WASHINGTON STATE LAWS FOR INSURNACE

Insurance Commissioner

The elected official in charge of enforcing insurance laws in Washington, serving a 4-year term.

Certificate of Authority

A document that states the name of the insurer, its main office location, attorney's name, and the type of insurance it is authorized to transact.

Surety Bond Requirement

Insurance producers must maintain a bond for the benefit of the public, amounting to either $2,500 or 5% of the previous year's premiums, not exceeding $100,000.

Temporary License

A license that can be issued for up to 180 days under specific circumstances, such as death or disability of a producer.

Appointment by Insurer

A requirement for producers to be appointed by an insurer to represent them in transactions.

Grievances

Complaints that can be filed with the Insurance Commissioner regarding any insurance-related persons, including brokers and adjusters.

Investigations

The Insurance Commissioner's power to conduct investigations to determine violations of insurance laws.

Prelicensing Course

A course that applicants must complete before obtaining a Washington insurance license.

Insurance Producer

A licensed individual who places insurance with insurers and must comply with Washington's insurance laws.

Adjusters

Individuals who investigate and negotiate insurance claim settlements relative to the insurer's policy.

Maintain bond

Insurance producers must maintain a surety bond to protect the public when placing insurance with unappointed insurers.

Examination Requirement

An exam that most applicants must pass to obtain a Washington insurance license, with exceptions for certain applicants.

Investigative Examinations

Mandatory examinations conducted by the Commissioner to audit authorized insurance companies at least once every 5 years.

Emergency Orders

Orders that the Insurance Commissioner can issue in line with a state of emergency as declared by the governor.

SHIBA Program

Statewide Health Insurance Benefits Advisors Program that assists the public with insurance information and complaints.

License Denial Grounds

Reasons that can lead to the denial, suspension, or revocation of a person's insurance license.

Denial of License

The Insurance Commissioner can deny a license if an applicant has a history of violations or misconduct.

30 days following effective date of termination

How many days does the insurer have to notify the Commissioner that the appointment of the producer has been cancelled.

2 Years

How long is the insurance license good for before renewal?

24 hours

How many hours of Continuing Education does a broker or producer need?

3 Hours of Ethics

What do producers and brokers need including standard continuing education?

Long-Term Care Insurance Certification Requirement

Each insurer offering long-term care insurance policies in Washington must certify annually that all insurance producers have completed an 8-hour, one-time long-term care education and training course.

Medical Waiver

Waives the need to complete Continuing Education if there is a doctors note submitted that would prevent the licensee from completing the contiuned education

Military Waiver

Continued Education is not needed to renew if the licensee is in active military service. Need to submit Letter of Mobilization

First 30 days Late

50% of the License renewal fee surcharge

31-60 days late

100% of the licenses renewal fee surcharge

61 to 12 months

200% of the license renewal fee surcharge

30 days

The time within which an insurance producer, title insurance agent, or adjuster must report to the Commissioner any administrative action taken against them in another jurisdiction or by another governmental agency in Washington, measured from the final resolution of the matter.

Display of License

The licenses of each producer must be displayed publicly

Change of address

Licensees must advise commissioner of any changes within 30 days of change. 1000 dollar fine if not

When may an individual that is not licensed be compensated for the sale of insurance?

If the individual was licensed at the time of sale and receives deferred commissions while unlicensed

5 years

How long must an insurer retain information about the compensation disclosure between the insurer, the producer and the insured?

Producer’s Compensation Disclosure

Insurance producers must disclose in writing the total fee paid by the insured, the commission received from the insurer, and any offsets or reimbursements for each policy.

Policy Delivery

If the insurer requires its producers to deliver policies, both the insurer and the producer are responsible for timely delivery and must physically deliver the policy.

electronic means

Any part or documents are allowed to be stored by these means if they meet the requirement of Washington Electronic Authentication Act.

Electronic Signature

Equivalent of a digital signature

fiduciary capacity

Premium or return premiums received by a producer or broker must be promptly accounted for paid to the entitled insured, insurer or producer

Commingling

Combing premium with other funds is prohibited. Must be a separate account from personal or other business accounts

Reply to the Insurance Commissioner

It is the licensee’s responsibility to see that the Commissioner receives the reply within 15 business days after the licensee receives the inquiry.

License Suspension, Revocation, Probation, Denial, or Refusal to Renew

Actions against an insurance license due to false information, law violations, fraud, misappropriation, or unethical conduct.

Notice of suspension

The Commissioner must notify in 15 days

Probations

Conditions set by the Commissioner for a licensee on probation, including regular reporting, practice limitations, and continuation of education until satisfactory skill is achieved.

Effect of Felony Conviction

The Commissioner may revoke or refuse renewal of any licensee immediately and without hearing upon sentencing of the licensee for a felony conviction by final judgment of the court.

