WSR 98-22-109
PERMANENT RULES
INSURANCE COMMISSIONER'S OFFICE
[Insurance Commissioner Matter No. R 98-13--Filed November 4, 1998, 11:41 a.m.]
Date of Adoption: November 4, 1998.
Purpose: To update and clarify the sections of the chapter in accordance with the commissioner's regulatory improvement process.
Citation of Existing Rules Affected by this Order: Repealing WAC 284-20-070; and amending WAC 284-20-006, 284-20-020, 284-20-030, 284-20-040, 284-20-050, 284-20-100, and 284-20-200.
Statutory Authority for Adoption: RCW 48.02.060 and 48.30.010.
Other Authority: RCW 48.01.030, 48.05.280, 48.15.100, and 48.15.170.
Adopted under notice filed as WSR 98-13-093 on June 16, 1998.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, amended 0, repealed 0; Federal Rules or Standards: New 0, amended 0, repealed 0; or Recently Enacted State Statutes: New 0, amended 0, repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, amended 0, repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, amended 7, repealed 1.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, amended 7, repealed 1.
Number of Sections Adopted Using Negotiated Rule Making: New 0, amended 0, repealed 0; Pilot Rule Making: New 0, amended 0, repealed 0; or Other Alternative Rule Making: New 0, amended 0, repealed 0.
Effective Date of Rule: Thirty-one days after filing.
November 4, 1998
Robert A. Harkins
for Greg Scully
Chief Deputy Commissioner
OTS-2060.2
AMENDATORY SECTION (Amending Order R 81-9, filed 12/30/81)
WAC 284-20-006 Washington Insurance Examining Bureau,
Inc.--Audits to test adherence to rate filings. (1) In
performing the duty of ((ascertaining)) determining that lawful
premiums are being charged, the commissioner finds that it is not
reasonable or necessary, with regard to any kind of insurance, to
mandate that data relating to all policies issued be submitted
for examination. ((He does)) The commissioner finds, however,
((that)) as to all kinds of insurance falling within the scope of
chapter 48.19 RCW, that occasions may arise where((, in order to
ascertain that lawful rates are being charged,)) documents with
respect to certain policies should be submitted for
examination((, and that such)) in order to determine that lawful
rates are being charged. The required submission should((, in
some instances,)) be on a random audit basis((, and in some
instances,)) or by designation of certain specific policies.
(2) Based on the ((foregoing)) preceding subsection and
((pursuant to)) under RCW 48.19.410((, with respect to policies
having an effective date on and after February 1, 1982,)) every
insurer authorized to write property or casualty insurance in the
state of Washington:
(a) May submit to the Washington Insurance Examining Bureau,
Inc., for examination, ((any policies and the related daily
reports, binders, renewal certificates, endorsements, and other
evidences of insurance or the cancellation thereof, which)) the
following information that relates to property insurance as
defined in RCW 48.11.040((;)):
(i) Any policies and the related daily reports;
(ii) Binders;
(iii) Renewal certificates;
(iv) Endorsements; and
(v) Other evidences of insurance or the cancellation of insurance.
(b) Shall make available to the ((Washington Insurance
Examining)) bureau, ((Inc. a specifically identified policy and
the related daily reports, binders, renewal certificates,
endorsements, and other evidences of insurance or the
cancellation thereof, when directed to do so by the commissioner;
and
(c) Shall make available to the Washington Insurance
Examining Bureau, Inc. such policies and the related daily
reports, binders, renewal certificates, endorsements, and other
evidences of insurance or the cancellation thereof,)) the
information listed in (a)(i) through (v) of this subsection:
(i) When directed to do so by the commissioner regarding a specifically identified policy; and
(ii) As may be required by the commissioner for purposes of random audits designed to test the companies' adherence to rate filings.
[Statutory Authority: RCW 48.02.060. 82-02-024 (Order R 81-9), § 284-20-006, filed 12/30/81.]
AMENDATORY SECTION (Amending Order R 77-2, filed 4/28/77)
WAC 284-20-020 Time of inception and expiration. ((Until
January 1, 1978, any contract of insurance containing a basic
contract of fire insurance shall provide that its time of
inception and expiration are either noon or 12:01 a.m. standard
time.)) Every ((such)) basic contract ((issued on or after
January 1, 1978,)) of fire insurance shall provide only 12:01
a.m. standard time as the time of inception and expiration.
((Such)) The contract, by endorsement or otherwise, shall also
contain language in substance as follows: "To the extent that
coverage contained in this policy replaces coverage in another
policy terminating at a different hour on the effective date of
this policy, this policy shall be effective at the same hour as
the termination hour of the other policy."
[Order R 77-2, § 284-20-020, filed 4/28/77.]
