, shall reinstate the policy:
PROVIDED, HOWEVER, That if the insurer or such ((agent)) insurance
producer requires an application for reinstatement and issues a
conditional receipt for the premium tendered, the policy will be
reinstated upon approval of such application by the insurer or, lacking
such approval, upon the forty-fifth day following the date of such
conditional receipt unless the insurer has previously notified the
insured in writing of its disapproval of such application. The
reinstated policy shall cover only loss resulting from such accidental
injury as may be sustained after the date of reinstatement and loss due
to such sickness as may begin more than ten days after such date. In
all other respects the insured and insurer shall have the same rights
thereunder as they had under the policy immediately before the due date
of the defaulted premium, subject to any provisions endorsed hereon or
attached hereto in connection with the reinstatement. Any premium
accepted in connection with a reinstatement shall be applied to a
period for which premium has not been previously paid, but not to any
period more than sixty days prior to the date of reinstatement.
(The last sentence of the above provision may be omitted from any
policy which the insured has the right to continue in force subject to
its terms by the timely payment of premiums (1) until at least age 50
or, (2) in the case of a policy issued after age 44, for at least five
years from its date of issue.)
NEW SECTION. Sec. 24 A new section is added to chapter 48.20 RCW
to read as follows:
No later than January 1, 2010, or when the insurer has used all of
its existing paper disability insurance policy forms which were in its
possession on July 1, 2009, whichever is earlier, the provisions
required by RCW 48.20.013, 48.20.042, and 48.20.072 shall use the term
insurance producer in place of agent.
Sec. 25 RCW 48.21A.040 and 1965 ex.s. c 70 s 30 are each amended
to read as follows:
((Notwithstanding the provisions of RCW 48.17.200,)) Any person
licensed to transact disability insurance as an ((agent, broker or
solicitor)) insurance producer may transact extended health insurance
and may be paid a commission thereon.
Sec. 26 RCW 48.23.380 and 1983 1st ex.s. c 32 s 10 are each
amended to read as follows:
(1) Every individual life insurance policy issued after September
1, 1977, shall have printed on its face or attached thereto a notice
stating in substance that the policy owner shall be permitted to return
the policy within ten days after it is received by the policy owner and
to have the premium paid refunded if, after examination of the policy,
the policy owner is not satisfied with it for any reason. An
additional ten percent penalty shall be added to any premium refund due
which is not paid within thirty days of return of the policy to the
insurer or ((agent)) insurance producer. If a policy owner pursuant to
such notice, returns the policy to the insurer at its home or branch
office or to the ((agent)) insurance producer through whom it was
purchased, it shall be void from the beginning and the parties shall be
in the same position as if no policy had been issued.
(2) This section shall not apply to individual life insurance
policies issued in connection with a credit transaction or issued under
a contractual policy change or conversion privilege provision contained
in a policy.
(3) No later than January 1, 2010, or when the insurer has used all
of its existing paper individual life insurance policy forms which were
in its possession on July 1, 2009, whichever is earlier, the notice
required by subsection (1) of this section shall use the term insurance
producer in place of agent.
Sec. 27 RCW 48.23.420 and 1982 1st ex.s. c 9 s 22 are each
amended to read as follows:
RCW 48.23.420 through 48.23.520 do not apply to any reinsurance;
group annuity purchased under a retirement plan or plan of deferred
compensation established or maintained by an employer (including a
partnership or sole proprietorship) or by an employee organization, or
by both, other than a plan providing individual retirement accounts or
individual retirement annuities under Section 408 of the Internal
Revenue Code, as now or hereafter amended; premium deposit fund;
variable annuity; investment annuity; immediate annuity; any deferred
annuity contract after annuity payments have commenced; or reversionary
annuity; nor to any contract which is delivered outside this state
through an ((agent)) insurance producer or other representative of the
company issuing the contract.
Sec. 28 RCW 48.23A.040 and 1997 c 313 s 6 are each amended to
read as follows:
(1) A basic illustration shall conform with the following
requirements:
(a) The illustration shall be labeled with the date on which it was
prepared.
(b) Each page, including any explanatory notes or pages, shall be
numbered and show its relationship to the total number of pages in the
illustration (for example, the fourth page of a seven-page illustration
shall be labeled "page 4 of 7 pages").
(c) The assumed dates of payment receipt and benefit payout within
a policy year shall be clearly identified.
(d) If the age of the proposed insured is shown as a component of
the tabular detail, it shall be issue age plus the numbers of years the
policy is assumed to have been in force.
(e) The assumed payments on which the illustrated benefits and
values are based shall be identified as premium outlay or contract
premium, as applicable. For policies that do not require a specific
contract premium, the illustrated payments shall be identified as
premium outlay.
(f) Guaranteed death benefits and values available upon surrender,
if any, for the illustrated premium outlay or contract premium shall be
shown and clearly labeled guaranteed.
(g) If the illustration shows any nonguaranteed elements, they
cannot be based on a scale more favorable to the policy owner than the
insurer's illustrated scale at any duration. These elements shall be
clearly labeled nonguaranteed.
(h) The guaranteed elements, if any, shall be shown before
corresponding nonguaranteed elements and shall be specifically referred
to on any page of an illustration that shows or describes only the
nonguaranteed elements (for example, "see page one for guaranteed
elements").
(i) The account or accumulation value of a policy, if shown, shall
be identified by the name this value is given in the policy being
illustrated and shown in close proximity to the corresponding value
available upon surrender.
(j) The value available upon surrender shall be identified by the
name this value is given in the policy being illustrated and shall be
the amount available to the policy owner in a lump sum after deduction
of surrender charges, policy loans, and policy loan interest, as
applicable.
(k) Illustrations may show policy benefits and values in graphic or
chart form in addition to the tabular form.
(l) Any illustration of nonguaranteed elements shall be accompanied
by a statement indicating that:
(i) The benefits and values are not guaranteed;
(ii) The assumptions on which they are based are subject to change
by the insurer; and
(iii) Actual results may be more or less favorable.
(m) If the illustration shows that the premium payer may have the
option to allow policy charges to be paid using nonguaranteed values,
the illustration must clearly disclose that a charge continues to be
required and that, depending on actual results, the premium payer may
need to continue or resume premium outlays. Similar disclosure shall
be made for premium outlay of lesser amounts or shorter durations than
the contract premium. If a contract premium is due, the premium outlay
display shall not be left blank or show zero unless accompanied by an
asterisk or similar mark to draw attention to the fact that the policy
is not paid up.
(n) If the applicant plans to use dividends or policy values,
guaranteed or nonguaranteed, to pay all or a portion of the contract
premium or policy charges, or for any other purpose, the illustration
may reflect those plans and the impact on future policy benefits and
values.
(2) A basic illustration shall include the following:
(a) A brief description of the policy being illustrated, including
a statement that it is a life insurance policy;
(b) A brief description of the premium outlay or contract premium,
as applicable, for the policy. For a policy that does not require
payment of a specific contract premium, the illustration shall show the
premium outlay that must be paid to guarantee coverage for the term of
the contract, subject to maximum premiums allowable to qualify as a
life insurance policy under the applicable provisions of the internal
revenue code;
(c) A brief description of any policy features, riders, or options,
guaranteed or nonguaranteed, shown in the basic illustration and the
impact they may have on the benefits and values of the policy;
(d) Identification and a brief definition of column headings and
key terms used in the illustration; and
(e) A statement containing in substance the following: "This
illustration assumes that the currently illustrated, nonguaranteed
elements will continue unchanged for all years shown. This is not
likely to occur, and actual results may be more or less favorable than
those shown."
(3)(a) Following the narrative summary, a basic illustration shall
include a numeric summary of the death benefits and values and the
premium outlay and contract premium, as applicable. For a policy that
provides for a contract premium, the guaranteed death benefits and
values shall be based on the contract premium. This summary shall be
shown for at least policy years five, ten, and twenty and at age
seventy, if applicable, on the three bases shown below. For multiple
life policies the summary shall show policy years five, ten, twenty,
and thirty.
(i) Policy guarantees;
(ii) Insurer's illustrated scale;
(iii) Insurer's illustrated scale used but with the nonguaranteed
elements reduced as follows:
(A) Dividends at fifty percent of the dividends contained in the
illustrated scale used;
(B) Nonguaranteed credited interest at rates that are the average
of the guaranteed rates and the rates contained in the illustrated
scale used; and
(C) All nonguaranteed charges, including but not limited to, term
insurance charges and mortality and expense charges, at rates that are
the average of the guaranteed rates and the rates contained in the
illustrated scale used.
(b) In addition, if coverage would cease prior to policy maturity
or age one hundred, the year in which coverage ceases shall be
identified for each of the three bases.
(4) Statements substantially similar to the following shall be
included on the same page as the numeric summary and signed by the
applicant, or the policy owner in the case of an illustration provided
at time of delivery, as required in this chapter.
(a) A statement to be signed and dated by the applicant or policy
owner reading as follows: "I have received a copy of this illustration
and understand that any nonguaranteed elements illustrated are subject
to change and could be either higher or lower. The ((agent)) insurance
producer has told me they are not guaranteed."
(b) A statement to be signed and dated by the insurance producer or
other authorized representative of the insurer reading as follows: "I
certify that this illustration has been presented to the applicant and
that I have explained that any nonguaranteed elements illustrated are
subject to change. I have made no statements that are inconsistent
with the illustration."
(5)(a) A basic illustration shall include the following for at
least each policy year from one to ten and for every fifth policy year
thereafter ending at age one hundred, policy maturity, or final
expiration; and except for term insurance beyond the twentieth year,
for any year in which the premium outlay and contract premium, if
applicable, is to change:
(i) The premium outlay and mode the applicant plans to pay and the
contract premium, as applicable;
(ii) The corresponding guaranteed death benefit, as provided in the
policy; and
(iii) The corresponding guaranteed value available upon surrender,
as provided in the policy.
(b) For a policy that provides for a contract premium, the
guaranteed death benefit and value available upon surrender shall
correspond to the contract premium.
(c) Nonguaranteed elements may be shown if described in the
contract. In the case of an illustration for a policy on which the
insurer intends to credit terminal dividends, they may be shown if the
insurer's current practice is to pay terminal dividends. If any
nonguaranteed elements are shown, they must be shown at the same
durations as the corresponding guaranteed elements, if any. If no
guaranteed benefit or value is available at any duration for which a
nonguaranteed benefit or value is shown, a zero shall be displayed in
the guaranteed column.
Sec. 29 RCW 48.23A.070 and 1997 c 313 s 9 are each amended to
read as follows:
(1) In the case of a policy designated as one for which
illustrations will be used, the insurer shall provide each policy owner
with an annual report on the status of the policy that shall contain at
least the following information:
(a) For universal life policies, the report shall include the
following:
(i) The beginning and end date of the current report period;
(ii) The policy value at the end of the previous report period and
at the end of the current report period;
(iii) The total amounts that have been credited or debited to the
policy value during the current report period, identifying each type,
such as interest, mortality, expense, and riders;
(iv) The current death benefit at the end of the current report
period on each life covered by the policy;
(v) The net cash surrender value of the policy as of the end of the
current report period;
(vi) The amount of outstanding loans, if any, as of the end of the
current report period; and
(vii) For fixed premium policies: If, assuming guaranteed
interest, mortality, and expense loads and continued scheduled premium
payments, the policy's net cash surrender value is such that it would
not maintain insurance in force until the end of the next reporting
period, a notice to this effect shall be included in the report; or
(viii) For flexible premium policies: If, assuming guaranteed
interest, mortality, and expense loads, the policy's net cash surrender
value will not maintain insurance in force until the end of the next
reporting period unless further premium payments are made, a notice to
this effect shall be included in the report.
(b) For all other policies, where applicable:
(i) Current death benefit;
(ii) Annual contract premium;
(iii) Current cash surrender value;
(iv) Current dividend;
(v) Application of current dividend; and
(vi) Amount of outstanding loan.
(c) Insurers writing life insurance policies that do not build
nonforfeiture values shall only be required to provide an annual report
with respect to these policies for those years when a change has been
made to nonguaranteed policy elements by the insurer.
(2) If the annual report does not include an in-force illustration,
it shall contain the following notice displayed prominently:
"IMPORTANT POLICY OWNER NOTICE: You should consider requesting more
detailed information about your policy to understand how it may perform
in the future. You should not consider replacement of your policy or
make changes in your coverage without requesting a current
illustration. You may annually request, without charge, such an
illustration by calling (insurer's phone number), writing to (insurer's
name) at (insurer's address) or contacting your ((agent)) insurance
producer. If you do not receive a current illustration of your policy
within 30 days from your request, you should contact your state
insurance department." The insurer may vary the sequential order of
the methods for obtaining an in-force illustration.
(3) Upon the request of the policy owner, the insurer shall furnish
an in-force illustration of current and future benefits and values
based on the insurer's present illustrated scale. This illustration
shall comply with the requirements of RCW 48.23A.030 (1) and (2) and
48.23A.040 (1) and (5). No signature or other acknowledgment of
receipt of this illustration shall be required.
(4) If an adverse change in nonguaranteed elements that could
affect the policy has been made by the insurer since the last annual
report, the annual report shall contain a notice of that fact and the
nature of the change prominently displayed.
Sec. 30 RCW 48.23A.080 and 1997 c 313 s 10 are each amended to
read as follows:
(1) The board of directors of each insurer shall appoint one or
more illustration actuaries.
(2) The illustration actuary shall certify that the disciplined
current scale used in illustrations is in conformity with the actuarial
standard of practice for compliance with the national association of
insurance commissioners model regulation on life insurance
illustrations adopted by the actuarial standards board, and that the
illustrated scales used in insurer-authorized illustrations meet the
requirements of this chapter.
(3) The illustration actuary shall:
(a) Be a member in good standing of the American academy of
actuaries;
(b) Be familiar with the standard of practice regarding life
insurance policy illustrations;
(c) Not have been found by the commissioner, following appropriate
notice and hearing to have:
(i) Violated any provision of, or any obligation imposed by, the
insurance law or other law in the course of his or her dealings as an
illustration actuary;
(ii) Been found guilty of fraudulent or dishonest practices;
(iii) Demonstrated his or her incompetence, lack of cooperation, or
untrustworthiness to act as an illustration actuary; or
(iv) Resigned or been removed as an illustration actuary within the
past five years as a result of acts or omissions indicated in any
adverse report on examination or as a result of a failure to adhere to
generally acceptable actuarial standards;
(d) Not fail to notify the commissioner of any action taken by a
commissioner of another state similar to that under (c) of this
subsection;
(e) Disclose in the annual certification whether, since the last
certification, a currently payable scale applicable for business issued
within the previous five years and within the scope of the
certification has been reduced for reasons other than changes in the
experience factors underlying the disciplined current scale. If
nonguaranteed elements illustrated for new policies are not consistent
with those illustrated for similar in-force policies, this must be
disclosed in the annual certification. If nonguaranteed elements
illustrated for both new and in-force policies are not consistent with
the nonguaranteed elements actually being paid, charged, or credited to
the same or similar forms, this must be disclosed in the annual
certification; and
(f) Disclose in the annual certification the method used to
allocate overhead expenses for all illustrations:
(i) Fully allocated expenses;
(ii) Marginal expenses; or
(iii) A generally recognized expense table based on fully allocated
expenses representing a significant portion of insurance companies and
approved by the national association of insurance commissioners.
(4)(a) The illustration actuary shall file a certification with the
board of directors and with the commissioner:
(i) Annually for all policy forms for which illustrations are used;
and
(ii) Before a new policy form is illustrated.
(b) If an error in a previous certification is discovered, the
illustration actuary shall notify the board of directors of the insurer
and the commissioner promptly.
(5) If an illustration actuary is unable to certify the scale for
any policy form illustration the insurer intends to use, the actuary
shall notify the board of directors of the insurer and the commissioner
promptly of his or her inability to certify.
(6) A responsible officer of the insurer, other than the
illustration actuary, shall certify annually:
(a) That the illustration formats meet the requirements of this
chapter and that the scales used in insurer-authorized illustrations
are those scales certified by the illustration actuary; and
(b) That the company has provided its ((agents)) insurance
producers with information about the expense allocation method used by
the company in its illustrations and disclosed as required in
subsection (3)(f) of this section.
(7) The annual certifications shall be provided to the commissioner
each year by a date determined by the insurer.
(8) If an insurer changes the illustration actuary responsible for
all or a portion of the company's policy forms, the insurer shall
notify the commissioner of that fact promptly and disclose the reason
for the change.
NEW SECTION. Sec. 31 A new section is added to chapter 48.23A
RCW to read as follows:
No later than January 1, 2010, or when the insurer has used all of
its existing paper life insurance policy illustration forms which were
in its possession on July 1, 2009, whichever is earlier, the provisions
required by RCW 48.23A.040 and 48.23A.070 shall use the term insurance
producer in place of agent.
Sec. 32 RCW 48.24.080 and 1949 c 190 s 33 are each amended to
read as follows:
The lives of a group of individuals may be insured under a policy
issued to a principal, or if such principal is a life insurer, by or to
such principal, covering when issued not less than twenty-five
((agents)) insurance producers of such principal, subject to the
following requirements:
(1) The ((agents)) insurance producers eligible for insurance under
the policy shall be those who are under contract to render personal
services for such principal for a commission or other fixed or
ascertainable compensation.
(2) The policy must insure either all of the ((agents)) insurance
producers or all of any class or classes thereof, determined by
conditions pertaining to the services to be rendered by such ((agents))
insurance producers, except that if a policy is intended to insure
several such classes it may be issued to insure any such class of which
seventy-five percent are covered and extended to other classes as
seventy-five percent thereof express the desire to be covered.
(3) The premium on the policy shall be paid by the principal or by
the principal and the ((agents)) insurance producers jointly. When the
premium is paid by the principal and ((agents)) insurance producers
jointly and the benefits of the policy are offered to all eligible
((agents)) insurance producers, the policy, when issued, must insure
not less than seventy-five percent of such ((agents)) insurance
producers.
(4) The amounts of insurance shall be based upon some plan which
will preclude individual selection.
(5) The insurance shall be for the benefit of persons other than
the principal.
(6) Such policy shall terminate if, subsequent to issue, the number
of ((agents)) insurance producers insured falls below twenty-five lives
or seventy-five percent of the number eligible and the contribution of
the ((agents)) insurance producers, if the premiums are on a renewable
term insurance basis, exceed one dollar per month per one thousand
dollars of insurance coverage plus any additional premium per one
thousand dollars of insurance coverage charged to cover one or more
hazardous occupations.
(((7) For the purposes of this section "agents" shall be deemed to
include agents, subagents, solicitors, and salesmen.))
