BILL REQ. #: Z-0445.1
| State of Washington | 62nd Legislature | 2011 Regular Session |
Read first time 01/18/11. Referred to Committee on Financial Institutions, Housing & Insurance.
AN ACT Relating to insurance; amending RCW 4.28.080, 48.02.150, 48.02.190, 48.03.060, 48.05.200, 48.05.215, 48.10.170, 48.14.0201, 48.15.150, 48.17.380, 48.36A.350, 48.85.030, 48.94.010, 48.102.011, 48.102.021, 48.110.030, 48.110.055, and 48.155.020; and repealing RCW 48.05.210.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 4.28.080 and 1997 c 380 s 1 are each amended to read
as follows:
Service made in the modes provided in this section ((shall be taken
and held to be)) is personal service. The summons shall be served by
delivering a copy thereof, as follows:
(1) If the action ((be)) is against any county in this state, to
the county auditor or, during normal office hours, to the deputy
auditor, or in the case of a charter county, summons may be served upon
the agent, if any, designated by the legislative authority.
(2) If against any town or incorporated city in the state, to the
mayor, city manager, or, during normal office hours, to the mayor's or
city manager's designated agent or the city clerk thereof.
(3) If against a school or fire district, to the superintendent or
commissioner thereof or by leaving the same in his or her office with
an assistant superintendent, deputy commissioner, or business manager
during normal business hours.
(4) If against a railroad corporation, to any station, freight,
ticket or other agent thereof within this state.
(5) If against a corporation owning or operating sleeping cars, or
hotel cars, to any person having charge of any of its cars or any agent
found within the state.
(6) If against a domestic insurance company, to any agent
authorized by such company to solicit insurance within this state.
(7)(a) If against ((a)) an unauthorized foreign or alien insurance
company, as provided in ((chapter 48.05)) RCW 48.05.200.
(b) If against an unauthorized insurer, as provided in RCW
48.05.215 and 48.15.150.
(c) If against a reciprocal insurer, as provided in RCW 48.10.170.
(d) If against a nonresident surplus line broker, as provided in
RCW 48.15.073.
(e) If against a nonresident insurance producer or title insurance
agent, as provided in RCW 48.17.173.
(f) If against a nonresident adjuster, as provided in RCW
48.17.380.
(g) If against a fraternal benefit society, as provided in RCW
48.36A.350.
(h) If against a nonresident reinsurance intermediary, as provided
in RCW 48.94.010.
(i) If against a nonresident life settlement provider, as provided
in RCW 48.102.011.
(j) If against a nonresident life settlement broker, as provided in
RCW 48.102.021.
(k) If against a service contract provider, as provided in RCW
48.110.030.
(l) If against a protection product guarantee provider, as provided
in RCW 48.110.055.
(m) If against a discount plan organization, as provided in RCW
48.155.020.
(8) If against a company or corporation doing any express business,
to any agent authorized by said company or corporation to receive and
deliver express matters and collect pay therefor within this state.
(9) If ((the suit be)) against a company or corporation other than
those designated in ((the preceding subdivisions)) subsections (1)
through (8) of this section, to the president or other head of the
company or corporation, the registered agent, secretary, cashier or
managing agent thereof or to the secretary, stenographer or office
assistant of the president or other head of the company or corporation,
registered agent, secretary, cashier or managing agent.
(10) If ((the suit be)) against a foreign corporation or
nonresident joint stock company, partnership or association doing
business within this state, to any agent, cashier or secretary thereof.
(11) If against a minor under the age of fourteen years, to such
minor personally, and also to his or her father, mother, guardian, or
if there be none within this state, then to any person having the care
or control of such minor, or with whom he or she resides, or in whose
service he or she is employed, if such there be.
(12) If against any person for whom a guardian has been appointed
for any cause, then to such guardian.
(13) If against a foreign or alien steamship company or steamship
charterer, to any agent authorized by such company or charterer to
solicit cargo or passengers for transportation to or from ports in the
state of Washington.
(14) If against a self-insurance program regulated by chapter 48.62
RCW, as provided in chapter 48.62 RCW.
(15) In all other cases, to the defendant personally, or by leaving
a copy of the summons at the house of his or her usual abode with some
person of suitable age and discretion then resident therein.
(16) In lieu of service under subsection (15) of this section,
where the person cannot with reasonable diligence be served as
described, the summons may be served as provided in this subsection,
and shall be deemed complete on the tenth day after the required
mailing: By leaving a copy at his or her usual mailing address with a
person of suitable age and discretion who is a resident, proprietor, or
agent thereof, and by thereafter mailing a copy by first-class mail,
postage prepaid, to the person to be served at his or her usual mailing
address. For the purposes of this subsection, "usual mailing address"
((shall)) does not include a United States postal service post office
box or the person's place of employment.
Sec. 2 RCW 48.02.150 and 2009 c 549 s 7011 are each amended to
read as follows:
The commissioner ((shall)) must purchase at the expense of the
state, and in the manner provided by law((:)), printing, books, reports, furniture, equipment, and supplies
as he or she deems necessary to the proper discharge of his or her
duties under this code.
(1)
(((2) "Convention form" insurers' annual statement blanks, which he
or she may purchase from any printer manufacturing the forms for the
various states.))
Sec. 3 RCW 48.02.190 and 2009 c 161 s 1 are each amended to read
as follows:
(1) As used in this section:
(a) "Organization" means every insurer, as defined in RCW
48.01.050, having a certificate of authority to do business in this
state, every health care service contractor, as defined in RCW
48.44.010, every health maintenance organization, as defined in RCW
48.46.020, or self-funded multiple employer welfare arrangement, as
defined in RCW 48.125.010, registered to do business in this state.
"Class one" organizations ((shall)) consist of all insurers as defined
in RCW 48.01.050. "Class two" organizations ((shall)) consist of all
organizations registered under provisions of chapters 48.44 and 48.46
RCW. "Class three" organizations ((shall)) consist of self-funded
multiple employer welfare arrangements as defined in RCW 48.125.010.
(b)(i) "Receipts" means (A) net direct premiums consisting of
direct gross premiums, as defined in RCW 48.18.170, paid for insurance
written or renewed upon risks or property resident, situated, or to be
performed in this state, less return premiums and premiums on policies
not taken, dividends paid or credited to policyholders on direct
business, and premiums received from policies or contracts issued in
connection with qualified plans as defined in RCW 48.14.021, and (B)
prepayments to health care service contractors, as defined in RCW
48.44.010, health maintenance organizations, as defined in RCW
48.46.020, or participant contributions to self-funded multiple
employer welfare arrangements, as defined in RCW 48.125.010, less
experience rating credits, dividends, prepayments returned to
subscribers, and payments for contracts not taken.
(ii) Participant contributions, under chapter 48.125 RCW, used to
determine the receipts in this state under this section ((shall be))
are determined in the same manner as premiums taxable in this state are
determined under RCW 48.14.090.
(c) "Regulatory surcharge" means the fees imposed by this section.
(2) The annual cost of operating the office of insurance
commissioner ((shall be)) is determined by legislative appropriation.
A pro rata share of the cost ((shall be)) is charged to all
organizations as a regulatory surcharge. Each class of organization
((shall)) must contribute a sufficient amount to the insurance
commissioner's regulatory account to pay the reasonable costs,
including overhead, of regulating that class of organization.
(3) The regulatory surcharge ((shall be)) is calculated separately
for each class of organization. The regulatory surcharge collected
from each organization ((shall be)) is that portion of the cost of
operating the insurance commissioner's office, for that class of
organization, for the ensuing fiscal year that is represented by the
organization's portion of the receipts collected or received by all
organizations within that class on business in this state during the
previous calendar year. However, the regulatory surcharge must not
exceed one-eighth of one percent of receipts and the minimum regulatory
surcharge ((shall be)) is one thousand dollars.