AMENDATORY SECTION (Amending Order R 77-3, filed 5/20/77)
WAC 284-20-030 Purpose. (1) The purpose of this
regulation, WAC 284-20-030 through 284-20-050, is to describe the
kinds of risks and coverages ((which)) that may be classified
under the insurance code as marine, inland marine or
transportation insurance((, but)). This regulation does not
include all of the kinds of risks and coverages ((which)) that
may be written, classified or identified under marine, inland
marine or transportation insuring powers, nor shall it ((be
construed to)) mean that the kinds of risks and coverages are
solely marine, inland marine or transportation insurance in all
instances.
(2) This regulation ((shall)) does not ((be construed to))
restrict or limit in any way the exercise of any insuring powers
granted under charters and license ((whether used separately, in
combination or otherwise)).
[Order R 77-3, § 284-20-030, filed 5/20/77; Rule made 7/31/53, filed 3/22/60.]
AMENDATORY SECTION (Amending Order R 77-3, filed 5/20/77)
WAC 284-20-040 Classification of risks and coverages. Marine and/or transportation policies may cover under the following conditions:
(1) Imports.
(a) Imports may be covered wherever the property may be and without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation.
(b) An import, as a proper subject of marine or
transportation insurance, ((shall be)) is deemed to maintain its
character as such, so long as the property remains segregated in
such a way that it can be identified and has not become
incorporated and mixed with the general mass of property in the
United States, and ((shall be)) is deemed to have been completed
when ((such)) the property has been:
(i) Sold and delivered by the importer, factor or consignee; or
(ii) Removed from place of storage and placed on sale as part of importer's stock in trade at a point of sale-distribution; or
(iii) Delivered for manufacture, processing or change in form to premises of the importer or of another used for any such purposes.
(2) Exports.
(a) Exports may be covered wherever the property may be without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation.
(b) An export, as a proper subject of marine or
transportation insurance, ((shall be)) is deemed to acquire its
character as such when designated or while being prepared for
export and retain that character unless diverted for domestic
trade, and when so diverted, the provisions of this ruling
respecting domestic shipments shall apply, provided, however,
that this provision shall not apply to long established methods
of insuring certain commodities, e.g., cotton.
(3) Domestic shipments.
(a) Domestic shipments on consignment, for sale, distribution, exhibit, trial, approval or auction, while in transit, while in the custody of others, and while being returned, provided that in no event shall the policy afford coverage on premises owned, leased or operated by the consignor.
(b) Domestic shipments not on consignment, provided the
coverage of the issuing companies includes hazards of
transportation, beginning and ending within the United States,
provided that ((such)) the shipments shall not be covered at
manufacturing premises nor after arrival at premises owned,
leased or operated by insured or purchaser.
(4) Bridges, tunnels and other instrumentalities of transportation and communication (excluding buildings, their improvements and betterments, furniture and furnishings, fixed contents and supplies held in storage). The foregoing includes:
(a) Bridges, tunnels, other similar instrumentalities, including auxiliary facilities and equipment attendant thereto.
(b) Piers, wharves, docks, slips, dry docks and marine railways.
(c) Pipelines, including on-line propulsion, regulating and other equipment appurtenant to such pipelines, but excluding all property at manufacturing, producing, refining, converting, treating or conditioning plants.
(d) Power transmission and telephone and telegraph lines, excluding all property at generating, converting or transforming stations, substations and exchanges.
(e) Radio and television communication equipment in use as such including towers and antennae with auxiliary equipment, and appurtenant electrical operating and control apparatus.
(f) Outdoor cranes, loading bridges and similar equipment used to load, unload and transport.
(5) Personal property floater risks covering individuals and/or generally:
(a) Personal effects floater policies.
(b) The personal property floater.
(c) Government service floaters.
(d) Personal fur floaters.
(e) Personal jewelry floaters.
(f) Wedding present floaters for not exceeding ninety days after the day of the wedding.
(g) Silverware floaters.
(h) Fine arts floaters covering paintings, etchings, pictures, tapestries, art glass windows, and other bonafide works of art of rarity, historical value or artistic merit.
(i) Stamp and coin floaters.
(j) Musical instrument floaters. Radios, televisions, record players and combinations thereof are not deemed musical instruments.
(k) Mobile articles, machinery and equipment floaters
(excluding motor vehicles designed for highway use and auto
homes, trailers and semi-trailers except when hauled by tractors
not designed for highway use) covering identified property of a
mobile or floating nature pertaining to or usual to a household.
((Such)) The policies shall not cover furniture and fixtures not
customarily used away from premises where such property is
usually kept.
(l) Installment sales and leased property policies covering
property pertaining to a household and sold under conditional
contract of sale, partial payment contract or installment sales
contract or leased, but excluding motor vehicles designed for
highway use. ((Such)) The policies must cover in transit but
shall not extend beyond the termination of the seller's or
lessor's interest.
