H-0590.1

HOUSE BILL 1416

ByRepresentatives Walen and Santos

AN ACT Relating to the reporting of debt information by insurers to enhance the collection of past-due child support; amending RCW 26.23.070; adding a new section to chapter 26.23 RCW; creating new sections; and providing an effective date.

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

(2) The legislature further finds that liens filed in the state of Washington are filed on a county-by-county basis, and there is no statewide registry or clearinghouse where a comprehensive collection of liens may be checked by a party or other entity before funds are disbursed to the debtor.

(3) The legislature further finds that it would enhance the collection opportunities for child support to require insurance companies doing business in the state of Washington to participate in a reporting scheme that would allow a data match with child support debts.

NEW SECTION.  Sec. 2. A new section is added to chapter 26.23 RCW to read as follows:

(1) Except as otherwise provided in subsection (9) of this section, each insurer shall, not later than five days after opening a tort liability claim for bodily injury or wrongful death, a workers' compensation claim, or a claim under a policy of life insurance, exchange information with the division of child support in the manner prescribed by the department to verify whether the claimant owes debt for the support of one or more children to the department or to a person receiving services from the division of child support. To the extent feasible, the division of child support shall facilitate a secure electronic process to exchange information with insurers pursuant to this subsection. The obligation of an insurer to exchange information with the division of child support is discharged upon complying with the requirements of this subsection.

(2) In order to determine whether a claimant owes a debt being enforced by the division of child support, all insurance companies doing business in the state of Washington that issue qualifying payments to claimants must provide minimum identifying information about the claimant to:

(a) The insurance services office claim search or any successor entity which may be created;

(b) The federal office of child support enforcement or the child support lien network; or

(c) The division of child support in a manner satisfactory to the department.

(3) Insurers must take the steps necessary to authorize the insurance services office claim search or successor entity to share minimum identifying information with the federal office of child support enforcement and the child support claim lien network.

(4) Except as otherwise provided in subsections (6) and (8) of this section, if an insurer is notified by the division of child support that a claimant owes debt for the support of one or more children to the department or to a person receiving services from the division of child support, the insurer shall, upon the receipt of a notice issued by the department identifying the amount of debt owed pursuant to chapter 74.20A RCW:

(a) Not later than five days after receiving notice from the department, notify the claimant and his or her attorney, if known to the insurer, of the debt owed;

(b) Withhold from payment on the claim the amount specified in the notice; and

(c) Remit the amount withheld from payment to the department within 20 days.

(5) If an insurer withholds any money from payment on a claim and remits the money to the department pursuant to subsection (4) of this section, the insurer shall notify the claimant and his or her attorney, if known to the insurer, of that fact.

(6) The department shall give any lien, claim, or demand for reasonable claim-related attorneys' fees and medical costs priority over any withholding of payment pursuant to subsection (4) of this section.

(7) Any information obtained pursuant to this act must be used only for the purpose of carrying out the provisions of this act. An insurer or other entity described in subsection (2) of this section may not be held liable in any civil or criminal action for any act made in good faith pursuant to this section including, but not limited to:

(a) Any disclosure of information to the department or the division of child support; or

(b) The withholding of any money from payment on a claim or the remittance of such money to the department.

(8) An insurer may not delay the disbursement of a payment on a claim to comply with the requirements of this section. An insurer is not required to comply with subsection (4) of this section if the notice issued by the department is received by the insurer after the insurer has disbursed the payment on the claim. In the case of a claim that will be paid through periodic payments, the insurer:

(a) Is not required to comply with the provisions of subsection (4) of this section with regard to any payments on the claim disbursed to the claimant before the notice was received by the insurer; and

(b) Must comply with the provisions of subsection (4) of this section with regard to any payments on the claim scheduled to be made after the receipt of the notice.

(9) If periodic payment will be made to a claimant, an insurer is only required to engage in the exchange of information pursuant to subsection (1) of this section before issuing the initial payment.

(10) An insurance company's failure to comply with the reporting requirements of this act does not amount to noncompliance with a requirement of the division of child support as described in RCW 74.20A.350.

(a) Such failures may be dealt with by the state office of the insurance commissioner.

(b) The division of child support may inform the office of the insurance commissioner when failure to provide information, or to authorize the sharing of information by one or more insurance companies, is discovered.

(11) For the purposes of this section, the following definitions apply:

(a) "Claimant" means any person who: (i) Brings a tort liability claim for bodily injury or wrongful death; (ii) is receiving workers' compensation benefits; or (iii) is a beneficiary under a life insurance policy. "Claim for bodily injury" does not include a claim for uninsured or underinsured vehicle coverage or medical payments coverage under a motor vehicle liability policy.

(b) "Insurer" means: (i) A person who holds a certificate of authority to transact insurance in the state; or (ii) a chapter 48.15 RCW unauthorized insurer.

(c) "Qualifying payment" means a payment that is either a one-time lump sum or an installment payment issued by an insurance company doing business in the state of Washington, which is made for the purpose of satisfying, compromising, or settling, a tort or insurance claim where the payment is in excess of $500 and is intended to go directly to the claimant and not to a third party, such as a health care provider.

(d) "Tort or insurance claim" means: (i) A claim for general damages, which are also called noneconomic damages; or (ii) a claim for lost wages. "Tort or insurance claim" does not include claims for property damage under either liability insurance or uninsured motorist insurance.

Sec. 3. RCW 26.23.070 and 1991 c 367 s 41 are each amended to read as follows:

(1) The employer or the employment security department may combine amounts withheld from the earnings of more than one responsible parent in a single payment to the Washington state support registry, listing separately the amount of the payment which is attributable to each individual.

(2) No employer nor employment security department that complies with a notice of payroll deduction under this chapter shall be civilly liable to the responsible parent for complying with a notice of payroll deduction under this chapter.

--- END ---