Sec. 33 RCW 48.25.140 and 1947 c 79 s .25.14 are each amended to
read as follows:
(1) There shall be a provision that no ((agent)) insurance producer
shall have the power or authority to waive, change, or alter any of the
terms or conditions of any policy; except that, at the option of the
insurer, the terms or conditions may be changed by an endorsement
signed by a duly authorized officer of the insurer.
(2) No later than January 1, 2010, or when the insurer has used all
of its existing paper industrial life insurance contract forms which
were in its possession on July 1, 2009, whichever is earlier, the
notice required by subsection (1) of this section shall use the term
insurance producer in place of agent.
Sec. 34 RCW 48.30.100 and 1947 c 79 s .30.10 are each amended to
read as follows:
No insurer, insurance producer, title insurance agent, ((broker,
solicitor,)) or other person((,)) shall guarantee or agree to the
payment of future dividends or future refunds of unused premiums or
savings in any specific or approximate amounts or percentages on
account of any insurance contract.
Sec. 35 RCW 48.30.140 and 1994 c 203 s 3 are each amended to read
as follows:
(1) Except to the extent provided for in an applicable filing with
the commissioner then in effect, no insurer, ((general agent, agent,
broker, or solicitor)) insurance producer, or title insurance agent
shall, as an inducement to insurance, or after insurance has been
effected, directly or indirectly, offer, promise, allow, give, set off,
or pay to the insured or to any employee of the insured, any rebate,
discount, abatement, or reduction of premium or any part thereof named
in any insurance contract, or any commission thereon, or earnings,
profits, dividends, or other benefit, or any other valuable
consideration or inducement whatsoever which is not expressly provided
for in the policy.
(2) Subsection (1) of this section shall not apply as to
commissions paid to a licensed ((agent, general agent, broker, or
solicitor)) insurance producer, or title insurance agent for insurance
placed on that person's own property or risks.
(3) This section shall not apply to the allowance by any marine
insurer, or marine insurance ((agent, general agent, broker, or
solicitor)) producer, to any insured, in connection with marine
insurance, of such discount as is sanctioned by custom among marine
insurers as being additional to the ((agent's or broker's)) insurance
producer's commission.
(4) This section shall not apply to advertising or promotional
programs conducted by insurers, insurance producers, or title insurance
agents((, or brokers)) whereby prizes, goods, wares, or merchandise,
not exceeding twenty-five dollars in value per person in the aggregate
in any twelve month period, are given to all insureds or prospective
insureds under similar qualifying circumstances.
(5) This section does not apply to an offset or reimbursement of
all or part of a fee paid to ((a broker)) an insurance producer as
provided in RCW 48.17.270.
Sec. 36 RCW 48.30.150 and 1990 1st ex.s. c 3 s 9 are each amended
to read as follows:
No insurer, ((general agent, agent, broker, solicitor)) insurance
producer, title insurance agent, or other person shall, as an
inducement to insurance, or in connection with any insurance
transaction, provide in any policy for, or offer, or sell, buy, or
offer or promise to buy or give, or promise, or allow to, or on behalf
of, the insured or prospective insured in any manner whatsoever:
(1) Any shares of stock or other securities issued or at any time
to be issued on any interest therein or rights thereto; or
(2) Any special advisory board contract, or other contract,
agreement, or understanding of any kind, offering, providing for, or
promising any profits or special returns or special dividends; or
(3) Any prizes, goods, wares, or merchandise of an aggregate value
in excess of twenty-five dollars.
This section shall not be deemed to prohibit the sale or purchase
of securities as a condition to or in connection with surety insurance
insuring the performance of an obligation as part of a plan of
financing found by the commissioner to be designed and operated in good
faith primarily for the purpose of such financing, nor shall it be
deemed to prohibit the sale of redeemable securities of a registered
investment company in the same transaction in which life insurance is
sold.
Sec. 37 RCW 48.30.157 and 1988 c 248 s 17 are each amended to
read as follows:
Notwithstanding the provisions of RCW 48.30.140, 48.30.150, and
48.30.155, the commissioner may permit an ((agent or broker)) insurance
producer to enter into reasonable arrangements with insureds and
prospective insureds to charge a reduced fee in situations where
services that are charged for are provided beyond the scope of services
customarily provided in connection with the solicitation and
procurement of insurance, so that an overall charge to an insured or
prospective insured is reasonable taking into account receipt of
commissions and fees and their relation, proportionally, to the value
of the total work performed.
Sec. 38 RCW 48.30.170 and 1994 c 203 s 4 are each amended to read
as follows:
(1) No insured person shall receive or accept, directly or
indirectly, any rebate of premium or part thereof, or any favor,
advantage, share in dividends, or other benefits, or any valuable
consideration or inducement not specified or provided for in the
policy, or any commission on any insurance policy to which he or she is
not lawfully entitled as a licensed insurance producer or title
insurance agent((, broker, or solicitor)). The retention by the
nominal policyholder in any group life insurance contract of any part
of any dividend or reduction of premium thereon contrary to the
provisions of RCW 48.24.260, shall be deemed the acceptance and receipt
of a rebate and shall be punishable as provided by this code.
(2) The amount of insurance whereon the insured has so received or
accepted any such rebate or any such commission, other than as to life
or disability insurances, shall be reduced in the proportion that the
amount or value of the rebate or commission bears to the premium for
such insurance. In addition to such reduction of insurance, if any,
any such insured shall be liable to a fine of not more than two hundred
dollars.
(3) This section shall not apply to an offset or reimbursement of
all or part of a fee paid to ((a broker)) an insurance producer as
provided in RCW 48.17.270.
Sec. 39 RCW 48.30.200 and 1947 c 79 s .30.20 are each amended to
read as follows:
It shall be unlawful for any insurer or its representative, or any
((agent or broker)) insurance producer, to hypothecate, sell, or
dispose of any promissory note, received in payment for any premium or
part thereof on any contract of life insurance or of disability
insurance applied for, prior to delivery of the policy to the
applicant.
Sec. 40 RCW 48.30.240 and 1947 c 79 s .30.24 are each amended to
read as follows:
(1) Any insurer which precipitates, or aids in precipitating or
conducting a rate war and by so doing writes or issues a policy of
insurance at a less rate than permitted under its schedules filed with
the commissioner, or below the rate deemed by him or her to be proper
and adequate to cover the class of risk insured, shall have its
certificate of authority to do business in this state suspended until
such time as the commissioner is satisfied that it is charging a proper
rate of premium.
(2) Any insurer which has precipitated, or aided in precipitating
or conducting a rate war for the purpose of punishing or eliminating
competitors or stifling competition, or demoralizing the business, or
for any other purpose, and has ordered the cancellation or rewriting of
policies at a rate lower than that provided by its rating schedules
where such rate war is not in operation, and has paid or attempted to
pay to the insured any return premiums, on any risk so to be rewritten,
on which its ((agent)) appointed insurance producer has received or is
entitled to receive ((his)) a regular commission, such insurer shall
not be allowed to charge back to such ((agent)) appointed insurance
producer any portion of ((his)) a commission on the ground that the
same has not been earned.
Sec. 41 RCW 48.30.260 and 1990 1st ex.s. c 3 s 13 are each
amended to read as follows:
(1) Every debtor or borrower, when property insurance of any kind
is required in connection with the debt or loan, shall have reasonable
opportunity and choice in the selection of the ((agent, broker,))
insurance producer and insurer through whom such insurance is to be
placed; but only if the insurance is properly provided for the
protection of the creditor or lender, whether by policy or binder, not
later than at commencement of risk as to such property as respects such
creditor or lender, and in the case of renewal of insurance, only if
the renewal policy, or a proper binder therefor containing a brief
description of the coverage bound and the identity of the insurer in
which the coverage is bound, is delivered to the creditor or lender not
later than thirty days prior to the renewal date.
(2) Every person who lends money or extends credit and who solicits
insurance on real and personal property must explain to the borrower in
prominently displayed writing that the insurance related to such loan
or credit extension may be purchased from an insurer or ((agent))
insurance producer of the borrower's choice, subject only to the
lender's right to reject a given insurer or ((agent)) insurance
producer as provided in subsection (3)(b) of this section.
(3) No person who lends money or extends credit may:
(a) Solicit insurance for the protection of property, after a
person indicates interest in securing a loan or credit extension, until
such person has received a commitment from the lender as to a loan or
credit extension;
(b) Unreasonably reject a contract of insurance furnished by the
borrower for the protection of the property securing the credit or
lien. A rejection shall not be deemed unreasonable if it is based on
reasonable standards, uniformly applied, relating to the extent of
coverage required and the financial soundness and the services of an
insurer. Such standards shall not discriminate against any particular
type of insurer, nor shall such standards call for rejection of an
insurance contract because the contract contains coverage in addition
to that required in the credit transaction;
(c) Require that any borrower, mortgagor, purchaser, insurer,
((broker, or agent)) or insurance producer pay a separate charge, in
connection with the handling of any contract of insurance required as
security for a loan, or pay a separate charge to substitute the
insurance policy of one insurer for that of another. This subsection
does not include the interest which may be charged on premium loans or
premium advancements in accordance with the terms of the loan or credit
document;
(d) Use or disclose, without the prior written consent of the
borrower, mortgagor, or purchaser taken at a time other than the making
of the loan or extension of credit, information relative to a contract
of insurance which is required by the credit transaction, for the
purpose of replacing such insurance;
(e) Require any procedures or conditions of duly licensed ((agents,
brokers,)) insurance producers or insurers not customarily required of
those ((agents, brokers,)) insurance producers or insurers affiliated
or in any way connected with the person who lends money or extends
credit; or
(f) Require property insurance in an amount in excess of the amount
which could reasonably be expected to be paid under the policy, or
combination of policies, in the event of a loss.
(4) Nothing contained in this section shall prevent a person who
lends money or extends credit from placing insurance on real or
personal property in the event the mortgagor, borrower, or purchaser
has failed to provide required insurance in accordance with the terms
of the loan or credit document.
(5) Nothing contained in this section shall apply to credit life or
credit disability insurance.
Sec. 42 RCW 48.30.270 and 2005 c 352 s 1 are each amended to read
as follows:
(1) No officer or employee of this state, or of any public agency,
public authority or public corporation except a public corporation or
public authority created pursuant to agreement or compact with another
state, and no person acting or purporting to act on behalf of such
officer or employee, or public agency or public authority or public
corporation, shall, with respect to any public building or construction
contract which is about to be, or which has been competitively bid,
require the bidder to make application to, or to furnish financial data
to, or to obtain or procure, any of the surety bonds or contracts of
insurance specified in connection with such contract, or specified by
any law, general, special or local, from a particular insurer or
((agent or broker)) insurance producer.
(2) No such officer or employee or any person, acting or purporting
to act on behalf of such officer or employee shall negotiate, make
application for, obtain or procure any of such surety bonds or
contracts of insurance, except contracts of insurance for builder's
risk or owner's protective liability, which can be obtained or procured
by the bidder, contractor or subcontractor.
(3) This section shall not be construed to prevent the exercise by
such officer or employee on behalf of the state or such public agency,
public authority, or public corporation of its right to approve the
form, sufficiency or manner or execution of the surety bonds or
contracts of insurance furnished by the insurer selected by the bidder
to underwrite such bonds, or contracts of insurance.
(4) Any provisions in any invitation for bids, or in any of the
contract documents, in conflict with this section are declared to be
contrary to the public policy of this state.
(5) A violation of this section shall be subject to the penalties
provided by RCW 48.01.080.
(6) This section shall not apply to public construction projects,
when the actual or estimated aggregate value of the project, exclusive
of insurance and surety costs, exceeds two hundred million dollars.
For purposes of applying the two hundred million dollar threshold set
forth in this subsection, the term "public construction project" means
a project that has a public owner and has phases, segments, or
component parts relating to a common geographic site or public
transportation system, but does not include the aggregation of
unrelated construction projects.
(7) The exclusions specified in subsection (6) of this section do
not apply to surety bonds.
Sec. 43 RCW 48.31.111 and 2003 c 248 s 11 are each amended to
read as follows:
(1) A delinquency proceeding may not be commenced under this
chapter by anyone other than the commissioner of this state, and no
court has jurisdiction to entertain a proceeding commenced by another
person.
(2) No court of this state has jurisdiction to entertain a
complaint praying for the dissolution, liquidation, rehabilitation,
sequestration, conservation, or receivership of an insurer, or praying
for an injunction or restraining order or other relief preliminary to,
incidental to, or relating to the proceedings, other than in accordance
with this chapter.
(3) In addition to other grounds for jurisdiction provided by the
law of this state, a court of this state having jurisdiction of the
subject matter has jurisdiction over a person served under the rules of
civil procedure or other applicable provisions of law in an action
brought by the receiver of a domestic insurer or an alien insurer
domiciled in this state:
(a) If the person served is an ((agent, broker)) insurance
producer, title insurance agent, or other person who has written
policies of insurance for or has acted in any manner on behalf of an
insurer against which a delinquency proceeding has been instituted, in
an action resulting from or incident to such a relationship with the
insurer;
(b) If the person served is a reinsurer who has entered into a
contract of reinsurance with an insurer against which a delinquency
proceeding has been instituted, or is an ((agent or broker)) insurance
producer of or for the reinsurer, in an action on or incident to the
reinsurance contract;
(c) If the person served is or has been an officer, director,
manager, trustee, organizer, promoter, or other person in a position of
comparable authority or influence over an insurer against which a
delinquency proceeding has been instituted, in an action resulting from
or incident to such a relationship with the insurer;
(d) If the person served is or was at the time of the institution
of the delinquency proceeding against the insurer holding assets in
which the receiver claims an interest on behalf of the insurer, in an
action concerning the assets; or
(e) If the person served is obligated to the insurer in any way, in
an action on or incident to the obligation.
(4) If the court on motion of a party finds that an action should
as a matter of substantial justice be tried in a forum outside this
state, the court may enter an appropriate order to stay further
proceedings on the action in this state.
Sec. 44 RCW 48.31.141 and 1993 c 462 s 65 are each amended to
read as follows:
(1)(a) An ((agent, broker)) insurance producer, title insurance
agent, premium finance company, or any other person, other than the
policy owner or the insured, responsible for the payment of a premium
is obligated to pay any unpaid premium for the full policy term due the
insurer at the time of the declaration of insolvency, whether earned or
unearned, as shown on the records of the insurer. The liquidator also
has the right to recover from the person a part of an unearned premium
that represents commission of the person. Credits or setoffs or both
may not be allowed to an ((agent, broker)) insurance producer, title
insurance agent, or premium finance company for amounts advanced to the
insurer by the ((agent,)) insurance producer, title insurance agent,
surplus line broker, or premium finance company on behalf of, but in
the absence of a payment by, the policy owner or the insured.
(b) Notwithstanding (a) of this subsection, the ((agent, broker))
insurance producer, title insurance agent, premium finance company, or
other person is not liable for uncollected unearned premium of the
insurer. A presumption exists that the premium as shown on the books
of the insurer is collected, and the burden is upon the ((agent,
broker)) insurance producer, title insurance agent, premium finance
company, or other person to demonstrate by a preponderance of the
evidence that the unearned premium was not actually collected. For
purposes of this subsection, "unearned premium" means that portion of
an insurance premium covering the unexpired term of the policy or the
unexpired period of the policy period.
(c) An insured is obligated to pay any unpaid earned premium due
the insurer at the time of the declaration of insolvency, as shown on
the records of the insurer.
(2) Upon a violation of this section, the commissioner may pursue
either one or both of the following courses of action:
(a) Suspend or revoke or refuse to renew the licenses of the
offending party or parties;
(b) Impose a penalty of not more than one thousand dollars for each
violation.
(3) Before the commissioner may take an action as set forth in
subsection (2) of this section, he or she shall give written notice to
the person accused of violating the law, stating specifically the
nature of the alleged violation, and fixing a time and place, at least
ten days thereafter, when a hearing on the matter shall be held. After
the hearing, or upon failure of the accused to appear at the hearing,
the commissioner, if he or she finds a violation, shall impose those
penalties under subsection (2) of this section that he or she deems
advisable.
(4) When the commissioner takes action in any or all of the ways
set out in subsection (2) of this section, the party aggrieved has the
rights granted under the Administrative Procedure Act, chapter 34.05
RCW.
Sec. 45 RCW 48.36A.310 and 1996 c 236 s 3 are each amended to
read as follows:
(1) The commissioner may refuse, suspend, or revoke a fraternal
benefit society's license, if the society:
(a) Has exceeded its powers;
(b) Has failed to comply with any of the provisions of this
chapter;
(c) Is not fulfilling its contracts in good faith;
(d) Is conducting its business fraudulently;
(e) Has a membership of less than four hundred after an existence
of one year or more;
(f) Is found by the commissioner to be in such a condition that its
further transaction of insurance in this state would be hazardous to
certificate holders and the people in this state;
(g) Refuses to remove or discharge a trustee, director, or officer
who has been convicted of any crime involving fraud, dishonesty, or
like moral turpitude;
(h) Refuses to be examined, or if its trustees, directors,
officers, employees, or representatives refuse to submit to examination
or to produce its accounts, records, and files for examination by the
commissioner when required, or refuse to perform any legal obligation
relative to the examination;
(i) Fails to pay any final judgment rendered against it in this
state upon any certificate, or undertaking issued by it, within thirty
days after the judgment became final or within thirty days after time
for taking an appeal has expired, or within thirty days after dismissal
of an appeal before final determination, whichever date is the later;
(j) Is found by the commissioner, after investigation or upon
receipt of reliable information, to be managed by persons, whether by
its trustees, directors, officers, or by any other means, who are
incompetent or untrustworthy or so lacking in fraternal benefit society
managerial experience as to make a proposed operation hazardous to its
members; or that there is good reason to believe it is affiliated
directly or indirectly through ownership, control, or business
relations, with any person or persons whose business operations are or
have been found to be in violation of any law or rule, to the detriment
of the members of the society or of the public, by bad faith or by
manipulation of the assets, or of accounts, or of reinsurance of the
society; or
(k) Does business through ((agents)) insurance producers or other
representatives in this state or in any other state who are not
properly licensed under applicable laws and rules.
(2) Nothing in this section shall prevent a society from
continuing, in good faith, all contracts made in this state during the
time the society was legally authorized to transact business herein.
Sec. 46 RCW 48.36A.330 and 1987 c 366 s 33 are each amended to
read as follows:
(1) ((Agents)) Insurance producers of societies shall be licensed
in accordance with the applicable provisions of chapter 48.17 RCW
regulating the licensing, revocation, suspension, or termination of
licenses of resident and nonresident ((agents. Persons who are so
authorized by a fraternal benefit society for a period of one year
immediately prior to June 13, 1963, shall not be required to take and
pass an examination as required by RCW 48.17.110)) insurance producers.