(m) Live animal floaters.
(6) Commercial property floater risks covering property pertaining to a business, profession or occupation, as follows:
(a) Radium floaters.
(b) Physicians' and surgeons' instrument floaters. ((Such))
The policies may include coverage of ((such)) furniture, fixtures
and tenant insured's interest in ((such)) the improvements and
betterments of buildings as are located in that portion of the
premises occupied by the insured in the practice of his or her
profession.
(c) Pattern and die floaters.
(d) Theatrical floaters, excluding buildings and their improvements and betterments, and furniture and fixtures that do not travel about with theatrical troupes.
(e) Film floaters, including builders' risk during the production and coverage on completed negatives and positives and sound records.
(f) Salesmen's samples floaters.
(g) Exhibition policies on property while on exhibition and
in transit to or from ((such)) the exhibitions.
(h) Live animal floaters.
(i) Builders risks and/or installation risks covering
interest of owner, seller or contractor, against loss or damage
to machinery, equipment, building materials or supplies, being
used with and during the course of installation, testing,
building, renovating or repairing. ((Such)) The policies may
cover at points or places where work is being performed, while in
transit and during temporary storage or deposit, of property
designated for and awaiting specific installation, building,
renovating or repairing.
(i) ((Such)) The coverage ((shall be)) is limited to
builders risks or installation risks where perils in addition to
fire and extended coverage are to be insured.
(ii) If written for account of owner, the coverage shall cease upon completion and acceptance thereof; or if written for account of a seller or contractor the coverages shall terminate when the interest of the seller or contractor ceases.
(j) Mobile articles, machinery and equipment floaters
(excluding motor vehicles designed for highway use and auto
homes, trailers and semi-trailers except when hauled by tractors
not designed for highway use and snow plows constructed
exclusively for highway use), covering identified property of a
mobile or floating nature, not on sale or consignment, or in
course of manufacture, which has come into custody or control of
parties who intend to use such property for the purpose for which
it was manufactured or created. ((Such)) The policies shall not
cover furniture and fixtures not customarily used away from
premises where such property is usually kept.
(k) Property in transit to or from and in the custody of
bailees (not owned, controlled or operated by the bailor.)
((Such)) The policies shall not cover bailee's property at his
premises.
(l) Installment sales and leased property. Policies
covering property sold under conditional contract of sale,
partial payment contract, installment sales contract, or leased
but excluding motor vehicles designed for highway use. ((Such))
The policies must cover in transit but shall not extend beyond
the termination of the seller's or lessor's interest. This
section is not intended to include machinery and equipment under
certain "lease-back" contracts.
(m) Garment contractors floaters.
(n) Furriers or fur storer's customer's policies (i.e., policies under which certificates or receipts are issued by furriers or fur storers) covering specified articles the property of customers.
(o) Accounts receivable policies, valuable papers and records policies.
(p) Floor plan policies, covering property for sale while in possession of dealers under a floor plan or any similar plan under which the dealer borrows money from a bank or lending institution with which to pay the manufacturer, provided:
(i) ((Such)) The merchandise is specifically identifiable as
encumbered to the bank or lending institution.
(ii) The dealer's right to sell or otherwise dispose of
((such)) the merchandise is conditioned upon its being released
from encumbrance by the bank or lending institution.
(iii) ((Such)) The policies cover in transit and do not
extend beyond the termination of the dealer's interest.
((Such)) The policies shall not cover automobiles or motor
vehicles, nor merchandise for which the dealer's collateral is
the stock or inventory as distinguished from merchandise
specifically identifiable as encumbered to the lending institution.
(q) Sign and street clock policies, including neon signs, automatic or mechanical signs, street clocks, while in use as such.
(r) Fine arts policies covering paintings, etchings, pictures, tapestries, art glass windows, and other bonafide works of art of rarity, historical value or artistic merit, for account of museums, galleries, universities, businesses, municipalities and other similar interests.
(s) Policies covering personal property which, when sold to the ultimate purchaser, may be covered specifically, by the owner, under inland marine policies including:
(i) Musical instrument dealers policies, covering property consisting principally of musical instruments and their accessories. Radios, televisions, record players and combinations thereof are not deemed musical instruments.
(ii) Camera dealers policies, covering property consisting principally of cameras and their accessories.
(iii) Furrier's dealers policies, covering property consisting principally of furs and fur garments.
(iv) Equipment dealers policies, covering mobile equipment consisting of binders, reapers, tractors, harvesters, harrows, tedders and other similar agricultural equipment and accessories therefor; construction equipment consisting of bulldozers, road scrapers, tractors, compressors, pneumatic tools and similar equipment and accessories therefor; but excluding motor vehicles designed for highway use.
(v) Stamp and coin dealers covering property of philatelic and numismatic nature.
