BILL REQ. #:  Z-0751.1 



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HOUSE BILL 2461
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State of Washington63rd Legislature2014 Regular Session

By Representatives Kirby and Ryu; by request of Insurance Commissioner

Read first time 01/17/14.   Referred to Committee on Business & Financial Services.



     AN ACT Relating to the financial solvency of insurance companies; amending RCW 42.56.400, 48.02.065, 48.13.061, 48.18.545, 48.18.547, 48.19.035, 48.38.010, 48.97.005, 48.125.140, 48.155.010, 48.155.015, 42.56.400, and 42.56.400; reenacting and amending RCW 42.56.400; adding new sections to chapter 48.31B RCW; adding a new chapter to Title 48 RCW; creating new sections; repealing RCW 48.31B.005, 48.31B.010, 48.31B.015, 48.31B.020, 48.31B.025, 48.31B.030, 48.31B.035, 48.31B.040, 48.31B.045, 48.31B.050, 48.31B.055, 48.31B.060, 48.31B.065, 48.31B.070, 48.31B.900, 48.31B.901, 48.31B.902, 48.31C.010, 48.31C.020, 48.31C.030, 48.31C.040, 48.31C.050, 48.31C.060, 48.31C.070, 48.31C.080, 48.31C.090, 48.31C.100, 48.31C.110, 48.31C.120, 48.31C.130, 48.31C.140, 48.31C.150, 48.31C.160, 48.31C.900, and 48.31C.901; prescribing penalties; providing effective dates; and providing an expiration date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   DEFINITIONS. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Affiliate" means an affiliate of, or person affiliated with, a specific person, and includes a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
     (2) "Commissioner" means the insurance commissioner, the commissioner's deputies, or the office of the insurance commissioner, as appropriate.
     (3) "Control" means as follows:
     (a) For a for-profit person, "control" (including the terms "controlling," "controlled by," and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control exists if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, ten percent or more of the voting securities of any other person. This may be rebutted by a showing made in the manner provided by section 5(11) of this act that control does not exist in fact. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect;
     (b) For a nonprofit corporation organized under chapters 24.03 and 24.06 RCW, control exists if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing a majority of voting rights of the person or the power to elect or appoint a majority of the board of directors, trustees, or other governing body of the person, unless the power is the result of an official position of, or corporate office held by, the person; and
     (c) Control includes either permanent or temporary control.
     (4) "Enterprise risk" means any activity, circumstance, event, or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole including, but not limited to, anything that would cause the insurer's risk-based capital to fall into company action level as set forth in RCW 48.05.440 or 48.43.310 or would cause the insurer to be in hazardous financial condition as defined in WAC 284-16-310.
     (5) "Insurance holding company system" means a system that consists of two or more affiliated persons, one or more of which is an insurer.
     (6) "Insurer" includes an insurer authorized under chapter 48.05 RCW, a fraternal mutual insurer or society holding a license under RCW 48.36A.290, a health care service contractor registered under chapter 48.44 RCW, a health maintenance organization registered under chapter 48.46 RCW, and a self-funded multiple employer welfare arrangement under chapter 48.125 RCW, as well as all persons engaged as, or purporting to be engaged as insurers, fraternal benefit societies, health care service contractors, health maintenance organizations, or self-funded multiple employer welfare arrangements in this state, and to persons in process of organization to become insurers, fraternal benefit societies, health care service contractors, health maintenance organizations, or self-funded multiple employer welfare arrangements, except that it does not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.
     (7) "Person" means an individual, a corporation, a limited liability company, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity or any combination of the foregoing acting in concert, but does not include any joint venture partnership exclusively engaged in owning, managing, leasing, or developing real or tangible personal property.
     (8) "Securityholder" means a securityholder of a specified person who owns any security of such person, including common stock, preferred stock, debt obligations, and any other security convertible into or evidencing the right to acquire any of the foregoing.
     (9) "Subsidiary" means a subsidiary of a specified person who is an affiliate controlled by such person directly or indirectly through one or more intermediaries.
     (10) "Supervisory colleges" means a forum for cooperation and communication among involved regulators and international supervisors facilitating the effectiveness of supervision of entities which belong to an insurance group and supervision of the group as a whole on a groupwide basis and improving the legal entity supervision of the entities within the insurance group.
     (11) "Voting security" includes any security convertible into or evidencing a right to acquire a voting security.

NEW SECTION.  Sec. 2   SUBSIDIARIES OF INSURERS. (1) A domestic insurer, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries. The subsidiaries may conduct any kind of business or businesses authorized in RCW 48.13.061(4) and subject to the percentage limitations contained in chapter 48.13 RCW.
     (2) If an insurer ceases to control a subsidiary, it shall dispose of any investment in that subsidiary within three years from the time of the cessation of control or within such further time as the commissioner may prescribe, unless at any time after the investment was made, the investment met the requirements for investment under any other section of this title, and the insurer notified the commissioner.

NEW SECTION.  Sec. 3   ACQUISITION OF CONTROL OF OR MERGER WITH DOMESTIC INSURER. (1)(a) No person other than the issuer may make a tender offer for or a request or invitation for tenders of, or enter into any agreement to exchange securities for, seek to acquire, or acquire, in the open market or otherwise, any voting security of a domestic insurer if, after the consummation thereof, such person would, directly or indirectly (or by conversion or by exercise of any right to acquire) be in control of the insurer, and no person may enter into an agreement to merge with or otherwise to acquire control of a domestic insurer or any person controlling a domestic insurer unless, at the time the offer, request, or invitation is made or the agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved, such person has filed with the commissioner and has sent to the insurer a statement containing the information required by this section and the offer, request, invitation, agreement, or acquisition has been approved by the commissioner in the manner prescribed in this chapter.
     (b) For purposes of this section, any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer, in any manner, must file with the commissioner, with a copy to the insurer, notice of its proposed divestiture at least thirty days prior to the cessation of control. If the statement referred to in (a) of this subsection is otherwise filed, this subsection does not apply.
     (c) With respect to a transaction subject to this section, the acquiring person must also file a preacquisition notification with the commissioner, which must contain the information set forth in section 4(3)(a) of this act. A failure to file the notification may be subject to penalties specified in section 4(5)(c) of this act.
     (d) For purposes of this section a domestic insurer includes any person controlling a domestic insurer unless the person, as determined by the commissioner, is either directly or through its affiliates primarily engaged in business other than the business of insurance. For the purposes of this section, person does not include any securities broker holding, in the usual and customary broker's function, less than twenty percent of the voting securities of an insurance company or of any person which controls an insurance company.
     (2) The statement to be filed with the commissioner must be made under oath or affirmation and contain the following:
     (a) The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in subsection (1) of this section is to be effected and referred to in this section as the acquiring party; and
     (i) If the person is an individual, his or her principal occupation and all offices and positions held during the past five years, and any conviction of crimes other than minor traffic violations during the past ten years;
     (ii) If the person is not an individual, a report of the nature of its business operations during the past five years or for the lesser period as the person and any predecessors shall have been in existence; an informative description of the business intended to be done by the person and the person's subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to such positions. The list shall include for each individual the information required by (a)(i) of this subsection;
     (b) The source, nature, and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction where funds were or are to be obtained for any such purpose (including any pledge of the insurer's stock, or the stock of any of its subsidiaries or controlling affiliates), and the identity of persons furnishing consideration. However, when a source of consideration is a loan made in the lender's ordinary course of business, the identity of the lender must remain confidential, if the person filing the statement so requests;
     (c) Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five fiscal years of each acquiring party (or for such lesser period as the acquiring party and any predecessors have been in existence), and similar unaudited information as of a date not earlier than ninety days prior to the filing of the statement;
     (d) Any plans or proposals which each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management;
     (e) The number of shares of any security referred to in subsection (1) of this section which each acquiring party proposes to acquire, and the terms of the offer, request, invitation, agreement, or acquisition referred to in subsection (1) of this section, and a statement as to the method by which the fairness of the proposal was arrived at;
     (f) The amount of each class of any security referred to in subsection (1) of this section which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;
     (g) A full description of any contracts, arrangements, or understandings with respect to any security referred to in subsection (1) of this section in which any acquiring party is involved, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description must identify the persons with whom the contracts, arrangements, or understandings have been entered into;
     (h) A description of the purchase of any security referred to in subsection (1) of this section during the twelve calendar months preceding the filing of the statement by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid or agreed to be paid;
     (i) A description of any recommendations to purchase any security referred to in subsection (1) of this section made during the twelve calendar months preceding the filing of the statement by any acquiring party, or by anyone based upon interviews or at the suggestion of the acquiring party;
     (j) Copies of all tender offers for, requests, or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities referred to in subsection (1) of this section, and, if distributed, of additional soliciting material relating to them;
     (k) The term of any agreement, contract, or understanding made with or proposed to be made with any broker-dealer as to solicitation of securities referred to in subsection (1) of this section for tender, and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard thereto;
     (l) An agreement by the person required to file the statement referred to in subsection (1) of this section that it will provide the annual report, specified in section 5(12) of this act, for so long as control exists;
     (m) An acknowledgement by the person required to file the statement referred to in subsection (1) of this section that the person and all subsidiaries within its control in the insurance holding company system will provide information to the commissioner upon request as necessary to evaluate enterprise risk to the insurer;
     (n) Such additional information as the commissioner may by rule prescribe as necessary or appropriate for the protection of policyholders of the insurer or in the public interest;
     (o) If the person required to file the statement referred to in subsection (1) of this section is a partnership, limited partnership, syndicate, or other group, information required by (a) through (n) of this subsection may be required by the commissioner to be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. If any partner, member, or person is a corporation or the person required to file the statement referred to in subsection (1) of this section is a corporation, the commissioner may require that the information required by (a) through (n) of this subsection be given with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than ten percent of the outstanding voting securities of the corporation; and
     (p) If any material change occurs in the facts set forth in the statement filed with the commissioner and sent to the insurer pursuant to this section, an amendment setting forth the change, together with copies of all documents and other material relevant to the change, must be filed with the commissioner and sent to the insurer within two business days after the person learns of the change.
     (3) If any offer, request, invitation, agreement, or acquisition referred to in subsection (1) of this section is proposed to be made by means of a registration statement under the securities act of 1933 or in circumstances requiring the disclosure of similar information under the securities exchange act of 1934, or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in subsection (1) of this section may utilize the documents in furnishing the information required by that statement.
     (4)(a) The commissioner shall approve any merger or other acquisition of control referred to in subsection (1) of this section unless, after a public hearing, the commissioner finds that:
     (i) After the change of control, the domestic insurer referred to in subsection (1) of this section would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed;
     (ii) The effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly. In applying the competitive standard in this subsection (4)(a)(ii):
     (A) The informational requirements of section 4(3)(a) of this act and the standards of section 4(4)(b) of this act apply;
     (B) The merger or other acquisition may not be disapproved if the commissioner finds that any of the situations meeting the criteria provided by section 4(4)(c) of this act exist; and
     (C) The commissioner may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time;
     (iii) The financial condition of any acquiring party is such as might jeopardize the financial stability of the insurer, or prejudice the interest of its policyholders;
     (iv) The plans or proposals which the acquiring party has to liquidate the insurer, sell its assets, or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the insurer and not in the public interest;
     (v) The competence, experience, and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control; or
     (vi) The acquisition is likely to be hazardous or prejudicial to the insurance-buying public.
     (b) The commissioner shall approve an exchange or other acquisition of control referred to in this section within sixty days after he or she declares the statement filed under this section to be complete and after holding a public hearing. At the hearing, the person filing the statement, the insurer, and any person whose significant interest is determined by the commissioner to be affected may present evidence, examine and cross-examine witnesses, and offer oral and written arguments, and in connection therewith may conduct discovery proceedings in the same manner as is allowed in the superior court of this state. All discovery proceedings must be concluded not later than three business days before the commencement of the public hearing.
     (c) If the proposed acquisition of control will require the approval of more than one commissioner, the public hearing referred to in (b) of this subsection may be held on a consolidated basis upon request of the person filing the statement referred to in subsection (1) of this section. Such person shall file the statement referred to in subsection (1) of this section with the national association of insurance commissioners within five days of making the request for a public hearing. A commissioner may opt out of a consolidated hearing, and shall provide notice to the applicant of the opt-out within ten days of the receipt of the statement referred to in subsection (1) of this section. A hearing conducted on a consolidated basis shall be public and shall be held within the United States before the commissioners of the states in which the insurers are domiciled. Such commissioners shall hear and receive evidence. A commissioner may attend such hearing, in person, or by telecommunication.
     (d) In connection with a change of control of a domestic insurer, any determination by the commissioner that the person acquiring control of the insurer shall be required to maintain or restore the capital of the insurer to the level required by the laws and rules of this state shall be made not later than sixty days after the date of notification of the change in control submitted pursuant to subsection (1)(a) of this section.
     (e) The commissioner may retain at the acquiring person's expense any attorneys, actuaries, accountants, and other experts not otherwise a part of the commissioner's staff as may be reasonably necessary to assist the commissioner in reviewing the proposed acquisition of control.
     (5) The provisions of this section do not apply to:
     (a) Any transaction which is subject to RCW 48.31.010, dealing with the merger or consolidation of two or more insurers;
     (b) Any offer, request, invitation, agreement or acquisition which the commissioner by order exempts as not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer, or as otherwise not comprehended within the purposes of this section.
     (6) The following are violations of this section:
     (a) The failure to file any statement, amendment, or other material required to be filed pursuant to subsection (1) or (2) of this section; or
     (b) The effectuation or any attempt to effectuate an acquisition of control of, divestiture of, or merger with a domestic insurer unless the commissioner has given approval.
     (7) The courts of this state are hereby vested with jurisdiction over every person not resident, domiciled, or authorized to do business in this state who files a statement with the commissioner under this section, and overall actions involving such person arising out of violations of this section, and each such person is deemed to have performed acts equivalent to and constituting an appointment by the person of the commissioner to be his or her true and lawful attorney upon whom may be served all lawful process in any action, suit, or proceeding arising out of violations of this section. Copies of all lawful process must be served on the commissioner and transmitted by registered or certified mail by the commissioner to the person at his or her last known address.