(2) The following individuals shall not be deemed an ((agent))
insurance producer of a fraternal benefit society within the provisions
of subsection (1) of this section:
(a) Any regular salaried officer or employee of a licensed society
who devotes substantially all of their services to activities other
than the solicitation of fraternal insurance contracts from the public,
and who receives for the solicitation of such contracts no commission
or other compensation directly dependent upon the amount of business
obtained; or
(b) Any ((agent)) insurance producer or representative of a society
who devotes, or intends to devote, less than fifty percent of their
time to the solicitation and procurement of insurance contracts for
such society: PROVIDED, That any person who in the preceding calendar
year has solicited and procured life insurance contracts on behalf of
any society in an amount of insurance in excess of fifty thousand
dollars shall be conclusively presumed to be devoting, or intending to
devote, fifty percent of the person's time to the solicitation or
procurement of insurance contracts for such society.
Sec. 47 RCW 48.41.060 and 2005 c 7 s 2 are each amended to read
as follows:
(1) The board shall have the general powers and authority granted
under the laws of this state to insurance companies, health care
service contractors, and health maintenance organizations, licensed or
registered to offer or provide the kinds of health coverage defined
under this title. In addition thereto, the board shall:
(a) Designate or establish the standard health questionnaire to be
used under RCW 48.41.100 and 48.43.018, including the form and content
of the standard health questionnaire and the method of its application.
The questionnaire must provide for an objective evaluation of an
individual's health status by assigning a discreet measure, such as a
system of point scoring to each individual. The questionnaire must not
contain any questions related to pregnancy, and pregnancy shall not be
a basis for coverage by the pool. The questionnaire shall be designed
such that it is reasonably expected to identify the eight percent of
persons who are the most costly to treat who are under individual
coverage in health benefit plans, as defined in RCW 48.43.005, in
Washington state or are covered by the pool, if applied to all such
persons;
(b) Obtain from a member of the American academy of actuaries, who
is independent of the board, a certification that the standard health
questionnaire meets the requirements of (a) of this subsection;
(c) Approve the standard health questionnaire and any modifications
needed to comply with this chapter. The standard health questionnaire
shall be submitted to an actuary for certification, modified as
necessary, and approved at least every eighteen months. The
designation and approval of the standard health questionnaire by the
board shall not be subject to review and approval by the commissioner.
The standard health questionnaire or any modification thereto shall not
be used until ninety days after public notice of the approval of the
questionnaire or any modification thereto, except that the initial
standard health questionnaire approved for use by the board after March
23, 2000, may be used immediately following public notice of such
approval;
(d) Establish appropriate rates, rate schedules, rate adjustments,
expense allowances, claim reserve formulas and any other actuarial
functions appropriate to the operation of the pool. Rates shall not be
unreasonable in relation to the coverage provided, the risk experience,
and expenses of providing the coverage. Rates and rate schedules may
be adjusted for appropriate risk factors such as age and area variation
in claim costs and shall take into consideration appropriate risk
factors in accordance with established actuarial underwriting practices
consistent with Washington state individual plan rating requirements
under RCW 48.44.022 and 48.46.064;
(e)(i) Assess members of the pool in accordance with the provisions
of this chapter, and make advance interim assessments as may be
reasonable and necessary for the organizational or interim operating
expenses. Any interim assessments will be credited as offsets against
any regular assessments due following the close of the year.
(ii) Self-funded multiple employer welfare arrangements are subject
to assessment under this subsection only in the event that assessments
are not preempted by the employee retirement income security act of
1974, as amended, 29 U.S.C. Sec. 1001 et seq. The arrangements and the
commissioner shall initially request an advisory opinion from the
United States department of labor or obtain a declaratory ruling from
a federal court on the legality of imposing assessments on these
arrangements before imposing the assessment. Once the legality of the
assessments has been determined, the multiple employer welfare
arrangement certified by the insurance commissioner must begin payment
of these assessments.
(iii) If there has not been a final determination of the legality
of these assessments, then beginning on the earlier of (A) the date the
fourth multiple employer welfare arrangement has been certified by the
insurance commissioner, or (B) April 1, 2006, the arrangement shall
deposit the assessments imposed by this subsection into an interest
bearing escrow account maintained by the arrangement. Upon a final
determination that the assessments are not preempted by the employee
retirement income security act of 1974, as amended, 29 U.S.C. Sec. 1001
et seq., all funds in the interest bearing escrow account shall be
transferred to the board;
(f) Issue policies of health coverage in accordance with the
requirements of this chapter;
(g) Establish procedures for the administration of the premium
discount provided under RCW 48.41.200(3)(a)(iii);
(h) Contract with the Washington state health care authority for
the administration of the premium discounts provided under RCW
48.41.200(3)(a) (i) and (ii);
(i) Set a reasonable fee to be paid to an insurance ((agent))
producer licensed in Washington state for submitting an acceptable
application for enrollment in the pool; and
(j) Provide certification to the commissioner when assessments will
exceed the threshold level established in RCW 48.41.037.
(2) In addition thereto, the board may:
(a) Enter into contracts as are necessary or proper to carry out
the provisions and purposes of this chapter including the authority,
with the approval of the commissioner, to enter into contracts with
similar pools of other states for the joint performance of common
administrative functions, or with persons or other organizations for
the performance of administrative functions;
(b) Sue or be sued, including taking any legal action as necessary
to avoid the payment of improper claims against the pool or the
coverage provided by or through the pool;
(c) Appoint appropriate legal, actuarial, and other committees as
necessary to provide technical assistance in the operation of the pool,
policy, and other contract design, and any other function within the
authority of the pool; and
(d) Conduct periodic audits to assure the general accuracy of the
financial data submitted to the pool, and the board shall cause the
pool to have an annual audit of its operations by an independent
certified public accountant.
(3) Nothing in this section shall be construed to require or
authorize the adoption of rules under chapter 34.05 RCW.
Sec. 48 RCW 48.43.105 and 1996 c 312 s 5 are each amended to read
as follows:
(1) A public or private entity who exercises due diligence in
preparing a document of any kind that compares health carriers of any
kind is immune from civil liability from claims based on the document
and the contents of the document.
(2)(a) There is absolute immunity to civil liability from claims
based on such a comparison document and its contents if the information
was provided by the carrier, was substantially accurately presented,
and contained the effective date of the information that the carrier
supplied, if any.
(b) Where due diligence efforts to obtain accurate information have
been taken, there is immunity from claims based on such a comparison
document and its contents if the publisher of the comparison document
asked for such information from the carrier, was refused, and relied on
any usually reliable source for the information including, but not
limited to, carrier enrollees, customers, ((agents, brokers)) insurance
producers, or providers. The carrier enrollees, customers, ((agents,
brokers)) insurance producers, or providers are likewise immune from
civil liability on claims based on information they provided if they
believed the information to be accurate and had exercised due diligence
in their efforts to confirm the accuracy of the information provided.
(3) The immunity from liability contained in this section applies
only if the comparison document contains the following in a conspicuous
place and in easy to read typeface:
This comparison is based on information believed to be reliable by its publisher, but the accuracy of the information cannot be guaranteed. Caution is suggested to all readers who are encouraged to confirm data of importance to the reader before any purchasing or other decisions are made.
Sec. 49 RCW 48.43.335 and 1998 c 241 s 8 are each amended to read
as follows:
(1) All RBC reports, to the extent the information therein is not
required to be set forth in a publicly available annual statement
schedule, and RBC plans, including the results or report of any
examination or analysis of a carrier and any corrective order issued by
the commissioner, with respect to any domestic carrier or foreign
carrier that are filed with the commissioner constitute information
that might be damaging to the carrier if made available to its
competitors, and therefore shall be kept confidential by the
commissioner. This information shall not be made public or be subject
to subpoena, other than by the commissioner and then only for the
purpose of enforcement actions taken by the commissioner.
(2) The comparison of a carrier's total adjusted capital to any of
its RBC levels is a regulatory tool that may indicate the need for
possible corrective action with respect to the carrier, and is not a
means to rank carriers generally. Therefore, except as otherwise
required under the provisions of RCW 48.43.300 through 48.43.370, the
making, publishing, disseminating, circulating, or placing before the
public, or causing, directly or indirectly, to be made, published,
disseminated, circulated, or placed before the public, in a newspaper,
magazine, or other publication, or in the form of a notice, circular,
pamphlet, letter, or poster, or over any radio or television station,
or in any other way, an advertisement, announcement, or statement
containing an assertion, representation, or statement with regard to
the RBC levels of any carrier, or of any component derived in the
calculation, by any carrier, ((agent, broker)) insurance producer, or
other person engaged in any manner in the insurance business would be
misleading and is therefore prohibited. However, if any materially
false statement with respect to the comparison regarding a carrier's
total adjusted capital to its RBC levels (or any of them) or an
inappropriate comparison of any other amount to the carrier's RBC
levels is published in any written publication and the carrier is able
to demonstrate to the commissioner with substantial proof the falsity
of such statement, or the inappropriateness, as the case may be, then
the carrier may publish an announcement in a written publication if the
sole purpose of the announcement is to rebut the materially false
statement.
(3) The RBC instructions, RBC reports, adjusted RBC reports, RBC
plans, and revised RBC plans are intended solely for use by the
commissioner in monitoring the solvency of carriers and the need for
possible corrective action with respect to carriers and shall not be
used by the commissioner for ratemaking nor considered or introduced as
evidence in any rate proceeding nor used by the commissioner to
calculate or derive any elements of an appropriate premium level or
rate of return for any line of insurance that a carrier or any
affiliate is authorized to write.
Sec. 50 RCW 48.44.011 and 1983 c 202 s 1 are each amended to read
as follows:
(1) ((Agent)) Insurance producer, as used in this chapter, means
any person appointed or authorized by a health care service contractor
to solicit applications for health care service contracts on its
behalf.
(2) No person shall act as or hold himself or herself out to be an
((agent)) appointed insurance producer of a health care service
contractor unless licensed as a disability insurance ((agent)) producer
by this state and appointed by the health care service contractor on
whose behalf solicitations are to be made.
(3) Applications, appointments, and qualifications for licenses,
the renewal thereof, the fees and issuance of a license, and the
renewal thereof shall be in accordance with the provisions of chapter
48.17 RCW that are applicable to a disability insurance ((agent))
producer.
(4) ((A person holding a valid license in this state as a health
care service contractor agent on July 24, 1983, is not required to
requalify by an examination for the renewal of the license.)) The commissioner may revoke, suspend, or refuse to issue or
renew any ((
(5)agent's)) insurance producer's license, or levy a fine upon
the licensee, in accordance with those provisions of chapter 48.17 RCW
that are applicable to a disability insurance ((agent)) producer.
Sec. 51 RCW 48.44.020 and 2000 c 79 s 28 are each amended to read
as follows:
(1) Any health care service contractor may enter into contracts
with or for the benefit of persons or groups of persons which require
prepayment for health care services by or for such persons in
consideration of such health care service contractor providing one or
more health care services to such persons and such activity shall not
be subject to the laws relating to insurance if the health care
services are rendered by the health care service contractor or by a
participating provider.
(2) The commissioner may on examination, subject to the right of
the health care service contractor to demand and receive a hearing
under chapters 48.04 and 34.05 RCW, disapprove any individual or group
contract form for any of the following grounds:
(a) If it contains or incorporates by reference any inconsistent,
ambiguous or misleading clauses, or exceptions and conditions which
unreasonably or deceptively affect the risk purported to be assumed in
the general coverage of the contract; or
(b) If it has any title, heading, or other indication of its
provisions which is misleading; or
(c) If purchase of health care services thereunder is being
solicited by deceptive advertising; or
(d) If it contains unreasonable restrictions on the treatment of
patients; or
(e) If it violates any provision of this chapter; or
(f) If it fails to conform to minimum provisions or standards
required by regulation made by the commissioner pursuant to chapter
34.05 RCW; or
(g) If any contract for health care services with any state agency,
division, subdivision, board, or commission or with any political
subdivision, municipal corporation, or quasi-municipal corporation
fails to comply with state law.
(3) In addition to the grounds listed in subsection (2) of this
section, the commissioner may disapprove any group contract if the
benefits provided therein are unreasonable in relation to the amount
charged for the contract.
(4)(a) Every contract between a health care service contractor and
a participating provider of health care services shall be in writing
and shall state that in the event the health care service contractor
fails to pay for health care services as provided in the contract, the
enrolled participant shall not be liable to the provider for sums owed
by the health care service contractor. Every such contract shall
provide that this requirement shall survive termination of the
contract.
(b) No participating provider, ((agent,)) insurance producer,
trustee, or assignee may maintain any action against an enrolled
participant to collect sums owed by the health care service contractor.
Sec. 52 RCW 48.44.164 and 1969 c 115 s 10 are each amended to
read as follows:
Upon the suspension, revocation or refusal of a health care service
contractor's registration, the commissioner shall give notice thereof
to such contractor and shall likewise suspend, revoke, or refuse the
authority of its ((agents)) appointed insurance producers to represent
it in this state and give notice thereof to the ((agents)) appointed
insurance producers.
Sec. 53 RCW 48.44.230 and 1983 1st ex.s. c 32 s 11 are each
amended to read as follows:
Every subscriber of an individual health care service plan contract
issued after September 1, 1973, may return the contract to the health
care service contractor or the ((agent)) insurance producer through
whom it was purchased within ten days of its delivery to the subscriber
if, after examination of the contract, he or she is not satisfied with
it for any reason, and the health care service contractor shall refund
promptly any fee paid for such contract. Upon such return of the
contract it shall be void from the beginning and the parties shall be
in the same position as if no policy had been issued. Notice of the
substance of this section shall be printed on the face of each such
contract or be attached thereto. An additional ten percent penalty
shall be added to any premium refund due which is not paid within
thirty days of return of the policy to the insurer or ((agent))
insurance producer.
Sec. 54 RCW 48.46.023 and 1983 c 202 s 8 are each amended to read
as follows:
(1) ((Agent)) Insurance producer, as used in this chapter, means
any person appointed or authorized by a health maintenance organization
to solicit applications for health care service agreements on its
behalf.
(2) No person shall act as or hold himself or herself out to be an
((agent)) appointed insurance producer of a health maintenance
organization unless licensed as a disability insurance ((agent))
producer by this state and appointed or authorized by the health
maintenance organization on whose behalf solicitations are to be made.
(3) Applications, appointments, and qualifications for licenses,
the renewal thereof, the fees and issuance of a license, and the
renewal thereof shall be in accordance with the provisions of chapter
48.17 RCW that are applicable to a disability insurance ((agent))
producer.
(4) ((A person holding a valid license in this state as a health
maintenance organization agent on July 24, 1983, is not required to
requalify by an examination for the renewal of the license.)) The commissioner may revoke, suspend, or refuse to issue or
renew any ((
(5)agent's)) insurance producer's license, or levy a fine upon
the licensee, in accordance with those provisions of chapter 48.17 RCW
that are applicable to a disability insurance ((agent)) producer.
Sec. 55 RCW 48.46.170 and 2003 c 248 s 17 are each amended to
read as follows:
(1) Solicitation of enrolled participants by a health maintenance
organization granted a certificate of registration, or its ((agents))
appointed insurance producers or representatives, does not violate any
provision of law relating to solicitation or advertising by health
professionals.
(2) Any health maintenance organization authorized under this
chapter is not violating any law prohibiting the practice by unlicensed
persons of podiatric medicine and surgery, chiropractic, dental
hygiene, opticianry, dentistry, optometry, osteopathic medicine and
surgery, pharmacy, medicine and surgery, physical therapy, nursing, or
psychology. This subsection does not expand a health professional's
scope of practice or allow employees of a health maintenance
organization to practice as a health professional unless licensed.
(3) This chapter does not alter any statutory obligation, or rule
adopted thereunder, in chapter 70.38 RCW.
(4) Any health maintenance organization receiving a certificate of
registration pursuant to this chapter is exempt from chapter 48.05 RCW.
Sec. 56 RCW 48.46.243 and 1990 c 119 s 7 are each amended to read
as follows:
(1) Subject to subsection (2) of this section, every contract
between a health maintenance organization and its participating
providers of health care services shall be in writing and shall set
forth that in the event the health maintenance organization fails to
pay for health care services as set forth in the agreement, the
enrolled participant shall not be liable to the provider for any sums
owed by the health maintenance organization. Every such contract shall
provide that this requirement shall survive termination of the
contract.
(2) The provisions of subsection (1) of this section shall not
apply to emergency care from a provider who is not a participating
provider, to out-of-area services or, in exceptional situations
approved in advance by the commissioner, if the health maintenance
organization is unable to negotiate reasonable and cost-effective
participating provider contracts.
(3)(a) Each participating provider contract form shall be filed
with the commissioner fifteen days before it is used.
(b) Any contract form not affirmatively disapproved within fifteen
days of filing shall be deemed approved, except that the commissioner
may extend the approval period an additional fifteen days upon giving
notice before the expiration of the initial fifteen-day period. The
commissioner may approve such a contract form for immediate use at any
time. Approval may be subsequently withdrawn for cause.
(c) Subject to the right of the health maintenance organization to
demand and receive a hearing under chapters 48.04 and 34.05 RCW, the
commissioner may disapprove such a contract form if it is in any
respect in violation of this chapter or if it fails to conform to
minimum provisions or standards required by the commissioner by rule
under chapter 34.05 RCW.
(4) No participating provider, or ((agent)) insurance producer,
trustee, or assignee thereof, may maintain an action against an
enrolled participant to collect sums owed by the health maintenance
organization.
Sec. 57 RCW 48.46.260 and 1983 c 202 s 13 are each amended to
read as follows:
Every subscriber of an individual health maintenance agreement may
return the agreement to the health maintenance organization or the
((agent)) insurance producer through whom it was purchased within ten
days of its delivery to the subscriber if, after examination of the
agreement, the subscriber is not satisfied with it for any reason. The
health maintenance organization shall refund promptly any fee paid for
the agreement. An additional ten percent penalty shall be added to any
premium refund due which is not paid within thirty days of return of
the policy to the health maintenance organization or ((agent))
insurance producer. Upon such return of the agreement, it shall be
void from the beginning and the parties shall be in the same position
as if no agreement had been issued. Notice of the provisions of this
section shall be printed on the face of each such agreement or be
attached thereto.
Sec. 58 RCW 48.46.340 and 1983 c 106 s 12 are each amended to
read as follows:
Every subscriber of an individual health maintenance agreement may
return the agreement to the health maintenance organization or the
((agent)) insurance producer through whom it was purchased within ten
days of its delivery to the subscriber if, after examination of the
agreement, the subscriber is not satisfied with it for any reason. The
health maintenance organization shall refund promptly any fee paid for
the agreement. Upon such return of the agreement, it shall be void
from the beginning and the parties shall be in the same position as if
no agreement had been issued. Notice of the substance of this section
shall be printed on the face of each such agreement or be attached
thereto.
