HOUSE BILL REPORT

 

 

                                HB 51

 

 

BYRepresentatives Lux, Winsley, P. King, Crane, Niemi, Wang, Brooks, Locke and Meyers;by request of Insurance Commissioner

 

 

Authorizing the continuation of the Washington Essential Property Insurance Inspection and Placement Program.

 

 

House Committe on Financial Institutions & Insurance

 

Majority Report:     Do Pass.  (13)

     Signed by Representatives Lux, Chair; Zellinsky, Vice Chair; Betrozoff, Chandler, Crane, Day, Dellwo, Ferguson, P. King, Meyers, Niemi, Nutley and Winsley.

 

     House Staff:John Conniff (786-7119)

 

 

                   AS PASSED HOUSE FEBRUARY 2, 1987

 

BACKGROUND:

 

The Fair Access to Insurance Requirements (FAIR) Plan was created by Congress as part of the Urban Property Protection and Reinsurance Act of 1968.  The legislation was a reaction to the riots and civil disorders of the 1960's.  The purpose of the act was to provide a method for business and property owners in high-risk areas to obtain property insurance.  Under the provision of the act, the U.S. Department of Housing and Urban Development (HUD) was directed to approve and oversee state-supervised plans to provide such property insurance.  In response, Washington created the "Washington Essential Property Insurance Inspection and Placement Program" in 1969.

 

The plan is an insurance industry placement facility (administrative group) which reviews applications for insurance and assigns the property for insurance to one of the insurance companies authorized to write property insurance in this state.  State regulations govern the inspection of property proposed for insurance; govern the acceptance and rejection of applications; and govern commissions, policy provisions and cancellations.  Numerous other regulations govern reinsurance of risks accepted under the plan. 

 

Changes in federal law have removed the Insurance Commissioner's authority to establish and regulate a FAIR Plan.

 

SUMMARY:

 

The commissioner is authorized to continue the FAIR Plan.

 

Fiscal Note:    Not Requested.

 

House Committee ‑ Testified For:     Scott Jarvis, Insurance Commissioner's Office.

 

House Committee - Testified Against: None Presented.

 

House Committee - Testimony For:     This bill permits the continued operation of the existing state FAIR PLAN.  It appears that such a program is still necessary and desirable to ensure the continued availability of property insurance in high risk neighborhoods.

 

House Committee - Testimony Against: None Presented.