HOUSE BILL REPORT

SB 6564

BYSenators von Reichbauer, McMullen and Johnson

Removing the pooling of funds by commercial fishers from the definition of insurer under the insurance code.

House Committe on Financial Institutions & Insurance

Majority Report:  Do pass.  (14)

      Signed by Representatives Dellwo, Chair; Zellinsky, Vice Chair; Chandler, Ranking Republican Member; Baugher, Beck, Crane, Day, Dorn, Inslee, P. King, Nutley, Schmidt, K. Wilson and Winsley.

House Staff:John Conniff (786-7119)

AS PASSED HOUSE MARCH 1, 1990

BACKGROUND:

Every person who engages in the business of making contracts of insurance, with limited exceptions, must obtain a certificate of authority from the Insurance Commissioner and must comply with all appropriate provisions of the insurance code. Persons who join together to insure their own commercial liability risks may form a risk retention group and avoid compliance with many insurance code provisions governing insurance companies. However, the risk retention act does not authorize persons to form groups for the insurance of property risks.

SUMMARY:

Two or more persons engaged in the business of commercial fishing are not considered an "insurer" when they enter into an arrangement to self-insure their own risks of loss or damage to a vessel or machinery used in the business of commercial fishing.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Thomas McKey, Bogle & Gates; Charles Rockness, West Coast Marine Fund; and Arne Aadland, West Coast Marine Fund.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    Commercial fishing self-insurance pools have been operating without problems for decades.  These self-insurance programs have been exempt from regulation based upon a 1927 Attorney General opinion.  The opinion may no longer be adequate to continue the unregulated status of these self-insurance arrangements.

House Committee - Testimony Against:      None.