Sec. 59 RCW 48.50.070 and 2006 c 284 s 14 are each amended to
read as follows:
Any licensed insurance producer, title insurance agent, ((any
licensed insurance broker, or any)) or insurer or person acting in the
insurer's behalf, health maintenance organization or person acting in
behalf of the health maintenance organization, health care service
contractor or person acting in behalf of the health care service
contractor, or any authorized agency which releases information,
whether oral or written, to the commissioner, the national insurance
crime bureau, the national association of insurance commissioners,
other law enforcement agent or agency, or another insurer under RCW
48.50.030, 48.50.040, 48.50.050, 48.50.055, or 48.135.050 is immune
from liability in any civil or criminal action, suit, or prosecution
arising from the release of the information, unless actual malice on
the part of the ((agent, broker)) insurance producer, title insurance
agent, insurer, health care maintenance organization, health care
service contractor, or authorized agency against the insured is shown.
Sec. 60 RCW 48.56.020 and 1969 ex.s. c 190 s 2 are each amended
to read as follows:
As used in this chapter:
(1) "Insurance premium finance company" means a person engaged in
the business of entering into insurance premium finance agreements.
(2) "Premium finance agreement" means an agreement by which an
insured or prospective insured promises to pay to a premium finance
company the amount advanced or to be advanced under the agreement to an
insurer or to an insurance ((agent or broker)) producer in payment of
premiums on an insurance contract together with a service charge as
authorized and limited by this chapter and as security therefor the
insurance premium finance company receives an assignment of the
unearned premium.
(3) "Licensee" means a premium finance company holding a license
issued by the insurance commissioner under this chapter.
Sec. 61 RCW 48.56.080 and 1975-'76 2nd ex.s. c 119 s 6 are each
amended to read as follows:
(1) A premium finance agreement shall((--)):
(a) Be dated, signed by or on behalf of the insured, and the
printed portion thereof shall be in at least eight point type;
(b) Contain the name and place of business of the insurance
((agent)) producer negotiating the related insurance contract, the name
and residence or the place of business of the premium finance company
to which payments are to be made, a description of the insurance
contracts involved and the amount of the premium therefor; and
(c) Set forth the following items where applicable((--)):
(i) The total amount of the premiums((,));
(ii) The amount of the down payment((,));
(iii) The principal balance (the difference between items (i) and
(ii))((,));
(iv) The amount of the service charge((,));
(v) The balance payable by the insured (sum of items (iii) and
(iv))((,)); and
(vi) The number of installments required, the amount of each
installment expressed in dollars, and the due date or period thereof.
(2) The items set out in ((paragraph (c) of)) subsection (1)(c) of
this section need not be stated in the sequence or order in which they
appear in ((such paragraph (c))) that subsection, and additional items
may be included to explain the computations made in determining the
amount to be paid by the insured.
(3) The information required by subsection (1) of this section
shall only be required in the initial agreement where the premium
finance company and the insured enter into an open end credit
transaction, which is defined as follows: A plan prescribing the terms
of credit transactions which may be made thereunder from time to time
and under the terms of which a finance charge may be computed on the
outstanding unpaid balance from time to time thereunder.
(4) A copy of the premium finance agreement shall be given to the
insured at the time or within ten days of its execution, except where
the application has been signed by the insured and all the finance
charges are one dollar or less per payment. In addition, the premium
finance company shall deliver or mail a copy of the premium finance
agreement or notice identifying policy, insured, and ((producing
agent)) insurance producer to each insurer that has premiums involved
in the transaction, within thirty days of the execution of the premium
finance agreement.
(5) It shall be illegal for a premium finance company to offset
funds of an ((agent)) insurance producer with funds belonging to an
insured. Premiums advanced by a premium finance company are funds
belonging to the insured and shall be held in a fiduciary relationship.
Sec. 62 RCW 48.62.121 and 1993 c 458 s 1 are each amended to read
as follows:
(1) No employee or official of a local government entity may
directly or indirectly receive anything of value for services rendered
in connection with the operation and management of a self-insurance
program other than the salary and benefits provided by his or her
employer or the reimbursement of expenses reasonably incurred in
furtherance of the operation or management of the program. No employee
or official of a local government entity may accept or solicit anything
of value for personal benefit or for the benefit of others under
circumstances in which it can be reasonably inferred that the
employee's or official's independence of judgment is impaired with
respect to the management and operation of the program.
(2)(a) No local government entity may participate in a joint self-insurance program in which local government entities do not retain
complete governing control. This prohibition does not apply to:
(i) Local government contribution to a self-insured employee health
and welfare benefits plan otherwise authorized and governed by state
statute;
(ii) Local government participation in a multistate joint program
where control is shared with local government entities from other
states; or
(iii) Local government contribution to a self-insured employee
health and welfare benefit trust in which the local government shares
governing control with their employees.
(b) If a local government self-insured health and welfare benefit
program, established by the local government as a trust, shares
governing control of the trust with its employees:
(i) The local government must maintain at least a fifty percent
voting control of the trust;
(ii) No more than one voting, nonemployee, union representative
selected by employees may serve as a trustee; and
(iii) The trust agreement must contain provisions for resolution of
any deadlock in the administration of the trust.
(3) Moneys made available and moneys expended by school districts
and educational service districts for self-insurance under this chapter
are subject to such rules of the superintendent of public instruction
as the superintendent may adopt governing budgeting and accounting.
However, the superintendent shall ensure that the rules are consistent
with those adopted by the state risk manager for the management and
operation of self-insurance programs.
(4) RCW 48.30.140, 48.30.150, 48.30.155, and 48.30.157 apply to the
use of ((agents and brokers)) insurance producers by local government
self-insurance programs.
(5) Every individual and joint local government self-insured health
and welfare benefits program that provides comprehensive coverage for
health care services shall include mandated benefits that the state
health care authority is required to provide under RCW 41.05.170 and
41.05.180. The state risk manager may adopt rules identifying the
mandated benefits.
(6) An employee health and welfare benefit program established as
a trust shall contain a provision that trust funds be expended only for
purposes of the trust consistent with statutes and rules governing the
local government or governments creating the trust.
Sec. 63 RCW 48.62.151 and 1991 sp.s. c 30 s 15 are each amended
to read as follows:
A joint self-insurance program approved in accordance with this
chapter is exempt from insurance premium taxes, from fees assessed
under chapter 48.02 RCW, from chapters 48.32 and 48.32A RCW, from
business and occupations taxes imposed under chapter 82.04 RCW, and
from any assigned risk plan or joint underwriting association otherwise
required by law. This section does not apply to and no exemption is
provided for insurance companies issuing policies to cover program
risks, nor does it apply to or provide an exemption for third-party
administrators or ((brokers)) insurance producers serving the self-insurance program.
Sec. 64 RCW 48.66.055 and 2005 c 41 s 5 are each amended to read
as follows:
(1) Under this section, persons eligible for a medicare supplement
policy or certificate are those individuals described in subsection (3)
of this section who, subject to subsection (3)(b)(ii) of this section,
apply to enroll under the policy not later than sixty-three days after
the date of the termination of enrollment described in subsection (3)
of this section, and who submit evidence of the date of termination or
disenrollment, or medicare part D enrollment, with the application for
a medicare supplement policy.
(2) With respect to eligible persons, an issuer may not deny or
condition the issuance or effectiveness of a medicare supplement policy
described in subsection (4) of this section that is offered and is
available for issuance to new enrollees by the issuer, shall not
discriminate in the pricing of such a medicare supplement policy
because of health status, claims experience, receipt of health care, or
medical condition, and shall not impose an exclusion of benefits based
on a preexisting condition under such a medicare supplement policy.
(3) "Eligible persons" means an individual that meets the
requirements of (a), (b), (c), (d), (e), or (f) of this subsection, as
follows:
(a) The individual is enrolled under an employee welfare benefit
plan that provides health benefits that supplement the benefits under
medicare; and the plan terminates, or the plan ceases to provide all
such supplemental health benefits to the individual;
(b)(i) The individual is enrolled with a medicare advantage
organization under a medicare advantage plan under part C of medicare,
and any of the following circumstances apply, or the individual is
sixty-five years of age or older and is enrolled with a program of all
inclusive care for the elderly (PACE) provider under section 1894 of
the social security act, and there are circumstances similar to those
described in this subsection (3)(b) that would permit discontinuance of
the individual's enrollment with the provider if the individual were
enrolled in a medicare advantage plan:
(A) The certification of the organization or plan has been
terminated;
(B) The organization has terminated or otherwise discontinued
providing the plan in the area in which the individual resides;
(C) The individual is no longer eligible to elect the plan because
of a change in the individual's place of residence or other change in
circumstances specified by the secretary of the United States
department of health and human services, but not including termination
of the individual's enrollment on the basis described in section
1851(g)(3)(B) of the federal social security act (where the individual
has not paid premiums on a timely basis or has engaged in disruptive
behavior as specified in standards under section 1856 of the federal
social security act), or the plan is terminated for all individuals
within a residence area;
(D) The individual demonstrates, in accordance with guidelines
established by the secretary of the United States department of health
and human services, that:
(I) The organization offering the plan substantially violated a
material provision of the organization's contract under this part in
relation to the individual, including the failure to provide an
enrollee on a timely basis medically necessary care for which benefits
are available under the plan or the failure to provide such covered
care in accordance with applicable quality standards; or
(II) The organization, an ((agent)) insurance producer, or other
entity acting on the organization's behalf materially misrepresented
the plan's provisions in marketing the plan to the individual; or
(E) The individual meets other exceptional conditions as the
secretary of the United States department of health and human services
may provide.
(ii)(A) An individual described in (b)(i) of this subsection may
elect to apply (a) of this subsection by substituting, for the date of
termination of enrollment, the date on which the individual was
notified by the medicare advantage organization of the impending
termination or discontinuance of the medicare advantage plan it offers
in the area in which the individual resides, but only if the individual
disenrolls from the plan as a result of such notification.
(B) In the case of an individual making the election under
(b)(ii)(A) of this subsection, the issuer involved shall accept the
application of the individual submitted before the date of termination
of enrollment, but the coverage under subsection (1) of this section is
only effective upon termination of coverage under the medicare
advantage plan involved;
(c)(i) The individual is enrolled with:
(A) An eligible organization under a contract under section 1876
(medicare risk or cost);
(B) A similar organization operating under demonstration project
authority, effective for periods before April 1, 1999;
(C) An organization under an agreement under section 1833(a)(1)(A)
(health care prepayment plan); or
(D) An organization under a medicare select policy; and
(ii) The enrollment ceases under the same circumstances that would
permit discontinuance of an individual's election of coverage under
(b)(i) of this subsection;
(d) The individual is enrolled under a medicare supplement policy
and the enrollment ceases because:
(i)(A) Of the insolvency of the issuer or bankruptcy of the
nonissuer organization; or
(B) Of other involuntary termination of coverage or enrollment
under the policy;
(ii) The issuer of the policy substantially violated a material
provision of the policy; or
(iii) The issuer, an ((agent)) insurance producer, or other entity
acting on the issuer's behalf materially misrepresented the policy's
provisions in marketing the policy to the individual;
(e)(i) The individual was enrolled under a medicare supplement
policy and terminates enrollment and subsequently enrolls, for the
first time, with any medicare advantage organization under a medicare
advantage plan under part C of medicare, any eligible organization
under a contract under section 1876 (medicare risk or cost), any
similar organization operating under demonstration project authority,
any PACE program under section 1894 of the social security act or a
medicare select policy; and
(ii) The subsequent enrollment under (e)(i) of this subsection is
terminated by the enrollee during any period within the first twelve
months of such subsequent enrollment (during which the enrollee is
permitted to terminate such subsequent enrollment under section 1851(e)
of the federal social security act);
(f) The individual, upon first becoming eligible for benefits under
part A of medicare at age sixty-five, enrolls in a medicare advantage
plan under part C of medicare, or in a PACE program under section 1894,
and disenrolls from the plan or program by not later than twelve months
after the effective date of enrollment; or
(g) The individual enrolls in a medicare part D plan during the
initial enrollment period and, at the time of enrollment in part D, was
enrolled under a medicare supplement policy that covers outpatient
prescription drugs, and the individual terminates enrollment in the
medicare supplement policy and submits evidence of enrollment in
medicare part D along with the application for a policy described in
subsection (4)(d) of this section.
(4) An eligible person under subsection (3) of this section is
entitled to a medicare supplement policy as follows:
(a) A person eligible under subsection (3)(a), (b), (c), and (d) of
this section is entitled to a medicare supplement policy that has a
benefit package classified as plan A through F (including F with a high
deductible), K, or L, offered by any issuer;
(b)(i) Subject to (b)(ii) of this subsection, a person eligible
under subsection (3)(e) of this section is entitled to the same
medicare supplement policy in which the individual was most recently
previously enrolled, if available from the same issuer, or, if not so
available, a policy described in (a) of this subsection;
(ii) After December 31, 2005, if the individual was most recently
enrolled in a medicare supplement policy with an outpatient
prescription drug benefit, a medicare supplement policy described in
this subsection (4)(b)(ii) is:
(A) The policy available from the same issuer but modified to
remove outpatient prescription drug coverage; or
(B) At the election of the policyholder, an A, B, C, F (including
F with a high deductible), K, or L policy that is offered by any
issuer;
(c) A person eligible under subsection (3)(f) of this section is
entitled to any medicare supplement policy offered by any issuer; and
(d) A person eligible under subsection (3)(g) of this section is
entitled to a medicare supplement policy that has a benefit package
classified as plan A, B, C, F (including F with a high deductible), K,
or L and that is offered and is available for issuance to new enrollees
by the same issuer that issued the individual's medicare supplement
policy with outpatient prescription drug coverage.
(5)(a) At the time of an event described in subsection (3) of this
section, and because of which an individual loses coverage or benefits
due to the termination of a contract, agreement, policy, or plan, the
organization that terminates the contract or agreement, the issuer
terminating the policy, or the administrator of the plan being
terminated, respectively, must notify the individual of his or her
rights under this section, and of the obligations of issuers of
medicare supplement policies under subsection (1) of this section. The
notice must be communicated contemporaneously with the notification of
termination.
(b) At the time of an event described in subsection (3) of this
section, and because of which an individual ceases enrollment under a
contract, agreement, policy, or plan, the organization that offers the
contract or agreement, regardless of the basis for the cessation of
enrollment, the issuer offering the policy, or the administrator of the
plan, respectively, must notify the individual of his or her rights
under this section, and of the obligations of issuers of medicare
supplement policies under subsection (1) of this section. The notice
must be communicated within ten working days of the issuer receiving
notification of disenrollment.
(6) Guaranteed issue time periods:
(a) In the case of an individual described in subsection (3)(a) of
this section, the guaranteed issue period begins on the later of: (i)
The date the individual receives a notice of termination or cessation
of all supplemental health benefits (or, if a notice is not received,
notice that a claim has been denied because of a termination or
cessation), or (ii) the date that the applicable coverage terminates or
ceases, and ends sixty-three days thereafter;
(b) In the case of an individual described in subsection (3)(b),
(c), (e), or (f) of this section whose enrollment is terminated
involuntarily, the guaranteed issue period begins on the date that the
individual receives a notice of termination and ends sixty-three days
after the date the applicable coverage is terminated;
(c) In the case of an individual described in subsection (3)(d)(i)
of this section, the guaranteed issue period begins on the earlier of:
(i) The date that the individual receives a notice of termination, a
notice of the issuer's bankruptcy or insolvency, or other such similar
notice if any, and (ii) the date that the applicable coverage is
terminated, and ends on the date that is sixty-three days after the
date the coverage is terminated;
(d) In the case of an individual described in subsection (3)(b),
(d)(ii) and (iii), (e), or (f) of this section, who disenrolls
voluntarily, the guaranteed issue period begins on the date that is
sixty days before the effective date of the disenrollment and ends on
the date that is sixty-three days after the effective date;
(e) In the case of an individual described in subsection (3)(g) of
this section, the guaranteed issue period begins on the date the
individual receives notice pursuant to section 1882(v)(2)(B) of the
federal social security act from the medicare supplement issuer during
the sixty-day period immediately preceding the initial part D
enrollment period and ends on the date that is sixty-three days after
the effective date of the individual's coverage under medicare part D;
and
(f) In the case of an individual described in subsection (3) of
this section but not described in the preceding provisions of this
subsection, the guaranteed issue period begins on the effective date of
disenrollment and ends on the date that is sixty-three days after the
effective date.
(7) In the case of an individual described in subsection (3)(e) of
this section whose enrollment with an organization or provider
described in subsection (3)(e)(i) of this section is involuntarily
terminated within the first twelve months of enrollment, and who,
without an intervening enrollment, enrolls with another organization or
provider, the subsequent enrollment is an initial enrollment as
described in subsection (3)(e) of this section.
(8) In the case of an individual described in subsection (3)(f) of
this section whose enrollment with a plan or in a program described in
subsection (3)(f) of this section is involuntarily terminated within
the first twelve months of enrollment, and who, without an intervening
enrollment, enrolls in another plan or program, the subsequent
enrollment is an initial enrollment as described in subsection (3)(f)
of this section.
(9) For purposes of subsection (3)(e) and (f) of this section, an
enrollment of an individual with an organization or provider described
in subsection (3)(e)(i) of this section, or with a plan or in a program
described in subsection (3)(f) of this section is not an initial
enrollment under this subsection after the two-year period beginning on
the date on which the individual first enrolled with such an
organization, provider, plan, or program.
Sec. 65 RCW 48.66.120 and 1983 1st ex.s. c 32 s 12 are each
amended to read as follows:
(1) Every individual medicare supplement insurance policy issued
after January 1, 1982, and every certificate issued pursuant to a group
medicare supplement policy after January 1, 1982, shall have
prominently displayed on the first page of the policy form or
certificate a notice stating in substance that the person to whom the
policy or certificate is issued shall be permitted to return the policy
or certificate within thirty days of its delivery to the purchaser and
to have the premium refunded if, after examination of the policy or
certificate, the purchaser is not satisfied with it for any reason. An
additional ten percent penalty shall be added to any premium refund due
which is not paid within thirty days of return of the policy to the
insurer or ((agent)) insurance producer. If a policyholder or
purchaser, pursuant to such notice, returns the policy or certificate
to the insurer at its home or branch office or to the ((agent))
insurance producer through whom it was purchased, it shall be void from
the beginning and the parties shall be in the same position as if no
policy or certificate had been issued.
(2) No later than January 1, 2010, or when the insurer has used all
of its existing paper individual medicare supplement insurance policy
forms which were in its possession on July 1, 2009, whichever is
earlier, the notice required by subsection (1) of this section shall
use the term insurance producer in place of agent.