(4) The commissioner ((shall)) must annually, on or before ((June))
July 1st, calculate and bill each organization for the amount of the
regulatory surcharge. The regulatory surcharge ((shall be)) is due and
payable no later than ((June)) July 15th of each year. However, if the
necessary financial records are not available or if the amount of the
legislative appropriation is not determined in time to carry out such
calculations and bill such regulatory surcharge within the time
specified, the commissioner may use the regulatory surcharge factors
for the prior year as the basis for the regulatory surcharge and, if
necessary, the commissioner may impose supplemental fees to fully and
properly charge the organizations. Any organization failing to pay the
regulatory surcharges by ((June 30th shall)) July 31st must pay the
same penalties as the penalties for failure to pay taxes when due under
RCW 48.14.060. The regulatory surcharge required by this section is in
addition to all other taxes and fees now imposed or that may be
subsequently imposed.
(5) All moneys collected ((shall)) must be deposited in the
insurance commissioner's regulatory account in the state treasury which
is hereby created.
(6) Unexpended funds in the insurance commissioner's regulatory
account at the close of a fiscal year ((shall be)) are carried forward
in the insurance commissioner's regulatory account to the succeeding
fiscal year and ((shall be)) are used to reduce future regulatory
surcharges.
(7)(a) Each insurer may annually collect regulatory surcharges
remitted in preceding years by means of a policyholder surcharge on
premiums charged for all kinds of insurance. The recoupment ((shall
be)) is at a uniform rate reasonably calculated to collect the
regulatory surcharge remitted by the insurer.
(b) If an insurer fails to collect the entire amount of the
recoupment in the first year under this section, it may repeat the
recoupment procedure provided for in this subsection (7) in succeeding
years until the regulatory surcharge is fully collected or a de minimis
amount remains uncollected. Any such de minimis amount may be
collected as provided in (d) of this subsection.
(c) The amount and nature of any recoupment ((shall)) must be
separately stated on either a billing or policy declaration sent to an
insured. The amount of the recoupment must not be considered a premium
for any purpose, including the premium tax or agents' commissions.
(d) An insurer may elect not to collect the regulatory surcharge
from its insured. In such a case, the insurer may recoup the
regulatory surcharge through its rates, if the following requirements
are met:
(i) The insurer remits the amount of surcharge not collected by
election under this subsection; and
(ii) The surcharge is not considered a premium for any purpose,
including the premium tax or agents' commission.
Sec. 4 RCW 48.03.060 and 2004 c 260 s 23 are each amended to read
as follows:
(1) Examinations within this state of any insurer or self-funded
multiple employer welfare arrangement as defined in RCW 48.125.010
domiciled or having its home offices in this state, other than a title
insurer, made by the commissioner or the commissioner's examiners and
employees ((shall)) must, except as to fees, mileage, and expense
incurred as to witnesses, be at the expense of the state.
(2) Every other examination, whatsoever, or any part of the
examination of any person domiciled or having its home offices in this
state requiring travel and services outside this state, ((shall)) must
be made by the commissioner or by examiners designated by the
commissioner and ((shall)) must be at the expense of the person
examined; but a domestic insurer ((shall)) must not be liable for the
compensation of examiners employed by the commissioner for such
services outside this state.
(3) When making an examination under this chapter, the commissioner
may retain attorneys, appraisers, independent actuaries, independent
certified public accountants, or other professionals and specialists as
examiners, the cost of which ((shall)) must be borne by the person who
is the subject of the examination, except as provided in subsection (1)
of this section.
(4) The person examined and liable ((therefor shall)) must
reimburse the state upon presentation of an itemized statement
((thereof,)) for the actual travel expenses of the commissioner's
examiners, their reasonable living expense allowance, and their per
diem compensation, including salary and the employer's cost of employee
benefits, at a reasonable rate approved by the commissioner, incurred
on account of the examination. Per diem salary and expenses for
employees examining insurers domiciled outside the state of Washington
((shall)) must be established by the commissioner on the basis of the
national association of insurance commissioner's recommended salary and
expense schedule for zone examiners, or the salary schedule established
by the ((Washington)) state director of personnel ((resources board)),
and the expense schedule established by the office of financial
management, whichever is higher. A domestic title insurer ((shall))
must pay the examination expense and costs to the commissioner as
itemized and billed by the commissioner.
The commissioner or the commissioner's examiners ((shall)) must not
receive or accept any additional emolument on account of any
examination.
(5) Nothing contained in this chapter limits the commissioner's
authority to terminate or suspend any examination in order to pursue
other legal or regulatory action under the insurance laws of this
state. Findings of fact and conclusions made pursuant to any
examination are prima facie evidence in any legal or regulatory action.
Sec. 5 RCW 48.05.200 and 1985 c 264 s 3 are each amended to read
as follows:
(1) Each authorized foreign or alien insurer ((shall)) must appoint
the commissioner as its attorney to receive service of, and upon whom
((shall)) must be served, all legal process issued against it in this
state upon causes of action arising within this state. Service upon
the commissioner as attorney ((shall)) constitutes service upon the
insurer. Service of legal process against ((such)) the insurer can be
had only by service upon the commissioner, except actions upon
contractor bonds pursuant to RCW 18.27.040, where service may be upon
the department of labor and industries.
(2) With the appointment the insurer ((shall)) must designate by
name, e-mail address, and address the person to whom the commissioner
((shall)) must forward legal process so served upon him or her. The
insurer may change ((such)) the person by filing a new designation.
(3) The insurer must keep the designation, address, and e-mail
address filed with the commissioner current.
(4) The appointment of the commissioner as attorney ((shall be)) is
irrevocable, ((shall)) binds any successor in interest or to the assets
or liabilities of the insurer, and ((shall)) remains in effect as long
as there is in force in this state any contract made by the insurer or
liabilities or duties arising therefrom.
(5) The service of process must be accomplished and processed in
the manner prescribed under RCW 48.02.200.
Sec. 6 RCW 48.05.215 and 1981 c 339 s 4 are each amended to read
as follows:
(1) Any foreign or alien insurer not ((thereunto)) authorized by
the commissioner, whether it be a surplus lines insurer operating under
chapter 48.15 RCW or not, who, by mail or otherwise, solicits insurance
business in this state or transacts insurance business in this state as
defined by RCW 48.01.060, thereby submits itself to the jurisdiction of
the courts of this state in any action, suit, or proceeding instituted
by or on behalf of an insured, beneficiary or the commissioner arising
out of ((such)) an unauthorized solicitation of insurance business,
including, but not limited to, an action for injunctive relief by the
commissioner.
(2) In any ((such)) action, suit, or proceeding instituted by or on
behalf of an insured or beneficiary, service of legal process against
((such)) an unauthorized foreign or alien insurer ((may be made by
service of duplicate copies of legal process on the commissioner by a
person competent to serve a summons or by registered mail. At the time
of service the plaintiff shall pay to the commissioner ten dollars,
taxable as costs in the action. The commissioner shall forthwith mail
one of the copies of the process, by registered mail with return
receipt requested, to the defendant at its last known principal place
of business)) must be accomplished and processed in the manner
prescribed under RCW 48.02.200. The defendant insurer ((shall have))
has forty days from the date of the service on the commissioner within
which to plead, answer, or otherwise defend the action.
(3) In any such action, suit, or proceeding by the commissioner,
service of legal process against ((such)) an unauthorized foreign or
alien insurer may be made by personal service of legal process upon any
officer of such insurer at its last known principal place of business
outside the state of Washington. The summons upon ((such)) an
unauthorized foreign or alien insurer ((shall)) must contain the same
requisites and be served in like manner as personal summons within the
state of Washington; except, the insurer ((shall have)) has forty days
from the date of ((such)) personal service within which to plead,
answer, or otherwise defend the action.
