PREPROPOSAL STATEMENT OF INQUIRY
Subject of Possible Rule Making: Deregulation of commercial property casualty lines of insurance. Rate and form filing requirements may be suspended for large policies.
Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 48.02.060, 48.18.100(6), and 48.19.080.
Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: This subject was suggested in the commissioner's regulatory improvement process as a regulatory scheme that should be revisited. The subject has also been discussed extensively by members of the NAIC and by the legislatures of several states. Purchasers of large commercial property casualty policies are sophisticated buyers who have the ability to negotiate as equals over the rates and provisions of their policies and to adequately safeguard their interests. This may save insurers some time and expense and these savings may be passed along to the purchasers. Large policyholders may benefit from insurers' increased flexibility. The commissioner will seek comments from businesses and business associations as well as the insurance industry.
Among the concepts that will be explored and discussed in the development of a new regulatory scheme are: (1) Suspending filing requirements for rates and forms used on any commercial property casualty insurance policy with estimated annual premium of $25,000 or more. Coverages that may be excepted from this suspension include motor vehicle service contract reimbursement insurance (chapter 48.96 RCW) and professional liability insurance, including medical malpractice; (2) providing that the commissioner retains the ability to examine these rates and forms to ascertain whether they meet statutory requirements; (3) providing that property rates and forms used on these policies will not be audited by the Washington Insurance Examining Bureau under WAC 284-20-006; and (4) attaching a "sunset provision" that would cause the suspension of filing requirements to expire after an adequate trial period unless the rule is amended. This would ensure that the rule was reviewed; at that time it could be expanded, narrowed, altered, extended, or allowed to expire.
Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: None.
Process for Developing New Rule: Agency study; and send written comments by July 22, 1999, to Kacy Brandeberry, P.O. Box 40256, Olympia, WA 98504-0256, fax (360) 407-0186, Internet KacyB@oic.wa.gov.
Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by contacting Kacy Brandeberry, P.O. Box 40256, Olympia, WA 98504-0256, phone (360) 407-0729, fax (360) 407-0186, Internet KacyB@oic.wa.gov.
June 2, 1999
Robert A. Harkins
Chief Deputy Commissioner