NEW SECTION.  Sec. 4   ACQUISITIONS INVOLVING INSURERS NOT OTHERWISE COVERED. (1) The following definitions apply for the purposes of this section only:
     (a) "Acquisition" means any agreement, arrangement, or activity the consummation of which results in a person acquiring directly or indirectly the control of another person, and includes but is not limited to the acquisition of voting securities, the acquisition of assets, bulk reinsurance, and mergers.
     (b) An "involved insurer" includes an insurer which either acquires or is acquired, is affiliated with an acquirer or acquired, or is the result of a merger.
     (2)(a) Except as exempted in (b) of this subsection, this section applies to any acquisition in which there is a change in control of an insurer authorized to do business in this state.
     (b) This section does not apply to the following:
     (i) A purchase of securities solely for investment purposes so long as the securities are not used by voting or otherwise to cause or attempt to cause the substantial lessening of competition in any insurance market in this state. If a purchase of securities results in a presumption of control under section 1(3) of this act, it is not solely for investment purposes unless the commissioner of the insurer's state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer action or affirmative finding is communicated by the domiciliary commissioner to the commissioner of this state;
     (ii) The acquisition of a person by another person when both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if preacquisition notification is filed with the commissioner in accordance with subsection (3)(a) of this section thirty days prior to the proposed effective date of the acquisition. However, such preacquisition notification is not required for exclusion from this section if the acquisition would otherwise be excluded from this section by this subsection (2)(b);
     (iii) The acquisition of already affiliated persons;
     (iv) An acquisition if, as an immediate result of the acquisition:
     (A) In no market would the combined market share of the involved insurers exceed five percent of the total market;
     (B) There would be no increase in any market share; or
     (C) In no market would the:
     (I) Combined market share of the involved insurers exceed twelve percent of the total market; and
     (II) The market share increase by more than two percent of the total market.
     For the purpose of this subsection (2)(b)(iv), a market means direct written insurance premium in this state for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in this state;
     (v) An acquisition for which a preacquisition notification would be required pursuant to this section due solely to the resulting effect on the ocean marine insurance line of business;
     (vi) An acquisition of an insurer whose domiciliary commissioner affirmatively finds that the insurer is in failing condition; there is a lack of feasible alternative to improving such condition; the public benefits of improving the insurer's condition through the acquisition exceed the public benefits that would arise from not lessening competition; and the findings are communicated by the domiciliary commissioner to the commissioner of this state.
     (3) An acquisition covered by subsection (2) of this section may be subject to an order pursuant to subsection (5) of this section unless the acquiring person files a preacquisition notification and the waiting period has expired. The acquired person may file a preacquisition notification.
     (a) The preacquisition notification shall be in such form and contain such information as prescribed by the national association of insurance commissioners relating to those markets which, under subsection (2)(b)(iv) of this section, cause the acquisition not to be exempted from this section. The commissioner may require additional material and information as necessary to determine whether the proposed acquisition, if consummated, would violate the competitive standard of subsection (4) of this section. The required information may include an opinion of an economist as to the competitive impact of the acquisition in this state accompanied by a summary of the education and experience of that economist indicating his or her ability to render an informed opinion.
     (b) The waiting period required begins on the date of receipt by the commissioner of a preacquisition notification and shall end on the earlier of the thirtieth day after the date of receipt, or termination of the waiting period by the commissioner. Prior to the end of the waiting period, the commissioner on a one-time basis may require the submission of additional needed information relevant to the proposed acquisition, in which event the waiting period shall end on the earlier of the thirtieth day after receipt of the additional information by the commissioner or termination of the waiting period by the commissioner.
     (4)(a) The commissioner may enter an order under subsection (5)(a) of this section with respect to an acquisition if there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in this state or tend to create a monopoly or if the insurer fails to file adequate information in compliance with subsection (3) of this section.
     (b) In determining whether a proposed acquisition would violate the competitive standard of (a) of this subsection, the commissioner shall consider the following:
     (i) Any acquisition covered under subsection (2) of this section involving two or more insurers competing in the same market is prima facie evidence of violation of the competitive standards, as follows:
     (A) If the market is highly concentrated and the involved insurers possess the following shares of the market:

Insurer AInsurer B
4%4% or more
10%2% or more
15%1% or more


     (B) Or, if the market is not highly concentrated and the involved insurers possess the following shares of the market:

Insurer AInsurer B
5%5% or more
10%4% or more
15%3% or more
19%1% or more


     A highly concentrated market is one in which the share of the four largest insurers is seventy-five percent or more of the market. Percentages not shown in the tables are interpolated proportionately to the percentages that are shown. If more than two insurers are involved, exceeding the total of the two columns in the table is prima facie evidence of violation of the competitive standard in (a) of this subsection. For the purpose of this subsection (4)(b)(i), the insurer with the largest share of the market is insurer A, as set forth in (a) of this subsection.
     (ii) There is a significant trend toward increased concentration when the aggregate market share of any grouping of the largest insurers in the market, from the two largest to the eight largest, has increased by seven percent or more of the market over a period of time extending from any base year five to ten years prior to the acquisition up to the time of the acquisition. Any acquisition or merger covered under subsection (2) of this section involving two or more insurers competing in the same market is prima facie evidence of violation of the competitive standard in subsection (4) of this section if:
     (A) There is a significant trend toward increased concentration in the market;
     (B) One of the insurers involved is one of the insurers in a grouping of large insurers showing the requisite increase in the market share; and
     (C) Another involved insurer's market is two percent or more.
     (iii) For the purposes of this subsection (4)(b):
     (A) "Insurer" includes any company or group of companies under common management, ownership, or control;
     (B) "Market" means the relevant product and geographical markets. In determining the relevant product and geographical markets, the commissioner shall give due consideration to, among other things, the definitions or guidelines, if any, promulgated by the national association of insurance commissioners and to information, if any, submitted by parties to the acquisition. In the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business, such line being that used in the annual statement required to be filed by insurers doing business in this state, and the relevant geographical market is assumed to be this state;
     (C) The burden of showing prima facie evidence of violation of the competitive standard rests upon the commissioner.
     (iv) Even though an acquisition is not prima facie violative of the competitive standard under (b)(i) and (ii) of this subsection, the commissioner may establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition is prima facie violative of the competitive standard under (b)(i) and (ii) of this subsection, a party may establish the absence of the requisite anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under this subsection include, but are not limited to, the following: Market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry, and ease of entry and exit into the market.
     (c) An order may not be entered under subsection (5)(a) of this section if:
     (i) The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits which would arise from such economies exceed the public benefits which would arise from not lessening competition; or
     (ii) The acquisition will substantially increase the availability of insurance, and the public benefits of the increase exceed the public benefits which would arise from not lessening competition.
     (5)(a)(i) If an acquisition violates the standards of this section, the commissioner may enter an order:
     (A) Requiring an involved insurer to cease and desist from doing business in this state with respect to the line or lines of insurance involved in the violation; or
     (B) Denying the application of an acquired or acquiring insurer for a license to do business in this state.
     (ii) Such an order may not be entered unless:
     (A) There is a hearing;
     (B) Notice of the hearing is issued prior to the end of the waiting period and not less than fifteen days prior to the hearing; and
     (C) The hearing is concluded and the order is issued no later than sixty days after the date of the filing of the preacquisition notification with the commissioner.
     (iii)     Every order shall be accompanied by a written decision of the commissioner setting forth findings of fact and conclusions of law.
     (iv) An order pursuant to this subsection (5)(a) does not apply if the acquisition is not consummated.
     (b) Any person who violates a cease and desist order of the commissioner under (a) of this subsection and while the order is in effect may, after notice and hearing and upon order of the commissioner, be subject at the discretion of the commissioner to one or more of the following:
     (i) A monetary fine of not more than ten thousand dollars for every day of violation; or
     (ii) Suspension or revocation of the person's license.
     (c) Any insurer or other person who fails to make any filing required by this section, and who also fails to demonstrate a good faith effort to comply with any filing requirement, is subject to a fine of not more than fifty thousand dollars.
     (6) Sections 10 (2) and (3) and 12 of this act do not apply to acquisitions covered under this section.

NEW SECTION.  Sec. 5   REGISTRATION OF INSURERS. (1) Every insurer that is authorized to do business in this state and is a member of an insurance holding company system shall register with the commissioner, except a foreign insurer subject to registration requirements and standards adopted by statute or rule in the jurisdiction of its domicile that are substantially similar to those contained in:
     (a) This section;
     (b) Section 6 (1)(a), (2), and (4) of this act; and
     (c) Either section 6(1)(b) of this act or a provision such as the following: Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions within fifteen days after the end of the month in which it learns of each change or addition.
     Any insurer which is subject to registration under this section shall register within fifteen days after it becomes subject to registration, and annually thereafter by April 30th of each year for the previous calendar year, unless the commissioner for good cause shown extends the time for registration, and then within the extended time. The commissioner may require any insurer authorized to do business in the state which is a member of an insurance holding company system, and which is not subject to registration under this section, to furnish a copy of the registration statement, the summary specified in subsection (3) of this section or other information filed by the insurance company with the insurance regulatory authority of its domiciliary jurisdiction.
     (2) Every insurer subject to registration shall file the registration statement with the commissioner on a form and in a format prescribed by the national association of insurance commissioners, which shall contain the following current information:
     (a) The capital structure, general financial condition, ownership and management of the insurer, and any person controlling the insurer;
     (b) The identity and relationship of every member of the insurance holding company system;
     (c) The following agreements in force, and transactions currently outstanding or which have occurred during the last calendar year between the insurer and its affiliates:
     (i) Loans, other investments, or purchases, sales, or exchanges of securities of the affiliates by the insurer or of the insurer by its affiliates;
     (ii) Purchases, sales, or exchange of assets;
     (iii) Transactions not in the ordinary course of business;
     (iv) Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the insurer's assets to liability, other than insurance contracts entered into in the ordinary course of the insurer's business;
     (v) All management agreements, service contracts, and all cost-sharing arrangements;
     (vi) Reinsurance agreements;
     (vii) Dividends and other distributions to shareholders; and
     (viii) Consolidated tax allocation agreements;
     (d) Any pledge of the insurer's stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system;
     (e) If requested by the commissioner, the insurer must include financial statements of or within an insurance holding company system, including all affiliates. Financial statements may include but are not limited to annual audited financial statements filed with the United States securities and exchange commission pursuant to the securities act of 1933, as amended, or the securities exchange act of 1934, as amended. An insurer required to file financial statements pursuant to this subsection (2)(e) may satisfy the request by providing the commissioner with the most recently filed parent corporation financial statements that have been filed with the United States securities and exchange commission;
     (f) Other matters concerning transactions between registered insurers and any affiliates as may be included from time to time in any registration forms adopted or approved by the commissioner;
     (g) Statements that the insurer's board of directors oversees corporate governance and internal controls and that the insurer's officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures; and
     (h) Any other information required by the commissioner by rule.
     (3) All registration statements shall contain a summary outlining all items in the current registration statement representing changes from the prior registration statement.
     (4) No information need be disclosed on the registration statement filed pursuant to subsection (2) of this section if the information is not material for the purposes of this section. Unless the commissioner by rule or order provides otherwise; sales, purchases, exchanges, loans, or extensions of credit, investments, or guarantees involving one-half of one percent or less of an insurer's admitted assets as of December 31st next preceding is not material for purposes of this section.
     (5) Subject to section 6(2) of this act, each registered insurer shall report to the commissioner all dividends and other distributions to shareholders within five business days following the declaration and fifteen business days before payment, and shall provide the commissioner such other information as may be required by rule.
     (6) Any person within an insurance holding company system subject to registration is required to provide complete and accurate information to an insurer, where the information is reasonably necessary to enable the insurer to comply with the provisions of this chapter.
     (7) The commissioner shall terminate the registration of any insurer which demonstrates that it no longer is a member of an insurance holding company system.
     (8) The commissioner may require or allow two or more affiliated insurers subject to registration to file a consolidated registration statement.
     (9) The commissioner may allow an insurer which is authorized to do business in this state and which is part of an insurance holding company system to register on behalf of any affiliated insurer which is required to register under subsection (1) of this section and to file all information and material required to be filed under this section.
     (10) This section does not apply to any insurer, information, or transaction if and to the extent that the commissioner by rule or order exempts the same from this section.
     (11) Any person may file with the commissioner a disclaimer of affiliation with any authorized insurer or a disclaimer may be filed by the insurer or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between the person and the insurer as well as the basis for disclaiming the affiliation. A disclaimer of affiliation is deemed to have been granted unless the commissioner, within thirty days following receipt of a complete disclaimer, notifies the filing party the disclaimer is disallowed. In the event of disallowance, the disclaiming party may request an administrative hearing, which shall be granted. The disclaiming party is relieved of its duty to register under this section if approval of the disclaimer has been granted by the commissioner, or if the disclaimer is deemed to have been approved.
     (12) The ultimate controlling person of every insurer subject to registration shall also file an annual enterprise risk report. The report must, to the best of the ultimate controlling person's knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The report must be filed with the lead state commissioner of the insurance holding company system as determined by the procedures within the financial analysis handbook adopted by the national association of insurance commissioners.
     (13) The failure to file a registration statement or any summary of the registration statement or enterprise risk filing required by this section within the time specified for filing is a violation of this section.