Sec. 66 RCW 48.76.090 and 1982 1st ex.s. c 9 s 18 are each
amended to read as follows:
This chapter does not apply to any of the following:
(1) Reinsurance;
(2) Group insurance;
(3) A pure endowment;
(4) An annuity or reversionary annuity contract;
(5) A term policy of a uniform amount, which provides no guaranteed
nonforfeiture or endowment benefits, or renewal thereof, of twenty
years or less expiring before age seventy-one, for which uniform
premiums are payable during the entire term of the policy;
(6) A term policy of a decreasing amount, which provides no
guaranteed nonforfeiture or endowment benefits, on which each adjusted
premium, calculated as specified in RCW 48.76.050, is less than the
adjusted premium so calculated, on a term policy of uniform amount, or
renewal thereof, which provides no guaranteed nonforfeiture or
endowment benefits, issued at the same age and for the same initial
amount of insurance and for a term of twenty years or less expiring
before age seventy-one, for which uniform premiums are payable during
the entire term of the policy;
(7) A policy, which provides no guaranteed nonforfeiture or
endowment benefits, for which no cash surrender value, if any, or
present value of any paid-up nonforfeiture benefit, at the beginning of
any policy year, calculated as specified in RCW 48.76.030 through
48.76.050, exceeds two and one-half percent of the amount of insurance
at the beginning of the same policy year; nor
(8) A policy which is delivered outside this state through an
((agent)) insurance producer or other representative of the company
issuing the policy.
For purposes of determining the applicability of this chapter, the
age at expiration for a joint term life insurance policy is the age at
expiration of the oldest life.
Sec. 67 RCW 48.84.050 and 1986 c 170 s 5 are each amended to read
as follows:
(1) The commissioner shall adopt rules requiring disclosure to
consumers of the level, type, and amount of benefits provided and the
limitations, exclusions, and exceptions contained in a long-term care
insurance policy or contract. In adopting such rules the commissioner
shall require an understandable disclosure to consumers of any cost for
services that the consumer will be responsible for in utilizing
benefits covered under the policy or contract.
(2) Each long-term care insurance policy or contract shall include
a provision, prominently displayed on the first page of the policy or
contract, stating in substance that the person to whom the policy or
contract is sold shall be permitted to return the policy or contract
within thirty days of its delivery. In the case of policies or
contracts solicited and sold by mail, the person may return the policy
or contract within sixty days. Once the policy or contract has been
returned, the person may have the premium refunded if, after
examination of the policy or contract, the person is not satisfied with
it for any reason. An additional ten percent penalty shall be added to
any premium refund due which is not paid within thirty days of return
of the policy or contract to the insurer or ((agent)) insurance
producer. If a person, pursuant to such notice, returns the policy or
contract to the insurer at its branch or home office, or to the
((agent)) insurance producer from whom the policy or contract was
purchased, the policy or contract shall be void from its inception, and
the parties shall be in the same position as if no policy or contract
had been issued.
(3) No later than January 1, 2010, or when the insurer has used all
of its existing paper long-term care insurance policy forms which were
in its possession on July 1, 2009, whichever is earlier, the notice
required by subsection (2) of this section shall use the term insurance
producer in place of agent.
Sec. 68 RCW 48.84.060 and 1986 c 170 s 6 are each amended to read
as follows:
No ((agent, broker,)) insurance producer or other representative of
an insurer, contractor, or other organization selling or offering long-term care insurance policies or benefit contracts may: (1) Complete
the medical history portion of any form or application for the purchase
of such policy or contract; (2) knowingly sell a long-term care policy
or contract to any person who is receiving medicaid; or (3) use or
engage in any unfair or deceptive act or practice in the advertising,
sale, or marketing of long-term care policies or contracts.
Sec. 69 RCW 48.92.040 and 1993 c 462 s 94 are each amended to
read as follows:
Risk retention groups chartered and licensed in states other than
this state and seeking to do business as a risk retention group in this
state shall comply with the laws of this state as follows:
(1) Before offering insurance in this state, a risk retention group
shall submit to the commissioner on a form prescribed by the National
Association of Insurance Commissioners:
(a) A statement identifying the state or states in which the risk
retention group is chartered and licensed as a liability insurance
company, date of chartering, its principal place of business, and any
other information including information on its membership, as the
commissioner of this state may require to verify that the risk
retention group is qualified under RCW 48.92.020(11);
(b) A copy of its plan of operations or a feasibility study and
revisions of the plan or study submitted to its state of domicile:
PROVIDED, HOWEVER, That the provision relating to the submission of a
plan of operation or a feasibility study shall not apply with respect
to any line or classification of liability insurance which: (i) Was
defined in the federal Product Liability Risk Retention Act of 1981
before October 27, 1986; and (ii) was offered before that date by any
risk retention group which had been chartered and operating for not
less than three years before that date;
(c) The risk retention group shall submit a copy of any revision to
its plan of operation or feasibility study required under RCW
48.92.030(3) at the same time that the revision is submitted to the
commissioner of its chartering state; and
(d) A statement of registration which designates the commissioner
as its agent for the purpose of receiving service of legal documents or
process.
(2) Any risk retention group doing business in this state shall
submit to the commissioner:
(a) A copy of the group's financial statement submitted to its
state of domicile, which shall be certified by an independent public
accountant and contain a statement of opinion on loss and loss
adjustment expense reserves made by a member of the American academy of
actuaries or a qualified loss reserve specialist under criteria
established by the National Association of Insurance Commissioners;
(b) A copy of each examination of the risk retention group as
certified by the commissioner or public official conducting the
examination;
(c) Upon request by the commissioner, a copy of any information or
document pertaining to an outside audit performed with respect to the
risk retention group; and
(d) Any information as may be required to verify its continuing
qualification as a risk retention group under RCW 48.92.020(11).
(3)(a) A risk retention group is liable for the payment of premium
taxes and taxes on premiums of direct business for risks resident or
located within this state, and shall report on or before March 1st of
each year to the commissioner the direct premiums written for risks
resident or located within this state. The risk retention group is
subject to taxation, and applicable fines and penalties related
thereto, on the same basis as a foreign admitted insurer.
(b) To the extent ((agents or brokers)) insurance producers are
utilized under RCW 48.92.120 or otherwise, they shall report to the
commissioner the premiums for direct business for risks resident or
located within this state that the licensees have placed with or on
behalf of a risk retention group not chartered in this state.
(c) To the extent ((agents or brokers)) insurance producers are
used under RCW 48.92.120 or otherwise, an ((agent or broker)) insurance
producer shall keep a complete and separate record of all policies
procured from each risk retention group. The record is open to
examination by the commissioner, as provided in chapter 48.03 RCW.
These records must include, for each policy and each kind of insurance
provided thereunder, the following:
(i) The limit of liability;
(ii) The time period covered;
(iii) The effective date;
(iv) The name of the risk retention group that issued the policy;
(v) The gross premium charged; and
(vi) The amount of return premiums, if any.
(4) Any risk retention group, its ((agents)) appointed insurance
producers and representatives, shall be subject to any and all unfair
claims settlement practices statutes and regulations specifically
denominated by the commissioner as unfair claims settlement practices
regulations.
(5) Any risk retention group, its ((agents)) appointed insurance
producers and representatives, shall be subject to the provisions of
chapter 48.30 RCW pertaining to deceptive, false, or fraudulent acts or
practices. However, if the commissioner seeks an injunction regarding
such conduct, the injunction must be obtained from a court of competent
jurisdiction.
(6) Any risk retention group must submit to an examination by the
commissioner to determine its financial condition if the commissioner
of the jurisdiction in which the group is chartered has not initiated
an examination or does not initiate an examination within sixty days
after a request by the commissioner of this state. The examination
shall be coordinated to avoid unjustified repetition and conducted in
an expeditious manner and in accordance with the National Association
of Insurance Commissioners' examiner handbook.
(7) Every application form for insurance from a risk retention
group and every policy issued by a risk retention group shall contain
in ten-point type on the front page and the declaration page, the
following notice:
This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.
Sec. 70 RCW 48.92.090 and 1993 c 462 s 98 are each amended to
read as follows:
(1) A purchasing group may not purchase insurance from a risk
retention group that is not chartered in a state or from an insurer not
admitted in the state in which the purchasing group is located, unless
the purchase is effected through a licensed ((agent or broker))
insurance producer acting pursuant to the surplus lines laws and
regulations of that state.
(2) A purchasing group that obtains liability insurance from an
insurer not admitted in this state or a risk retention group shall
inform each of the members of the group that have a risk resident or
located in this state that the risk is not protected by an insurance
insolvency guaranty fund in this state, and that the risk retention
group or insurer may not be subject to all insurance laws and rules of
this state.
(3) No purchasing group may purchase insurance providing for a
deductible or self-insured retention applicable to the group as a
whole; however, coverage may provide for a deductible or self-insured
retention applicable to individual members.
(4) Purchases of insurance by purchasing groups are subject to the
same standards regarding aggregate limits that are applicable to all
purchases of group insurance.
Sec. 71 RCW 48.92.095 and 1993 c 462 s 99 are each amended to
read as follows:
Premium taxes and taxes on premiums paid for coverage of risks
resident or located in this state by a purchasing group or any members
of the purchasing groups must be:
(1) Imposed at the same rate and subject to the same interest,
fines, and penalties as those applicable to premium taxes and taxes on
premiums paid for similar coverage from authorized insurers, as defined
under chapter 48.05 RCW, or unauthorized insurers, as defined and
provided for under chapter 48.15 RCW, by other insurers; and
(2) The obligation of the insurer; and if not paid by the insurer,
then the obligation of the purchasing group; and if not paid by the
purchasing group, then the obligation of the ((agent or broker))
insurance producer for the purchasing group; and if not paid by the
((agent or broker)) insurance producer for the purchasing group, then
the obligation of each of the purchasing group's members. The
liability of each member of the purchasing group is several, not joint,
and is limited to the tax due in relation to the premiums paid by that
member.
Sec. 72 RCW 48.92.120 and 2005 c 223 s 31 are each amended to
read as follows:
(1) A person may not act or aid in any manner in soliciting,
negotiating, or procuring liability insurance in this state from a risk
retention group unless the person is licensed as an insurance ((agent
or broker)) producer for casualty insurance in accordance with chapter
48.17 RCW and pays the fees designated for the license under RCW
48.14.010.
(2)(a) A person may not act or aid in any manner in soliciting,
negotiating, or procuring liability insurance in this state for a
purchasing group from an authorized insurer or a risk retention group
chartered in a state unless the person is licensed as an insurance
((agent or broker)) producer for casualty insurance in accordance with
chapter 48.17 RCW and pays the fees designated for the license under
RCW 48.14.010.
(b) A person may not act or aid in any manner in soliciting,
negotiating, or procuring liability insurance coverage in this state
for a member of a purchasing group under a purchasing group's policy
unless the person is licensed as an insurance ((agent or broker))
producer for casualty insurance in accordance with chapter 48.17 RCW
and pays the fees designated for the license under RCW 48.14.010.
(c) A person may not act or aid in any manner in soliciting,
negotiating, or procuring liability insurance from an insurer not
authorized to do business in this state on behalf of a purchasing group
located in this state unless the person is licensed as a surplus
((lines [line])) line broker in accordance with chapter 48.15 RCW and
pays the fees designated for the license under RCW 48.14.010.
(3) For purposes of acting as an ((agent or broker)) insurance
producer for a risk retention group or purchasing group under
subsections (1) and (2) of this section, the requirement of residence
in this state does not apply.
(4) Every person licensed under chapters 48.15 and 48.17 RCW, on
business placed with risk retention groups or written through a
purchasing group, must inform each prospective insured of the
provisions of the notice required under RCW 48.92.040(7) in the case of
a risk retention group and RCW 48.92.090(2) in the case of a purchasing
group.
Sec. 73 RCW 48.94.005 and 1993 c 462 s 23 are each amended to
read as follows:
The definitions set forth in this section apply throughout this
chapter:
(1) "Actuary" means a person who is a member in good standing of
the American Academy of Actuaries.
(2) "Controlling person" means a person, firm, association, or
corporation who directly or indirectly has the power to direct or cause
to be directed, the management, control, or activities of the
reinsurance intermediary.
(3) "Insurer" means insurer as defined in RCW 48.01.050.
(4) "Licensed producer" means an ((agent, broker,)) insurance
producer or reinsurance intermediary licensed under the applicable
provisions of this title.
(5) "Reinsurance intermediary" means a reinsurance
intermediary-
(6) "Reinsurance intermediary-
(7) "Reinsurance intermediary-agent)) insurance producer for the reinsurer whether
known as a reinsurance intermediary-
(a) An employee of the reinsurer;
(b) A United States manager of the United States branch of an alien
reinsurer;
(c) An underwriting manager who, pursuant to contract, manages all
the reinsurance operations of the reinsurer, is under common control
with the reinsurer, subject to the Insurer Holding Company Act, chapter
48.31B RCW, and whose compensation is not based on the volume of
premiums written;
(d) The manager of a group, association, pool, or organization of
insurers that engages in joint underwriting or joint reinsurance and
that are subject to examination by the insurance commissioner of the
state in which the manager's principal business office is located.
(8) "Reinsurer" means a person, firm, association, or corporation
licensed in this state under this title as an insurer with the
authority to assume reinsurance.
(9) "To be in violation" means that the reinsurance intermediary,
insurer, or reinsurer for whom the reinsurance intermediary was acting
failed to substantially comply with this chapter.
(10) "Qualified United States financial institution" means an
institution that:
(a) Is organized or, in the case of a United States office of a
foreign banking organization, licensed, under the laws of the United
States or any state thereof;
(b) Is regulated, supervised, and examined by United States federal
or state authorities having regulatory authority over banks and trust
companies; and
(c) Has been determined by either the commissioner, or the
securities valuation office of the National Association of Insurance
Commissioners, to meet such standards of financial condition and
standing as are considered necessary and appropriate to regulate the
quality of financial institutions whose letters of credit will be
acceptable to the commissioner.
Sec. 74 RCW 48.94.040 and 1993 c 462 s 30 are each amended to
read as follows:
(1) A reinsurer may not engage the services of a person, firm,
association, or corporation to act as a reinsurance intermediary-manager on its behalf unless the person is licensed as required by RCW
48.94.010(2).
(2) The reinsurer shall annually obtain a copy of statements of the
financial condition of each reinsurance intermediary-manager that the
reinsurer has had prepared by an independent certified accountant in a
form acceptable to the commissioner.
(3) If a reinsurance intermediary-manager establishes loss
reserves, the reinsurer shall annually obtain the opinion of an actuary
attesting to the adequacy of loss reserves established for losses
incurred and outstanding on business produced by the reinsurance
intermediary-manager. This opinion is in addition to any other
required loss reserve certification.
(4) Binding authority for all retrocessional contracts or
participation in reinsurance syndicates must rest with an officer of
the reinsurer who is not affiliated with the reinsurance intermediary-manager.
(5) Within thirty days of termination of a contract with a
reinsurance intermediary-manager, the reinsurer shall provide written
notification of the termination to the commissioner.
(6) A reinsurer may not appoint to its board of directors an
officer, director, employee, controlling shareholder, or subproducer of
its reinsurance intermediary-manager. This subsection does not apply
to relationships governed by the insurer holding company act, chapter
48.31B RCW, or, if applicable, the ((Broker-controlled)) producer-controlled property and casualty insurer act, chapter 48.97 RCW.
Sec. 75 RCW 48.97.005 and 1993 c 462 s 17 are each amended to
read as follows:
Unless the context clearly requires otherwise, the definitions in
this section apply throughout this chapter.
(1) "Accredited state" means a state in which the insurance
department or regulatory agency has qualified as meeting the minimum
financial regulatory standards promulgated and established from time to
time by the National Association of Insurance Commissioners.
(2) (("Broker" means an insurance broker or brokers or any other
person, firm, association, or corporation, when, for compensation,
commission, or other thing of value, the person, firm, association, or
corporation acts or aids in any manner in soliciting, negotiating, or
procuring the making of an insurance contract on behalf of an insured
other than the person, firm, association, or corporation.)) "Control" or "controlled by" has the meaning ascribed in RCW
48.31B.005(2).
(3)
(((4))) (3) "Controlled insurer" means a licensed insurer that is
controlled, directly or indirectly, by a broker.
(((5))) (4) "Controlling producer" means a ((broker)) producer who,
directly or indirectly, controls an insurer.
(((6))) (5) "Licensed insurer" or "insurer" means a person, firm,
association, or corporation licensed to transact property and casualty
insurance business in this state. The following, among others, are not
licensed insurers for purposes of this chapter:
(a) Risk retention groups as defined in the Superfund Amendments
Reauthorization Act of 1986, P.L. 99-499, 100 Stat. 1613 (1986), the
Risk Retention Act, 15 U.S.C. Sec. 3901 et seq. (1982 Supp. 1986), and
chapter 48.92 RCW;
(b) Residual market pools and joint underwriting associations; and
(c) Captive insurers. For the purposes of this chapter, captive
insurers are insurance companies owned by another organization, whose
exclusive purpose is to insure risks of the parent organization and
affiliated companies or, in the case of groups and associations,
insurance organizations owned by the insureds whose exclusive purpose
is to insure risks to member organizations or group members, or both,
and their affiliates.
(6) "Producer" means an insurance broker or brokers or any other
person, firm, association, or corporation when, for compensation,
commission, or other thing of value, the person, firm, association, or
corporation acts or aids in any manner in soliciting, negotiating, or
procuring the making of an insurance contract on behalf of an insured
other than the person, firm, association, or corporation.
Sec. 76 RCW 48.97.015 and 1993 c 462 s 19 are each amended to
read as follows:
(1)(a) This section applies in a particular calendar year if in
that calendar year the aggregate amount of gross written premium on
business placed with a controlled insurer by a controlling ((broker))
producer is equal to or greater than five percent of the admitted
assets of the controlled insurer, as reported in the controlled
insurer's quarterly statement filed as of September 30th of the prior
year.
(b) Notwithstanding (a) of this subsection, this section does not
apply if:
(i) The controlling producer:
(A) Places insurance only with the controlled insurer; or only with
the controlled insurer and a member or members of the controlled
insurer's holding company system, or the controlled insurer's parent,
affiliate, or subsidiary and receives no compensation based upon the
amount of premiums written in connection with the insurance; and
(B) Accepts insurance placements only from nonaffiliated
((subbrokers)) subproducers, and not directly from insureds; and
(ii) The controlled insurer, except for business written through a
residual market facility such as the assigned risk plan, fair plans, or
other such plans, accepts insurance business only from a controlling
((broker, a broker)) producer, a producer controlled by the controlled
insurer, or a ((broker)) producer that is a subsidiary of the
controlled insurer.
