S-1442.1

SUBSTITUTE SENATE BILL 5331

State of Washington

69th Legislature

2025 Regular Session

BySenate Business, Financial Services & Trade (originally sponsored by Senators Cortes, Frame, Hasegawa, Kauffman, Lovelett, Lovick, Nobles, Orwall, Stanford, Trudeau, and C. Wilson; by request of Insurance Commissioner)

READ FIRST TIME 02/20/25.

AN ACT Relating to strengthening consumer protection through increased insurer accountability for violations of the insurance code; and amending RCW 48.02.080 and 48.05.185.

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

Sec. 1. RCW 48.02.080 and 2009 c 549 s 7005 are each amended to read as follows:

(1) The commissioner may prosecute an action in any court of competent jurisdiction to enforce any order made by him or her pursuant to any provision of this code.

(2) If the commissioner has cause to believe that any person has violated any penal provision of this code or of other laws relating to insurance he or she shall certify the facts of the violation to the public prosecutor of the jurisdiction in which the offense was committed.

(3) If the commissioner has cause to believe that any person is violating or is about to violate any provision of this code or any regulation or order of the commissioner, he or she may:

(a) ((issue))Issue a cease and desist order; ((and/or))

(b) ((bring))Bring an action in any court of competent jurisdiction to enjoin the person from continuing the violation or doing any action in furtherance thereof;

(d) Any combination of (a), (b), and (c) of this subsection.

(4) The attorney general and the several prosecuting attorneys throughout the state shall prosecute or defend all proceedings brought pursuant to the provisions of this code when requested by the commissioner.

(5)(a) The commissioner may order payment of restitution after a hearing under Title 34 RCW or with consent of the person owing the obligation. Restitution shall include only demonstrated economic damages due to another person, excluding a provider. Restitution shall be paid with eight 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.

(b) For purposes of this subsection, the following definitions apply:

(i) "Date the obligation arose" means:

(A) 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 such investigation cannot reasonably be completed within 30 days;

(B) For obligations related to the payment of premium, the date the premium was charged to the person entitled to restitution; and

(C) 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; and

(ii) "Provider" means any entity providing a service to the person entitled to restitution under this section including, but not limited to, a health care provider, a restoration or mitigation contractor, or an auto body repair shop.

Sec. 2. RCW 48.05.185 and 1980 c 102 s 1 are each amended to read as follows:

After hearing or with the consent of the insurer and in addition to or in lieu of the suspension, revocation, or refusal to renew any certificate of authority the commissioner may levy a fine upon the insurer in an amount not less than ((two hundred fifty dollars))$250 and not more than ((ten thousand dollars))$10,000 per violation. The order levying such fine shall specify the period within which the fine shall be fully paid and which period shall not be less than ((fifteen))15 nor more than ((thirty))30 days from the date of such order. Upon failure to pay any such fine when due the commissioner shall revoke the certificate of authority of the insurer if not already revoked, and the fine shall be recovered in a civil action brought ((in))on behalf of the commissioner by the attorney general. Any fine so collected shall be paid by the commissioner to the state treasurer for the account of the general fund.

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