Sec. 7 RCW 48.10.170 and 2009 c 549 s 7042 are each amended to
read as follows:
(1) ((A certificate of authority shall not be issued to a
domestic)) Each authorized reciprocal insurer ((unless prior thereto
the attorney has executed and filed with the commissioner the insurer's
irrevocable authorization of the commissioner to receive legal process
issued in this state against the insurer upon any cause of action
arising within this state.)) must appoint the commissioner as its attorney to receive
service of, and upon whom service must be served, all legal process
issued against it in this state upon causes of action arising within
this state. Service upon the commissioner as attorney constitutes
service upon the insurer.
(2) The provisions of RCW 48.05.210 shall apply to service of such
process upon the commissioner.
(3)
(2) With the appointment the insurer must designate the person to
whom the commissioner must forward legal process so served upon him or
her.
(3) The appointment of the commissioner as attorney is irrevocable,
binds any successor in interest or to the assets or liabilities of the
insurer, and remains in effect as long as there is in force in this
state any contract made by the insurer or liabilities or duties arising
under that contract.
(4) The service of process must be accomplished and processed in
the manner prescribed under RCW 48.02.200.
(5) In lieu of service on the commissioner, legal process may be
served upon a domestic reciprocal insurer by serving the insurer's
attorney at his or her principal offices.
(((4))) (6) Any judgment against the insurer based upon legal
process so served ((shall be)) is binding upon each of the insurer's
subscribers as their respective interests may appear and in an amount
not exceeding their respective contingent liabilities.
Sec. 8 RCW 48.14.0201 and 2009 c 479 s 41 are each amended to
read as follows:
(1) As used in this section, "taxpayer" means a health maintenance
organization as defined in RCW 48.46.020, a health care service
contractor as defined in RCW 48.44.010, or a self-funded multiple
employer welfare arrangement as defined in RCW 48.125.010.
(2) Each taxpayer ((shall)) must pay a tax on or before the first
day of March of each year to the state treasurer through the insurance
commissioner's office. The tax ((shall)) must be equal to the total
amount of all premiums and prepayments for health care services
collected or received by the taxpayer under RCW 48.14.090 during the
preceding calendar year multiplied by the rate of two percent. For tax
purposes, the reporting of premiums and prepayments must be on a
written basis or on a paid-for basis consistent with the basis required
by the annual statement.
(3) Taxpayers ((shall)) must prepay their tax obligations under
this section. The minimum amount of the prepayments ((shall be)) is
the percentages of the taxpayer's tax obligation for the preceding
calendar year recomputed using the rate in effect for the current year.
For the prepayment of taxes due during the first calendar year, the
minimum amount of the prepayments ((shall be)) is the percentages of
the taxpayer's tax obligation that would have been due had the tax been
in effect during the previous calendar year. The tax prepayments
((shall)) must be paid to the state treasurer through the
commissioner's office by the due dates and in the following amounts:
(a) On or before June 15, forty-five percent;
(b) On or before September 15, twenty-five percent;
(c) On or before December 15, twenty-five percent.
(4) For good cause demonstrated in writing, the commissioner may
approve an amount smaller than the preceding calendar year's tax
obligation as recomputed for calculating the health maintenance
organization's, health care service contractor's, self-funded multiple
employer welfare arrangement's, or certified health plan's prepayment
obligations for the current tax year.
(5) Moneys collected under this section ((shall be)) are deposited
in the general fund.
(6) The taxes imposed in this section do not apply to:
(a) Amounts received by any taxpayer from the United States or any
instrumentality thereof as prepayments for health care services
provided under Title XVIII (medicare) of the federal social security
act.
(b) Amounts received by any taxpayer from the state of Washington
as prepayments for health care services provided under:
(i) The medical care services program as provided in RCW 74.09.035;
or
(ii) The Washington basic health plan on behalf of subsidized
enrollees as provided in chapter 70.47 RCW((; or)).
(iii) The medicaid program on behalf of elderly or clients with
disabilities as provided in chapter 74.09 RCW when these prepayments
are received prior to July 1, 2009, and are associated with a managed
care contract program that has been implemented on a voluntary
demonstration or pilot project basis
(c) Amounts received by any health care service contractor, as
defined in RCW 48.44.010, as prepayments for health care services
included within the definition of practice of dentistry under RCW
18.32.020.
(d) Participant contributions to self-funded multiple employer
welfare arrangements that are not taxable in this state.
(7) Beginning January 1, 2000, the state ((does hereby)) preempts
the field of imposing excise or privilege taxes upon taxpayers and no
county, city, town, or other municipal subdivision ((shall have)) has
the right to impose any such taxes upon such taxpayers. This
subsection ((shall be)) is limited to premiums and payments for health
benefit plans offered by health care service contractors under chapter
48.44 RCW, health maintenance organizations under chapter 48.46 RCW,
and self-funded multiple employer welfare arrangements as defined in
RCW 48.125.010. The preemption authorized by this subsection ((shall))
must not impair the ability of a county, city, town, or other municipal
subdivision to impose excise or privilege taxes upon the health care
services directly delivered by the employees of a health maintenance
organization under chapter 48.46 RCW.
(8)(a) The taxes imposed by this section apply to a self-funded
multiple employer welfare arrangement only in the event that they 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)) must 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 state premium taxes on
these arrangements. Once the legality of the taxes has been
determined, the multiple employer welfare arrangement certified by the
insurance commissioner must begin payment of these taxes.
(b) If there has not been a final determination of the legality of
these taxes, then beginning on the earlier of (i) the date the fourth
multiple employer welfare arrangement has been certified by the
insurance commissioner, or (ii) April 1, 2006, the arrangement
((shall)) must deposit the taxes imposed by this section into an
interest bearing escrow account maintained by the arrangement. Upon a
final determination that the taxes 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))
must be transferred to the state treasurer.
(9) The effect of transferring contracts for health care services
from one taxpayer to another taxpayer is to transfer the tax prepayment
obligation with respect to the contracts.
(10) On or before June 1st of each year, the commissioner ((shall))
must notify each taxpayer required to make prepayments in that year of
the amount of each prepayment and ((shall)) must provide remittance
forms to be used by the taxpayer. However, a taxpayer's responsibility
to make prepayments is not affected by failure of the commissioner to
send, or the taxpayer to receive, the notice or forms.
Sec. 9 RCW 48.15.150 and 1979 ex.s. c 199 s 4 are each amended to
read as follows:
(1) For any cause of action arising in this state under any
contract issued as a surplus line contract under this chapter, an
unauthorized insurer ((shall)) must be sued((, upon any cause of action
arising in this state under any contract issued by it as a surplus line
contract, pursuant to this chapter,)) in the superior court of the
county in which the cause of action arose.
(2) ((Service of legal process against the insurer may be made in
any such action by service upon the commissioner of duplicate copies of
such legal process either by a person competent to serve a summons or
by registered mail or certified mail with return receipt requested. At
the time of such service the plaintiff shall pay to the commissioner
ten dollars, taxable as costs in the action. The commissioner shall
forthwith mail the documents of process served, or a true copy thereof,
to the insurer at its principal place of business last known to the
commissioner, or to the person designated by the insurer for that
purpose in the most recent document filed with the commissioner, on
forms prescribed by the commissioner, by prepaid registered or
certified mail with return receipt requested. The insurer shall have
forty days from the date of service upon the commissioner within which
to plead, answer, or otherwise defend the action. Upon service of
process upon the commissioner in accordance with this provision, the
court shall be deemed to have jurisdiction in personam of the insurer.)) An unauthorized insurer issuing ((
(3)such)) a policy ((shall be
deemed thereby to have)) under this chapter has authorized service of
process against it in the manner ((and to the effect as provided in
this section)) prescribed under RCW 48.02.200. Any ((such)) policy
((shall)) must contain a provision designating the commissioner as the
person upon whom service of process may be made.
