Original Notice.

     Preproposal statement of inquiry was filed as WSR 11-06-063.

     Title of Rule and Other Identifying Information: Board of directors of the joint underwriting association (JUA) for midwifery and birthing centers malpractice insurance.

     Hearing Location(s): Insurance Commissioner's Office, TR 120, 5000 Capitol Boulevard, Tumwater, WA 98504-02555 [98504-0255], on May 26, 2011, at 9:00 a.m.

     Date of Intended Adoption: May 27, 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 May 25, 2011.

     Assistance for Persons with Disabilities: Contact Lorrie [Lorie] Villaflores by May 25, 2011, TTY (360) 586-0241 or (360) 725-7087.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rule will amend WAC 284-87-050 to reduce the number of members of the board of directors of the JUA for midwifery and birthing centers malpractice insurance from seven members to five members.

     Reasons Supporting Proposal: The board of directors of the JUA for midwifery and birthing centers malpractice insurance has had two vacancies for which the commissioner has had a difficult time finding anyone willing to accept an appointment to fill the vacancies.

     Statutory Authority for Adoption: RCW 48.02.060 and 48.87.100.

     Statute Being Implemented: Chapter 48.87 RCW.

     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, Implementation and Enforcement: Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, (360) 725-7036.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. This proposed rule amendment would reduce the number of members of the midwifery JUA board from seven to five members and make adjustments in the representational slots on the board in accordance with this proposed reduced number of board members. This proposed change in the constitution of the midwifery JUA board will not result in any extra cost or loss of revenue for any insurer or other small business. As a result no small business economic impact statement is required.

     A cost-benefit analysis is not required under RCW 34.05.328. This proposed rule amendment sets forth the agency's interpretation of a statutory provision it administers and does not subject a person to a penalty or sanction as a result of this interpretation; as a result this proposed rule amendment falls within the statutory category of an "interpretive rule." Under RCW 34.05.328 an interpretive rule is explicitly differentiated from being considered a significant legislative rule; therefore the cost-benefit analysis required for significant legislative rule making is not required for this rule.

April 18, 2011

Mike Kreidler

Insurance Commissioner

OTS-3908.1

AMENDATORY SECTION(Amending Matter No. R 2010-02, filed 7/8/10, effective 8/8/10)

WAC 284-87-050   Administration.   (1) The association must be administered by a governing board, subject to the supervision of the commissioner, and operated by a service company or companies appointed by the board.

     (2) The board must consist of ((seven)) five members. ((Five)) Three board members must be member insurers appointed by the commissioner. The other two board members must be licensees who are appointed by the commissioner to so serve, neither of whom shall have an interest, directly or indirectly, in any insurer except as a policyholder. ((Three)) Two of the original board members must be appointed to serve an initial term of three years, two must be appointed to serve an initial term of two years, and the remaining must be appointed to serve a one-year initial term. All other terms must be for three years or until a successor has been appointed. Not more than one member insurer in a group under the same management or ownership shall serve on the board at the same time. At least one of the ((five)) three insurers on the board must be a domestic insurer. Members of the board may be removed by the commissioner for cause.

     (3) The association must indemnify each person serving on the board or any subcommittee thereof, each member insurer of the association, and each officer and employee of the association all costs and expenses actually and necessarily incurred by him, her, or it in connection with the defense of any action, suit, or proceeding in which he, she, or it is made a party by reason of his, her, or its being or having been a member of the board, or a member or officer or employee of the association, except in relation to matters as to which he, she, or it has been judged in such action, suit, or proceeding to be liable by reason of willful misconduct in the performance of his, her, or its duties as a member of such board, or member, officer, or employee of the association. This indemnification shall not be exclusive of other rights as to which such member, or officer, or employee may be entitled as a matter of law.

     (4) The association at the discretion of the board may agree to indemnify its appointed service company or companies and its staff from all costs and expenses actually and necessarily incurred by them in defense of any action, suit, or proceeding in which they are made a party by reason of their being or having been a service company of the association, except in relation to matters as to which they have been judged by a court of competent jurisdiction, to have engaged in willful misconduct in the performance of their duties as a service company on its behalf by staff.

[Statutory Authority: RCW 48.02.060 and 48.87.100. 10-15-014 (Matter No. R 2010-02), § 284-87-050, filed 7/8/10, effective 8/8/10; 94-02-053 (Order R 93-18), § 284-87-050, filed 12/30/93, effective 1/30/94.]

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