(2) A controlled insurer may not accept business from a controlling
((broker)) producer and a controlling ((broker)) producer may not place
business with a controlled insurer unless there is a written contract
between the controlling ((broker)) producer and the insurer specifying
the responsibilities of each party, which contract has been approved by
the board of directors of the insurer and contains the following
minimum provisions:
(a) The controlled insurer may terminate the contract for cause,
upon written notice to the controlling ((broker)) producer. The
controlled insurer shall suspend the authority of the controlling
((broker)) producer to write business during the pendency of a dispute
regarding the cause for the termination;
(b) The controlling ((broker)) producer shall render accounts to
the controlling insurer detailing all material transactions, including
information necessary to support all commissions, charges, and other
fees received by, or owing to, the controlling ((broker)) producer;
(c) The controlling ((broker)) producer shall remit all funds due
under the terms of the contract to the controlling insurer on at least
a monthly basis. The due date must be fixed so that premiums or
installments collected are remitted no later than ninety days after the
effective date of a policy placed with the controlling insurer under
this contract;
(d) The controlling ((broker)) producer shall hold all funds
collected for the controlled insurer's account in a fiduciary capacity,
in one or more appropriately identified bank accounts in banks that are
members of the federal reserve system, in accordance with the
applicable provisions of this title. However, funds of a controlling
((broker)) producer not required to be licensed in this state must be
maintained in compliance with the requirements of the controlling
((broker's)) producer's domiciliary jurisdiction;
(e) The controlling ((broker)) producer shall maintain separately
identifiable records of business written for the controlled insurer;
(f) The contract shall not be assigned in whole or in part by the
controlling ((broker)) producer;
(g) The controlled insurer shall provide the controlling ((broker))
producer with its underwriting standards, rules, and procedures,
manuals setting forth the rates to be charged, and the conditions for
the acceptance or rejection of risks. The controlling ((broker))
producer shall adhere to the standards, rules, procedures, rates, and
conditions that are the same as those applicable to comparable business
placed with the controlled insurer by a ((broker)) producer other than
the controlling ((broker)) producer;
(h) The rates of the controlling ((broker's)) producer's
commissions, charges, and other fees must be no greater than those
applicable to comparable business placed with the controlled insurer by
((brokers)) producers other than controlling ((brokers)) producers.
For purposes of (g) and (h) of this subsection, examples of comparable
business include the same lines of insurance, same kinds of insurance,
same kinds of risks, similar policy limits, and similar quality of
business;
(i) If the contract provides that the controlling ((broker))
producer, on insurance business placed with the insurer, is to be
compensated contingent upon the insurer's profits on that business,
then the compensation shall not be determined and paid until at least
five years after the premiums on liability insurance are earned and at
least one year after the premiums are earned on any other insurance.
In no event may the commissions be paid until the adequacy of the
controlled insurer's reserves on remaining claims has been
independently verified under subsection (3) of this section;
(j) The insurer may establish a different limit on the controlling
((broker's)) producer's writings in relation to the controlled
insurer's surplus and total writings for each line or subline of
business. The controlled insurer shall notify the controlling
((broker)) producer when the applicable limit is approached and may not
accept business from the controlling ((broker)) producer if the limit
is reached. The controlling ((broker)) producer may not place business
with the controlled insurer if it has been notified by the controlled
insurer that the limit has been reached; and
(k) The controlling ((broker)) producer may negotiate but may not
bind reinsurance on behalf of the controlled insurer on business the
controlling ((broker)) producer places with the controlled insurer,
except that the controlling ((broker)) producer may bind facultative
reinsurance contracts under obligatory facultative agreements if the
contract with the controlled insurer contains underwriting guidelines
including, for both reinsurance assumed and ceded, a list of reinsurers
with which the automatic agreements are in effect, the coverages and
amounts of percentages that may be reinsured, and commission schedules.
(3) Every controlled insurer shall have an audit committee of the
board of directors composed of independent directors. The audit
committee shall annually meet with management, the insurer's
independent certified public accountants, and an independent casualty
actuary or other independent loss reserve specialist acceptable to the
commissioner to review the adequacy of the insurer's loss reserves.
(4)(a) In addition to any other required loss reserve
certification, the controlled insurer shall, annually, on April 1st of
each year, file with the commissioner an opinion of an independent
casualty actuary, or such other independent loss reserve specialist
acceptable to the commissioner, reporting loss ratios for each line of
business written and attesting to the adequacy of loss reserves
established for losses incurred and outstanding as of year-end,
including losses incurred but not reported, on business placed by the
((broker)) producer; and
(b) The controlled insurer shall annually report to the
commissioner the amount of commissions paid to the producer, the
percentage that amount represents of the net premiums written, and
comparable amounts and percentages paid to noncontrolling ((brokers))
producers for placements of the same kinds of insurance.
Sec. 77 RCW 48.97.020 and 1993 c 462 s 20 are each amended to
read as follows:
The ((broker)) producer, before the effective date of the policy,
shall deliver written notice to the prospective insured disclosing the
relationship between the ((broker)) producer and the controlled
insurer, except that, if the business is placed through a ((subbroker))
subproducer who is not a controlling ((broker)) producer, the
controlling ((broker)) producer shall retain in his or her records a
signed commitment from the ((subbroker)) subproducer that the
((subbroker)) subproducer is aware of the relationship between the
insurer and the ((broker)) producer and that the ((subbroker))
subproducer has notified or will notify the insured.
Sec. 78 RCW 48.97.025 and 1993 c 462 s 21 are each amended to
read as follows:
(1)(a) If the commissioner believes that the controlling ((broker))
producer has not materially complied with this chapter, or a rule
adopted or order issued under this chapter, the commissioner may after
notice and opportunity to be heard, order the controlling ((broker))
producer to cease placing business with the controlled insurer; and
(b) If it is found that because of material noncompliance that the
controlled insurer or any policyholder thereof has suffered loss or
damage, the commissioner may maintain a civil action or intervene in an
action brought by or on behalf of the insurer or policyholder for
recovery of compensatory damages for the benefit of the insurer or
policyholder or other appropriate relief.
(2) If an order for liquidation or rehabilitation of the controlled
insurer has been entered under chapter 48.31 RCW, and the receiver
appointed under that order believes that the controlling ((broker))
producer or any other person has not materially complied with this
chapter, or a rule adopted or order issued under this chapter, and the
insurer suffered any loss or damage from the noncompliance, the
receiver may maintain a civil action for recovery of damages or other
appropriate sanctions for the benefit of the insurer.
(3) Nothing contained in this section alters or affects the right
of the commissioner to impose other penalties provided for in this
title.
(4) Nothing contained in this section alters or affects the rights
of policyholders, claimants, creditors, or other third parties.
Sec. 79 RCW 48.97.900 and 1993 c 462 s 16 are each amended to
read as follows:
This chapter may be known and cited as the business transacted with
((Broker-controlled)) producer-controlled property and casualty insurer
act.
Sec. 80 RCW 48.98.010 and 1993 c 462 s 36 are each amended to
read as follows:
(1) No person may act in the capacity of a managing general agent
with respect to risks located in this state, for an insurer authorized
by this state, unless that person is licensed in this state as an
((agent)) insurance producer, under chapter 48.17 RCW, for the lines of
insurance involved and is designated as a managing general agent and
appointed as such by the insurer.
(2) No person may act in the capacity of a managing general agent
representing an insurer domiciled in this state with respect to risks
located outside this state unless that person is licensed as an
((agent)) insurance producer in this state, under chapter 48.17 RCW,
for the lines of insurance involved and is designated as a managing
general agent and appointed as such by the insurer.
(3) The commissioner may require a bond for the protection of each
insurer.
(4) The commissioner may require the managing general agent to
maintain an errors and omissions policy.
Sec. 81 RCW 48.98.015 and 2005 c 223 s 32 are each amended to
read as follows:
A managing general agent may not place business with an insurer
unless there is in force a written contract between the managing
general agent and the insurer that sets forth the responsibilities of
each party and, where both parties share responsibility for a
particular function, that specifies the division of the
responsibilities, and that contains the following minimum provisions:
(1) The insurer may terminate the contract for cause upon written
notice to the managing general agent. The insurer may suspend the
underwriting authority of the managing general agent during the
pendency of a dispute regarding the cause for termination.
(2) The managing general agent shall render accounts to the insurer
detailing all transactions and remit all funds due under the contract
to the insurer on not less than a monthly basis.
(3) The managing general agent shall hold funds collected for the
account of an insurer in a fiduciary capacity in an FDIC insured
financial institution. This account must be used for all payments on
behalf of the insurer. The managing general agent may retain no more
than three months' estimated claims payments and allocated loss
adjustment expenses.
(4) The managing general agent shall maintain separate records of
business written for each insurer. The insurer has access to and the
right to copy all accounts and records related to its business in a
form usable by the insurer, and the commissioner has access to all
books, bank accounts, and records of the managing general agent in a
form usable to the commissioner. Those records must be retained
according to the requirements of this title and rules adopted under it.
(5) The managing general agent may not assign the contract in whole
or part.
(6)(a) Appropriate underwriting guidelines must include at least
the following: The maximum annual premium volume; the basis of the
rates to be charged; the types of risks that may be written; maximum
limits of liability; applicable exclusions; territorial limitations;
policy cancellation provisions; and the maximum policy period.
(b) The insurer has the right to cancel or not renew any policy of
insurance, subject to the applicable laws and rules, including those in
chapter 48.18 RCW.
(7) If the contract permits the managing general agent to settle
claims on behalf of the insurer:
(a) All claims must be reported to the insurer in a timely manner;
(b) A copy of the claim file must be sent to the insurer at its
request or as soon as it becomes known that the claim:
(i) Has the potential to exceed an amount determined by the
commissioner, or exceeds the limit set by the insurer, whichever is
less;
(ii) Involves a coverage dispute;
(iii) May exceed the managing general agent's claims settlement
authority;
(iv) Is open for more than six months; or
(v) Is closed by payment in excess of an amount set by the
commissioner or an amount set by the insurer, whichever is less;
(c) All claim files are the joint property of the insurer and the
managing general agent. However, upon an order of liquidation of the
insurer, those files become the sole property of the insurer or its
liquidator or successor. The managing general agent has reasonable
access to and the right to copy the files on a timely basis; and
(d) Settlement authority granted to the managing general agent may
be terminated for cause upon the insurer's written notice to the
managing general agent or upon the termination of the contract. The
insurer may suspend the managing general agent's settlement authority
during the pendency of a dispute regarding the cause for termination.
(8) When electronic claims files are in existence, the contract
must address the timely transmission of the data.
(9) If the contract provides for a sharing of interim profits by
the managing general agent, and the managing general agent has the
authority to determine the amount of the interim profits by
establishing loss reserves or controlling claim payments or in any
other manner, interim profits may not be paid to the managing general
agent until one year after they are earned for property insurance
business and five years after they are earned on casualty business and
not until the profits have been verified under RCW 48.98.020.
(10) The managing general agent may not:
(a) Bind reinsurance or retrocessions on behalf of the insurer,
except that the managing general agent may bind automatic reinsurance
contracts under obligatory automatic agreements if the contract with
the insurer contains reinsurance underwriting guidelines including, for
both reinsurance assumed and ceded, a list of reinsurers with which the
automatic agreements are in effect, the coverages and amounts or
percentages that may be reinsured, and commission schedules;
(b) Commit the insurer to participate in insurance or reinsurance
syndicates;
(c) Use an ((agent)) insurance producer that is not appointed to
represent the insurer in accordance with the requirements of chapter
48.17 RCW;
(d) Without prior approval of the insurer, pay or commit the
insurer to pay a claim over a specified amount, net of reinsurance,
that may not exceed one percent of the insurer's policyholder surplus
as of December 31st of the last-completed calendar year;
(e) Collect a payment from a reinsurer or commit the insurer to a
claim settlement with a reinsurer, without prior approval of the
insurer. If prior approval is given, a report must be promptly
forwarded to the insurer;
(f) Permit an agent appointed by it to serve on the insurer's board
of directors;
(g) Jointly employ an individual who is employed by the insurer; or
(h) Appoint a submanaging general agent.
Sec. 82 RCW 48.98.020 and 1993 c 462 s 38 are each amended to
read as follows:
(1) The insurer shall have on file an independent audited financial
statement, in a form acceptable to the commissioner, of each managing
general agent with which it is doing or has done business.
(2) If a managing general agent establishes loss reserves, the
insurer shall annually obtain the opinion of an actuary attesting to
the adequacy of loss reserves established for losses incurred and
outstanding on business produced by the managing general agent. This
is in addition to any other required loss reserve certification.
(3) The insurer shall periodically, and no less frequently than
semiannually, conduct an on-site review of the underwriting and claims
processing operations of the managing general agent.
(4) Binding authority for all reinsurance contracts or
participation in insurance or reinsurance syndicates must rest with an
officer of the insurer, who may not be affiliated with the managing
general agent.
(5) Within thirty days of entering into or terminating a contract
with a managing general agent, the insurer shall provide written
notification of that appointment or termination to the commissioner.
Notices of appointment of a managing general agent must include a
statement of duties that the managing general agent is expected to
perform on behalf of the insurer, the lines of insurance for which the
managing general agent is to be authorized to act, and any other
information the commissioner may request. This subsection applies to
managing general agents operating in this state.
(6) An insurer shall review its books and records each calendar
quarter to determine if any ((agent)) insurance producer has become a
managing general agent. If the insurer determines that an ((agent))
insurance producer has become a managing general agent under RCW
48.98.005, the insurer shall promptly notify the ((agent)) insurance
producer and the commissioner of that determination, and the insurer
and ((agent)) insurance producer shall fully comply with this chapter
within thirty days.
(7) An insurer may not appoint to its board of directors an
officer, director, employee, subagent, or controlling shareholder of
its managing general agents. This subsection does not apply to
relationships governed by the Insurer Holding Company Act, chapter
48.31B RCW, or, if applicable, the business transacted with Broker-controlled Property and Casualty Insurer Act, chapter 48.97 RCW.
Sec. 83 RCW 48.98.030 and 1993 c 462 s 40 are each amended to
read as follows:
(1) Subject to a hearing in accordance with chapters 34.05 and
48.04 RCW, upon a finding by the commissioner that any person has
violated any provision of this chapter, the commissioner may order:
(a) For each separate violation, a penalty in an amount of not more
than one thousand dollars;
(b) Revocation, or suspension for up to one year, of the managing
general agent's license including any insurance producer's licenses
held by the managing general agent; and
(c) The managing general agent to reimburse the insurer, the
rehabilitator, or liquidator of the insurer for losses incurred by the
insurer caused by a violation of this chapter committed by the managing
general agent.
(2) The decision, determination, or order of the commissioner under
this section is subject to judicial review under chapters 34.05 and
48.04 RCW.
(3) Nothing contained in this section affects the right of the
commissioner to impose any other penalties provided for in this title.
(4) Nothing contained in this chapter is intended to or in any
manner limits or restricts the rights of policyholders, claimants, and
auditors.
Sec. 84 RCW 48.99.030 and 1947 c 79 s .31.13 are each amended to
read as follows:
(1) Whenever under the laws of this state an ancillary receiver is
to be appointed in delinquency proceedings for an insurer not domiciled
in this state, the court shall appoint the commissioner as ancillary
receiver. The commissioner shall file a petition requesting the
appointment (a) if he or she finds that there are sufficient assets of
such insurer located in this state to justify the appointment of an
ancillary receiver, or (b) if ten or more persons resident in this
state having claims against such insurer file a petition with the
commissioner requesting the appointment of such ancillary receiver.
(2) The domiciliary receiver for the purpose of liquidating an
insurer domiciled in a reciprocal state, shall be vested by operation
of law with the title to all of the property, contracts, and rights of
action, and all of the books and records of the insurer located in this
state, and he or she shall have the immediate right to recover balances
due from local ((agents)) insurance producers and to obtain possession
of any books and records of the insurer found in this state. He or she
shall also be entitled to recover the other assets of the insurer
located in this state except that upon the appointment of an ancillary
receiver in this state, the ancillary receiver shall during the
ancillary receivership proceedings have the sole right to recover such
other assets. The ancillary receiver shall, as soon as practicable,
liquidate from their respective securities those special deposit claims
and secured claims which are proved and allowed in the ancillary
proceedings in this state, and shall pay the necessary expenses of the
proceedings. All remaining assets ((he)) shall promptly transfer to
the domiciliary receiver. Subject to the foregoing provisions the
ancillary receiver and his or her deputies shall have the same powers
and be subject to the same duties with respect to the administration of
such assets, as a receiver of an insurer domiciled in this state.
(3) The domiciliary receiver of an insurer domiciled in a
reciprocal state may sue in this state to recover any assets of such
insurer to which he or she may be entitled under the laws of this
state.
Sec. 85 RCW 48.115.001 and 2002 c 273 s 1 are each amended to
read as follows:
This chapter may be known and cited as the rental car specialty
insurance ((limited agent)) producer license act.
Sec. 86 RCW 48.115.005 and 2002 c 273 s 2 are each amended to
read as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Endorsee" means an unlicensed employee or agent of a rental
car ((agent)) insurance producer who meets the requirements of this
chapter.
(2) "Person" means an individual or a business entity.
(3) "Rental agreement" means any written master, corporate, group,
or individual agreement setting forth the terms and conditions
governing the use of a rental car rented or leased by a rental car
company.
(4) "Rental car" means any motor vehicle that is intended to be
rented or leased for a period of thirty consecutive days or less by a
driver who is not required to possess a commercial driver's license to
operate the motor vehicle and the motor vehicle is either of the
following:
(a) A private passenger motor vehicle, including a passenger van,
recreational vehicle, minivan, or sports utility vehicle; or
(b) A cargo vehicle, including a cargo van, pickup truck, or truck
with a gross vehicle weight of less than twenty-six thousand pounds.
(5) "Rental car ((agent)) insurance producer" means any rental car
company that is licensed to offer, sell, or solicit rental car
insurance under this chapter.
(6) "Rental car company" means any person in the business of
renting rental cars to the public, including a franchisee.
(7) "Rental car insurance" means insurance offered, sold, or
solicited in connection with and incidental to the rental of rental
cars, whether at the rental office or by preselection of coverage in
master, corporate, group, or individual agreements that: (a) Is
nontransferable; (b) applies only to the rental car that is the subject
of the rental agreement; and (c) is limited to the following kinds of
insurance:
(i) Personal accident insurance for renters and other rental car
occupants, for accidental death or dismemberment, and for medical
expenses resulting from an accident that occurs with the rental car
during the rental period;
(ii) Liability insurance, including uninsured or underinsured
motorist coverage, whether offered separately or in combination with
other liability insurance, that provides protection to the renters and
to other authorized drivers of a rental car for liability arising from
the operation of the rental car during the rental period;
(iii) Personal effects insurance that provides coverage to renters
and other vehicle occupants for loss of, or damage to, personal effects
in the rental car during the rental period; and
(iv) Roadside assistance and emergency sickness protection
insurance.