(3) The insurer has forty days from the date of the service upon
the commissioner within which to plead, answer, or otherwise defend the
action. Upon service of process upon the commissioner in accordance
with this section, the court has jurisdiction in personam of the
insurer.
Sec. 10 RCW 48.17.380 and 2009 c 162 s 23 are each amended to
read as follows:
(1) Application for a license to be an adjuster ((shall)) must be
made to the commissioner upon forms furnished by the commissioner. As
a part of or in connection with the application, an individual
applicant ((shall)) must furnish information concerning his or her
identity, including fingerprints for submission to the Washington state
patrol, the federal bureau of investigation, and any governmental
agency or entity authorized to receive this information for a state and
national criminal history background check, personal history,
experience, business record, purposes, and other pertinent facts, as
the commissioner may reasonably require. If, in the process of
verifying fingerprints, business records, or other information, the
commissioner's office incurs fees or charges from another governmental
agency or from a business firm, the amount of the fees or charges must
be paid to the commissioner's office by the applicant.
(2) Any person willfully misrepresenting any fact required to be
disclosed in any application shall be liable to penalties as provided
by this code.
(3) The commissioner ((shall)) licenses as an adjuster only an
individual or business entity which has otherwise complied with this
code ((therefor)) and the individual or responsible officer of the
business entity has furnished evidence satisfactory to the commissioner
that the individual or responsible officer of the business entity is
qualified as follows:
(a) Is eighteen or more years of age;
(b) Is a bona fide resident of this state, or is a resident of a
state which will permit residents of this state to act as adjusters in
such other state;
(c) Is a trustworthy person;
(d) Has had experience or special education or training with
reference to the handling of loss claims under insurance contracts, of
sufficient duration and extent reasonably to make the individual or
responsible officer of the business entity competent to fulfill the
responsibilities of an adjuster;
(e) Has successfully passed any examination as required under this
chapter;
(f) If for a public adjuster's license, has filed the bond required
by RCW 48.17.430;
(g) If a nonresident business entity, has designated an individual
licensed adjuster responsible for the business entity's compliance with
the insurance laws and rules of this state.
(4)(a) Each licensed nonresident adjuster, by application for and
issuance of a license, has appointed the commissioner as the adjuster's
attorney to receive service of legal process against the adjuster in
this state upon causes of action arising within this state. Service
upon the commissioner as attorney constitutes effective legal service
on the adjuster.
(b) The appointment of the commissioner as attorney is irrevocable,
binds any successor in interest or to the assets or liabilities of the
adjuster, and remains in effect for as long as there could be any cause
of action against the adjuster arising out of the adjuster's
transactions in this state. The service of process must be
accomplished and processed in the manner prescribed under RCW
48.02.200.
(5) The commissioner may require any documents reasonably necessary
to verify the information contained in an application and may, from
time to time, require any licensed adjuster to produce the information
called for in an application for a license.
Sec. 11 RCW 48.36A.350 and 1987 c 366 s 35 are each amended to
read as follows:
(1) Every society authorized to do business in this state ((shall:)) must appoint the commissioner
as its attorney to receive service of, and upon whom must be served,
all legal process issued against it in this state upon causes of action
arising within this state. Service upon the commissioner as attorney
constitutes service upon the society.
(a) Appoint in writing the commissioner and each successor in
office to be its true and lawful attorney upon whom all lawful process
in any action or proceeding against it shall be served;
(b) Agree in writing that any lawful process against it which is
served on the commissioner shall be of the same legal force and
validity as if served upon the society; and
(c) Agree that the authority shall continue in force so long as any
liability remains outstanding in this state.
Copies of such appointment, certified by said commissioner, shall
be deemed sufficient evidence thereof and shall be admitted in evidence
with the same force and effect as the original.
(2) Service shall only be made upon the commissioner, or if absent,
upon the person in charge of the commissioner's office. It shall be
made in duplicate and shall constitute sufficient service upon the
society. When legal process against a society is served upon the
commissioner, the commissioner shall forward one of the duplicate
copies by registered mail, prepaid, directed to the secretary or
corresponding officer. No service shall require a society to file its
answer, pleading, or defense in less than forty days from the date of
mailing the copy of the service to a society. Legal process shall not
be served upon a society except in the manner provided in this section.
At the time of serving any process upon the commissioner, the plaintiff
or complainant in the action shall pay to the commissioner the fee
established pursuant to RCW 48.05.210.
(2) With the appointment the society must designate the person to
whom the commissioner must forward legal process so served upon him or
her.
(3) The appointment of the commissioner as attorney is irrevocable,
binds any successor in interest or to the assets or liabilities of the
society, and remains in effect as long as there is in force in this
state any contract made by the society or liabilities or duties arising
therefrom.
(4) The service of process must be accomplished and processed in
the manner prescribed under RCW 48.02.200.
Sec. 12 RCW 48.85.030 and 1995 1st sp.s. c 18 s 78 are each
amended to read as follows:
(1) The insurance commissioner shall adopt rules defining the
criteria that qualified long-term care partnership insurance policies
must meet to satisfy the requirements of this chapter. The rules shall
((provide that all)) incorporate any requirements set forth by chapter
48.83 RCW and the deficit reduction act of 2005 for qualified long-term
care partnership insurance policies purchased for the purposes of this
chapter((:)).
(a) Be guaranteed renewable;
(b) Provide coverage for nursing home care and provide coverage for
an alternative plan of care benefit as defined by the commissioner;
(c) Provide optional coverage for home and community-based
services. Such home and community-based services shall be included in
the coverage unless rejected in writing by the applicant;
(d) Provide automatic inflation protection or similar coverage for
any policyholder through the age of seventy-nine and made optional at
age eighty to protect the policyholder from future increases in the
cost of long-term care;
(e) Not require prior hospitalization or confinement in a nursing
home as a prerequisite to receiving long-term care benefits; and
(f) Contain at least a six-month grace period that permits
reinstatement of the policy or contract retroactive to the date of
termination if the policy or contract holder's nonpayment of premiums
arose as a result of a cognitive impairment suffered by the policy or
contract holder as certified by a physician
(2) Insurers offering long-term care policies for the purposes of
this chapter shall demonstrate to the satisfaction of the insurance
commissioner that they:
(a) Have procedures to provide notice to each purchaser of the
long-term care consumer education program;
(b) ((Offer case management services;)) Have procedures that provide for the keeping of individual
policy records and procedures for the explanation of coverage and
benefits identifying those payments or services available under the
policy that meet the purposes of this chapter;
(c)
(((d))) (c) Agree to provide the insurance commissioner((, on or
before September 1 of each year, an)) any required annual report
containing information derived from the long-term care partnership
long-term care insurance uniform data set as specified by the office of
the insurance commissioner.
Sec. 13 RCW 48.94.010 and 2005 c 274 s 317 are each amended to
read as follows:
(1) No person, firm, association, or corporation may act as a
reinsurance intermediary-broker in this state if the person, firm,
association, or corporation maintains an office either directly or as
a member or employee of a firm or association, or an officer, director,
or employee of a corporation:
(a) In this state, unless the person, firm, association, or
corporation is a licensed reinsurance intermediary-broker in this
state; or
(b) In another state, unless the person, firm, association, or
corporation is a licensed reinsurance intermediary-broker in this state
or another state having a regulatory scheme substantially similar to
this chapter.
