WSR 11-05-090

PROPOSED RULES

OFFICE OF

INSURANCE COMMISSIONER

[ Insurance Commissioner Matter No. R 2010-10 -- Filed February 16, 2011, 7:36 a.m. ]

Supplemental Notice to WSR 10-24-096.

Preproposal statement of inquiry was filed as WSR 10-17-112.

Title of Rule and Other Identifying Information: Crop adjusters.

Hearing Location(s): Insurance Commissioner's Office, TR 120, 5000 Capitol Boulevard, Tumwater, WA 98504-02555 [98504-0255], on March 22, 2011, at 10:00 a.m.

Date of Intended Adoption: March 23, 2011.

Submit Written Comments to: Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, e-mail jimt@oic.wa.gov, fax (360) 586-3109, by March 21, 2011.

Assistance for Persons with Disabilities: Contact Lorrie [Lorie] Villaflores by March 21, 2011, TTY (360) 586-0241 or (360) 725-7087.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Chapter 67, Laws of 2010, provides for the separate licensing of crop adjusters and for the commissioner to adopt rules regarding the prelicensing education, examination, continuing education requirements, and renewal of the license. The proposed rules will set forth these educational, examination, and licensing requirements.

Reasons Supporting Proposal: The United States Department of Agriculture has indicated that if states did not enact statutes and adopt rules requiring crop adjuster licensing and compliance with their requirements that the department would preempt state regulation of crop adjusters. These rules are being proposed to be adopted to require crop adjusters to comply with the education, examination, and continuing education requirements of the Risk Management Agency of the United States Department of Agriculture.

Statutory Authority for Adoption: RCW 48.02.060, 48.17.005, and sections 4 and 5, chapter 67, Laws of 2010.

Statute Being Implemented: Chapter 67, Laws of 2010.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Mike Kreidler, insurance commissioner, governmental.

Name of Agency Personnel Responsible for Drafting: Jim Tompkins, P.O. Box 40528, Olympia, WA 98504-0258, (360) 725-7036; Implementation and Enforcement: Jeff Baughman, P.O. Box 40257, Olympia, WA 98504-0257, (360) 725-7156.

No small business economic impact statement has been prepared under chapter 19.85 RCW. This proposed rule essentially establish[es] two classes of crop adjusters: (A) Those that are certified to adjust crop losses insured under a federal program ("federally qualified"); and (B) those qualified only to adjust crop losses not insured under a federal program ("state qualified"). The proposed rule does not impose new testing requirements, but just reiterates the requirement in state statute that crop adjusters must pass a written examination unless otherwise specifically exempted under the law. The proposed rule does allow those who have met the requirements of the federal program (they are "federally qualified") to submit documentation of their federal certification in lieu of taking a state examination.

Therefore, the only additional requirement imposed by the proposed rule is that "federally qualified" crop adjusters must submit documentation to the commissioner to verify that they have passed the federal certification.

From a cost perspective, this proposed rule therefore affects only "federally qualified" crop adjusters and authorized insurers or licensed managing general agents who are having salaried employees act in [on] their behalf as "federally qualified" crop adjusters.

The costs of these filings and the extra copies that will accompany them is projected to be quite small, easily less than $10 annually for each employee on the list in terms of paper and postage cost and less than $30 annually per employee on the list even when clerical labor is considered. The projected annual cost of compliance per business is well within the definition of "minor costs" contained in the law.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, phone (360) 725-7036, fax (360) 586-3109, e-mail jimt@oic.wa.gov.

February 16, 2011

Mike Kreidler

Insurance Commissioner

OTS-3632.5

CROP ADJUSTERS
NEW SECTION
WAC 284-17-700   Definitions.   As used in WAC 284-17-705 through 284-17-730, the terms below have the following meaning unless the context clearly requires otherwise:

"Certification program" means any crop adjuster educational and examination program meeting the federal Risk Management Agency requirements.

"Crop adjuster" has the meaning set forth in RCW 48.17.010 (1)(c).

"Risk Management Agency" or "RMA" means the Risk Management Agency of the United States Department of Agriculture.

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NEW SECTION
WAC 284-17-705   Crop adjuster prelicensing education and examination requirements.   (1) An applicant for a crop adjuster's license to adjust crop losses insured through a federal crop insurance program must complete all educational and examination requirements of a certification program. With the application, an applicant for a crop adjuster's license must submit to the commissioner true and accurate documentation of their certification program completion. A copy of the documentation demonstrates compliance with the prelicensing education and examination requirements necessary for a crop adjuster license. A crop adjuster licensed under this subsection may adjust crop losses that are and are not insured through a federal crop insurance program.

(2) An applicant for a crop adjuster's license to adjust crop losses that are not insured through a federal crop insurance program:

(a) Is not required to complete a prelicensing education course;

(b) Must pass the state's crop adjuster licensing exam; and

(c) Must not adjust crop insurance losses that are insured through a federal crop insurance program.

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NEW SECTION
WAC 284-17-720   Crop adjuster license renewal requirements.   (1) Every licensed crop adjuster adjusting crop insurance losses insured through a federal insurance program must:

(a) Renew their license on or before the expiration of the license; and

(b) On or before February 28th of each year, file with the commissioner a true and accurate copy of documents establishing their certification program completion. Failure to timely file a copy of the documentation with the commissioner is a sufficient basis for the commissioner to suspend, revoke, or refuse to renew a crop adjuster license.

(2) Every licensed crop adjuster adjusting crop losses not insured through a federal crop insurance program:

(a) Must renew their license on or before the expiration of the license; and

(b) Are not required to take continuing education.

(3) Crop adjusters who do not renew their license prior to the expiration date must pay the surcharge under RCW 48.17.170.

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NEW SECTION
WAC 284-17-730   Crop adjusters who are salaried employees of an insurance company or of a managing general agent.   (1) All authorized insurance companies and licensed managing general agents must annually, on or before February 28th of each year, file with the commissioner a list of all salaried employees who act on their behalf as crop adjusters adjusting losses insured through a federal crop insurance program and a true and accurate copy of the documentation establishing completion of the crop adjuster certification program.

(2) Each insurance company and its managing general agents must file with the commissioner any changes to the list within thirty days of a change. If the change includes the addition of a new crop adjuster to the list, the insurance company and managing general agent must also file a copy of the documentation establishing the crop adjuster's completion of the certification program.

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NEW SECTION
WAC 284-17-735   Limited conversion to crop adjuster license.   On or before September 30, 2011, an adjuster that is currently licensed by the commissioner as an independent or public adjuster may convert the license to a crop adjuster license to only adjust crop losses not insured through a federal program upon compliance with the following:

(1) Send written notice to the commissioner requesting the conversion; and

(2) Provide the commissioner with proof of a minimum of two years crop adjusting experience.

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Washington State Code Reviser's Office