NEW SECTION.  Sec. 6   STANDARDS AND MANAGEMENT OF AN INSURER WITHIN AN INSURANCE HOLDING COMPANY SYSTEM. (1)(a) Transactions within an insurance holding company system to which an insurer subject to registration is a party are subject to the following standards:
     (i) The terms must be fair and reasonable;
     (ii) Agreements for cost-sharing services and management must include such provisions as required by rule issued by the commissioner;
     (iii) Charges or fees for services performed must be reasonable;
     (iv) Expenses incurred and payment received must be allocated to the insurer in conformity with customary insurance accounting practices consistently applied;
     (v) The books, accounts, and records of each party to all such transactions must be so maintained as to clearly and accurately disclose the nature and details of the transactions including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties; and
     (vi) The insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates must be reasonable in relation to the insurer's outstanding liabilities and adequate to meet its financial needs.
     (b) The following transactions involving a domestic insurer and any person in its insurance holding company system, including amendments or modifications of affiliate agreements previously filed pursuant to this section, which are subject to any materiality standards contained in this subsection, may not be entered into unless the insurer has notified the commissioner in writing of its intention to enter into the transaction at least thirty days prior thereto, or such shorter period as the commissioner may permit, and the commissioner has not disapproved it within that period. The notice for amendments or modifications must include the reasons for the change and the financial impact on the domestic insurer. Informal notice must be reported, within thirty days after a termination of a previously filed agreement, to the commissioner for determination of the type of filing required, if any.
     (i) Sales, purchases, exchanges, loans, extensions of credit, or investments, provided the transactions are equal to or exceed:
     (A) With respect to nonlife insurers and not including health care service contractors and health maintenance organizations, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders as of December 31st next preceding;
     (B) With respect to life insurers, three percent of the insurer's admitted assets as of December 31st next preceding;
     (C) With respect to health care service contractors and health maintenance organizations, the lesser of five percent of the insurer's admitted assets or twenty-five percent of its capital and surplus or net worth as of December 31st next preceding;
     (ii) Loans or extensions of credit to any person who is not an affiliate, where the insurer makes loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in, any affiliate of the insurer making the loans or extensions of credit provided the transactions are equal to or exceed:
     (A) With respect to nonlife insurers and not including health care service contractors and health maintenance organizations, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders as of December 31st next preceding;
     (B) With respect to life insurers, three percent of the insurer's admitted assets as of December 31st next preceding;
     (C) With respect to health care service contractors and health maintenance organizations, the lesser of five percent of the insurer's admitted assets or twenty-five percent of its capital and surplus or net worth as of December 31st next preceding;
     (iii) Reinsurance agreements or modifications thereto, including:
     (A) All reinsurance pooling agreements;
     (B) Agreements in which the reinsurance premium or a change in the insurer's liabilities, or the projected reinsurance premium or a change in the insurer's liabilities in any of the next three years, equals or exceeds five percent of the insurer's surplus as regards policyholders, as of December 31st next preceding, including those agreements which may require as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one or more affiliates of the insurer;
     (iv) All management agreements, service contracts, tax allocation agreements, guarantees, and all cost-sharing arrangements;
     (v) Guarantees when made by a domestic insurer. However, a guarantee which is quantifiable as to amount is not subject to the notice requirements of this subsection (1)(b)(v) unless it exceeds the lesser of one-half of one percent of the insurer's admitted assets or ten percent of surplus as regards policyholders as of December 31st next preceding. Further, all guarantees which are not quantifiable as to amount are subject to the notice requirements of this subsection (1)(b)(v);
     (vi) Direct or indirect acquisitions or investments in a person that controls the insurer or in an affiliate of the insurer in an amount which, together with its present holdings in such investments, exceeds two and one-half percent of the insurer's surplus to policyholders. Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to chapter 48.13 RCW, or in nonsubsidiary insurance affiliates that are subject to this act, are exempt from this requirement; and
     (vii) Any material transactions, specified by rule, which the commissioner determines may adversely affect the interests of the insurer's policyholders.
This subsection does not authorize or permit any transactions which, in the case of an insurer not a member of the same insurance holding company system, would be otherwise contrary to law.
     (c) A domestic insurer may not enter into transactions which are part of a plan or series of like transactions with persons within the insurance holding company system if the purpose of those separate transactions is to avoid the statutory threshold amount and thus avoid the review that would occur otherwise. If the commissioner determines that separate transactions were entered into over any twelve-month period for that purpose, the commissioner may exercise his or her authority under section 11 of this act.
     (d) The commissioner, in reviewing transactions pursuant to (b) of this subsection, shall consider whether the transactions comply with the standards set forth in (a) of this subsection and whether they may adversely affect the interests of policyholders.
     (e) The commissioner must be notified within thirty days of any investment of the domestic insurer in any one corporation if the total investment in the corporation by the insurance holding company system exceeds ten percent of the corporation's voting securities.
     (2)(a) A domestic insurer shall not pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until thirty days after the commissioner has received notice of the declaration thereof and has not within that period disapproved the payment, or until the commissioner has approved the payment within the thirty-day period.
     (b) For purposes of this section, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property, whose fair market value together with that of other dividends or distributions made within the preceding twelve months exceeds the lesser of:
     (i) Ten percent of the insurer's surplus as regards policyholders or net worth as of December 31st next preceding; or
     (ii) The net gain from operations of the insurer, if the insurer is a life insurer, or the net income, if the insurer is not a life insurer, not including realized capital gains, for the twelve-month period ending December 31st next preceding, but shall not include pro rata distributions of any class of the insurer's own securities.
     (c) In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous two calendar years that has not already been paid out as dividends. This carry-forward is computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediate preceding calendar years.
     (d) An insurer may declare an extraordinary dividend or distribution which is conditional upon the commissioner's approval, and the declaration shall confer no rights upon shareholders until (i) the commissioner has approved the payment of the dividend or distribution or (ii) the commissioner has not disapproved payment within the thirty-day period referred to in (a) of this subsection.
     (3)(a) Notwithstanding the control of a domestic insurer by any person, the officers and directors of the insurer are not thereby relieved of any obligation or liability to which they would otherwise be subject by law, and the insurer must be managed so as to assure its separate operating identity consistent with this title.
     (b) This section does not preclude a domestic insurer from having or sharing a common management or cooperative or joint use of personnel, property, or services with one or more other persons under arrangements meeting the standards of subsection (1)(a) of this section.
     (c) At least one-third of a domestic insurer's directors and at least one-third of the members of each committee of the insurer's board of directors must be persons who are not: (i) Officers or employees of the insurer or of any entity that controls, is controlled by, or is under common control with the insurer; or (ii) beneficial owners of a controlling interest in the voting securities of the insurer or of an entity that controls, is controlled by, or is under common control with the insurer. A quorum for transacting business at a meeting of the insurer's board of directors or any committee of the board of directors must include at least one person with the qualifications described in (a) of this subsection.
     (d) The board of directors of a domestic insurer shall establish one or more committees comprised solely of directors who are not officers or employees of the insurer or of any entity controlling, controlled by, or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or any such entity. The committee or committees have responsibility for nominating candidates for director for election by shareholders or policyholders, evaluating the performance of officers deemed to be principal officers of the insurer, and recommending to the board of directors the selection and compensation of the principal officers.
     (e) The provisions of (c) and (d) of this subsection do not apply to a domestic insurer if the person controlling the insurer has a board of directors and committees thereof that meet the requirements of (c) and (d) of this subsection with respect to such controlling entity.
     (f) An insurer may make application to the commissioner for a waiver from the requirements of this subsection, if the insurer's annual direct written and assumed premium, excluding premiums reinsured with the federal crop insurance corporation and federal flood program, is less than three hundred million dollars. An insurer may also make application to the commissioner for a waiver from the requirements of this subsection based upon unique circumstances. The commissioner may consider various factors including, but not limited to, the type of business entity, volume of business written, availability of qualified board members, or the ownership or organizational structure of the entity.
     (4) For purposes of this chapter, in determining whether an insurer's surplus as regards policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to meet its financial needs, the following factors, among others, must be considered:
     (a) The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria;
     (b) The extent to which the insurer's business is diversified among several lines of insurance;
     (c) The number and size of risks insured in each line of business;
     (d) The extent of the geographical dispersion of the insurer's insured risks;
     (e) The nature and extent of the insurer's reinsurance program;
     (f) The quality, diversification, and liquidity of the insurer's investment portfolio;
     (g) The recent past and projected future trend in the size of the insurer's investment portfolio;
     (h) The surplus as regards policyholders maintained by other comparable insurers;
     (i) The adequacy of the insurer's reserves; and
     (j) The quality and liquidity of investments in affiliates. The commissioner may treat any such investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever in the judgment of the commissioner the investment so warrants.

NEW SECTION.  Sec. 7   EXAMINATION. (1) Subject to the limitation contained in this section and in addition to the powers which the commissioner has under chapter 48.03 RCW relating to the examination of insurers, the commissioner has the power to examine any insurer registered under section 5 of this act and its affiliates to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by the ultimate controlling party, or by any entity or combination of entities within the insurance holding company system, or by the insurance holding company system on a consolidated basis.
     (2)(a) The commissioner may order any insurer registered under section 5 of this act to produce such records, books, or other information papers in the possession of the insurer or its affiliates as are reasonably necessary to determine compliance with this title.
     (b) To determine compliance with this title, the commissioner may order any insurer registered under section 5 of this act to produce information not in the possession of the insurer if the insurer can obtain access to such information pursuant to contractual relationships, statutory obligations, or other method. In the event the insurer cannot obtain the information requested by the commissioner, the insurer shall provide the commissioner a detailed explanation of the reason that the insurer cannot obtain the information and the identity of the holder of information. Whenever it appears to the commissioner that the detailed explanation is without merit, the commissioner may require, after notice and hearing, the insurer to pay a fine of ten thousand dollars for each day's delay, or may suspend or revoke the insurer's license. The commissioner shall pay the fine collected under this section to the state treasurer for deposit into the general fund.
     (3) The commissioner may retain at the registered insurer's expense such attorneys, actuaries, accountants, and other experts not otherwise a part of the commissioner's staff as shall be reasonably necessary to assist in the conduct of the examination under subsection (1) of this section. Any persons so retained are under the direction and control of the commissioner and act in a purely advisory capacity.
     (4) Notwithstanding the provisions under RCW 48.03.060, each registered insurer producing for examination records, books, and papers pursuant to subsection (1) of this section is liable for and must pay the expense of examination.
     (5) In the event the insurer fails to comply with an order, the commissioner has the power to examine the affiliates to obtain the information. The commissioner also has the power to issue subpoenas, to administer oaths, and to examine under oath any person for purposes of determining compliance with this section. Upon the failure or refusal of any person to obey a subpoena, the commissioner may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order is punishable as contempt of court. Every person is required to attend as a witness at the place specified in the subpoena, when subpoenaed, anywhere within the state. He or she is entitled to the same fees and mileage, if claimed, as a witness as provided in RCW 48.03.070.

NEW SECTION.  Sec. 8   SUPERVISORY COLLEGES. (1) With respect to any insurer registered under section 5 of this act, and in accordance with subsection (3) of this section, the commissioner has the power to participate in a supervisory college for any domestic insurer that is part of an insurance holding company system with international operations in order to determine compliance by the insurer with this title. The powers of the commissioner with respect to supervisory colleges include, but are not limited to, the following:
     (a) Initiating the establishment of a supervisory college;
     (b) Clarifying the membership and participation of other supervisors in the supervisory college;
     (c) Clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor;
     (d) Coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and
     (e) Establishing a crisis management plan.
     (2) Each registered insurer subject to this section is liable for and must pay the reasonable expenses of the commissioner's participation in a supervisory college in accordance with subsection (3) of this section, including reasonable travel expenses. For purposes of this section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates, and the commissioner may establish a regular assessment to the insurer for the payment of these expenses.
     (3) In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management, and governance processes, and as part of the examination of individual insurers in accordance with section 7 of this act, the commissioner may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including other state, federal, and international regulatory agencies. The commissioner may enter into agreements in accordance with section 9(3) of this act providing the basis for cooperation between the commissioner and the other regulatory agencies, and the activities of the supervisory college. This section does not delegate to the supervisory college the authority of the commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.

NEW SECTION.  Sec. 9   CONFIDENTIAL TREATMENT. (1) Documents, materials, or other information in the possession or control of the commissioner that are obtained by or disclosed to the commissioner or any other person in the course of an examination or investigation made pursuant to section 7 of this act and all information reported pursuant to sections 5(12) and 8 of this act are confidential by law and privileged, are not subject to chapter 42.56 RCW, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties. The commissioner shall not otherwise make the documents, materials, or other information public without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer and its affiliates who would be affected thereby, notice and opportunity to be heard, determines that the interest of policyholders, shareholders, or the public is served by the publication thereof, in which event the commissioner may publish all or any part in such manner as may be deemed appropriate.
     (2) Neither the commissioner nor any person who received documents, materials, or other information while acting under the authority of the commissioner or with whom such documents, materials, or other information are shared pursuant to this chapter is permitted or may be required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (1) of this section.
     (3) In order to assist in the performance of the commissioner's duties, the commissioner:
     (a) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection (1) of this section, with other state, federal, and international regulatory agencies, with the national association of insurance commissioners and its affiliates and subsidiaries, with the international association of insurance supervisors and the bank for international settlements and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities, including members of any supervisory college described in section 8 of this act, provided the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material, or other information, and has verified in writing the legal authority to maintain confidentiality;
     (b) Notwithstanding (a) of this subsection, may only share confidential and privileged documents, material, or information reported pursuant to section 5(12) of this act with commissioners of states having statutes or rules substantially similar to subsection (1) of this section and who have agreed in writing not to disclose such information;
     (c) May receive documents, materials, or information, including otherwise confidential and privileged documents, materials or information from the national association of insurance commissioners and its affiliates and subsidiaries, the international association of insurance supervisors and the bank for international settlements and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and
     (d) Shall enter into written agreements with the national association of insurance commissioners governing sharing and use of information provided pursuant to this chapter consistent with this subsection that shall:
     (i) Specify procedures and protocols regarding the confidentiality and security of information shared with the national association of insurance commissioners and its affiliates and subsidiaries pursuant to this chapter, including procedures and protocols for sharing by the national association of insurance commissioners with other state, federal, or international regulators including the international association of insurance supervisors and the bank for international settlements and its affiliates and subsidiaries;
     (ii) Specify that ownership of information shared with the national association of insurance commissioners and its affiliates and subsidiaries pursuant to this chapter remains with the commissioner and the national association of insurance commissioners' use of the information is subject to the direction of the commissioner;
     (iii) Require prompt notice to be given to an insurer whose confidential information in the possession of the national association of insurance commissioners pursuant to this chapter is subject to a request or subpoena to the national association of insurance commissioners for disclosure or production; and
     (iv) Require the national association of insurance commissioners and its affiliates and subsidiaries to consent to intervention by an insurer in any judicial or administrative action in which the national association of insurance commissioners and its affiliates and subsidiaries may be required to disclose confidential information about the insurer shared with the national association of insurance commissioners and its affiliates and subsidiaries pursuant to this chapter.
     (4) The sharing of information by the commissioner pursuant to this chapter does not constitute a delegation of regulatory authority or rule making, and the commissioner is solely responsible for the administration, execution, and enforcement of the provisions of this chapter.
     (5) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (3) of this section.
     (6) Documents, materials, or other information in the possession or control of the national association of insurance commissioners pursuant to this chapter are confidential by law and privileged, are not subject to chapter 42.56 RCW, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action.