Fines

The Commissioner may impose fines up to $1,000 per offense after a hearing. Fines must be paid within 15 to 30 days, or license revocation and civil action may occur.

How many days does the Department of Motor Vehicles (DMV) have after receiving an accident report to determine the amount of security needed to satisfy any judgement for damages?

20 Days

Conducting the business of insurance without required or proper licensure

Class B Felony subject to civil penalty of 25,000, suspension or revoke a license, issue and enforce a cease and desist order

Rebating

Insurers and producers cannot offer any rebates, discounts, commissions, or other inducements to insureds or their employees that are not specified in the insurance contract.

illegal inducement for an insurer or producer

Offering incentives like stocks, advisory contracts, or gifts over $100 in a year to insureds or prospects is prohibited.

$200

Fine for Rebating and Inducements

Exceptions to Rebating and Inducements

• Payment of commissions to a licensed producer for insurance placed on the producer’s own property or risks

• Discounts applied to a Marine insurance producer that are standard among Marine insurers and are additional to the producer’s commission

• Advertising or promotional programs involving prizes, goods, gift cards, or merchandise not exceeding $100 per person in any 12-month period

• Lawful offset or reimbursement of all or part of a fee paid to an insurance producer

• The inclusion of a wellness program in a group or individual health benefit plan or contract, as long as the program is lawful

• Products or services related to a life insurance policy intended to incentivize behavioral changes to improve health and reduce risk of death

Illegal Dealing in Premiums

Collecting and not providing coverage, collecting more than required or required at all, and failing to issue a refund. All are misdemeanors unless if they are felony

Misrepresentation

No person may make or issues a claim about a policies terms knowing they are false. The names or classes may not misrepresent the nature of the policy

Twisting

Insurance producers may not use any misleading policy comparisons to induce any insured to lapse, terminate, forfeit, surrender, retain, or convert any insurance.

Advertising

Must include the full name of the insurer, location of its principal office in the united states. No misrepresentative quotes

Unfair Discrimination

Anyone in the business of insurance cannot deny or cancel a contract due to sex, marital status, sexual orientation or disability

Failure to Issue Proper Receipts

An insurance producer or other representative of an insurer who receives a contract payment or premium from an insured or applicant must deliver or mail a signed receipt as promptly as possible, generally no later than the next business day.

File and Record Documentation

The insurer’s claim files are subject to examination by the Commissioner.

Misrepresentation of Policy Provisions

An insurer may not fail to fully disclose to first-party claimants all pertinent benefits, coverages, and provisions of the insurance policy or contract under which a claim is presented.

Standards for Insurer to Acknowledge Pertinent Communications

Insurers must acknowledge the receipt of a notice of claim:

• Within 10 working days, if the claim is related to an individual insurance policy

• Within 15 working days, if the claim is related to a group insurance contract

For any other communication in the regard for the claims the same reply time period is expected in 10 and 15 day periods.

Standards for Prompt Investigation of Claims

Insurer must complete investigation of a claim within 30 days after receiving notice of claims unless not reasonably completed in that time.

15 Working Days

How many days does an insurer have to accept or deny a claim after receiving proof of loss?

Standards for Settlement

If accept/deny cannot be determined in 15 days, they must provide notice within that time for investigation, if that investigation is not complete, they must provide notice in 45 days and then every 30 days there after

Processing and Paying Claims

Unless otherwise required by statute, rule, or contract, insurers must deliver payment of a settled claim within 15 business days after the insurer receives properly executed releases.

Practices Regarding Policy Denial or Termination

When an insurer is required by law to give the reason for denying, cancelling, or nonrenewing insurance, it must give the true and actual reason in clear and simple language,

Practices Regarding Policy Changes

It is an unfair practice to use a 20-day notice to increase premiums by a change of rates or policy terms to the adverse interest of the insured, except on a one-time basis in connection with policy renewal.

Practices Regarding Incorrect Premium

If the insurer elected to make a mid-term premium revision due to an incorrect premium was charged, they must notify the insured of the error and the additional amount, offer to the cancel the policy at a pro-rata basis or continue the policy with the full term with the correct premium no earlier than 20 days after notice of additional premium, correct the premium and rate/retroactively if the premium revision results from incomplete information provided by the insured

Transacting Business in the Insurer’s Legal Name

The insurer cannot conduct business in any other name than its own legal name

Applications and Binders

Any written application for insurance may be altered solely by the applicant or by the applicant’s written consent. This does not apply to administrative insertions made by the insurer. Violating this requirement is a misdemeanor.