(8) "Renter" means any person who obtains the use of a vehicle from
a rental car company under the terms of a rental agreement.
Sec. 87 RCW 48.115.010 and 2002 c 273 s 3 are each amended to
read as follows:
(1) A rental car company, or officer, director, employee, or agent
of a rental car company, may not offer, sell, or solicit the purchase
of rental car insurance unless that person is licensed under chapter
48.17 RCW or is in compliance with this chapter.
(2) The commissioner may issue a license to a rental car company
that is in compliance with this chapter authorizing the rental car
company to act as a rental car ((agent)) insurance producer under this
chapter, in connection with and incidental to rental agreements, on
behalf of any insurer authorized to write rental car insurance in this
state.
Sec. 88 RCW 48.115.015 and 2002 c 273 s 4 are each amended to
read as follows:
A rental car company may apply to be licensed as a rental car
((agent)) insurance producer under, and if in compliance with, this
chapter by filing the following documents with the commissioner:
(1) A written application for licensure, signed by the applicant or
by an officer of the applicant, in the form prescribed by the
commissioner that includes a listing of all locations at which the
rental car company intends to offer, sell, or solicit rental car
insurance; and
(2)(a) A certificate by the insurer that is to be named in the
rental car ((agent)) insurance producer license, stating that: (i) The
insurer has satisfied itself that the named applicant is trustworthy
and competent to act as its rental car ((agent)) insurance producer,
limited to this purpose; (ii) the insurer has reviewed the endorsee
training and education program required by RCW 48.115.020(4) and
believes that it satisfies the statutory requirements; and (iii) the
insurer will appoint the applicant to act as its rental car ((agent))
insurance producer to offer, sell, or solicit rental car insurance, if
the license for which the applicant is applying is issued by the
commissioner.
(b) The certification shall be subscribed by an authorized
representative of the insurer on a form prescribed by the commissioner.
Sec. 89 RCW 48.115.020 and 2002 c 273 s 5 are each amended to
read as follows:
(1) An employee or agent of a rental car ((agent)) insurance
producer may be an endorsee authorized to offer, sell, or solicit
rental car insurance under the authority of the rental car ((agent))
insurance producer license, if all of the following conditions have
been satisfied:
(a) The employee or agent is eighteen years of age or older;
(b) The employee or agent is a trustworthy person and has not
committed any act set forth in RCW 48.17.530;
(c) The employee or agent has completed a training and education
program;
(d) The rental car company, at the time it submits its rental car
((agent)) insurance producer license application, also submits a list
of the names of all endorsees to its rental car ((agent)) insurance
producer license on forms prescribed by the commissioner. The list
shall be updated and submitted to the commissioner quarterly on a
calendar year basis. Each list shall be retained by the rental car
company for a period of three years from submission; and
(e) The rental car company or its agent submits to the commissioner
with its initial rental car ((agent)) insurance producer license
application, and annually thereafter, a certification subscribed by an
officer of the rental car company on a form prescribed by the
commissioner, stating all of the following:
(i) No person other than an endorsee offers, sells, or solicits
rental car insurance on its behalf or while working as an employee or
agent of the rental car ((agent)) insurance producer; and
(ii) All endorsees have completed the training and education
program under subsection (4) of this section.
(2) A rental car ((agent's)) insurance producer's endorsee may only
act on behalf of the rental car ((agent)) insurance producer in the
offer, sale, or solicitation of a rental car insurance. A rental car
((agent)) insurance producer is responsible for, and must supervise,
all actions of its endorsees related to the offering, sale, or
solicitation of rental car insurance. The conduct of an endorsee
acting within the scope of his or her employment or agency is the same
as the conduct of the rental car ((agent)) insurance producer for
purposes of this chapter.
(3) The manager at each location of a rental car ((agent))
insurance producer, or the direct supervisor of the rental car
((agent's)) insurance producer's endorsees at each location, must be an
endorsee of that rental car ((agent)) insurance producer and is
responsible for the supervision of each additional endorsee at that
location. Each rental car ((agent)) insurance producer shall identify
the endorsee who is the manager or direct supervisor at each location
in the endorsee list that it submits under subsection (1)(d) of this
section.
(4) Each rental car ((agent)) insurance producer shall provide a
training and education program for each endorsee prior to allowing an
endorsee to offer, sell, or solicit rental car insurance. Details of
the program must be submitted to the commissioner, along with the
license application, for approval prior to use, and resubmitted for
approval of any changes prior to use. This training program shall meet
the following minimum standards:
(a) Each endorsee shall receive instruction about the kinds of
insurance authorized under this chapter that may be offered for sale to
prospective renters; and
(b) Each endorsee shall receive training about the requirements and
limitations imposed on ((car)) rental ((agents)) car insurance
producers and endorsees under this chapter. The training must include
specific instruction that the endorsee is prohibited by law from making
any statement or engaging in any conduct express or implied, that would
lead a consumer to believe that the:
(i) Purchase of rental car insurance is required in order for the
renter to rent a motor vehicle;
(ii) Renter does not have insurance policies in place that already
provide the coverage being offered by the rental car company under this
chapter; or
(iii) Endorsee is qualified to evaluate the adequacy of the
renter's existing insurance coverages.
(5) The training and education program submitted to the
commissioner is approved if no action is taken within thirty days of
its submission.
(6) An endorsee's authorization to offer, sell, or solicit rental
car insurance expires when the endorsee's employment with the rental
car company is terminated.
(7) The rental car ((agent)) insurance producer shall retain for a
period of one year from the date of each transaction records which
enable it to identify the name of the endorsee involved in each rental
transaction when a renter purchases rental car insurance.
Sec. 90 RCW 48.115.025 and 2002 c 273 s 6 are each amended to
read as follows:
Insurance may not be offered, sold, or solicited under this
section, unless:
(1) The rental period of the rental car agreement is thirty
consecutive days or less;
(2) At every location where rental agreements are executed, the
rental car ((agent)) insurance producer or endorsee provides brochures
or other written materials to each renter who purchases rental car
insurance that clearly, conspicuously, and in plain language:
(a) Summarize, clearly and correctly, the material terms,
exclusions, limitations, and conditions of coverage offered to renters,
including the identity of the insurer;
(b) Describe the process for filing a claim in the event the renter
elects to purchase coverage, including a toll-free telephone number to
report a claim;
(c) Provide the rental car ((agent's)) insurance producer's name,
address, telephone number, and license number, as well as the
commissioner's consumer hotline number;
(d) Inform the consumer that the rental car insurance offered,
sold, or solicited by the rental car ((agent)) insurance producer may
provide a duplication of coverage already provided by a renter's
personal automobile insurance policy, homeowners' insurance policy, or
by another source of coverage;
(e) Inform the consumer that the purchase by the renter of the
rental car insurance is not required in order to rent a rental car from
the rental car ((agent)) insurance producer; and
(f) Inform the consumer that the rental car ((agent)) insurance
producer and the rental car ((agent's)) insurance producer's endorsees
are not qualified to evaluate the adequacy of the renter's existing
insurance coverages;
(3) The purchaser of rental car insurance acknowledges in writing
the receipt of the brochures or written materials required by
subsection (2) of this section;
(4) Evidence of the rental car insurance coverage is stated on the
face of the rental agreement;
(5) All costs for the rental car insurance are separately itemized
in the rental agreement;
(6) When the rental car insurance is not the primary source of
coverage, the consumer is informed in writing in the form required by
subsection (2) of this section that their personal insurance will serve
as the primary source of coverage; and
(7) For transactions conducted by electronic means, the rental car
((agent)) insurance producer must comply with the requirements of this
section, and the renter must acknowledge in writing or by electronic
signature the receipt of the following disclosures:
(a) The insurance policies offered by the rental car ((agent))
insurance producer may provide a duplication of coverage already
provided by a renter's personal automobile insurance policy,
homeowners' insurance policy, or by another source of coverage;
(b) The purchase by the renter of rental car insurance is not
required in order to rent a rental car from the rental car ((agent))
insurance producer; and
(c) The rental car ((agent)) insurance producer and the rental car
((agent's)) insurance producer's endorsees are not qualified to
evaluate the adequacy of the renter's existing insurance coverages.
Sec. 91 RCW 48.115.030 and 2002 c 273 s 7 are each amended to
read as follows:
A rental car ((agent)) insurance producer may not:
(1) Offer, sell, or solicit the purchase of insurance except in
conjunction with and incidental to rental car agreements;
(2) Advertise, represent, or otherwise portray itself or any of its
employees or agents as licensed insurers((, insurance agents,)) or
insurance ((brokers)) producers;
(3) Pay any person, including a rental car ((agent)) insurance
producer endorsee, any compensation, fee, or commission that is
dependent primarily on the placement of insurance under the license
issued under this chapter;
(4) Make any statement or engage in any conduct, express or
implied, that would lead a customer to believe that the:
(a) Insurance policies offered by the rental car ((agent))
insurance producer do not provide a duplication of coverage already
provided by a renter's personal automobile insurance policy,
homeowners' insurance policy, or by another source of coverage;
(b) Purchase by the renter of rental car insurance is required in
order to rent a rental car from the rental car ((agent)) insurance
producer; and
(c) Rental car ((agent)) insurance producer or the rental car
((agent's)) insurance producer's endorsees are qualified to evaluate
the adequacy of the renter's existing insurance coverages.
Sec. 92 RCW 48.115.035 and 2002 c 273 s 8 are each amended to
read as follows:
(1) Every rental car ((agent)) insurance producer licensed under
this chapter shall promptly reply in writing to an inquiry of the
commissioner relative to the business of ((car)) rental car insurance.
(2)(a) In the event of a violation of this chapter by a rental car
((agent)) insurance producer, the commissioner may revoke, suspend, or
refuse to issue or renew any rental car ((agent's)) insurance
producer's license that is issued or may be issued under this chapter
for any cause specified in any other provision of this title, or for
any of the following causes:
(i) For any cause that the issuance of this license could have been
refused had it then existed and been known to the commissioner;
(ii) If the licensee or applicant willfully violates or knowingly
participates in a violation of this title or any proper order or rule
of the commissioner;
(iii) If the licensee or applicant has obtained or attempted to
obtain a license through willful misrepresentation or fraud;
(iv) If the licensee or applicant has misappropriated or converted
funds that belong to, or should be paid to, another person as a result
of, or in connection with, a ((car)) rental car or insurance
transaction;
(v) If the licensee or applicant has, with intent to deceive,
materially misrepresented the terms or effects of any insurance
contract, or has engaged, or is about to engage, in any fraudulent
transaction;
(vi) If the licensee or applicant or officer of the licensee or
applicant has been convicted by final judgment of a felony;
(vii) If the licensee or applicant is shown to be, and is
determined by the commissioner, incompetent or untrustworthy, or a
source of injury and loss to the public; and
(viii) If the licensee has dealt with, or attempted to deal with,
insurances, or has exercised powers relative to insurance outside the
scope of the ((car)) rental ((agent)) car insurance producer license or
other insurance licenses.
(b) If any natural person named under a firm or corporate ((car))
rental ((agent)) car insurance producer license, or application
therefore, commits or has committed any act, or fails or has failed to
perform any duty, that constitutes grounds for the commissioner to
revoke, suspend, or refuse to issue or renew the license or application
for license, the commissioner may revoke, suspend, refuse to renew, or
refuse to issue the license or application for a license of the
corporation or firm.
(c) Any conduct of an applicant or licensee that constitutes
grounds for disciplinary action under this title may be addressed under
this section regardless of where the conduct took place.
(d) The holder of any license that has been revoked or suspended
shall surrender the license to the commissioner at the commissioner's
request.
(e) After notice and hearing the commissioner may impose other
penalties, including suspending the transaction of insurance at
specific rental locations where violations of this section have
occurred and imposing fines on the manager or supervisor at each
location responsible for the supervision and conduct of each endorsee,
as the commissioner determines necessary or convenient to carry out the
purpose of this chapter.
(3) The commissioner may suspend, revoke, or refuse to renew any
((car)) rental ((agent)) car insurance producer license by an order
served by mail or personal service upon the licensee not less than
fifteen days prior to its effective date. The order is subject to the
right of the licensee to a hearing under chapter 48.04 RCW.
(4) The commissioner may temporarily suspend a license by an order
served by mail or personal service upon the licensee not less than
three days prior to its effective date. However, the order must
contain a notice of revocation and include a finding that the public
safety or welfare imperatively requires emergency action. These
suspensions may continue only until proceedings for revocation are
concluded. The commissioner may also temporarily suspend a license in
cases when proceedings for revocation are pending if it is found that
the public safety or welfare imperatively requires emergency action.
(5) Service by mail under this section means posting in the United
States mail, addressed to the licensee at the most recent address shown
in the commissioner's licensing records for the licensee. Service by
mail is complete upon deposit in the United States mail.
(6) If any person sells insurance in connection with or incidental
to rental car agreements, or holds himself or herself or a company out
as a rental car ((agent)) insurance producer, without satisfying the
requirements of this chapter, the commissioner is authorized to issue
a cease and desist order.
Sec. 93 RCW 48.115.040 and 2002 c 273 s 9 are each amended to
read as follows:
A rental car ((agent)) insurance producer is not required to treat
moneys collected from renters purchasing rental car insurance as funds
received in a fiduciary capacity, if:
(1) The charges for rental car insurance coverage are itemized and
ancillary to a rental transaction; and
(2) The insurer has consented in writing, signed by an officer of
the insurer, that premiums need not be segregated from funds received
by the rental car ((agent)) insurance producer.
Sec. 94 RCW 48.120.005 and 2002 c 357 s 1 are each amended to
read as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Communications equipment" means handsets, pagers, personal
digital assistants, portable computers, automatic answering devices,
batteries, and their accessories or other devices used to originate or
receive communications signals or service approved for coverage by rule
of the commissioner, and also includes services related to the use of
the devices.
(2) "Communications equipment insurance program" means an insurance
program as described in RCW 48.120.015.
(3) "Communications service" means the service necessary to send,
receive, or originate communications signals.
(4) "Customer" means a person or entity purchasing or leasing
communications equipment or communications services from a vendor.
(5) "Specialty producer license" means a license issued under RCW
48.120.010 that authorizes a vendor to offer or sell insurance as
provided in RCW 48.120.015.
(6) "Supervising agent" means an ((agent)) appointed insurance
producer licensed under RCW ((48.17.060)) 48.17.090 who provides
training as described in RCW 48.120.020 and is affiliated to a licensed
vendor.
(7) "Vendor" means a person or entity resident or with offices in
this state in the business of leasing, selling, or providing
communications equipment or communications service to customers.
(8) "Appointing insurer" means the insurer appointing the vendor as
its agent under a specialty producer license.
Sec. 95 RCW 48.120.010 and 2002 c 357 s 2 are each amended to
read as follows:
(1) A vendor that intends to offer insurance under RCW 48.120.015
must file a specialty producer license application with the
commissioner. Before the commissioner issues such a license, the
vendor must be appointed as the ((agent)) insurance producer of one or
more authorized appointing insurers under a vendor's specialty producer
license.
(2) Upon receipt of an application, if the commissioner is
satisfied that the application is complete, the commissioner may issue
a specialty producer license to the vendor.
Sec. 96 RCW 48.125.030 and 2004 c 260 s 5 are each amended to
read as follows:
The commissioner may not issue a certificate of authority to a
self-funded multiple employer welfare arrangement unless the
arrangement establishes to the satisfaction of the commissioner that
the following requirements have been satisfied by the arrangement:
(1) The employers participating in the arrangement are members of
a bona fide association;
(2) The employers participating in the arrangement exercise control
over the arrangement, as follows:
(a) Subject to (b) of this subsection, control exists if the board
of directors of the bona fide association or the employers
participating in the arrangement have the right to elect at least
seventy-five percent of the individuals designated in the arrangement's
organizational documents as having control over the operations of the
arrangement and the individuals designated in the arrangement's
organizational documents in fact exercise control over the operation of
the arrangement; and
(b) The use of a third-party administrator to process claims and to
assist in the administration of the arrangement is not evidence of the
lack of exercise of control over the operation of the arrangement;
(3) In this state, the arrangement provides only health care
services;
(4) In this state, the arrangement provides or arranges benefits
for health care services in compliance with those provisions of this
title that mandate particular benefits or offerings and with provisions
that require access to particular types or categories of health care
providers and facilities;
(5) In this state, the arrangement provides or arranges benefits
for health care services in compliance with RCW 48.43.500 through
48.43.535, 48.43.545, and 48.43.550;
(6) The arrangement provides health care services to not less than
twenty employers and not less than seventy-five employees;
(7) The arrangement may not solicit participation in the
arrangement from the general public. However, the arrangement may
employ licensed insurance ((agents)) producers who receive a
commission, unlicensed individuals who do not receive a commission, and
may contract with a licensed insurance producer who may be paid a
commission or other remuneration, for the purpose of enrolling and
renewing the enrollments of employers in the arrangement;
(8) The arrangement has been in existence and operated actively for
a continuous period of not less than ten years as of December 31, 2003,
except for an arrangement that has been in existence and operated
actively since December 31, 2000, and is sponsored by an association
that has been in existence more than twenty-five years; and
(9) The arrangement is not organized or maintained solely as a
conduit for the collection of premiums and the forwarding of premiums
to an insurance company.
Sec. 97 RCW 48.135.010 and 2006 c 284 s 2 are each amended to
read as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Insurance fraud" means an act or omission committed by a
person who, knowingly, and with intent to defraud, commits, or conceals
any material information concerning, one or more of the following:
(a) Presenting, causing to be presented, or preparing with
knowledge or belief that it will be presented to or by an insurer((,
broker, or its agent)) or insurance producer, false information as part
of, in support of, or concerning a fact material to one or more of the
following:
(i) An application for the issuance or renewal of an insurance
policy;
(ii) The rating of an insurance policy or contract;
(iii) A claim for payment or benefit pursuant to an insurance
policy;
(iv) Premiums paid on an insurance policy;
(v) Payments made in accordance with the terms of an insurance
policy; or
(vi) The reinstatement of an insurance policy;
(b) Willful embezzlement, abstracting, purloining, or conversion of
moneys, funds, premiums, credits, or other property of an insurer or
person engaged in the business of insurance; or
(c) Attempting to commit, aiding or abetting in the commission of,
or conspiracy to commit the acts or omissions specified in this
subsection.
The definition of insurance fraud is for illustrative purposes only
under this chapter to describe the nature of the behavior to be
reported and investigated, and is not intended in any manner to create
or modify the definition of any existing criminal acts nor to create or
modify the burdens of proof in any criminal prosecution brought as a
result of an investigation under this chapter.
(2) "Insurer" means an insurance company authorized under chapter
48.05 RCW, a health care service contractor registered under chapter
48.44 RCW, and a health care maintenance organization registered under
chapter 48.46 RCW.