NEW SECTION.  Sec. 10   INJUNCTIONS, PROHIBITIONS AGAINST VOTING SECURITIES, SEQUESTRATION OF VOTING SECURITIES. (1) Whenever it appears to the commissioner that any insurer or any director, officer, employee, or agent thereof has committed or is about to commit a violation of this chapter or of any rule or order issued by the commissioner, the commissioner may apply to the superior court for Thurston county for an order enjoining the insurer or director, officer, employee, or agent thereof from violating or continuing to violate this chapter or any rule or order, and for such other equitable relief as the nature of the case and the interest of the insurer's policyholders, creditors, and shareholders or the public may require.
     (2) No security which is the subject of any agreement or arrangement regarding acquisition, or which is acquired or to be acquired, in contravention of the provisions of this chapter or of any rule or order issued by the commissioner may be voted at any shareholder's meeting, or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though the securities were not issued and outstanding; but no action taken at any such meeting may be invalidated by the voting of the securities, unless the action would materially affect control of the insurer or unless the courts of this state have so ordered. If an insurer or the commissioner has reason to believe that any security of the insurer has been or is about to be acquired in contravention of the provisions of this chapter or of any rule or order issued by the commissioner; the insurer or the commissioner may apply to the superior court for Thurston county to enjoin any offer, request, invitation, agreement, or acquisition made in contravention of section 3 of this act or any rule or order issued by the commissioner to enjoin the voting of any security so acquired, to void any vote of the security already cast at any meeting of shareholders and for such other equitable relief as the nature of the case and the interest of the insurer's policyholders, creditors, and shareholders or the public may require.
     (3) In any case where a person has acquired or is proposing to acquire any voting securities in violation of this chapter or any rule or order issued by the commissioner, the commissioner may refer the matter to the prosecuting attorney of Thurston county or the county in which the insurer has its principal place of business may, on such notice as the court deems appropriate, upon the application of the insurer or the commissioner, seize or sequester any voting securities of the insurer owned directly or indirectly by the person, and issue such order as may be appropriate to effectuate the provisions of this chapter.
     (4) For the purposes of this chapter the situs of the ownership of the securities of domestic insurers is this state.

NEW SECTION.  Sec. 11   SANCTIONS. (1) The commissioner shall require any insurer failing, without just cause, to file any registration statement as required in this chapter, after notice and hearing, to pay a fine of not more than ten thousand dollars for each day's delay, to be recovered by the commissioner and the fine collected shall be transferred to the treasurer for deposit into the state general fund. The maximum fine under this section is one million dollars. The commissioner may reduce the fine if the insurer demonstrates to the commissioner that the imposition of the fine would constitute a financial hardship to the insurer.
     (2) Every director or officer of an insurance holding company system who knowingly violates, participates in, or assents to, or who knowingly shall permit any of the officers or agents of the insurer to engage in transactions or make investments which have not been properly reported or submitted pursuant to sections 5(1) and 6(1)(b) or (2) of this act, or which violate this chapter, shall pay, in their individual capacity, a fine of not more than ten thousand dollars per violation, after notice and hearing before the commissioner. In determining the amount of the fine, the commissioner shall take into account the appropriateness of the forfeiture with respect to the gravity of the violation, the history of previous violations, and such other matters as justice may require.
     (3) Whenever it appears to the commissioner that any insurer subject to this chapter or any director, officer, employee, or agent thereof has engaged in any transaction or entered into a contract which is subject to section 6 of this act and which would not have been approved had the approval been requested, the commissioner may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing the commissioner may also order the insurer to void any contracts and restore the status quo if the action is in the best interest of the policyholders, creditors, or the public.
     (4) Whenever it appears to the commissioner that any insurer or any director, officer, employee, or agent thereof has committed a willful violation of this chapter, the commissioner may refer the matter to the prosecuting attorney of Thurston county or the county in which the principal office of the insurer is located. Any insurer who willfully violates this chapter may be fined not more than one million dollars. Any individual who willfully violates this chapter may be fined in his or her individual capacity not more than ten thousand dollars, or be imprisoned for not more than three years or both.
     (5) Any officer, director, or employee of an insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the intent to deceive the commissioner in the performance of his or her duties under this chapter, upon conviction shall be imprisoned for not more than three years or fined not more than ten thousand dollars or both. Any fines imposed shall be paid by the officer, director, or employee in his or her individual capacity.
     (6) Whenever it appears to the commissioner that any person has committed a violation of section 3 of this act and which prevents the full understanding of the enterprise risk to the insurer by affiliates or by the insurance holding company system, the violation may serve as an independent basis for disapproving dividends or distributions and for placing the insurer under an order of supervision in accordance with RCW 48.31.400.

NEW SECTION.  Sec. 12   RECEIVERSHIP. Whenever it appears to the commissioner that any person has committed a violation of this chapter which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders, or the public, then the commissioner may proceed as provided in chapters 48.31 and 48.99 RCW to take possessions of the property of the domestic insurer and to conduct its business.

NEW SECTION.  Sec. 13   RECOVERY. (1) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under the order has a right to recover on behalf of the insurer, (a) from any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions (other than distributions of shares of the same class of stock) paid by the insurer on its capital stock, or (b) any payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the insurer or its subsidiary to a director, officer, or employee, where the distribution or payment pursuant to (a) or (b) of this subsection is made at any time during the one year preceding the petition for liquidation, conservation or rehabilitation, as the case may be, subject to the limitations of subsections (2), (3), and (4) of this section.
     (2) A distribution is not recoverable if the parent or affiliate shows that when paid the distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.
     (3) Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time the distributions were paid is liable up to the amount of distributions or payments under subsection (1) of this section which the person received. Any person who otherwise controlled the insurer at the time the distributions were declared is liable up to the amount of distributions that would have been received if they had been paid immediately. If two or more persons are liable with respect to the same distributions, they are jointly and severally liable.
     (4) The maximum amount recoverable under this section is the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.
     (5) To the extent that any person liable under subsection (3) of this section is insolvent or otherwise fails to pay claims due from it, its parent corporation or holding company or person who otherwise controlled it at the time the distribution was paid is jointly and severally liable for any resulting deficiency in the amount recovered from the parent corporation or holding company or person who otherwise controlled it.

NEW SECTION.  Sec. 14   REVOCATION, SUSPENSION, OR NONRENEWAL OF INSURER'S LICENSE. Whenever it appears to the commissioner that any person has committed a violation of this chapter which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the commissioner may, after giving notice and an opportunity to be heard, suspend, revoke, or refuse to renew the insurer's license or authority to do business in this state for such period as the commissioner finds is required for the protection of policyholders or the public. Any such determination must be accompanied by specific findings of fact and conclusions of law.

NEW SECTION.  Sec. 15   JUDICIAL REVIEW, MANDAMUS. (1) Any person aggrieved by any act, determination, rule, order, or any other action of the commissioner pursuant to this chapter must proceed in accordance with the administrative procedure act, chapter 34.05 RCW.
     (2) The filing of an appeal pursuant to this section does not stay the application of any rule, order, or other action of the commissioner to the appealing party except as provided in the administrative procedure act, chapter 34.05 RCW.
     (3) Any person aggrieved by any failure of the commissioner to act or make a determination required by this chapter may petition the commissioner under the procedure described in the administrative procedure act, chapter 34.05 RCW.

NEW SECTION.  Sec. 16   RULES. The commissioner may, in accordance with the administrative procedure act, chapter 34.05 RCW, adopt rules interpreting and implementing the provisions of this chapter.

Sec. 17   RCW 42.56.400 and 2013 c 277 s 5 and 2013 c 65 s 5 are each reenacted and amended to read as follows:
     The following information relating to insurance and financial institutions is exempt from disclosure under this chapter:
     (1) Records maintained by the board of industrial insurance appeals that are related to appeals of crime victims' compensation claims filed with the board under RCW 7.68.110;
     (2) Information obtained and exempted or withheld from public inspection by the health care authority under RCW 41.05.026, whether retained by the authority, transferred to another state purchased health care program by the authority, or transferred by the authority to a technical review committee created to facilitate the development, acquisition, or implementation of state purchased health care under chapter 41.05 RCW;
     (3) The names and individual identification data of either all owners or all insureds, or both, received by the insurance commissioner under chapter 48.102 RCW;
     (4) Information provided under RCW 48.30A.045 through 48.30A.060;
     (5) Information provided under RCW 48.05.510 through 48.05.535, 48.43.200 through 48.43.225, 48.44.530 through 48.44.555, and 48.46.600 through 48.46.625;
     (6) Examination reports and information obtained by the department of financial institutions from banks under RCW 30.04.075, from savings banks under RCW 32.04.220, from savings and loan associations under RCW 33.04.110, from credit unions under RCW 31.12.565, from check cashers and sellers under RCW 31.45.030(3), and from securities brokers and investment advisers under RCW 21.20.100, all of which is confidential and privileged information;
     (7) Information provided to the insurance commissioner under RCW 48.110.040(3);
     (8) Documents, materials, or information obtained by the insurance commissioner under RCW 48.02.065, all of which are confidential and privileged;
     (9) ((Confidential proprietary and trade secret information provided to the commissioner under RCW 48.31C.020 through 48.31C.050 and 48.31C.070)) Documents, materials, or information obtained by the insurance commissioner under sections 5(12) and 8 of this act, all of which are confidential and privileged;
     (10) Data filed under RCW 48.140.020, 48.140.030, 48.140.050, and 7.70.140 that, alone or in combination with any other data, may reveal the identity of a claimant, health care provider, health care facility, insuring entity, or self-insurer involved in a particular claim or a collection of claims. For the purposes of this subsection:
     (a) "Claimant" has the same meaning as in RCW 48.140.010(2).
     (b) "Health care facility" has the same meaning as in RCW 48.140.010(6).
     (c) "Health care provider" has the same meaning as in RCW 48.140.010(7).
     (d) "Insuring entity" has the same meaning as in RCW 48.140.010(8).
     (e) "Self-insurer" has the same meaning as in RCW 48.140.010(11);
     (11) Documents, materials, or information obtained by the insurance commissioner under RCW 48.135.060;
     (12) Documents, materials, or information obtained by the insurance commissioner under RCW 48.37.060;
     (13) Confidential and privileged documents obtained or produced by the insurance commissioner and identified in RCW 48.37.080;
     (14) Documents, materials, or information obtained by the insurance commissioner under RCW 48.37.140;
     (15) Documents, materials, or information obtained by the insurance commissioner under RCW 48.17.595;
     (16) Documents, materials, or information obtained by the insurance commissioner under RCW 48.102.051(1) and 48.102.140 (3) and (7)(a)(ii);
     (17) Documents, materials, or information obtained by the insurance commissioner in the commissioner's capacity as receiver under RCW 48.31.025 and 48.99.017, which are records under the jurisdiction and control of the receivership court. The commissioner is not required to search for, log, produce, or otherwise comply with the public records act for any records that the commissioner obtains under chapters 48.31 and 48.99 RCW in the commissioner's capacity as a receiver, except as directed by the receivership court;
     (18) Documents, materials, or information obtained by the insurance commissioner under RCW 48.13.151;
     (19) Data, information, and documents provided by a carrier pursuant to section 1, chapter 172, Laws of 2010;
     (20) Information in a filing of usage-based insurance about the usage-based component of the rate pursuant to RCW 48.19.040(5)(b);
     (21) Data, information, and documents, other than those described in RCW 48.02.210(2), that are submitted to the office of the insurance commissioner by an entity providing health care coverage pursuant to RCW 28A.400.275 and 48.02.210; ((and))
     (22) Data, information, and documents obtained by the insurance commissioner under RCW 48.29.017; and
     (23) Information not subject to public inspection or public disclosure under RCW 48.43.730(5).

