H-1231              _______________________________________________

                                                    HOUSE BILL NO. 603

                        _______________________________________________

State of Washington                              50th Legislature                              1987 Regular Session

By Representatives P. King, C. Smith, Holm and May

Read first time 2/4/87 and referred to Committee on Commerce & Labor.

AN ACT Relating to local government insurance; and amending RCW 48.62.040 and 51.14.150.

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

        Sec. 1.  Section 4, chapter 256, Laws of 1979 ex. sess. as last amended by section 1, chapter 302, Laws of 1986 and RCW 48.62.040 are each amended to read as follows:

          (1) Except as provided in subsection (2) of this section, the governing body of any one or more local governmental entities may, as an alternative or in addition to exercising any one or more of the powers granted in RCW 48.62.030 and 36.16.138, as now or hereafter amended, or any other provision of law, form together into or join a pool or organization for the joint purchasing of insurance, and/or joint self-insuring, and/or joint hiring or contracting for risk management services to the same extent that they may individually purchase insurance, self-insure, or hire or contract for risk management services.

          (2)(a) No organization of local governmental entities, other than local school districts and educational service districts, that is organized under this section for the purpose of self-insuring shall provide any self-insurance other than liability ((and)), property, casualty, and industrial accident insurance.  For purposes of this section, liability insurance shall include but not be limited to coverage for claims arising from the tortious or negligent conduct of the local government entity, its officers, employees, or agents thereof, or any error or omission on the part of said local government entity, its officers, employees or agents thereof as a result of which a claim may be made against the local government entity.

          (b) Local school districts and educational service districts may not organize under this section for the purpose of providing joint self-insured life, health, health care, accident, disability and salary protection or insurance, or any combination thereof, to the district employees, students, directors, or any of their dependents.

          (3) The agreement to form such a pooling arrangement shall be made under chapter 39.34 RCW.             Any pool or organization authorized to be formed by this section shall be subject to audit by the state auditor.

        Sec. 2.  Section 7, chapter 191, Laws of 1982 as amended by section 2, chapter 174, Laws of 1983 and RCW 51.14.150 are each amended to read as follows:

          (1) Any two or more employers which are school districts or educational service districts, (2) any two or more employers which are hospitals, as defined in RCW 70.39.020(3), and are owned or operated by a state agency or municipal corporation of this state, ((or)) (3) any two or more employers which are hospitals, as defined in RCW 70.39.020(3), no one of which is owned or operated by a state agency or municipal corporation of this state or subject to RCW 70.39.150(3), or (4) any two or more employers which are local government entities, may enter into agreements to form self-insurance groups for the purposes of this chapter:  PROVIDED, That no more than one group may be formed under subsection (2) of this section and no more than one group may be formed under subsection (3) of this section.  The self-insurance groups shall be organized and operated under rules promulgated by the director under RCW 51.14.160.  Such a self-insurance group shall be deemed an employer for the purposes of this chapter, and may qualify as a self-insurer if it meets all the other requirements of this chapter.