(2) No person, firm, association, or corporation may act as a
reinsurance intermediary-manager:
(a) For a reinsurer domiciled in this state, unless the person,
firm, association, or corporation is a licensed reinsurance
intermediary-manager in this state;
(b) In this state, if the person, firm, association, or corporation
maintains an office either directly or as a member or employee of a
firm or association, or an officer, director, or employee of a
corporation in this state, unless the person, firm, association, or
corporation is a licensed reinsurance intermediary-manager in this
state;
(c) In another state for a nondomestic reinsurer, unless the
person, firm, association, or corporation is a licensed reinsurance
intermediary-manager in this state or another state having a
substantially similar regulatory scheme.
(3) The commissioner may require a reinsurance intermediary-manager
subject to subsection (2) of this section to:
(a) File a bond in an amount and from an insurer acceptable to the
commissioner for the protection of the reinsurer; and
(b) Maintain an errors and omissions policy in an amount acceptable
to the commissioner.
(4)(((a))) The commissioner may issue a reinsurance intermediary
license to a person, firm, association, or corporation who has complied
with the requirements of this chapter. Any such license issued to a
firm or association authorizes all the members of the firm or
association and any designated employees to act as reinsurance
intermediaries under the license, and all such persons may be named in
the application and any supplements to it. Any such license issued to
a corporation authorizes all of the officers, and any designated
employees and directors of it, to act as reinsurance intermediaries on
behalf of the corporation, and all such persons must be named in the
application and any supplements to it.
(((b) If the applicant for a reinsurance intermediary license is a
nonresident, the applicant, as a condition precedent to receiving or
holding a license, shall designate the commissioner as agent for
service of process in the manner, and with the same legal effect,
provided for by this title for designation of service of process upon
unauthorized insurers, and also shall furnish the commissioner with the
name and address of a resident of this state upon whom notices or
orders of the commissioner or process affecting the nonresident
reinsurance intermediary may be served. The licensee shall promptly
notify the commissioner in writing of every change in its designated
agent for service of process, but the change does not become effective
until acknowledged by the commissioner.))
(5)(a) Each licensed nonresident reinsurance intermediary must
appoint the commissioner as the reinsurance intermediary's attorney to
receive service of legal process issued against the reinsurance
intermediary in this state upon causes of action arising within this
state. Service upon the commissioner as attorney constitutes effective
legal service upon the reinsurance intermediary.
(b) With the appointment the reinsurance intermediary must
designate the person to whom the commissioner must forward legal
process so served upon him or her.
(c) The appointment is irrevocable, binds any successor in interest
or to the assets or liabilities of the reinsurance intermediary, and
remains in effect for as long as there could be any cause of action
against the reinsurance intermediary arising out of the reinsurance
intermediary's insurance transactions in this state.
(d) The service of process must be accomplished and processed in
the manner prescribed under RCW 48.02.200.
(6) The commissioner may refuse to issue a reinsurance intermediary
license if, in his or her judgment, the applicant, anyone named on the
application, or a member, principal, officer, or director of the
applicant, is not trustworthy, or that a controlling person of the
applicant is not trustworthy to act as a reinsurance intermediary, or
that any of the foregoing has given cause for revocation or suspension
of the license, or has failed to comply with a prerequisite for the
issuance of such license. Upon written request, the commissioner will
furnish a summary of the basis for refusal to issue a license, which
document is privileged and not subject to chapter 42.56 RCW.
(((6))) (7) Licensed attorneys-at-law of this state when acting in
their professional capacity as such are exempt from this section.
Sec. 14 RCW 48.102.011 and 2010 c 27 s 5 are each amended to read
as follows:
(1) A person, wherever located, may not act as a provider with an
owner who is a resident of this state or if there is more than one
owner on a single policy and one of the owners is a resident of this
state, without first having obtained a license from the commissioner.
(2) An application for a provider license must be made to the
commissioner by the applicant on a form prescribed by the commissioner,
and the application must be accompanied by a licensing fee in the
amount of two hundred fifty dollars for deposit into the general fund.
(3) All provider licenses continue in force until suspended,
revoked, or not renewed. A license is subject to renewal annually on
the first day of July upon application of the provider and payment of
a renewal fee of two hundred fifty dollars for deposit into the general
fund. If not so renewed, the license automatically expires on the
renewal date.
(a) If the renewal fee is not received by the commissioner prior to
the expiration date, the provider must pay to the commissioner in
addition to the renewal fee, a surcharge as follows:
(i) For the first thirty days or part thereof delinquency the
surcharge is fifty percent of the renewal fee;
(ii) For the next thirty days or part thereof delinquency the
surcharge is one hundred percent of the renewal fee;
(b) If the renewal fee is not received by the commissioner after
sixty days but prior to twelve months after the expiration date the
payment of the renewal fee is for reinstatement of the license and the
provider must pay to the commissioner the renewal fee and a surcharge
of two hundred percent.
(4) Subsection (3)(a) and (b) of this section does not exempt any
person from any penalty provided by law for transacting a life
settlement business without a valid and subsisting license.
(5) The applicant must provide information as the commissioner may
require on forms prescribed by the commissioner. The commissioner has
the authority, at any time, to require an applicant to fully disclose
the identity of its stockholders, partners, officers, and employees,
and the commissioner may, in the exercise of the commissioner's sole
discretion, refuse to issue a license in the name of any person if not
satisfied that any officer, employee, stockholder, or partner thereof
who may materially influence the applicant's conduct meets the
standards of this chapter.
(6) A license issued to a partnership, corporation, or other entity
authorizes all members, officers, and designated employees to act as a
licensee under the license, if those persons are named in the
application and any supplements to the application.
(7) Upon the filing of an application for a provider's license and
the payment of the license fee, the commissioner must make an
investigation of each applicant and may issue a license if the
commissioner finds that the applicant:
(a) Has provided a detailed plan of operation;
(b) Is competent and trustworthy and intends to transact its
business in good faith;
(c) Has a good business reputation and has had experience,
training, or education so as to be qualified in the business for which
the license is applied;
(d)(i) Has demonstrated evidence of financial responsibility in a
form and in an amount prescribed by the commissioner by rule.
(ii) The commissioner may ask for evidence of financial
responsibility at any time the commissioner deems necessary;
(e) If the applicant is a legal entity, is formed or organized
((pursuant to)) under the laws of this state, is a foreign legal entity
authorized to transact business in this state, or provides a
certificate of good standing from the state of its domicile; and
(f) Has provided to the commissioner an antifraud plan that meets
the requirements of RCW 48.102.140 and includes:
(i) A description of the procedures for detecting and investigating
possible fraudulent acts and procedures for resolving material
inconsistencies between medical records and insurance applications;
(ii) A description of the procedures for reporting fraudulent
insurance acts to the commissioner;
(iii) A description of the plan for antifraud education and
training of its underwriters and other personnel; and
(iv) A written description or chart outlining the arrangement of
the antifraud personnel who are responsible for the investigation and
reporting of possible fraudulent insurance acts and investigating
unresolved material inconsistencies between medical records and
insurance applications.
(8)(a) A nonresident provider must appoint the commissioner as its
attorney to receive service of, and upon whom must be served, all legal
process issued against it in this state upon causes of action arising
within this state. Service upon the commissioner as attorney
constitutes service upon the provider. Service of legal process
against the provider can be had only by service upon the commissioner.
(b) With the appointment the provider must designate the person to
whom the commissioner must forward legal process so served upon him or
her. The provider may change the person by filing a new designation.
(c) The appointment of the commissioner as attorney is irrevocable,
binds any successor in interest or to the assets or liabilities of the
provider, and remains in effect as long as there is in this state any
contract made by the provider or liabilities or duties arising
therefrom.