Sec. 18   RCW 42.56.400 and 2013 c 65 s 5 are each amended to read as follows:
     The following information relating to insurance and financial institutions is exempt from disclosure under this chapter:
     (1) Records maintained by the board of industrial insurance appeals that are related to appeals of crime victims' compensation claims filed with the board under RCW 7.68.110;
     (2) Information obtained and exempted or withheld from public inspection by the health care authority under RCW 41.05.026, whether retained by the authority, transferred to another state purchased health care program by the authority, or transferred by the authority to a technical review committee created to facilitate the development, acquisition, or implementation of state purchased health care under chapter 41.05 RCW;
     (3) The names and individual identification data of either all owners or all insureds, or both, received by the insurance commissioner under chapter 48.102 RCW;
     (4) Information provided under RCW 48.30A.045 through 48.30A.060;
     (5) Information provided under RCW 48.05.510 through 48.05.535, 48.43.200 through 48.43.225, 48.44.530 through 48.44.555, and 48.46.600 through 48.46.625;
     (6) Examination reports and information obtained by the department of financial institutions from banks under RCW 30.04.075, from savings banks under RCW 32.04.220, from savings and loan associations under RCW 33.04.110, from credit unions under RCW 31.12.565, from check cashers and sellers under RCW 31.45.030(3), and from securities brokers and investment advisers under RCW 21.20.100, all of which is confidential and privileged information;
     (7) Information provided to the insurance commissioner under RCW 48.110.040(3);
     (8) Documents, materials, or information obtained by the insurance commissioner under RCW 48.02.065, all of which are confidential and privileged;
     (9) ((Confidential proprietary and trade secret information provided to the commissioner under RCW 48.31C.020 through 48.31C.050 and 48.31C.070)) Documents, materials, or information obtained by the insurance commissioner under sections 5(12) and 8 of this act, all of which are confidential and privileged;
     (10) Data filed under RCW 48.140.020, 48.140.030, 48.140.050, and 7.70.140 that, alone or in combination with any other data, may reveal the identity of a claimant, health care provider, health care facility, insuring entity, or self-insurer involved in a particular claim or a collection of claims. For the purposes of this subsection:
     (a) "Claimant" has the same meaning as in RCW 48.140.010(2).
     (b) "Health care facility" has the same meaning as in RCW 48.140.010(6).
     (c) "Health care provider" has the same meaning as in RCW 48.140.010(7).
     (d) "Insuring entity" has the same meaning as in RCW 48.140.010(8).
     (e) "Self-insurer" has the same meaning as in RCW 48.140.010(11);
     (11) Documents, materials, or information obtained by the insurance commissioner under RCW 48.135.060;
     (12) Documents, materials, or information obtained by the insurance commissioner under RCW 48.37.060;
     (13) Confidential and privileged documents obtained or produced by the insurance commissioner and identified in RCW 48.37.080;
     (14) Documents, materials, or information obtained by the insurance commissioner under RCW 48.37.140;
     (15) Documents, materials, or information obtained by the insurance commissioner under RCW 48.17.595;
     (16) Documents, materials, or information obtained by the insurance commissioner under RCW 48.102.051(1) and 48.102.140 (3) and (7)(a)(ii);
     (17) Documents, materials, or information obtained by the insurance commissioner in the commissioner's capacity as receiver under RCW 48.31.025 and 48.99.017, which are records under the jurisdiction and control of the receivership court. The commissioner is not required to search for, log, produce, or otherwise comply with the public records act for any records that the commissioner obtains under chapters 48.31 and 48.99 RCW in the commissioner's capacity as a receiver, except as directed by the receivership court;
     (18) Documents, materials, or information obtained by the insurance commissioner under RCW 48.13.151;
     (19) Data, information, and documents provided by a carrier pursuant to section 1, chapter 172, Laws of 2010;
     (20) Information in a filing of usage-based insurance about the usage-based component of the rate pursuant to RCW 48.19.040(5)(b);
     (21) Data, information, and documents, other than those described in RCW 48.02.210(2), that are submitted to the office of the insurance commissioner by an entity providing health care coverage pursuant to RCW 28A.400.275 and 48.02.210; and
     (22) Data, information, and documents obtained by the insurance commissioner under RCW 48.29.017.

Sec. 19   RCW 48.02.065 and 2007 c 126 s 1 are each amended to read as follows:
     (1) Documents, materials, or other information as described in either subsection (5) or (6), or both, of this section are confidential by law and privileged, are not subject to public disclosure under chapter 42.56 RCW, and are not subject to subpoena directed to the commissioner or any person who received documents, materials, or other information while acting under the authority of the commissioner. The commissioner is authorized to use such documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties. The confidentiality and privilege created by this section and RCW 42.56.400(((9))) (8) applies only to the commissioner, any person acting under the authority of the commissioner, the national association of insurance commissioners and its affiliates and subsidiaries, regulatory and law enforcement officials of other states and nations, the federal government, and international authorities.
     (2) Neither the commissioner nor any person who received documents, materials, or other information while acting under the authority of the commissioner is permitted or required to testify in any private civil action concerning any confidential and privileged documents, materials, or information subject to subsection (1) of this section.
     (3) The commissioner:
     (a) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection (1) of this section, with (i) the national association of insurance commissioners and its affiliates and subsidiaries, and (ii) regulatory and law enforcement officials of other states and nations, the federal government, and international authorities, if the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information;
     (b) May receive documents, materials, or information, including otherwise either confidential or privileged, or both, documents, materials, or information, from (i) the national association of insurance commissioners and its affiliates and subsidiaries, and (ii) regulatory and law enforcement officials of other states and nations, the federal government, and international authorities and shall maintain as confidential and privileged any document, material, or information received that is either confidential or privileged, or both, under the laws of the jurisdiction that is the source of the document, material, or information; and
     (c) May enter into agreements governing the sharing and use of information consistent with this subsection.
     (4) No waiver of an existing privilege or claim of confidentiality in the documents, materials, or information may occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (3) of this section.
     (5) Documents, materials, or information, which is either confidential or privileged, or both, which has been provided to the commissioner by (a) the national association of insurance commissioners and its affiliates and subsidiaries, (b) regulatory or law enforcement officials of other states and nations, the federal government, or international authorities, or (c) agencies of this state, is confidential and privileged only if the documents, materials, or information is protected from disclosure by the applicable laws of the jurisdiction that is the source of the document, material, or information.
     (6) Working papers, documents, materials, or information produced by, obtained by, or disclosed to the commissioner or any other person in the course of a financial or market conduct examination, or in the course of financial analysis or market conduct desk audit, are not required to be disclosed by the commissioner unless cited by the commissioner in connection with an agency action as defined in RCW 34.05.010(3). The commissioner shall notify a party that produced the documents, materials, or information five business days before disclosure in connection with an agency action. The notified party may seek injunctive relief in any Washington state superior court to prevent disclosure of any documents, materials, or information it believes is confidential or privileged. In civil actions between private parties or in criminal actions, disclosure to the commissioner under this section does not create any privilege or claim of confidentiality or waive any existing privilege or claim of confidentiality.
     (7)(a) After receipt of a public disclosure request, the commissioner shall disclose the documents, materials, or information under subsection (6) of this section that relate to a financial or market conduct examination undertaken as a result of a proposed change of control of a nonprofit or mutual health insurer governed in whole or in part by chapter 48.31B ((or 48.31C)) RCW.
     (b) The commissioner is not required to disclose the documents, materials, or information in (a) of this subsection if:
     (i) The documents, materials, or information are otherwise privileged or exempted from public disclosure; or
     (ii) The commissioner finds that the public interest in disclosure of the documents, materials, or information is outweighed by the public interest in nondisclosure in that particular instance.
     (8) Any person may petition a Washington state superior court to allow inspection of information exempt from public disclosure under subsection (6) of this section when the information is connected to allegations of negligence or malfeasance by the commissioner related to a financial or market conduct examination. The court shall conduct an in-camera review after notifying the commissioner and every party that produced the information. The court may order the commissioner to allow the petitioner to have access to the information provided the petitioner maintains the confidentiality of the information. The petitioner must not disclose the information to any other person, except upon further order of the court. After conducting a regular hearing, the court may order that the information can be disclosed publicly if the court finds that there is a public interest in the disclosure of the information and the exemption of the information from public disclosure is clearly unnecessary to protect any individual's right of privacy or any vital governmental function.

Sec. 20   RCW 48.13.061 and 2011 c 188 s 7 are each amended to read as follows:
     The following classes of investments may be counted for the purposes specified in RCW 48.13.101, whether they are made directly or as a participant in a partnership, joint venture, or limited liability company. Investments in partnerships, joint ventures, and limited liability companies are authorized investments only pursuant to subsection (12) of this section:
     (1) Cash in the direct possession of the insurer or on deposit with a financial institution regulated by any federal or state agency of the United States;
     (2) Bonds, debt-like preferred stock, and other evidences of indebtedness of governmental units in the United States or Canada, or the instrumentalities of the governmental units, or private business entities domiciled in the United States or Canada, including asset-backed securities and securities valuation office listed mutual funds;
     (3) Loans secured by first mortgages, first trust deeds, or other first security interests in real property located in the United States or Canada or secured by insurance against default issued by a government insurance corporation of the United States or Canada or by an insurer authorized to do business in this state;
     (4) Common stock or equity-like preferred stock or equity interests in any United States or Canadian business entity, or shares of mutual funds registered with the securities and exchange commission of the United States under the investment company act of 1940, other than securities valuation office listed mutual funds, and, subsidiaries, as defined in ((RCW 48.31B.005 or 48.31C.010)) section 1(9) of this act, engaged exclusively in the following businesses:
     (a) Acting as an insurance producer, surplus line broker, 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 subsection (4)(g) 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, health care service contractors, or health maintenance organizations to the extent permitted by this chapter;
     (ii) Businesses specified in (a) through (k) of this subsection inclusive; or
     (iii) Any combination of such insurers and businesses;
     (5) Real property necessary for the convenient transaction of the insurer's business;
     (6) Real property, together with the fixtures, furniture, furnishings, and equipment pertaining thereto in the United States or Canada, which produces or after suitable improvement can reasonably be expected to produce income;
     (7) Loans, securities, or other investments of the types described in subsections (1) through (6) of this section in national association of insurance commissioners securities valuation office 1 debt rated countries other than the United States and Canada;
     (8) Bonds or other evidences of indebtedness of international development organizations of which the United States is a member;
     (9) Loans upon the security of the insurer's own policies in amounts that are adequately secured by the policies and that in no case exceed the surrender values of the policies;
     (10) Tangible personal property under contract of sale or lease under which contractual payments may reasonably be expected to return the principal of and provide earnings on the investment within its anticipated useful life;
     (11) Other investments the commissioner authorizes by rule; and
     (12) Investments not otherwise permitted by this section, and not specifically prohibited by statute, to the extent of not more than five percent of the first five hundred million dollars of the insurer's admitted assets plus ten percent of the insurer's admitted assets exceeding five hundred million dollars.

Sec. 21   RCW 48.18.545 and 2002 c 360 s 1 are each amended to read as follows:
     (1) For the purposes of this section:
     (a) "Adverse action" has the same meaning as defined in the fair credit reporting act, 15 U.S.C. Sec. 1681 et seq. Adverse actions include, but are not limited to:
     (i) Cancellation, denial, or nonrenewal of personal insurance coverage;
     (ii) Charging a higher insurance premium for personal insurance than would have been offered if the credit history or insurance score had been more favorable, whether the charge is by:
     (A) Application of a rating rule;
     (B) Assignment to a rating tier that does not have the lowest available rates; or
     (C) Placement with an affiliate company that does not offer the lowest rates available to the consumer within the affiliate group of insurance companies; or
     (iii) Any reduction, adverse, or unfavorable change in the terms of coverage or amount of any personal insurance due to a consumer's credit history or insurance score. A reduction, adverse, or unfavorable change in the terms of coverage occurs when:
     (A) Coverage provided to the consumer is not as broad in scope as coverage requested by the consumer but available to other insureds of the insurer or any affiliate; or
     (B) The consumer is not eligible for benefits such as dividends that are available through affiliate insurers.
     (b) "Affiliate" has the same meaning as defined in ((RCW 48.31B.005(1))) section 1 of this act.
     (c) "Consumer" means an individual policyholder or applicant for insurance.
     (d) "Consumer report" has the same meaning as defined in the fair credit reporting act, 15 U.S.C. Sec. 1681 et seq.
     (e) "Credit history" means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's creditworthiness, credit standing, or credit capacity that is used or expected to be used, or collected in whole or in part, for the purpose of serving as a factor in determining personal insurance premiums or eligibility for coverage.
     (f) "Insurance score" means a number or rating that is derived from an algorithm, computer application, model, or other process that is based in whole or in part on credit history.
     (g) "Personal insurance" means:
     (i) Private passenger automobile coverage;
     (ii) Homeowner's coverage, including mobile homeowners, manufactured homeowners, condominium owners, and renter's coverage;
     (iii) Dwelling property coverage;
     (iv) Earthquake coverage for a residence or personal property;
     (v) Personal liability and theft coverage;
     (vi) Personal inland marine coverage; and
     (vii) Mechanical breakdown coverage for personal auto or home appliances.
     (h) "Tier" means a category within a single insurer into which insureds with substantially like insuring, risk or exposure factors, and expense elements are placed for purposes of determining rate or premium.
     (2) An insurer that takes adverse action against a consumer based in whole or in part on credit history or insurance score shall provide written notice to the applicant or named insured. The notice must state the significant factors of the credit history or insurance score that resulted in the adverse action. The insurer shall also inform the consumer that the consumer is entitled to a free copy of their consumer report under the fair credit reporting act.
     (3) An insurer shall not cancel or nonrenew personal insurance based in whole or in part on a consumer's credit history or insurance score. An offer of placement with an affiliate insurer does not constitute cancellation or nonrenewal under this section.
     (4) An insurer may use credit history to deny personal insurance only in combination with other substantive underwriting factors. For the purposes of this subsection:
     (a) "Deny" means an insurer refuses to offer insurance coverage to a consumer;
     (b) An offer of placement with an affiliate insurer does not constitute denial of coverage; and
     (c) An insurer may reject an application when coverage is not bound or cancel an insurance contract within the first sixty days after the effective date of the contract.
     (5) Insurers shall not deny personal insurance coverage based on:
     (a) The absence of credit history or the inability to determine the consumer's credit history, if the insurer has received accurate and complete information from the consumer;
     (b) The number of credit inquiries;
     (c) Credit history or an insurance score based on collection accounts identified with a medical industry code;
     (d) The initial purchase or finance of a vehicle or house that adds a new loan to the consumer's existing credit history, if evident from the consumer report; however, an insurer may consider the bill payment history of any loan, the total number of loans, or both;
     (e) The consumer's use of a particular type of credit card, charge card, or debit card; or
     (f) The consumer's total available line of credit; however, an insurer may consider the total amount of outstanding debt in relation to the total available line of credit.
     (6)(a) If disputed credit history is used to determine eligibility for coverage and a consumer is placed with an affiliate that charges higher premiums or offers less favorable policy terms:
     (i) The insurer shall reissue or rerate the policy retroactive to the effective date of the current policy term; and
     (ii) The policy, as reissued or rerated, shall provide premiums and policy terms the consumer would have been eligible for if accurate credit history had been used to determine eligibility.
     (b) This subsection only applies if the consumer resolves the dispute under the process set forth in the fair credit reporting act and notifies the insurer in writing that the dispute has been resolved.
     (7) The commissioner may adopt rules to implement this section.
     (8) This section applies to all personal insurance policies issued or renewed after January 1, 2003.