Binding Coverage

Binders pending the issuance of any property, marine, transportation or general casualty must be in writing or printed and sent no later than the next business day. Binders should be replaced promptly with insurance policies, typically within 90 days of the binders effective date

90 days

Without the Commissioner's approval, binders issued in Washington are only valid for

Denial and Terminations of Homeowners Insurance Affected by Day Care Operations

Insurer cannot deny a homeowners policy over the insured having an in-home daycare. Insurers are able to limit business coverage under the policy

Disclosure of Producers’ and Brokers’ Fees

Producers and Brokers cannot charge a fee in excess of usual commission without first advising the insured in writing before rendering services

Remedies and Penalties for Unfair Practices

If a person violates an order made by the Commission after 10 days of receiving the order, they may get a 250 fine per violation

180 days

Before terminating an independent producer's contract, an insurer must give the producer at least how much notice? 

diligent effort

You are able to purchase Surplus lines from unauthorized insurers IF they made ____ to find coverage from authorized insurer

Conditions for Procurement of Surplus Line Coverage

• The insurance must be procured through a licensed surplus line broker and must be unavailable from most authorized insurers

• Coverage may not be procured solely to secure a lower premium or other competitive advantage

• The surplus line broker must execute an affidavit and file it with the Commissioner within 30 days after procuring such insurance

Property and Casualty Insurance Guaranty Association

The purpose of the Property and Casualty Insurance Guaranty Association is to pay covered claims under certain policies to avoid claimants’ financial losses because of an insurer’s insolvency.

Coverage and Limitations of Association Investigations

Pays claims that become liable to pay that are filed within 30 days of the insurers insolvency. Association will pay up to 300,000 per claimant

Prevention of Insolvencies

The Commissioner must help detect/prevent insolvencies and notify other states commissioners within 30 days of revoking a member insurance license due to this risk.

Prohibited Advertising

A person may not make any statement using the Association’s existence to sell, solicit, or induce the purchase of any form of insurance.

Examination of the Association

The Association will be subject to examination and regulation by the Commissioner, must submit a report no later than March 30 of each year.

Cancellation of Property and Casualty Policy

Must provide 45 days before cancellation, including to the named insured and all people with an interest in the property, must be writing

Cancellation of Property and Casualty Policy for non-payment of premium

Insurer only needs to give 10 days’ notice, must be writing

Cancellation of Fire Policies of Property and Casualty Policy

Requires 5 days notice, must be writing

Nonrenewal of Property and Casualty Policy

Provide 45 days’ notice before the nonrenewal, must state the reason for nonrenewal. May not renew a policy due to non payment of premium, insured has gotten equivalent coverage and contract clearly states that it is nonrenewable or is evidences by a written binder that has expired

Credit Scoring – Adverse Action

The insurer cannot deny personal insurance coverage based on the applicant’s credit score or credit history

Cancellation by the Company

An insurer terminating a Homeowners policy must give the insured 45 days’ advance notice and must give the insured’s broker or the account’s producer a copy of the termination notice within 5 working days. Must have the reason for cancellation in clear and simple language and provided to all with an interest in the home

The insurer must return unearned premiums within 30 days of receiving notice

When an insured decides to cancel a Homeowners, policy issued in Washington?

Overinsurance

A person may not knowingly require, request, issue, place, or accept any contract resulting in insuring an interest under one or more policies against the same hazard in an amount exceeding the interest’s fair value

Fair Access to Insurance Requirements (FAIR) Plan

Participation is mandatory for all insurers and fraternal benefit societies authorized to transact property insurance business in Washington.

Procedure for Inspection

The inspector has no authority to advise whether the facility will provide the coverage. The report will include a rate make-up statement, including any condition charges or surcharges imposed. A copy of the inspection report will be made available to the applicant or the applicant’s producer upon request.

The maximum limit of liability

The program may issue per property at one location is $1.5 million.

Procedure after Inspection

Within 3 business days after receipt of the report the facility must notify the insured and the producer of the

• The risk is acceptable

• The risk will be acceptable if the improvements noted in the action report are made by the applicant and confirmed by reinspection

• The risk is not acceptable for the reasons stated in the action report

Right to Appeal to inspection

The insurer has the right to reappeal to the committee and the committee can appeal to the commissioner. The Committee must provide decisions on appeals in writing within 15 business days after nofication

The Joint Reinsurance Association

All property insurers authorized in Washington are members of

$25,000

The minimum limits of liability must be at least ____ for bodily injury or death of one person in any one accident

$50,000

The minimum limits of liability must be at least for bodily injury or death of 2 or more persons in any one accident

$10,000

The minimum limits of liability must be at least for damage or destruction of property of others in any one accident

Laws requiring proof of financial responsibility for the future apply to persons who have:

• Been convicted of or forfeited bail for certain offenses under motor vehicle laws

• Failed to pay judgments

• Driven or owned a vehicle involved in an accident and are required to deposit security

Automobile insurers must offer the following minimum Personal Injury Protection coverages:

• $10,000 in medical and hospital benefits

• $2,000 for funeral expenses

• $10,000 for income continuation (also known as wage loss) benefits, subject to a limit of $200 per week

• $5,000 in loss of services benefits, subject to a limit of $200 per week