(d) ((Duplicate copies of legal process against a provider for whom
the commissioner is attorney shall be served upon him or her either by
a person competent to serve summons, or by registered mail. At the
time of service the plaintiff shall pay to the commissioner ten
dollars, taxable as costs in the action.)) The service of process must be
accomplished and processed in the manner prescribed under RCW
48.02.200.
(e) The commissioner shall immediately send one of the copies of
the process, by registered mail with return receipt requested, to the
person designated for the purpose by the provider in its most recent
designation filed with the commissioner.
(f) The commissioner shall keep a record of the day and hour of
service upon him or her of all legal process. Proceedings shall not be
had against the provider, and the provider shall not be required to
appear, plead, or answer until the expiration of forty days after the
date of service upon the commissioner.
(9) A provider may not use any person to perform the functions of
a broker unless the person is authorized to act as a broker under this
chapter.
(10) A provider must provide to the commissioner new or revised
information about officers, stockholders, partners, directors, members,
or designated employees within thirty days of the change.
Sec. 15 RCW 48.102.021 and 2009 c 104 s 4 are each amended to
read as follows:
(1) Only a life insurance producer who has been duly licensed as a
resident insurance producer with a lifeline of authority in this state
or his or her home state for at least one year and is licensed as a
nonresident producer in this state is permitted to operate as a broker.
(2) Not later than thirty days from the first day of operating as
a broker, the life insurance producer ((shall)) must notify the
commissioner that he or she intends acting as a broker on a form
prescribed by the commissioner, pay a fee of one hundred dollars, and
if a nonresident producer appoint the commissioner as attorney for
service of process under ((subsection (6) of this section)) RCW
48.02.200. Notification ((shall)) must include an acknowledgement by
the life insurance producer that he or she will operate as a broker in
accordance with this chapter.
(3) A person licensed as an attorney, certified public accountant,
or financial planner accredited by a nationally recognized
accreditation agency, who is retained to represent the owner, whose
compensation is not paid directly or indirectly by the provider or
purchaser, may negotiate life settlement contracts on behalf of the
owner without having to obtain a license as a broker.
(4) The authority to act as a broker ((shall)) continues in force
until suspended, revoked, or not renewed. The authority to act as a
broker ((shall)) automatically expires if not timely renewed. The
authority to act as a broker ((shall be)) is valid for a time period
coincident with the expiration date of the broker's insurance producer
license. The authority to act as a broker is renewable at that time,
upon payment of a renewal fee in the amount of one hundred dollars and
if the payment is received by the commissioner prior to the expiration
date, the broker's authority to act as a broker continues in effect.
(a) If the renewal fee is not received by the commissioner prior to
the expiration date, the broker ((shall)) must pay to the commissioner
in addition to the renewal fee, a surcharge as follows:
(i) For the first thirty days or part thereof of delinquency the
surcharge is fifty percent of the renewal fee;
(ii) For the next thirty days or part thereof delinquency the
surcharge is one hundred percent of the renewal fee;
(b) If the payment of the renewal fee is not received by the
commissioner after sixty days the surcharge is two hundred percent of
the renewal fee.
(5) Subsection (4)(a) of this section does not exempt any person
from any penalty provided by law for transacting life settlement
business without the valid authority to act as a broker.
(6)(a) A nonresident broker ((shall)) must appoint the commissioner
as its attorney to receive service of, and upon whom ((shall)) must be
served, all legal process issued against it in this state upon causes
of action arising within this state. Service upon the commissioner as
attorney ((shall)) constitutes service upon the broker. Service of
legal process against the broker can be had only by service upon the
commissioner.
(b) ((With the appointment the broker shall designate the person to
whom the commissioner shall forward legal process so served upon him or
her. The broker may change the person by filing a new designation.)) The appointment of the commissioner as attorney ((
(c)shall be))
is irrevocable, ((shall)) binds any successor in interest or to the
assets or liabilities of the broker, and ((shall)) remains in effect as
long as there is in this state any contract made by the broker or
liabilities or duties arising therefrom.
(((d) Duplicate copies of legal process against a broker for whom
the commissioner is attorney shall be served upon him or her either by
a person competent to serve summons, or by registered mail. At the
time of service the plaintiff shall pay to the commissioner ten
dollars, taxable as costs in the action.)) (c) The service of process must be
accomplished and processed in the manner prescribed in RCW 48.02.200.
(e) The commissioner shall immediately send one of the copies of
the process, by registered mail with return receipt requested, to the
person designated for the purpose by the broker in its most recent
designation filed with the commissioner.
(f) The commissioner shall keep a record of the day and hour of
service upon him or her of all legal process. Proceedings shall not be
had against the broker, and the broker shall not be required to appear,
plead, or answer until the expiration of forty days after the date of
service upon the commissioner.
(7) A broker may not use any person to perform the functions of a
provider unless such a person holds a current, valid license as a
provider, and as provided in this chapter.
Sec. 16 RCW 48.110.030 and 2006 c 274 s 4 are each amended to
read as follows:
(1) A person may not act as, or offer to act as, or hold himself or
herself out to be a service contract provider in this state, nor may a
service contract be sold to a consumer in this state, unless the
service contract provider has a valid registration as a service
contract provider issued by the commissioner.
(2) Applicants to be a service contract provider must make an
application to the commissioner upon a form to be furnished by the
commissioner. The application must include or be accompanied by the
following information and documents:
(a) All basic organizational documents of the service contract
provider, including any articles of incorporation, articles of
association, partnership agreement, trade name certificate, trust
agreement, shareholder agreement, bylaws, and other applicable
documents, and all amendments to those documents;
(b) The identities of the service contract provider's executive
officer or officers directly responsible for the service contract
provider's service contract business, and, if more than fifty percent
of the service contract provider's gross revenue is derived from the
sale of service contracts, the identities of the service contract
provider's directors and stockholders having beneficial ownership of
ten percent or more of any class of securities;
(c) Audited annual financial statements or other financial reports
acceptable to the commissioner for the two most recent years which
prove that the applicant is solvent and any information the
commissioner may require in order to review the current financial
condition of the applicant. If the service contract provider is
relying on RCW 48.110.050(2)(c) to assure the faithful performance of
its obligations to service contract holders, then the audited financial
statements of the service contract provider's parent company must also
be filed;
(d) An application fee of two hundred fifty dollars, which
((shall)) must be deposited into the general fund; and
(e) Any other pertinent information required by the commissioner.
(3) ((The applicant shall appoint the commissioner as its attorney
to receive service of legal process in any action, suit, or proceeding
in any court. This appointment is irrevocable and shall bind the
service contract provider or any successor in interest, shall remain in
effect as long as there is in force in this state any contract or any
obligation arising therefrom related to residents of this state, and
shall be processed in accordance with RCW 48.05.210.)) Each registered
service contract provider must appoint the commissioner as the service
contract provider's attorney to receive service of legal process issued
against the service contract provider in this state upon causes of
action arising within this state. Service upon the commissioner as
attorney constitutes effective legal service upon the service contract
provider.
(a) With the appointment the service contract provider must
designate the person to whom the commissioner must forward legal
process so served upon him or her.
(b) The appointment is irrevocable, binds any successor in interest
or to the assets or liabilities of the service contract provider, and
remains in effect for as long as there could be any cause of action
against the service contract provider arising out of any of the service
contract provider's contracts or obligations in this state.
(c) The service of process must be accomplished and processed in
the manner prescribed under RCW 48.02.200.