Sec. 22   RCW 48.18.547 and 2006 c 8 s 211 are each amended to read as follows:
     (1) For the purposes of this section:
     (a) "Affiliate" has the same meaning as in ((RCW 48.31B.005(1))) section 1 of this act.
     (b) "Claim" means a demand for monetary damages by a claimant.
     (c) "Claimant" means a person, including a decedent's estate, who is seeking or has sought monetary damages for injury or death caused by medical malpractice.
     (d) "Tier" has the same meaning as in RCW 48.18.545(1)(h).
     (e) "Underwrite" or "underwriting" means the process of selecting, rejecting, or pricing a risk, and includes each of these activities:
     (i) Evaluation, selection, and classification of risk, including placing a risk with an affiliate insurer that has higher rates and/or rating plan components that will result in higher premiums;
     (ii) Application of classification plans, rates, rating rules, and rating tiers to an insured risk; and
     (iii) Determining eligibility for:
     (A) Insurance coverage provisions;
     (B) Higher policy limits; or
     (C) Premium payment plans.
     (2) During each underwriting process, an insurer may consider the following factors only in combination with other substantive underwriting factors:
     (a) An insured has inquired about the nature or scope of coverage under a medical malpractice insurance policy;
     (b) An insured has notified their insurer about an incident that may be covered under the terms of their medical malpractice insurance policy, and that incident does not result in a claim; or
     (c) A claim made against an insured was closed by the insurer without payment. An insurer may consider the effect of multiple claims if they have a significant effect on the insured's risk profile.
     (3) If any underwriting activity related to the insured's risk profile results in higher premiums as described under subsection (1)(e)(i) and (ii) of this section or reduced coverage as described under subsection (1)(e)(iii) of this section, the insurer must provide written notice to the insured, in clear and simple language, that describes the significant risk factors which led to the underwriting action. The commissioner must adopt rules that define the components of a risk profile that require notice under this subsection.

Sec. 23   RCW 48.19.035 and 2004 c 86 s 1 are each amended to read as follows:
     (1) For the purposes of this section:
     (a) "Affiliate" has the same meaning as defined in ((RCW 48.31B.005(1))) section 1 of this act.
     (b) "Consumer" means an individual policyholder or applicant for insurance.
     (c) "Credit history" means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's creditworthiness, credit standing, or credit capacity that is used or expected to be used, or collected in whole or in part, for the purpose of serving as a factor in determining personal insurance premiums or eligibility for coverage.
     (d) "Insurance score" means a number or rating that is derived from an algorithm, computer application, model, or other process that is based in whole or in part on credit history.
     (e) "Personal insurance" means:
     (i) Private passenger automobile coverage;
     (ii) Homeowner's coverage, including mobile homeowners, manufactured homeowners, condominium owners, and renter's coverage;
     (iii) Dwelling property coverage;
     (iv) Earthquake coverage for a residence or personal property;
     (v) Personal liability and theft coverage;
     (vi) Personal inland marine coverage; and
     (vii) Mechanical breakdown coverage for personal auto or home appliances.
     (2)(a) Credit history shall not be used to determine personal insurance rates, premiums, or eligibility for coverage unless the insurance scoring models are filed with the commissioner. Insurance scoring models include all attributes and factors used in the calculation of an insurance score. RCW 48.19.040(5) does not apply to any information filed under this subsection, and the information shall be withheld from public inspection and kept confidential by the commissioner. All information filed under this subsection shall be considered trade secrets under RCW 48.02.120(3). Information filed under this subsection may be made public by the commissioner for the sole purpose of enforcement actions taken by the commissioner.
     (b) Each insurer that uses credit history or an insurance score to determine personal insurance rates, premiums, or eligibility for coverage must file all rates and rating plans for that line of coverage with the commissioner. This requirement applies equally to a single insurer and two or more affiliated insurers. RCW 48.19.040(5) applies to information filed under this subsection except that any eligibility rules or guidelines shall be withheld from public inspection under RCW 48.02.120(3) from the date that the information is filed and after it becomes effective.
     (3) Insurers shall not use the following types of credit history to calculate a personal insurance score or determine personal insurance premiums or rates:
     (a) The absence of credit history or the inability to determine the consumer's credit history, unless the insurer has filed actuarial data segmented by demographic factors in a manner prescribed by the commissioner that demonstrates compliance with RCW 48.19.020;
     (b) The number of credit inquiries;
     (c) Credit history or an insurance score based on collection accounts identified with a medical industry code;
     (d) The initial purchase or finance of a vehicle or house that adds a new loan to the consumer's existing credit history, if evident from the consumer report; however, an insurer may consider the bill payment history of any loan, the total number of loans, or both;
     (e) The consumer's use of a particular type of credit card, charge card, or debit card; or
     (f) The consumer's total available line of credit; however, an insurer may consider the total amount of outstanding debt in relation to the total available line of credit.
     (4) If a consumer is charged higher premiums due to disputed credit history, the insurer shall rerate the policy retroactive to the effective date of the current policy term. As rerated, the consumer shall be charged the same premiums they would have been charged if accurate credit history was used to calculate an insurance score. This subsection applies only if the consumer resolves the dispute under the process set forth in the fair credit reporting act and notifies the insurer in writing that the dispute has been resolved.
     (5) The commissioner may adopt rules to implement this section.
     (6) This section applies to all personal insurance policies issued or renewed on or after June 30, 2003.

Sec. 24   RCW 48.38.010 and 2012 c 211 s 5 are each amended to read as follows:
     The commissioner may grant a certificate of exemption to any insurer or educational, religious, charitable, or scientific institution conducting a charitable gift annuity business:
     (1) Which is organized and operated exclusively as, or for the purpose of aiding, an educational, religious, charitable, or scientific institution which is organized as a nonprofit organization without profit to any person, firm, partnership, association, corporation, or other entity;
     (2) Which possesses a current tax exempt status under the laws of the United States;
     (3) Which serves such purpose by issuing charitable gift annuity contracts only for the benefit of such educational, religious, charitable, or scientific institution;
     (4) Which appoints the insurance commissioner as its true and lawful attorney upon whom may be served lawful process in any action, suit, or proceeding in any court, which appointment is irrevocable, binds the insurer or institution or any successor in interest, remains in effect as long as there is in force in this state any contract made or issued by the insurer or institution, or any obligation arising therefrom, and must be processed in accordance with RCW 48.05.200;
     (5) Which is fully and legally organized and qualified to do business and has been actively doing business under the laws of the state of its domicile for a period of at least three years prior to its application for a certificate of exemption;
     (6) Which has and maintains minimum unrestricted net assets of five hundred thousand dollars. "Unrestricted net assets" means the excess of total assets over total liabilities that are neither permanently restricted nor temporarily restricted by donor-imposed stipulations;
     (7) Which files with the insurance commissioner its application for a certificate of exemption showing:
     (a) Its name, location, and organization date;
     (b) The kinds of charitable annuities it proposes to offer;
     (c) A statement of the financial condition, management, and affairs of the organization and any affiliate thereof, as that term is defined in ((RCW 48.31B.005)) section 1 of this act, on a form satisfactory to, or furnished by the insurance commissioner;
     (d) Other documents, stipulations, or information as the insurance commissioner may reasonably require to evidence compliance with the provisions of this chapter;
     (8) Which subjects itself and any affiliate thereof, as that term is defined in ((RCW 48.31B.005)) section 1 of this act, to periodic examinations conducted under chapter 48.03 RCW as may be deemed necessary by the insurance commissioner;
     (9) Which files with the insurance commissioner for the commissioner's advance approval a copy of any policy or contract form to be offered or issued to residents of this state. The grounds for disapproval of the policy or contract form are set forth in RCW 48.18.110; and
     (10) Which:
     (a) Files with the insurance commissioner annually, within sixty days of the end of its fiscal year a report of its current financial condition, management, and affairs, on a form and in a manner prescribed by the commissioner, as well as such other financial material as may be requested, including the annual statement or other such financial materials as may be requested relating to any affiliate, as that term is defined in ((RCW 48.31B.005)) section 1 of this act;
     (b) Attaches to the report of its current financial condition the statement of a qualified actuary setting forth the actuary's opinion relating to annuity reserves and other actuarial items for the fiscal year covered by the report. "Qualified actuary" as used in this subsection means a member in good standing of the American academy of actuaries or a person who has otherwise demonstrated actuarial competence to the satisfaction of the insurance regulatory official of the domiciliary state; and
     (c) On or before March 1st of each year, pays an annual filing fee of twenty-five dollars plus five dollars for each charitable gift annuity contract written for residents of this state during its fiscal year ending on or before December 31st of the previous calendar year.

Sec. 25   RCW 48.97.005 and 2008 c 217 s 75 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) "Control" or "controlled by" has the meaning ((ascribed in RCW 48.31B.005(2))) as in section 1 of this act.
     (3) "Controlled insurer" means a licensed insurer that is controlled, directly or indirectly, by a broker.
     (4) "Controlling producer" means a producer who, directly or indirectly, controls an insurer.
     (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)
)) All residual market pools and joint underwriting associations; and
     (((c) Captive insurers.)) (b) For the purposes of this chapter, captive insurers other than risk retention groups as defined in 15 U.S.C. Sec. 3901 et seq. and 42 U.S.C. Sec. 9671 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. 26   RCW 48.125.140 and 2004 c 260 s 16 are each amended to read as follows:
     (1) The commissioner may make an examination of the operations of any self-funded multiple employer welfare arrangement as often as he or she deems necessary in order to carry out the purposes of this chapter.
     (2) Every self-funded multiple employer welfare arrangement shall submit its books and records relating to its operation for financial condition and market conduct examinations and in every way facilitate them. For the purpose of examinations, the commissioner may issue subpoenas, administer oaths, and examine the officers and principals of the (([self-funded])) self-funded multiple employer welfare arrangement.
     (3) The commissioner may elect to accept and rely on audit reports made by an independent certified public accountant for the self-funded multiple employer welfare arrangement in the course of that part of the commissioner's examination covering the same general subject matter as the audit. The commissioner may incorporate the audit report in his or her report of the examination.
     (4)(a) The commissioner may also examine any affiliate of the self-funded multiple employer welfare arrangement. An examination of an affiliate is limited to the activities or operations of the affiliate that may impact the financial position of the arrangement.
     (b) For the purposes of this section, "affiliate" has the same meaning as defined in ((RCW 48.31C.010)) section 1 of this act.
     (5) Whenever an examination is made, all of the provisions of chapter 48.03 RCW not inconsistent with this chapter shall be applicable. In lieu of making an examination himself or herself, the commissioner may, in the case of a foreign self-funded multiple employer welfare arrangement, accept an examination report of the applicant by the regulatory official in its state of domicile. In the case of a domestic self-funded multiple employer welfare arrangement, the commissioner may accept an examination report of the applicant by the regulatory official of a state that has already licensed the arrangement.

Sec. 27   RCW 48.155.010 and 2010 c 27 s 4 are each amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
     (2) "Commissioner" means the Washington state insurance commissioner.
     (3)(a) "Control" or "controlled by" or "under common control with" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person.
     (b) Control exists when any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person. A presumption of control may be rebutted by a showing made in the manner provided by ((RCW 48.31B.005(2) and 48.31B.025(11))) section 1(2) and 5(11) of this act that control does not exist in fact. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.
     (4)(a) "Discount plan" means a business arrangement or contract in which a person or organization, in exchange for fees, dues, charges, or other consideration, provides or purports to provide discounts to its members on charges by providers for health care services.
     (b) "Discount plan" does not include:
     (i) A plan that does not charge a membership or other fee to use the plan's discount card;
     (ii) A patient access program as defined in this chapter;
     (iii) A medicare prescription drug plan as defined in this chapter; or
     (iv) A discount plan offered by a health carrier authorized under chapter 48.20, 48.21, 48.44, or 48.46 RCW.
     (5)(a) "Discount plan organization" means a person that, in exchange for fees, dues, charges, or other consideration, provides or purports to provide access to discounts to its members on charges by providers for health care services. "Discount plan organization" also means a person or organization that contracts with providers, provider networks, or other discount plan organizations to offer discounts on health care services to its members. This term also includes all persons that determine the charge to or other consideration paid by members.
     (b) "Discount plan organization" does not mean:
     (i) Pharmacy benefit managers;
     (ii) Health care provider networks, when the network's only involvement in discount plans is contracting with the plan to provide discounts to the plan's members;
     (iii) Marketers who market the discount plans of discount plan organizations which are licensed under this chapter as long as all written communications of the marketer in connection with a discount plan clearly identify the licensed discount plan organization as the responsible entity; or
     (iv) Health carriers, if the discount on health care services is offered by a health carrier authorized under chapter 48.20, 48.21, 48.44, or 48.46 RCW.
     (6) "Health care facility" or "facility" has the same meaning as in RCW 48.43.005(((15))) (22).
     (7) "Health care provider" or "provider" has the same meaning as in RCW 48.43.005(((16))) (23).
     (8) "Health care provider network," "provider network," or "network" means any network of health care providers, including any person or entity that negotiates directly or indirectly with a discount plan organization on behalf of more than one provider to provide health care services to members.
     (9) "Health care services" has the same meaning as in RCW 48.43.005(((17))) (24).
     (10) "Health carrier" or "carrier" has the same meaning as in RCW 48.43.005(((18))) (25).
     (11) "Marketer" means a person or entity that markets, promotes, sells, or distributes a discount plan, including a contracted marketing organization and a private label entity that places its name on and markets or distributes a discount plan pursuant to a marketing agreement with a discount plan organization.
     (12) "Medicare prescription drug plan" means a plan that provides a medicare part D prescription drug benefit in accordance with the requirements of the federal medicare prescription drug improvement and modernization act of 2003.
     (13) "Member" means any individual who pays fees, dues, charges, or other consideration for the right to receive the benefits of a discount plan, but does not include any individual who enrolls in a patient access program.
     (14) "Patient access program" means a voluntary program sponsored by a pharmaceutical manufacturer, or a consortium of pharmaceutical manufacturers, that provides free or discounted health care products for no additional consideration directly to low-income or uninsured individuals either through a discount card or direct shipment.
     (15) "Person" means an individual, a corporation, a governmental entity, a partnership, an association, a joint venture, a joint stock company, a trust, an unincorporated organization, any similar entity, or any combination of the persons listed in this subsection.
     (16)(a) "Pharmacy benefit manager" means a person that performs pharmacy benefit management for a covered entity.
     (b) For purposes of this subsection, a "covered entity" means an insurer, a health care service contractor, a health maintenance organization, or a multiple employer welfare arrangement licensed, certified, or registered under the provisions of this title. "Covered entity" also means a health program administered by the state as a provider of health coverage, a single employer that provides health coverage to its employees, or a labor union that provides health coverage to its members as part of a collective bargaining agreement.

