Effective Date of Rule: Thirty-one days after filing.
Purpose: WAC 284-24-120 exempts large risks from rate filing requirements. WAC 284-20-150 will exempt large risks from form filing requirements, so large risks can negotiate both price and coverage terms with admitted insurers.
Statutory Authority for Adoption: RCW 48.02.060, 48.18.100(6), and 48.18.103(3).
Adopted under notice filed as WSR 06-01-099 on December 21, 2005.
Changes Other than Editing from Proposed to Adopted Version: WAC 284-20-150 (7)(c): The exception in subsection (7)(c) was changed following enactment of SHB 2553 (2005) to include a more general description of the exception than the earlier version; that version excluded only "motor vehicle service contract reimbursement insurance, as defined in RCW 48.96.010(4)." This change to the proposed exception for "reimbursement insurance policies" should enable effectuation of future laws that require such policies without requiring further amendments to this subsection.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 1, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 1, Amended 0, Repealed 0.
Date Adopted: March 13, 2006.
WAC 284-20-150 Rules that exempt certain commercial property casualty forms from filing requirements. (1) For purposes of this rule, "large commercial property casualty account" means insurance coverage that:
(a) Involves the lines of property and casualty insurance defined in RCW 48.11.040, 48.11.050, 48.11.060, 48.11.070, and/or 48.11.080; and
(b) Is purchased by a business, not-for-profit organization, or public entity with enough insurance buying experience to negotiate with insurers in a largely unregulated environment and that meets any two of the following criteria:
(i) Annual premiums of one hundred thousand dollars or more, excluding workers compensation insurance issued by the department of labor and industries and types of insurance listed in subsection (7) of this section;
(ii) Net revenues or sales in excess of one hundred million dollars;
(iii) More than two hundred employees;
(iv) Net worth over fifty million dollars;
(v) Is a not-for-profit organization or public entity with an annual budget or assets of at least forty-five million dollars;
(vi) Is a municipality with a population over fifty thousand.
(2) This rule exempts forms issued to insure a large commercial property casualty account from the filing requirement of chapter 48.18 RCW, as permitted under RCW 48.18.103(3).
(3) Each insurer or its agent must notify the insured in writing that the policy forms are not filed with or approved by the commissioner before the insurer issues an insurance policy under this rule.
(4) The Washington Insurance Examining Bureau will not audit property forms used to insure large commercial property casualty accounts under WAC 284-20-006.
(5) If grounds exist under RCW 48.18.110(1), the commissioner may subsequently disapprove any form used to insure a large commercial property casualty account. If the form is disapproved under RCW 48.18.110(1), the insurer must construe the form as if it fully complied with the requirements of RCW 48.18.510.
(6) Each insurer must keep copies of policy forms used to insure large commercial property casualty accounts for at least six years from the date each policy is issued under this section. These records must be made available to the commissioner upon request.
(7) Subsection (2) of this section does not apply to:
(a) Professional liability insurance, including medical malpractice insurance;
(b) Directors' and officers' liability insurance purchased by individuals;
(c) Reimbursement insurance policies that reimburse service contract providers or protection product guarantee providers for contractual obligations assumed under a service contract or protection product guarantee; and
(d) Master policies under which certificates of coverage are issued to individual consumers, households, businesses, or other organizations.