(4) The commissioner may refuse to issue a registration if the
commissioner determines that the service contract provider, or any
individual responsible for the conduct of the affairs of the service
contract provider under subsection (2)(b) of this section, is not
competent, trustworthy, financially responsible, or has had a license
as a service contract provider or similar license denied or revoked for
cause by any state.
(5) A registration issued under this section is valid, unless
surrendered, suspended, or revoked by the commissioner, or not renewed
for so long as the service contract provider continues in business in
this state and remains in compliance with this chapter. A registration
is subject to renewal annually on the first day of July upon
application of the service contract provider and payment of a fee of
two hundred dollars, which ((shall)) must be deposited into the general
fund. If not so renewed, the registration expires on the June 30th
next preceding.
(6) A service contract provider ((shall)) must keep current the
information required to be disclosed in its registration under this
section by reporting all material changes or additions within thirty
days after the end of the month in which the change or addition occurs.
Sec. 17 RCW 48.110.055 and 2006 c 274 s 17 are each amended to
read as follows:
(1) This section applies to protection product guarantee providers.
(2) A person ((shall)) must not act as, or offer to act as, or hold
himself or herself out to be a protection product guarantee provider in
this state, nor may a protection product be sold to a consumer in this
state, unless the protection product guarantee provider has:
(a) A valid registration as a protection product guarantee provider
issued by the commissioner; and
(b) Either demonstrated its financial responsibility or assured the
faithful performance of the protection product guarantee provider's
obligations to its protection product guarantee holders by insuring all
protection product guarantees under a reimbursement insurance policy
issued by an insurer holding a certificate of authority from the
commissioner or a risk retention group, as defined in 15 U.S.C. Sec.
3901(a)(4), as long as that risk retention group is in full compliance
with the federal liability risk retention act of 1986 (15 U.S.C. Sec.
3901 et seq.), is in good standing in its domiciliary jurisdiction, and
properly registered with the commissioner under chapter 48.92 RCW. The
insurance required by this subsection must meet the following
requirements:
(i) The insurer or risk retention group must, at the time the
policy is filed with the commissioner, and continuously thereafter,
maintain surplus as to policyholders and paid-in capital of at least
fifteen million dollars and annually file audited financial statements
with the commissioner; and
(ii) The commissioner may authorize an insurer or risk retention
group that has surplus as to policyholders and paid-in capital of less
than fifteen million dollars, but at least equal to ten million
dollars, to issue the insurance required by this subsection if the
insurer or risk retention group demonstrates to the satisfaction of the
commissioner that the company maintains a ratio of direct written
premiums, wherever written, to surplus as to policyholders and paid-in
capital of not more than three to one.
(3) Applicants to be a protection product guarantee provider
((shall)) must make an application to the commissioner upon a form to
be furnished by the commissioner. The application ((shall)) must
include or be accompanied by the following information and documents:
(a) The names of the protection product guarantee provider's
executive officer or officers directly responsible for the protection
product guarantee provider's protection product guarantee business and
their biographical affidavits on a form prescribed by the commissioner;
(b) The name, address, and telephone number of any administrators
designated by the protection product guarantee provider to be
responsible for the administration of protection product guarantees in
this state;
(c) A copy of the protection product guarantee reimbursement
insurance policy or policies;
(d) A copy of each protection product guarantee the protection
product guarantee provider proposes to use in this state;
(e) Any other pertinent information required by the commissioner;
and
(f) A nonrefundable application fee of two hundred fifty dollars.
(4) ((The applicant shall appoint the commissioner as its attorney
to receive service of legal process in any action, suit, or proceeding
in any court. This appointment is irrevocable and shall bind the
protection product guarantee provider or any successor in interest,
shall remain in effect as long as there is in force in this state any
protection product guarantee or any obligation arising therefrom
related to residents of this state, and shall be processed in
accordance with RCW 48.05.210.)) Each registered protection product
guarantee provider must appoint the commissioner as the protection
product guarantee provider's attorney to receive service of legal
process issued against the protection product guarantee provider in
this state upon causes of action arising within this state. Service
upon the commissioner as attorney constitutes effective legal service
upon the protection product guarantee provider.
(a) With the appointment the protection product guarantee provider
must designate the person to whom the commissioner must forward legal
process so served upon him or her.
(b) The appointment is irrevocable, binds any successor in interest
or to the assets or liabilities of the protection product guarantee
provider, and remains in effect for as long as there could be any cause
of action against the protection product guarantee provider arising out
of any of the protection product guarantee provider's contracts or
obligations in this state.
(c) The service of process must be accomplished and processed in
the manner prescribed under RCW 48.02.200.
(5) The commissioner may refuse to issue a registration if the
commissioner determines that the protection product guarantee provider,
or any individual responsible for the conduct of the affairs of the
protection product guarantee provider under subsection (3)(a) of this
section, is not competent, trustworthy, financially responsible, or has
had a license as a protection product guarantee provider or similar
license denied or revoked for cause by any state.
(6) A registration issued under this section is valid, unless
surrendered, suspended, or revoked by the commissioner, or not renewed
for so long as the protection product guarantee provider continues in
business in this state and remains in compliance with this chapter. A
registration is subject to renewal annually on the first day of July
upon application of the protection product guarantee provider and
payment of a fee of two hundred fifty dollars. If not so renewed, the
registration expires on the June 30th next preceding.
(7) A protection product guarantee provider ((shall)) must keep
current the information required to be disclosed in its registration
under this section by reporting all material changes or additions
within thirty days after the end of the month in which the change or
addition occurs.
Sec. 18 RCW 48.155.020 and 2010 c 27 s 6 are each amended to read
as follows:
(1) Before conducting discount plan business to which this chapter
applies, a person must obtain a license from the commissioner to
operate as a discount plan organization.
(2) Except as provided in subsection (((3))) (4) of this section,
each application for a license to operate as a discount plan
organization:
(a) Must be in a form prescribed by the commissioner and verified
by an officer or authorized representative of the applicant; and
(b) Must demonstrate, set forth, or be accompanied by the
following:
(i) The two hundred fifty dollar application fee, which must be
deposited into the general fund;
(ii) A copy of the organization documents of the applicant, such as
the articles of incorporation, including all amendments;
(iii) A copy of the applicant's bylaws or other enabling documents
that establish organizational structure;
(iv) The applicant's federal identification number, business
address, and mailing address;
(v)(A) A list of names, addresses, official positions, and
biographical information of the individuals who are responsible for
conducting the applicant's affairs, including all members of the board
of directors, board of trustees, executive committee, or other
governing board or committee, the officers, contracted management
company personnel, and any person or entity owning or having the right
to acquire ten percent or more of the voting securities of the
applicant; and
(B) A disclosure in the listing of the extent and nature of any
contracts or arrangements between any individual who is responsible for
conducting the applicant's affairs and the discount plan organization,
including all possible conflicts of interest;
(vi) A complete biographical statement, on forms prescribed by the
commissioner, with respect to each individual identified under (b)(v)
of this subsection;
(vii) A statement generally describing the applicant, its
facilities and personnel, and the health care services for which a
discount will be made available under the discount plan;
(viii) A copy of the form of all contracts made or to be made
between the applicant and any health care providers or health care
provider networks regarding the provision of health care services to
members and discounts to be made available to members;
(ix) A copy of the form of any contract made or arrangement to be
made between the applicant and any individual listed in (b)(v) of this
subsection;
(x) A list identifying by name, address, telephone number, and e-mail address all persons who will market each discount plan offered by
the applicant. If the person who will market a discount plan is an
entity, only the entity must be identified. This list must be
maintained and updated within sixty days of any change in the
information. An updated list must be sent to the commissioner as part
of the discount plan organization's renewal application under (b)(vii)
of this subsection;
(xi) A copy of the form of any contract made or to be made between
the applicant and any person, corporation, partnership, or other entity
for the performance on the applicant's behalf of any function,
including marketing, administration, enrollment, and subcontracting for
the provision of health care services to members and discounts to be
made available to members;
(xii) A copy of the applicant's most recent financial statements
audited by an independent certified public accountant, except that,
subject to the approval of the commissioner, an applicant that is an
affiliate of a parent entity that is publicly traded and that prepares
audited financial statements reflecting the consolidated operations of
the parent entity may submit the audited financial statement of the
parent entity and a written guaranty that the minimum capital
requirements required under RCW 48.155.030 will be met by the parent
entity instead of the audited financial statement of the applicant;
(xiii) A description of the proposed methods of marketing
including, but not limited to, describing the use of marketers, use of
the internet, sales by telephone, electronic mail, or facsimile
machine, and use of salespersons to market the discount plan benefits;
(xiv) A description of the member complaint procedures which must
be established and maintained by the applicant;
(xv) If domiciled in this state, the name and address of the
applicant's Washington statutory agent for service of process, notice,
or demand ((or, if not domiciled in this state, a power of attorney
duly executed by the applicant, appointing the commissioner and duly
authorized deputies as the true and lawful attorney of the applicant in
and for this state upon whom all law process in any legal action or
proceeding against the discount plan organization on a cause of action
arising in this state may be served)); and
(xvi) Any other information the commissioner may reasonably
require.