Sec. 98 RCW 51.12.020 and 1999 c 68 s 1 are each amended to read
as follows:
The following are the only employments which shall not be included
within the mandatory coverage of this title:
(1) Any person employed as a domestic servant in a private home by
an employer who has less than two employees regularly employed forty or
more hours a week in such employment.
(2) Any person employed to do gardening, maintenance, or repair, in
or about the private home of the employer. For the purposes of this
subsection, "maintenance" means the work of keeping in proper
condition, "repair" means to restore to sound condition after damage,
and "private home" means a person's place of residence.
(3) A person whose employment is not in the course of the trade,
business, or profession of his or her employer and is not in or about
the private home of the employer.
(4) Any person performing services in return for aid or sustenance
only, received from any religious or charitable organization.
(5) Sole proprietors or partners.
(6) Any child under eighteen years of age employed by his or her
parent or parents in agricultural activities on the family farm.
(7) Jockeys while participating in or preparing horses for race
meets licensed by the Washington horse racing commission pursuant to
chapter 67.16 RCW.
(8)(a) Except as otherwise provided in (b) of this subsection, any
bona fide officer of a corporation voluntarily elected or voluntarily
appointed in accordance with the articles of incorporation or bylaws of
the corporation, who at all times during the period involved is also a
bona fide director, and who is also a shareholder of the corporation.
Only such officers who exercise substantial control in the daily
management of the corporation and whose primary responsibilities do not
include the performance of manual labor are included within this
subsection.
(b) Alternatively, a corporation that is not a "public company" as
defined in RCW 23B.01.400(((21)))(24) may exempt eight or fewer bona
fide officers, who are voluntarily elected or voluntarily appointed in
accordance with the articles of incorporation or bylaws of the
corporation and who exercise substantial control in the daily
management of the corporation, from coverage under this title without
regard to the officers' performance of manual labor if the exempted
officer is a shareholder of the corporation, or may exempt any number
of officers if all the exempted officers are related by blood within
the third degree or marriage. If a corporation that is not a "public
company" elects to be covered under subsection (8)(a) of this section,
the corporation's election must be made on a form prescribed by the
department and under such reasonable rules as the department may adopt.
(c) Determinations respecting the status of persons performing
services for a corporation shall be made, in part, by reference to
Title 23B RCW and to compliance by the corporation with its own
articles of incorporation and bylaws. For the purpose of determining
coverage under this title, substance shall control over form, and
mandatory coverage under this title shall extend to all workers of this
state, regardless of honorary titles conferred upon those actually
serving as workers.
(d) A corporation may elect to cover officers who are exempted by
this subsection in the manner provided by RCW 51.12.110.
(9) Services rendered by a musician or entertainer under a contract
with a purchaser of the services, for a specific engagement or
engagements when such musician or entertainer performs no other duties
for the purchaser and is not regularly and continuously employed by the
purchaser. A purchaser does not include the leader of a group or
recognized entity who employs other than on a casual basis musicians or
entertainers.
(10) Services performed by a newspaper carrier selling or
distributing newspapers on the street or from house to house.
(11) Services performed by an insurance ((agent, insurance broker,
or insurance solicitor)) producer, as defined in RCW 48.17.010((,
48.17.020, and 48.17.030, respectively))(5).
(12) Services performed by a booth renter ((as defined in RCW
18.16.020)). However, a person exempted under this subsection may
elect coverage under RCW 51.32.030.
(13) Members of a limited liability company, if either:
(a) Management of the company is vested in its members, and the
members for whom exemption is sought would qualify for exemption under
subsection (5) of this section were the company a sole proprietorship
or partnership; or
(b) Management of the company is vested in one or more managers,
and the members for whom the exemption is sought are managers who would
qualify for exemption under subsection (8) of this section were the
company a corporation.
Sec. 99 RCW 70.47.015 and 1997 c 337 s 1 are each amended to read
as follows:
(1) The legislature finds that the basic health plan has been an
effective program in providing health coverage for uninsured residents.
Further, since 1993, substantial amounts of public funds have been
allocated for subsidized basic health plan enrollment.
(2) It is the intent of the legislature that the basic health plan
enrollment be expanded expeditiously, consistent with funds available
in the health services account, with the goal of two hundred thousand
adult subsidized basic health plan enrollees and one hundred thirty
thousand children covered through expanded medical assistance services
by June 30, 1997, with the priority of providing needed health services
to children in conjunction with other public programs.
(3) Effective January 1, 1996, basic health plan enrollees whose
income is less than one hundred twenty-five percent of the federal
poverty level shall pay at least a ten-dollar premium share.
(4) No later than July 1, 1996, the administrator shall implement
procedures whereby hospitals licensed under chapters 70.41 and 71.12
RCW, health carrier, rural health care facilities regulated under
chapter 70.175 RCW, and community and migrant health centers funded
under RCW 41.05.220, may expeditiously assist patients and their
families in applying for basic health plan or medical assistance
coverage, and in submitting such applications directly to the health
care authority or the department of social and health services. The
health care authority and the department of social and health services
shall make every effort to simplify and expedite the application and
enrollment process.
(5) No later than July 1, 1996, the administrator shall implement
procedures whereby ((health)) disability insurance ((agents and
brokers)) producers, licensed under chapter 48.17 RCW, may
expeditiously assist patients and their families in applying for basic
health plan or medical assistance coverage, and in submitting such
applications directly to the health care authority or the department of
social and health services. ((Brokers and agents)) Insurance producers
may receive a commission for each individual sale of the basic health
plan to anyone not signed up within the previous five years and a
commission for each group sale of the basic health plan, if funding for
this purpose is provided in a specific appropriation to the health care
authority. No commission shall be provided upon a renewal.
Commissions shall be determined based on the estimated annual cost of
the basic health plan, however, commissions shall not result in a
reduction in the premium amount paid to health carriers. For purposes
of this section "health carrier" is as defined in RCW 48.43.005. The
administrator may establish: (a) Minimum educational requirements that
must be completed by the ((agents or brokers)) insurance producers; (b)
an appointment process for ((agents or brokers)) insurance producers
marketing the basic health plan; or (c) standards for revocation of the
appointment of an ((agent or broker)) insurance producer to submit
applications for cause, including untrustworthy or incompetent conduct
or harm to the public. The health care authority and the department of
social and health services shall make every effort to simplify and
expedite the application and enrollment process.
Sec. 100 RCW 82.04.260 and 2007 c 54 s 6 and 2007 c 48 s 2 are
each reenacted and amended to read as follows:
(1) Upon every person engaging within this state in the business of
manufacturing:
(a) Wheat into flour, barley into pearl barley, soybeans into
soybean oil, canola into canola oil, canola meal, or canola byproducts,
or sunflower seeds into sunflower oil; as to such persons the amount of
tax with respect to such business shall be equal to the value of the
flour, pearl barley, oil, canola meal, or canola byproduct
manufactured, multiplied by the rate of 0.138 percent;
(b) Beginning July 1, 2012, seafood products that remain in a raw,
raw frozen, or raw salted state at the completion of the manufacturing
by that person; or selling manufactured seafood products that remain in
a raw, raw frozen, or raw salted state at the completion of the
manufacturing, to purchasers who transport in the ordinary course of
business the goods out of this state; as to such persons the amount of
tax with respect to such business shall be equal to the value of the
products manufactured or the gross proceeds derived from such sales,
multiplied by the rate of 0.138 percent. Sellers must keep and
preserve records for the period required by RCW 82.32.070 establishing
that the goods were transported by the purchaser in the ordinary course
of business out of this state;
(c) Beginning July 1, 2012, dairy products that as of September 20,
2001, are identified in 21 C.F.R., chapter 1, parts 131, 133, and 135,
including byproducts from the manufacturing of the dairy products such
as whey and casein; or selling the same to purchasers who transport in
the ordinary course of business the goods out of state; as to such
persons the tax imposed shall be equal to the value of the products
manufactured or the gross proceeds derived from such sales multiplied
by the rate of 0.138 percent. Sellers must keep and preserve records
for the period required by RCW 82.32.070 establishing that the goods
were transported by the purchaser in the ordinary course of business
out of this state;
(d) Beginning July 1, 2012, fruits or vegetables by canning,
preserving, freezing, processing, or dehydrating fresh fruits or
vegetables, or selling at wholesale fruits or vegetables manufactured
by the seller by canning, preserving, freezing, processing, or
dehydrating fresh fruits or vegetables and sold to purchasers who
transport in the ordinary course of business the goods out of this
state; as to such persons the amount of tax with respect to such
business shall be equal to the value of the products manufactured or
the gross proceeds derived from such sales multiplied by the rate of
0.138 percent. Sellers must keep and preserve records for the period
required by RCW 82.32.070 establishing that the goods were transported
by the purchaser in the ordinary course of business out of this state;
(e) Until July 1, 2009, alcohol fuel, biodiesel fuel, or biodiesel
feedstock, as those terms are defined in RCW 82.29A.135; as to such
persons the amount of tax with respect to the business shall be equal
to the value of alcohol fuel, biodiesel fuel, or biodiesel feedstock
manufactured, multiplied by the rate of 0.138 percent; and
(f) Alcohol fuel or wood biomass fuel, as those terms are defined
in RCW 82.29A.135; as to such persons the amount of tax with respect to
the business shall be equal to the value of alcohol fuel or wood
biomass fuel manufactured, multiplied by the rate of 0.138 percent.
(2) Upon every person engaging within this state in the business of
splitting or processing dried peas; as to such persons the amount of
tax with respect to such business shall be equal to the value of the
peas split or processed, multiplied by the rate of 0.138 percent.
(3) Upon every nonprofit corporation and nonprofit association
engaging within this state in research and development, as to such
corporations and associations, the amount of tax with respect to such
activities shall be equal to the gross income derived from such
activities multiplied by the rate of 0.484 percent.
(4) Upon every person engaging within this state in the business of
slaughtering, breaking and/or processing perishable meat products
and/or selling the same at wholesale only and not at retail; as to such
persons the tax imposed shall be equal to the gross proceeds derived
from such sales multiplied by the rate of 0.138 percent.
(5) Upon every person engaging within this state in the business of
acting as a travel agent or tour operator; as to such persons the
amount of the tax with respect to such activities shall be equal to the
gross income derived from such activities multiplied by the rate of
0.275 percent.
(6) Upon every person engaging within this state in business as an
international steamship agent, international customs house broker,
international freight forwarder, vessel and/or cargo charter broker in
foreign commerce, and/or international air cargo agent; as to such
persons the amount of the tax with respect to only international
activities shall be equal to the gross income derived from such
activities multiplied by the rate of 0.275 percent.
(7) Upon every person engaging within this state in the business of
stevedoring and associated activities pertinent to the movement of
goods and commodities in waterborne interstate or foreign commerce; as
to such persons the amount of tax with respect to such business shall
be equal to the gross proceeds derived from such activities multiplied
by the rate of 0.275 percent. Persons subject to taxation under this
subsection shall be exempt from payment of taxes imposed by chapter
82.16 RCW for that portion of their business subject to taxation under
this subsection. Stevedoring and associated activities pertinent to
the conduct of goods and commodities in waterborne interstate or
foreign commerce are defined as all activities of a labor, service or
transportation nature whereby cargo may be loaded or unloaded to or
from vessels or barges, passing over, onto or under a wharf, pier, or
similar structure; cargo may be moved to a warehouse or similar holding
or storage yard or area to await further movement in import or export
or may move to a consolidation freight station and be stuffed,
unstuffed, containerized, separated or otherwise segregated or
aggregated for delivery or loaded on any mode of transportation for
delivery to its consignee. Specific activities included in this
definition are: Wharfage, handling, loading, unloading, moving of
cargo to a convenient place of delivery to the consignee or a
convenient place for further movement to export mode; documentation
services in connection with the receipt, delivery, checking, care,
custody and control of cargo required in the transfer of cargo;
imported automobile handling prior to delivery to consignee; terminal
stevedoring and incidental vessel services, including but not limited
to plugging and unplugging refrigerator service to containers,
trailers, and other refrigerated cargo receptacles, and securing ship
hatch covers.
(8) Upon every person engaging within this state in the business of
disposing of low-level waste, as defined in RCW 43.145.010; as to such
persons the amount of the tax with respect to such business shall be
equal to the gross income of the business, excluding any fees imposed
under chapter 43.200 RCW, multiplied by the rate of 3.3 percent.
If the gross income of the taxpayer is attributable to activities
both within and without this state, the gross income attributable to
this state shall be determined in accordance with the methods of
apportionment required under RCW 82.04.460.
(9) Upon every person engaging within this state as an insurance
((agent, insurance broker, or insurance solicitor)) producer or title
insurance agent licensed under chapter 48.17 RCW; as to such persons,
the amount of the tax with respect to such licensed activities shall be
equal to the gross income of such business multiplied by the rate of
0.484 percent.
(10) Upon every person engaging within this state in business as a
hospital, as defined in chapter 70.41 RCW, that is operated as a
nonprofit corporation or by the state or any of its political
subdivisions, as to such persons, the amount of tax with respect to
such activities shall be equal to the gross income of the business
multiplied by the rate of 0.75 percent through June 30, 1995, and 1.5
percent thereafter. The moneys collected under this subsection shall
be deposited in the health services account created under RCW
43.72.900.
(11)(a) Beginning October 1, 2005, upon every person engaging
within this state in the business of manufacturing commercial
airplanes, or components of such airplanes, as to such persons the
amount of tax with respect to such business shall, in the case of
manufacturers, be equal to the value of the product manufactured, or in
the case of processors for hire, be equal to the gross income of the
business, multiplied by the rate of:
(i) 0.4235 percent from October 1, 2005, through the later of June
30, 2007, or the day preceding the date final assembly of a
superefficient airplane begins in Washington state, as determined under
RCW 82.32.550; and
(ii) 0.2904 percent beginning on the later of July 1, 2007, or the
date final assembly of a superefficient airplane begins in Washington
state, as determined under RCW 82.32.550.
(b) Beginning October 1, 2005, upon every person engaging within
this state in the business of making sales, at retail or wholesale, of
commercial airplanes, or components of such airplanes, manufactured by
that person, as to such persons the amount of tax with respect to such
business shall be equal to the gross proceeds of sales of the airplanes
or components multiplied by the rate of:
(i) 0.4235 percent from October 1, 2005, through the later of June
30, 2007, or the day preceding the date final assembly of a
superefficient airplane begins in Washington state, as determined under
RCW 82.32.550; and
(ii) 0.2904 percent beginning on the later of July 1, 2007, or the
date final assembly of a superefficient airplane begins in Washington
state, as determined under RCW 82.32.550.
(c) For the purposes of this subsection (11), "commercial
airplane," "component," and "final assembly of a superefficient
airplane" have the meanings given in RCW 82.32.550.
(d) In addition to all other requirements under this title, a
person eligible for the tax rate under this subsection (11) must report
as required under RCW 82.32.545.
(e) This subsection (11) does not apply after the earlier of: July
1, 2024; or December 31, 2007, if assembly of a superefficient airplane
does not begin by December 31, 2007, as determined under RCW 82.32.550.
(12)(a) Until July 1, 2024, upon every person engaging within this
state in the business of extracting timber or extracting for hire
timber; as to such persons the amount of tax with respect to the
business shall, in the case of extractors, be equal to the value of
products, including byproducts, extracted, or in the case of extractors
for hire, be equal to the gross income of the business, multiplied by
the rate of 0.4235 percent from July 1, 2006, through June 30, 2007,
and 0.2904 percent from July 1, 2007, through June 30, 2024.
(b) Until July 1, 2024, upon every person engaging within this
state in the business of manufacturing or processing for hire: (i)
Timber into timber products or wood products; or (ii) timber products
into other timber products or wood products; as to such persons the
amount of the tax with respect to the business shall, in the case of
manufacturers, be equal to the value of products, including byproducts,
manufactured, or in the case of processors for hire, be equal to the
gross income of the business, multiplied by the rate of 0.4235 percent
from July 1, 2006, through June 30, 2007, and 0.2904 percent from July
1, 2007, through June 30, 2024.
(c) Until July 1, 2024, upon every person engaging within this
state in the business of selling at wholesale: (i) Timber extracted by
that person; (ii) timber products manufactured by that person from
timber or other timber products; or (iii) wood products manufactured by
that person from timber or timber products; as to such persons the
amount of the tax with respect to the business shall be equal to the
gross proceeds of sales of the timber, timber products, or wood
products multiplied by the rate of 0.4235 percent from July 1, 2006,
through June 30, 2007, and 0.2904 percent from July 1, 2007, through
June 30, 2024.
(d) Until July 1, 2024, upon every person engaging within this
state in the business of selling standing timber; as to such persons
the amount of the tax with respect to the business shall be equal to
the gross income of the business multiplied by the rate of 0.2904
percent. For purposes of this subsection (12)(d), "selling standing
timber" means the sale of timber apart from the land, where the buyer
is required to sever the timber within thirty months from the date of
the original contract, regardless of the method of payment for the
timber and whether title to the timber transfers before, upon, or after
severance.
(e) For purposes of this subsection, the following definitions
apply:
(i) "Paper and paper products" means products made of interwoven
cellulosic fibers held together largely by hydrogen bonding. "Paper
and paper products" includes newsprint; office, printing, fine, and
pressure-sensitive papers; paper napkins, towels, and toilet tissue;
kraft bag, construction, and other kraft industrial papers; paperboard,
liquid packaging containers, containerboard, corrugated, and solid-fiber containers including linerboard and corrugated medium; and
related types of cellulosic products containing primarily, by weight or
volume, cellulosic materials. "Paper and paper products" does not
include books, newspapers, magazines, periodicals, and other printed
publications, advertising materials, calendars, and similar types of
printed materials.
(ii) "Timber" means forest trees, standing or down, on privately or
publicly owned land. "Timber" does not include Christmas trees that
are cultivated by agricultural methods or short-rotation hardwoods as
defined in RCW 84.33.035.
(iii) "Timber products" means logs, wood chips, sawdust, wood
waste, and similar products obtained wholly from the processing of
timber, short-rotation hardwoods as defined in RCW 84.33.035, or both;
and pulp, including market pulp and pulp derived from recovered paper
or paper products.
(iv) "Wood products" means paper and paper products; dimensional
lumber; engineered wood products such as particleboard, oriented strand
board, medium density fiberboard, and plywood; wood doors; and wood
windows.
(13) Upon every person engaging within this state in inspecting,
testing, labeling, and storing canned salmon owned by another person,
as to such persons, the amount of tax with respect to such activities
shall be equal to the gross income derived from such activities
multiplied by the rate of 0.484 percent.
NEW SECTION. Sec. 101 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. 102 This act takes effect July 1, 2009.