Sec. 28   RCW 48.155.015 and 2009 c 175 s 4 are each amended to read as follows:
     (1) This chapter applies to all discount plans and all discount plan organizations doing business in or from this state or that affect subjects located wholly or in part or to be performed within this state, and all persons having to do with this business.
     (2) A discount plan organization that is a health carrier, as defined under RCW 48.43.005, with a license, certificate of authority, or registration ((under RCW 48.05.030 or chapter 48.31C RCW)):
     (a) Is not required to obtain a license under RCW 48.155.020, except that any of its affiliates that operate as a discount plan organization in this state must obtain a license under RCW 48.155.020 and comply with all other provisions of this chapter;
     (b) Is required to comply with RCW 48.155.060 through 48.155.090 and report, in the form and manner as the commissioner may require, any of the information described in RCW 48.155.110(2) (b), (c), or (d) that is not otherwise already reported; and
     (c) Is subject to RCW 48.155.130 and 48.155.140.

NEW SECTION.  Sec. 29   The following acts or parts of acts are each repealed:
     (1) RCW 48.31B.005 (Definitions) and 1993 c 462 s 2;
     (2) RCW 48.31B.010 (Insurer ceases to control subsidiary -- Disposal of investment) and 1993 c 462 s 3;
     (3) RCW 48.31B.015 (Control of insurer -- Acquisition, merger, or exchange -- Preacquisition notification -- Jurisdiction of courts) and 1993 c 462 s 4;
     (4) RCW 48.31B.020 (Acquisition of insurer -- Change in control--Definitions -- Exemptions -- Competition -- Preacquisition notification--Violations -- Penalties) and 1993 c 462 s 5;
     (5) RCW 48.31B.025 (Registration with commissioner -- Information required -- Rule making -- Disclaimer of affiliation -- Failure to file) and 2000 c 214 s 1 & 1993 c 462 s 6;
     (6) RCW 48.31B.030 (Insurer subject to registration -- Standards for transactions within a holding company system -- Extraordinary dividends or distributions -- Insurer's surplus) and 1993 c 462 s 7;
     (7) RCW 48.31B.035 (Examination of insurers -- Commissioner may order production of information -- Failure to comply -- Costs of examination) and 1993 c 462 s 8;
     (8) RCW 48.31B.040 (Rule making) and 1993 c 462 s 9;
     (9) RCW 48.31B.045 (Violations of chapter -- Commissioner may seek superior court order) and 1993 c 462 s 10;
     (10) RCW 48.31B.050 (Violations of chapter -- Penalties -- Civil forfeitures -- Orders -- Referral to prosecuting attorney -- Imprisonment) and 1993 c 462 s 11;
     (11) RCW 48.31B.055 (Violations of chapter -- Impairment of financial condition -- Commissioner may take possession) and 1993 c 462 s 12;
     (12) RCW 48.31B.060 (Order for liquidation or rehabilitation--Recovery of distributions or payments -- Personal liability -- Maximum amount recoverable) and 1993 c 462 s 13;
     (13) RCW 48.31B.065 (Violations of chapter -- Contrary to interests of policyholders or the public -- Suspension, revocation, or nonrenewal of license) and 1993 c 462 s 14;
     (14) RCW 48.31B.070 (Person aggrieved by actions of commissioner) and 1993 c 462 s 15;
     (15) RCW 48.31B.900 (Short title) and 1993 c 462 s 1;
     (16) RCW 48.31B.901 (Severability -- 1993 c 462) and 1993 c 462 s 112;
     (17) RCW 48.31B.902 (Implementation -- 1993 c 462) and 1993 c 462 s 106;
     (18) RCW 48.31C.010 (Definitions) and 2001 c 179 s 1;
     (19) RCW 48.31C.020 (Acquisition of a foreign health carrier--Preacquisition notification -- Review) and 2001 c 179 s 2;
     (20) RCW 48.31C.030 (Acquisition of a domestic health carrier--Filing -- Review--Jurisdiction of courts) and 2001 c 179 s 3;
     (21) RCW 48.31C.040 (Registration with commissioner -- Information required -- Rule making -- Disclaimer of affiliation -- Failure to file) and 2001 c 179 s 4;
     (22) RCW 48.31C.050 (Health carrier subject to registration--Standards for transactions within a holding company system -- Notice to commissioner -- Review) and 2001 c 179 s 5;
     (23) RCW 48.31C.060 (Extraordinary dividends or distributions--Restrictions -- Definition of distribution) and 2001 c 179 s 6;
     (24) RCW 48.31C.070 (Examination of health carriers -- Commissioner may order production of information -- Failure to comply -- Costs) and 2001 c 179 s 7;
     (25) RCW 48.31C.080 (Violations of chapter -- Commissioner may seek superior court order) and 2001 c 179 s 8;
     (26) RCW 48.31C.090 (Violations of chapter -- Penalties -- Civil forfeitures -- Orders -- Referral to prosecuting attorney -- Imprisonment) and 2001 c 179 s 9;
     (27) RCW 48.31C.100 (Violations of chapter -- Impairment of financial condition) and 2001 c 179 s 10;
     (28) RCW 48.31C.110 (Order for liquidation or rehabilitation--Recovery of distributions or payments -- Liability -- Maximum amount recoverable) and 2001 c 179 s 11;
     (29) RCW 48.31C.120 (Violations of chapter -- Contrary to interests of subscribers or the public) and 2001 c 179 s 12;
     (30) RCW 48.31C.130 (Confidential proprietary and trade secret information -- Exempt from public disclosure -- Exceptions) and 2001 c 179 s 13;
     (31) RCW 48.31C.140 (Person aggrieved by actions of commissioner) and 2001 c 179 s 15;
     (32) RCW 48.31C.150 (Rule making) and 2001 c 179 s 16;
     (33) RCW 48.31C.160 (Dual holding company system membership) and 2001 c 179 s 17;
     (34) RCW 48.31C.900 (Severability -- 2001 c 179) and 2001 c 179 s 18; and
     (35) RCW 48.31C.901 (Effective date -- 2001 c 179) and 2001 c 179 s 19.

NEW SECTION.  Sec. 30   SEVERABILITY. 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. 31   SHORT TITLE. This chapter may be known and cited as the insurer holding company act.

NEW SECTION.  Sec. 32   Sections 1 through 16 and 31 of this act are each added to chapter 48.31B RCW.

NEW SECTION.  Sec. 33   PURPOSE AND SCOPE. (1) The purpose of this chapter is to provide the requirements for maintaining a risk management framework and completing an own risk and solvency assessment and provide guidance and instructions for filing an ORSA summary report with the insurance commissioner of this state.
     (2) The requirements of this chapter apply to all insurers domiciled in this state unless exempt pursuant to section 38 of this act.
     (3) The legislature finds and declares that the ORSA summary report contains confidential and sensitive information related to an insurer or insurance group's identification of risks material and relevant to the insurer or insurance group filing the report. This information includes proprietary and trade secret information that has the potential for harm and competitive disadvantage to the insurer or insurance group if the information is made public. It is the intent of this legislature that the ORSA summary report is a confidential document filed with the commissioner, that the ORSA summary report may be shared only as stated in this chapter and to assist the commissioner in the performance of his or her duties, and that in no event may the ORSA summary report be subject to public disclosure.

NEW SECTION.  Sec. 34   DEFINITIONS. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Insurance group" means, for the purposes of conducting an ORSA, those insurers and affiliates included within an insurance holding company system as defined in section 1 of this act.
     (2) "Insurer" includes an insurer authorized under chapter 48.05 RCW, a fraternal mutual insurer or society holding a license under RCW 48.36A.290, a health care service contractor registered under chapter 48.44 RCW, a health maintenance organization registered under chapter 48.46 RCW, and a self-funded multiple employer welfare arrangement under chapter 48.125 RCW, as well as all persons engaged as, or purporting to be engaged as insurers, fraternal benefit societies, health care service contractors, health maintenance organizations, or self-funded multiple employer welfare arrangements in this state, and to persons in process of organization to become insurers, fraternal benefit societies, health care service contractors, health maintenance organizations, or self-funded multiple employer welfare arrangements, except that it does not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.
     (3) "Own risk and solvency assessment" or "ORSA" means a confidential internal assessment, appropriate to the nature, scale, and complexity of an insurer or insurance group, conducted by that insurer or insurance group of the material and relevant risks associated with the insurer or insurance group's current business plan, and the sufficiency of capital resources to support those risks.
     (4) "ORSA guidance manual" means the own risk and solvency assessment guidance manual developed and adopted by the national association of insurance commissioners as of the effective date of this section. A change in the ORSA guidance manual is effective on January 1st following the calendar year in which the changes are adopted by rule of the insurance commissioner.
     (5) "ORSA summary report" means a confidential high-level ORSA summary of an insurer or insurance group.

NEW SECTION.  Sec. 35   RISK MANAGEMENT FRAMEWORK. An insurer shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing, and reporting on its material and relevant risks. This requirement is satisfied if the insurance group of which the insurer is a member maintains a risk management framework applicable to the operations of the insurer.

NEW SECTION.  Sec. 36   ORSA REQUIREMENT. Subject to section 38 of this act, an insurer, or the insurance group of which the insurer is a member, shall regularly conduct an ORSA consistent with a process comparable to the ORSA guidance manual. The ORSA must be conducted annually but also at any time when there are significant changes to the risk profile of the insurer or the insurance group of which the insurer is a member.

NEW SECTION.  Sec. 37   ORSA SUMMARY REPORT. (1) Upon the commissioner's request, and no more than once each year, an insurer shall submit to the commissioner an ORSA summary report or any combination of reports that together contain the information described in the ORSA guidance manual, applicable to the insurer or the insurance group of which it is a member. Notwithstanding any request from the commissioner, if the insurer is a member of an insurance group, the insurer shall submit the report or set of reports required by this subsection if the commissioner is the lead state commissioner of the insurance group as determined by the procedures within the financial analysis handbook adopted by the national association of insurance commissioners.
     (2) The report shall include a signature of the insurer or insurance group's chief risk officer or other executive having responsibility for the oversight of the insurer's enterprise risk management process attesting to the best of his or her belief and knowledge that the insurer applies the enterprise risk management process described in the ORSA summary report and that a copy of the report has been provided to the insurer's board of directors or the appropriate governing committee.
     (3) An insurer may comply with subsection (1) of this section by providing the most recent and substantially similar report or reports provided by the insurer or another member of an insurance group of which the insurer is a member to the commissioner of another state or to a supervisor or regulator of a foreign jurisdiction, if that report provides information that is comparable to the information described in the ORSA guidance manual. Any such report in a language other than English must be accompanied by a translation of that report into the English language.
     (4) Beginning in 2015, an insurer which is required to submit an ORSA summary report to the commissioner shall file its report annually by June 30th of each year for its current calendar year ORSA. If it is impractical to furnish the ORSA summary report at the time it is required to be filed, an insurer must file a written request for extension with the commissioner at least ten days prior to the due date of the filing. The request for extension shall state why the filing at the time is impractical and requesting an extension of time for filing the report to a specified date. An extension must be granted in writing.

NEW SECTION.  Sec. 38   EXEMPTIONS. (1) An insurer is exempt from the requirements of this chapter, if:
     (a) The insurer has annual direct written and unaffiliated assumed premium including international direct and assumed premium, but excluding premium reinsured with the federal crop insurance corporation and federal flood program, less than five hundred million dollars; and
     (b) The insurance group of which the insurer is a member has annual direct written and unaffiliated assumed premium including international direct and assumed premium, but excluding premium reinsured with the federal crop insurance corporation and federal flood program, less than one billion dollars.
     (2) If an insurer qualifies for exemption pursuant to subsection (1)(a) of this section, but the insurance group of which the insurer is a member does not qualify for exemption pursuant to subsection (1)(b) of this section, then the ORSA summary report that may be required pursuant to section 37 of this act must include every insurer within the insurance group. This requirement is satisfied by the submission of more than one ORSA summary report for any combination of insurers, provided any combination of reports includes every insurer within the insurance group.
     (3) If an insurer does not qualify for exemption pursuant to subsection (1)(a) of this section, but the insurance group of which the insurer is a member does qualify for exemption pursuant to subsection (1)(b) of this section, then the only ORSA summary report that may be required pursuant to section 37 of this act is the report applicable to that insurer.
     (4) If an insurer does not qualify for exemption pursuant to subsection (1)(a) of this section, the insurer may apply to the commissioner for a waiver from the requirements of this chapter based upon unique circumstances. In deciding whether to grant the insurer's request for waiver, the commissioner may consider the type and volume of business written, ownership and organizational structure, and any other factor the commissioner considers relevant to the insurer or insurance group of which the insurer is a member. If the insurer is a part of an insurance group with insurers domiciled in more than one state, the commissioner shall coordinate with the lead state commissioner and with the other domiciliary commissioners in considering whether to grant the insurer's request for a waiver.
     (5) Notwithstanding the exemptions stated in this section, the commissioner may require that an insurer maintain a risk management framework, conduct an ORSA, and file an ORSA summary report (a) based on unique circumstances including, but not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests; and (b) if the insurer has risk-based capital at the company action level event as set forth in RCW 48.05.440 or 48.43.310, meets one or more of the standards of an insurer deemed to be in hazardous financial condition as defined in WAC 284-16-310, or otherwise exhibits qualities of a troubled insurer as determined by the commissioner.
     (6) If an insurer that qualifies for exemption pursuant to subsection (1)(a) of this section subsequently no longer qualifies for that exemption due to changes in premium reflected in the insurer's most recent annual statement or in the most recent annual statements of the insurers within the insurance group of which the insurer is a member, the insurer has one year following the year the threshold is exceeded to comply with the requirement of this chapter.

