Washington State
House of Representatives
Office of Program Research
BILL
ANALYSIS
Consumer Protection & Business Committee
SSB 5331
Brief Description: Strengthening consumer protection through increased insurer accountability for violations of the insurance code.
Sponsors: Senate Committee on Business, Financial Services & Trade (originally sponsored by Senators Cortes, Frame, Hasegawa, Kauffman, Lovelett, Lovick, Nobles, Orwall, Stanford, Trudeau and Wilson, C.; by request of Insurance Commissioner).
Brief Summary of Substitute Bill
  • Authorizes the Insurance Commissioner (Commissioner) to order the payment of restitution after a hearing or with consent of the person owing the obligation, subject to requirements.
  • Requires restitution to be paid with 8 percent simple interest from the date the obligation arose, and defines when that date is considered to arise for different obligations.
  • Specifies that an existing fine of $250 to $10,000 that the Commissioner may levy on an insurer is "per violation."
Hearing Date: 3/19/25
Staff: Peter Clodfelter (786-7127).
Background:

If the Insurance Commissioner (Commissioner) has cause to believe that any person is violating or is about to violate any provision of the Insurance Code or any regulation or order of the Commissioner, the Commissioner may issue a cease and desist order and/or may bring an action in any court of competent jurisdiction to enjoin the person from continuing the violation or doing any action in furtherance of the violation.  The Attorney General and the several prosecuting attorneys throughout Washington must prosecute or defend all proceedings brought pursuant to the Insurance Code when requested by the Commissioner. 

 

After a hearing or with an insurer's consent, and in addition to or instead of a suspension, revocation, or refusal to renew a certificate of authority, the Commissioner may levy a fine of not less than $250 nor more than $10,000 upon an insurer.  The order levying the fine must specify when the fine must be fully paid and must not be less than 15 nor more than 30 days from the date of the order. 

 

Upon failure to pay a fine when due, the Commissioner must revoke the insurer's certificate of authority if not already revoked, and the fine may be recovered in a civil action brought on behalf of the Commissioner by the Attorney General.  Any fine collected must be paid by the Commissioner to the State Treasurer for the General Fund.

 

The Balance Billing Protection Act provides consumers with protections from surprise or balance billing related to certain health care or emergency services, including when a consumer is treated at an in-network hospital or outpatient surgical facility by an out-of-network provider, and includes a dispute resolution process related to bills and payments for the services.
Summary of Bill:

Authority is granted to the Commissioner to order the payment of restitution after a hearing under the Administrative Procedure Act or with the consent of the person owing the obligation, which is in addition to the Commissioner's authority to issue a cease and desist order and/or bring an action in a court of competent jurisdiction to enjoin the person from continuing the violation or doing any action in furtherance of the violation. 

 

Restitution may include only demonstrated economic damages due to another person, excluding a provider.  A provider is considered any entity providing a service to the person entitled to restitution including, but not limited to, a health care provider, a restoration or mitigation contractor, or an auto body repair shop.

 

Restitution must be paid with 8 percent simple interest from the date the obligation arose.  Any restitution ordered by the Commissioner must be paid to the person to whom it is due within 30 days of the date of the order.

 

The date the obligation arose is defined as the following:

  • for obligations related to the payment of an insurance claim, 30 days from the date the insurer received all information necessary to determine liability and payment under the policy, unless the investigation cannot reasonably be completed within 30 days;
  • for obligations related to the payment of premium, the date the premium was charged to the person entitled to restitution; and
  • for all other obligations, the date the obligation was required to be performed under statute, rule, or contract, or the date the obligated person was first provided written notice of noncompliance.

 

It is specified that the new authority of the Commissioner to order the payment of restitution does not interfere with the dispute resolution process in the Balance Billing Protection Act.

 

It is specified that the existing authority of the Commissioner to levy a fine of not less than $250 nor more than $10,000 upon an insurer after a hearing or with the insurer's consent is "per violation."
Appropriation: None.
Fiscal Note: Available.  New fiscal note requested on March 12, 2025.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.