WSR 10-14-071




[ Insurance Commissioner Matter No. R 2010-06 -- Filed July 1, 2010, 7:17 a.m. , effective July 3, 2010 ]

Effective Date of Rule: July 3, 2010.

Purpose: Explain to insurers the requirements for complying with RCW 48.05.190.

Citation of Existing Rules Affected by this Order: Amending WAC 284-30-670.

Statutory Authority for Adoption: RCW 48.02.060.

Under RCW 34.05.350 the agency for good cause finds that immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest.

Reasons for this Finding: WAC 284-30-670 was filed for permanent adoption on June 2, 2010. After the rule was filed multiple impacted parties wrote to the commissioner indicating difficulty in implementing the new rule.

Regular rule making will follow this emergency rule making to ensure that the permanent rule is adopted prior to the expiration of the emergency rule.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.

Date Adopted: July 1, 2010.

Mike Kreidler

Insurance Commissioner

AMENDATORY SECTION(Amending Matter No. R 2008-11, filed 6/2/10, effective 7/3/10)

WAC 284-30-670   Insurers must transact business in their legal name.   (1) The commissioner is adopting this regulation as an unfair practice for the following reasons:

(a) Many insurers fail or periodically fail to comply with the legal name requirement of RCW 48.05.190(1) when transacting insurance business.

(b) When a consumer seeks assistance from the commissioner, the legal name of the company must be determined. When the consumer is unable to provide the information, the commissioner's staff must research it, which unnecessarily wastes the commissioner's resources and delays the inquiry and resolution, posing a risk of harm to the consumer.

(c) ((Insurers will not accept a lawsuit from their insured)) ((i)) If ((the)) lawsuit paperwork does not identify the insurer correctly the lawsuit may be dismissed on that technicality rather than on the merits.

(2) The following definitions apply to this section:

(a) "Legal name" of the insurer means the name displayed on the Washington state certificate of authority issued by the commissioner.

(b) (("Contracted entity" means an entity with which an insurer contracts to transact any aspect of the business of insurance, such as adjudicating claims, determining eligibility, or underwriting or marketing products on behalf of an insurer, and includes such entities as insurance producers, claims administrators, and managing general agents as defined in RCW 48.98.005(3).

(c) "Transacting business" includes)) "Transaction" means activities associated with an insurance transaction, as defined in RCW 48.01.060.

(3) ((An insurer must identify itself by its legal name when:

(a) Transacting business with a consumer, insured, potential insured or claimant as defined in WAC 284-30-320(2); and)) Insurers must make a reasonable effort to ensure that consumers are aware of the legal name of the insurance company with which they hold a policy or contract or are doing business. While not every written document must include the legal name to satisfy this requirement, documents material to accomplishing the transaction must include the legal name and home office or principal office of the insurer.

(a) When a policy or contract is issued and at renewal, insurers must provide the legal name of the insuring company to the insured on the declarations page or other required policy or contract summary.

(b) When an insurer communicates with other persons or companies on behalf of an insured, the insurer must provide its legal name at appropriate points in the transaction. The preferred first point is the first instance of written communication. For example, a written acknowledgement or notice of assignment of a claim must include the legal name of the insurer.

(c) At some point before the policy or contract is issued, the insurer or their producer must inform the consumer of the legal name of the company that will issue the policy or contract.

(d) If the commissioner receives a complaint in whole or in part that involves an insurer not using its legal name when transacting business, the insurer must demonstrate to the commissioner's satisfaction that reasonable efforts were made to inform the complainant of its legal name.

(((b))) (4) The commissioner must be able to identify the legal name of the insurer when conducting ((Communicating orally, electronically, or in writing with the commissioner regarding)) an investigation, inquiry, enforcement matter or examination. Written communication with the commissioner must ((also)) include the insurer's NAIC code.

(((4))) (5) Direct mail or electronic mail ((A)) advertisements directed to ((insureds or potential insureds)) consumers must clearly display the insurer's legal name and the location of its home office or principal office, as required by RCW 48.30.050.

(a) An advertisement by an insurance producer, licensee, or other marketing entity advertising an insurance product common to multiple insurers does not need to include the legal name of the insurer. The advertisement must include the insurance producer, licensee, or other marketing entity's name and address.

(b) Advertisements directed solely to insurance producers, providers, or other marketing entities, but not directed to insureds or potential insureds, are exempt from this subsection.

(((5))) (6) Each single violation of this section by an insurer or its contracted entity may subject the insurer to all applicable provisions of Title 48 RCW((, including, but not limited to, RCW 48.05.140 and 48.05.185)).

(((6))) (7) This regulation does not bar the use of trade names, group names, logos or trademarks. ((To be in compliance with RCW 48.05.190(1), when an insurer uses a trade name, group name, logo or trademark when conducting its business, the insurer must also identify itself by its legal name as required by this section.))

[Statutory Authority: RCW 48.02.060. 10-12-100 (Matter No. R 2008-11), 284-30-670, filed 6/2/10, effective 7/3/10.]

Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.

Washington State Code Reviser's Office