(vi) Jewelers' block policies.
(vii) Fine arts dealers policies.
((Such)) The policies may include coverage of money in
locked safes or vaults on the insured's premises. ((Such)) The
policies also may include coverage of furniture, fixtures, tools,
machinery, patterns, molds, dies and tenant insured's interest in
improvements of buildings.
(t) Wool growers floaters.
(u) Domestic bulk liquids policies, covering tanks and domestic bulk liquids stored therein.
(v) Difference in conditions coverage excluding fire and extended coverage perils.
(w) Electronic data processing policies.
[Order R 77-3, § 284-20-040, filed 5/20/77; Rule made 7/31/53, filed 3/22/60.]
AMENDATORY SECTION (Amending Order R 77-3, filed 5/20/77)
WAC 284-20-050 Excluded coverages. Unless otherwise
permitted, ((nothing in)) WAC 284-20-030 ((or)) and 284-20-040
((shall be construed to)) do not permit marine or transportation
policies to cover:
(1) Storage of insured's merchandise, except as
((hereinbefore)) provided in this chapter.
(2) Merchandise in course of manufacture, the property of and on the premises of the manufacturer.
(3) Furniture and fixtures and improvements and betterments to buildings.
(4) Monies and/or securities in safes, vaults, safety deposit vaults, bank or insured's premises, except while in course of transportation.
[Order R 77-3, § 284-20-050, filed 5/20/77; Rule made 1/31/56, filed 3/22/60.]
AMENDATORY SECTION (Amending Order R 86-7, filed 11/26/86)
WAC 284-20-100 Modification of form filing requirements.
((Pursuant to)) Under RCW 48.18.100(6), the commissioner rules
and ((hereby)) orders that all insurance documents and forms
pertaining to surplus line coverages placed in this state
((pursuant to)) under chapter 48.15 RCW are exempt from the
requirements of RCW 48.18.100((, hereby confirming the long-standing practice in this state)).
[Statutory Authority: RCW 48.02.060 (3)(e). 86-24-043 (Order R 86-7), § 284-20-100, filed 11/26/86.]
AMENDATORY SECTION (Amending Order R 94-30, filed 4/10/95, effective 5/11/95)
WAC 284-20-200 Retention of policy forms. Beginning July 1, 1996, every insurer shall adopt a record retention procedure and shall maintain records sufficient to reconstruct a copy of every general liability insurance policy issued for delivery in this state to a Washington resident on or after July 1, 1996.
(1) Records may be kept in any reasonable and customary format, including any photographic or electronic format.
(2) Records shall be kept for at least twenty years following the expiration date of the policy.
(3) The insurer shall maintain the capacity to retrieve records sufficient to reconstruct any policy by name of the named insured(s) as shown on the policy declarations page and by policy number.
(4)(a) The insurer shall keep either a copy of each form of general liability insurance policy issued to a resident of this state so that it can be matched to an insured's record upon request, or a copy of the insured's policy as issued. For manuscript policies, the insurer shall retain a copy of the insured's policy as issued.
(b) For each insured, the insurer shall maintain at least the following information as the insured's record:
(i) The name of all named insureds as shown on the policy declarations page;
(ii) The address of the named insured as shown on the policy declarations page;
(iii) The name of any additional named insured(s);
(iv) The policy number;
(v) The form number(s) or a copy of the insured's policy as issued;
(vi) The limits of liability;
(vii) The annual premium;
(viii) The form number(s) or a copy of any endorsement(s); and
(ix) The policy period.
(5) Records of general liability insurance policies issued
to Washington residents and that are in the possession of the
insurer on the effective date of this section shall not be
destroyed for twenty years after the effective date of this
section((: Provided however, That such)). The records do not
need ((not)) to be catalogued or indexed to meet the standards of
this section.
(6) Records of general liability insurance policies issued
by unauthorized insurers shall be kept in this state; however,
((such)) the records may be maintained on behalf of an
unauthorized insurer by the surplus line broker of record on the
policy, or the broker's successor.
(7) For purposes of this section, "general liability insurance policy" means a contract of insurance that provides coverage for the legal obligations of an insured for bodily injury or property damage to others. It includes, for example, pollution liability insurance policies and comprehensive general liability insurance policies; it does not include insurance policies relating to motor vehicles, personal coverage such as homeowners, or specialty line liability coverage such as directors and officers insurance, errors and omissions insurance, or other similar policies.
[Statutory Authority: RCW 48.02.060, 48.30.010, 48.01.030, 48.05.280, 48.15.100 and 48.15.170. 95-09-014 (Order R 94-30), § 284-20-200, filed 4/10/95, effective 5/11/95.]
REPEALER
The following section of the Washington Administrative Code is repealed:
WAC 284-20-070 Catastrophe coverage.