NEW SECTION.  Sec. 39   CONTENTS OF ORSA SUMMARY REPORT. (1) The ORSA summary report shall be prepared consistent with the ORSA guidance manual, subject to the requirements of subsection (2) of this section. Documentation and supporting information must be maintained and made available upon examination or upon the request of the commissioner.
     (2) The review of the ORSA summary report, and any additional requests for information, must be made using similar procedures currently used in the analysis and examination of multistate or global insurers and insurance groups.

NEW SECTION.  Sec. 40   CONFIDENTIAL TREATMENT. (1) Documents, materials, or other information, including the ORSA summary report, in the possession or control of the commissioner that are obtained by, created by, or disclosed to the commissioner or any other person under this chapter, is recognized by this state as being proprietary and to contain trade secrets. All such documents, materials, or other information is confidential by law and privileged, is not subject to chapter 42.56 RCW, is not subject to subpoena, and is not subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties. The commissioner may not otherwise make the documents, materials, or other information public without the prior written consent of the insurer.
     (2) Neither the commissioner nor any person who received documents, materials, or other ORSA-related information, through examination or otherwise, while acting under the authority of the commissioner or with whom such documents, materials, or other information are shared pursuant to this chapter, is permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (1) of this section.
     (3) In order to assist in the performance of the commissioner's regulatory duties, the commissioner:
     (a) May share documents, materials, or other ORSA-related information, including the confidential and privileged documents, materials, or information subject to subsection (1) of this section, including proprietary and trade secret documents and materials with other state, federal, and international regulatory agencies, including members of any supervisory college under section 8(3) of this act, with the national association of insurance commissioners, with the international association of insurance supervisors and the bank for international settlements, and with any third-party consultants designated by the commissioner, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality;
     (b) May receive documents, materials, or ORSA-related information, including otherwise confidential and privileged documents, materials, or information, including proprietary and trade secret information or documents, from regulatory officials of other foreign or domestic jurisdictions, including members of any supervisory college under section 8(3) of this act, from the national association of insurance commissioners, the international association of insurance supervisors and the bank for international settlements, and must maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information;
     (c) Shall enter into written agreements with the national association of insurance commissioners or a third-party consultant governing sharing and use of information provided pursuant to this chapter, consistent with this subsection that specifies procedures and protocols regarding the confidentiality and security of information shared with the national association of insurance commissioners or third-party consultant pursuant to this chapter, including procedures and protocols for sharing by the national association of insurance commissioners with other state regulators from states in which the insurance group has domiciled insurers. The agreement must provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality;
     (d) Shall specify that ownership of information shared with the national association of insurance commissioners or third-party consultants pursuant to this chapter remains with the commissioner and the national association of insurance commissioners' or a third-party consultant's use of the information is subject to the direction of the commissioner;
     (e) Shall prohibit the national association of insurance commissioners or third-party consultant from storing the information shared pursuant to this chapter in a permanent database after the underlying analysis is completed;
     (f) Shall require prompt notice to be given to an insurer whose confidential information in the possession of the national association of insurance commissioners or a third-party consultant pursuant to this chapter is subject to a request or subpoena to the national association of insurance commissioners for disclosure or production;
     (g) Shall require the national association of insurance commissioners and its affiliates and subsidiaries to consent to intervention by an insurer in any judicial or administrative action in which the national association of insurance commissioners and its affiliates and subsidiaries may be required to disclose confidential information about the insurer shared with the national association of insurance commissioners and its affiliates and subsidiaries pursuant to this chapter; and
     (h) In the case of an agreement involving a third-party consultant, shall provide the insurer's written consent.
     (4) The sharing of information by the commissioner pursuant to this chapter shall not constitute a delegation of regulatory authority or rule making, and the commissioner is solely responsible for the administration, execution, and enforcement of the provisions of this chapter.
     (5) A waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall not occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in this chapter.
     (6) Documents, materials, or other information in the possession or control of the national association of insurance commissioners pursuant to this chapter are confidential by law and privileged, are not subject to chapter 42.56 RCW, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action.

NEW SECTION.  Sec. 41   SANCTIONS. The commissioner shall require any insurer failing, without just cause, to file the ORSA summary report as required in this chapter, after notice and hearing, to pay a fine of five hundred dollars for each day's delay, to be recovered by the commissioner and the fine collected shall be transferred to the treasurer for deposit into the state general fund. The maximum fine under this section is one hundred thousand dollars. The commissioner may reduce the fine if the insurer demonstrates to the commissioner that the imposition of the fine would constitute a financial hardship to the insurer.

Sec. 42   RCW 42.56.400 and 2013 c 277 s 5 and 2013 c 65 s 5 are each reenacted and amended to read as follows:
     The following information relating to insurance and financial institutions is exempt from disclosure under this chapter:
     (1) Records maintained by the board of industrial insurance appeals that are related to appeals of crime victims' compensation claims filed with the board under RCW 7.68.110;
     (2) Information obtained and exempted or withheld from public inspection by the health care authority under RCW 41.05.026, whether retained by the authority, transferred to another state purchased health care program by the authority, or transferred by the authority to a technical review committee created to facilitate the development, acquisition, or implementation of state purchased health care under chapter 41.05 RCW;
     (3) The names and individual identification data of either all owners or all insureds, or both, received by the insurance commissioner under chapter 48.102 RCW;
     (4) Information provided under RCW 48.30A.045 through 48.30A.060;
     (5) Information provided under RCW 48.05.510 through 48.05.535, 48.43.200 through 48.43.225, 48.44.530 through 48.44.555, and 48.46.600 through 48.46.625;
     (6) Examination reports and information obtained by the department of financial institutions from banks under RCW 30.04.075, from savings banks under RCW 32.04.220, from savings and loan associations under RCW 33.04.110, from credit unions under RCW 31.12.565, from check cashers and sellers under RCW 31.45.030(3), and from securities brokers and investment advisers under RCW 21.20.100, all of which is confidential and privileged information;
     (7) Information provided to the insurance commissioner under RCW 48.110.040(3);
     (8) Documents, materials, or information obtained by the insurance commissioner under RCW 48.02.065, all of which are confidential and privileged;
     (9) ((Confidential proprietary and trade secret information provided to the commissioner under RCW 48.31C.020 through 48.31C.050 and 48.31C.070)) Documents, materials, or information obtained by the insurance commissioner under sections 5(12) and 8 of this act, all of which are confidential and privileged;
     (10) Data filed under RCW 48.140.020, 48.140.030, 48.140.050, and 7.70.140 that, alone or in combination with any other data, may reveal the identity of a claimant, health care provider, health care facility, insuring entity, or self-insurer involved in a particular claim or a collection of claims. For the purposes of this subsection:
     (a) "Claimant" has the same meaning as in RCW 48.140.010(2).
     (b) "Health care facility" has the same meaning as in RCW 48.140.010(6).
     (c) "Health care provider" has the same meaning as in RCW 48.140.010(7).
     (d) "Insuring entity" has the same meaning as in RCW 48.140.010(8).
     (e) "Self-insurer" has the same meaning as in RCW 48.140.010(11);
     (11) Documents, materials, or information obtained by the insurance commissioner under RCW 48.135.060;
     (12) Documents, materials, or information obtained by the insurance commissioner under RCW 48.37.060;
     (13) Confidential and privileged documents obtained or produced by the insurance commissioner and identified in RCW 48.37.080;
     (14) Documents, materials, or information obtained by the insurance commissioner under RCW 48.37.140;
     (15) Documents, materials, or information obtained by the insurance commissioner under RCW 48.17.595;
     (16) Documents, materials, or information obtained by the insurance commissioner under RCW 48.102.051(1) and 48.102.140 (3) and (7)(a)(ii);
     (17) Documents, materials, or information obtained by the insurance commissioner in the commissioner's capacity as receiver under RCW 48.31.025 and 48.99.017, which are records under the jurisdiction and control of the receivership court. The commissioner is not required to search for, log, produce, or otherwise comply with the public records act for any records that the commissioner obtains under chapters 48.31 and 48.99 RCW in the commissioner's capacity as a receiver, except as directed by the receivership court;
     (18) Documents, materials, or information obtained by the insurance commissioner under RCW 48.13.151;
     (19) Data, information, and documents provided by a carrier pursuant to section 1, chapter 172, Laws of 2010;
     (20) Information in a filing of usage-based insurance about the usage-based component of the rate pursuant to RCW 48.19.040(5)(b);
     (21) Data, information, and documents, other than those described in RCW 48.02.210(2), that are submitted to the office of the insurance commissioner by an entity providing health care coverage pursuant to RCW 28A.400.275 and 48.02.210; ((and))
     (22) Data, information, and documents obtained by the insurance commissioner under RCW 48.29.017; ((and))
     (23) Information not subject to public inspection or public disclosure under RCW 48.43.730(5); and
     (24) Documents, materials, or information obtained by the insurance commissioner under chapter 48.-- RCW (sections 33 through 41 and 46 of this act)
.

Sec. 43   RCW 42.56.400 and 2013 c 65 s 5 are each amended to read as follows:
     The following information relating to insurance and financial institutions is exempt from disclosure under this chapter:
     (1) Records maintained by the board of industrial insurance appeals that are related to appeals of crime victims' compensation claims filed with the board under RCW 7.68.110;
     (2) Information obtained and exempted or withheld from public inspection by the health care authority under RCW 41.05.026, whether retained by the authority, transferred to another state purchased health care program by the authority, or transferred by the authority to a technical review committee created to facilitate the development, acquisition, or implementation of state purchased health care under chapter 41.05 RCW;
     (3) The names and individual identification data of either all owners or all insureds, or both, received by the insurance commissioner under chapter 48.102 RCW;
     (4) Information provided under RCW 48.30A.045 through 48.30A.060;
     (5) Information provided under RCW 48.05.510 through 48.05.535, 48.43.200 through 48.43.225, 48.44.530 through 48.44.555, and 48.46.600 through 48.46.625;
     (6) Examination reports and information obtained by the department of financial institutions from banks under RCW 30.04.075, from savings banks under RCW 32.04.220, from savings and loan associations under RCW 33.04.110, from credit unions under RCW 31.12.565, from check cashers and sellers under RCW 31.45.030(3), and from securities brokers and investment advisers under RCW 21.20.100, all of which is confidential and privileged information;
     (7) Information provided to the insurance commissioner under RCW 48.110.040(3);
     (8) Documents, materials, or information obtained by the insurance commissioner under RCW 48.02.065, all of which are confidential and privileged;
     (9) ((Confidential proprietary and trade secret information provided to the commissioner under RCW 48.31C.020 through 48.31C.050 and 48.31C.070)) Documents, materials, or information obtained by the insurance commissioner under sections 5(12) and 8 of this act, all of which are confidential and privileged;
     (10) Data filed under RCW 48.140.020, 48.140.030, 48.140.050, and 7.70.140 that, alone or in combination with any other data, may reveal the identity of a claimant, health care provider, health care facility, insuring entity, or self-insurer involved in a particular claim or a collection of claims. For the purposes of this subsection:
     (a) "Claimant" has the same meaning as in RCW 48.140.010(2).
     (b) "Health care facility" has the same meaning as in RCW 48.140.010(6).
     (c) "Health care provider" has the same meaning as in RCW 48.140.010(7).
     (d) "Insuring entity" has the same meaning as in RCW 48.140.010(8).
     (e) "Self-insurer" has the same meaning as in RCW 48.140.010(11);
     (11) Documents, materials, or information obtained by the insurance commissioner under RCW 48.135.060;
     (12) Documents, materials, or information obtained by the insurance commissioner under RCW 48.37.060;
     (13) Confidential and privileged documents obtained or produced by the insurance commissioner and identified in RCW 48.37.080;
     (14) Documents, materials, or information obtained by the insurance commissioner under RCW 48.37.140;
     (15) Documents, materials, or information obtained by the insurance commissioner under RCW 48.17.595;
     (16) Documents, materials, or information obtained by the insurance commissioner under RCW 48.102.051(1) and 48.102.140 (3) and (7)(a)(ii);
     (17) Documents, materials, or information obtained by the insurance commissioner in the commissioner's capacity as receiver under RCW 48.31.025 and 48.99.017, which are records under the jurisdiction and control of the receivership court. The commissioner is not required to search for, log, produce, or otherwise comply with the public records act for any records that the commissioner obtains under chapters 48.31 and 48.99 RCW in the commissioner's capacity as a receiver, except as directed by the receivership court;
     (18) Documents, materials, or information obtained by the insurance commissioner under RCW 48.13.151;
     (19) Data, information, and documents provided by a carrier pursuant to section 1, chapter 172, Laws of 2010;
     (20) Information in a filing of usage-based insurance about the usage-based component of the rate pursuant to RCW 48.19.040(5)(b);
     (21) Data, information, and documents, other than those described in RCW 48.02.210(2), that are submitted to the office of the insurance commissioner by an entity providing health care coverage pursuant to RCW 28A.400.275 and 48.02.210; ((and))
     (22) Data, information, and documents obtained by the insurance commissioner under RCW 48.29.017; and
     (23) Documents, materials, or information obtained by the insurance commissioner under chapter 48.-- RCW (sections 33 through 41 and 46 of this act)
.

NEW SECTION.  Sec. 44   SEVERABILITY. 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. 45   Sections 33 through 41 and 46 of this act constitute a new chapter in Title 48 RCW.

NEW SECTION.  Sec. 46   SHORT TITLE. This chapter may be known and cited as the risk management and solvency assessment act.

NEW SECTION.  Sec. 47   EFFECTIVE DATE. Except for sections 18 and 43 of this act, which take effect July 1, 2017, this act takes effect January 1, 2015.

NEW SECTION.  Sec. 48   Sections 17 and 42 of this act expire July 1, 2017.

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