(3)(a) If the applicant is not domiciled in this state, the
applicant must appoint the commissioner as the discount plan
organization's attorney to receive service of legal process issued
against the discount plan organization in this state upon causes of
action arising within this state. Service upon the commissioner as
attorney constitutes effective legal service upon the discount plan
organization.
(b) With the appointment the discount plan organization must
designate by name, e-mail address, and address the person to whom the
commissioner must forward legal process so served upon him or her. The
discount plan organization may change the person by filing a new
designation.
(c) The discount plan organization must keep the designation,
address, and e-mail address filed with the commissioner current.
(d) The appointment is irrevocable, binds any successor in interest
or to the assets or liabilities of the discount plan organization, and
remains in effect for as long as there could be any cause of action
against the discount plan organization arising out of the discount plan
organization's transactions in this state.
(e) The service of process must be accomplished and processed in
the manner prescribed under RCW 48.02.200.
(4)(a) Upon application to and approval by the commissioner and
payment of the applicable fees, a discount plan organization that holds
a current license or other form of authority from another state to
operate as a discount plan organization, at the commissioner's
discretion, may not be required to submit the information required
under subsection (2) of this section in order to obtain a license under
this section if the commissioner is satisfied that the other state's
requirements, at a minimum, are equivalent to those required under
subsection (2) of this section or the commissioner is satisfied that
the other state's requirements are sufficient to protect the interests
of the residents of this state.
(b) Whenever the discount plan organization loses its license or
other form of authority in that other state to operate as a discount
plan organization, or is the subject of any disciplinary administrative
proceeding related to the organization's operating as a discount plan
organization in that other state, the discount plan organization must
immediately notify the commissioner.
(((4))) (5) After the receipt of an application filed under
subsection (2) or (((3))) (4) of this section, the commissioner must
review the application and notify the applicant of any deficiencies in
the application.
(((5))) (6)(a) Within ninety days after the date of receipt of a
completed application, the commissioner must:
(i) Issue a license if the commissioner is satisfied that the
applicant has met the following:
(A) The applicant has fulfilled the requirements of this section
and the minimum capital requirements in accordance with RCW 48.155.030;
and
(B) The persons who own, control, and manage the applicant are
competent and trustworthy and possess managerial experience that would
make the proposed operation of the discount plan organization
beneficial to discount plan members; or
(ii) Disapprove the application and state the grounds for
disapproval.
(b) In making a determination under (a) of this subsection, the
commissioner may consider, for example, whether the applicant or an
officer or manager of the applicant: (i) Is not financially
responsible; (ii) does not have adequate expertise or experience to
operate a medical discount plan organization; or (iii) is not of good
character. Among the factors that the commissioner may consider in
making the determination is whether the applicant or an affiliate or a
business formerly owned or managed by the applicant or an officer or
manager of the applicant has had a previous application for a license,
or other authority, to operate as any entity regulated by the
commissioner denied, revoked, suspended, or terminated for cause, or is
under investigation for or has been found in violation of a statute or
regulation in another jurisdiction within the previous five years.
(((6))) (7) Prior to licensure by the commissioner, each discount
plan organization must establish an internet web site in order to
conform to the requirements of RCW 48.155.070(2).
(((7))) (8)(a) A license is effective for up to one year, unless
prior to its expiration the license is renewed in accordance with this
subsection or suspended or revoked in accordance with subsection
(((8))) (9) of this section. Licenses issued or renewed on or after
July 1, 2010, will be subject to renewal annually on July 1st. If not
so renewed, the license will automatically expire on the renewal date.
(b) At least ninety days before a license expires, the discount
plan organization must submit:
(i) A renewal application form; and
(ii) A two hundred dollar renewal application fee for deposit into
the general fund.
(c) The commissioner must renew the license of each holder that
meets the requirements of this chapter and pays the appropriate renewal
fee required.
(((8))) (9)(a) The commissioner may suspend the authority of a
discount plan organization to enroll new members or refuse to renew or
revoke a discount plan organization's license if the commissioner finds
that any of the following conditions exist:
(i) The discount plan organization is not operating in compliance
with this chapter;
(ii) The discount plan organization does not have the minimum net
worth as required under RCW 48.155.030;
(iii) The discount plan organization has advertised, merchandised,
or attempted to merchandise its services in such a manner as to
misrepresent its services or capacity for service or has engaged in
deceptive, misleading, or unfair practices with respect to advertising
or merchandising;
(iv) The discount plan organization is not fulfilling its
obligations as a discount plan organization; or
(v) The continued operation of the discount plan organization would
be hazardous to its members.
(b) If the commissioner has cause to believe that grounds for the
nonrenewal, suspension, or revocation of a license exists, the
commissioner must notify the discount plan organization in writing
specifically stating the grounds for the refusal to renew or suspension
or revocation and may also pursue a hearing on the matter under chapter
48.04 RCW.
(c) When the license of a discount plan organization is nonrenewed,
surrendered, or revoked, the discount plan organization must
immediately upon the effective date of the order of revocation or, in
the case of a nonrenewal, the date of expiration of the license, stop
any further advertising, solicitation, collecting of fees, or renewal
of contracts, and proceed to wind up its affairs transacted under the
license.
(d)(i) When the commissioner suspends a discount plan
organization's authority to enroll new members, the suspension order
must specify the period during which the suspension is to be in effect
and the conditions, if any, that must be met by the discount plan
organization prior to reinstatement of its license to enroll members.
(ii) The commissioner may rescind or modify the order of suspension
prior to the expiration of the suspension period.
(iii) The license of a discount plan organization may not be
reinstated unless requested by the discount plan organization. The
commissioner may not grant the request for reinstatement if the
commissioner finds that the circumstances for which the suspension
occurred still exist or are likely to recur.
(((9))) (10) Each licensed discount plan organization must notify
the commissioner immediately whenever the discount plan organization's
license, or other form of authority to operate as a discount plan
organization in another state, is suspended, revoked, or nonrenewed in
that state.
(((10))) (11) A health care provider who provides discounts to his
or her own patients without any cost or fee of any kind to the patient
is not required to obtain and maintain a license under this chapter as
a discount plan organization.
NEW SECTION. Sec. 19 RCW 48.05.210 (Service of process--Procedure) and 2009 c 549 s 7018, 1981 c 339 s 3, & 1947 c 79 s .05.21
are each repealed.