Washington State Senate Approves Bill for Insurance Consumer Restitution

A significant bill aimed at providing restitution to policyholders adversely affected by their insurer or agent successfully passed the Washington Senate on Wednesday, with a vote tally of 29 to 20.

This legislation, championed by Insurance Commissioner Patty Kuderer and Senator Adrian Cortes (D–Battle Ground), seeks to establish fining parity across all insurance entities regulated by the Office of the Insurance Commissioner.

Related: Washington Commish Tells Insurers to Give Relief on Payments, Cancellations

The proposed bill empowers the commissioner to mandate that any company or individual found in violation of insurance laws must pay restitution to affected policyholders.

Currently, there is a significant gap in the system. When an insurance company employs rates that have not received approval from the commissioner, there is no existing mechanism to compel repayment to policyholders who have overpaid. In cases where an unauthorized insurer defrauds policyholders, the commissioner can impose fines but lacks the authority to mandate repayment of the funds taken. Similarly, if an insurance agent collects premiums but fails to forward those funds to the insurance company, the commissioner cannot require them to return the money.

Related: Washington Commissioner Tells Thin Blue Line to Stop Selling Unlicensed Coverage

Furthermore, the current authority of the commissioner to fine certain property and casualty insurers is capped at $10,000, irrespective of the number of violations. In contrast, health insurers face a limit of $10,000 per violation or offense. SB 5331 aims to rectify this disparity by allowing per-violation fines of up to $10,000 for property and casualty insurance companies, thereby aligning the penalties across different types of insurers.

With the Senate’s approval, SB 5331 is now set to move to the House Consumer Protection & Business Committee for further consideration.

Topics
Washington
Politics

A significant bill aimed at providing restitution to policyholders adversely affected by their insurer or agent successfully passed the Washington Senate on Wednesday, with a vote tally of 29 to 20.

This legislation, championed by Insurance Commissioner Patty Kuderer and Senator Adrian Cortes (D–Battle Ground), seeks to establish fining parity across all insurance entities regulated by the Office of the Insurance Commissioner.

Related: Washington Commish Tells Insurers to Give Relief on Payments, Cancellations

The proposed bill empowers the commissioner to mandate that any company or individual found in violation of insurance laws must pay restitution to affected policyholders.

Currently, there is a significant gap in the system. When an insurance company employs rates that have not received approval from the commissioner, there is no existing mechanism to compel repayment to policyholders who have overpaid. In cases where an unauthorized insurer defrauds policyholders, the commissioner can impose fines but lacks the authority to mandate repayment of the funds taken. Similarly, if an insurance agent collects premiums but fails to forward those funds to the insurance company, the commissioner cannot require them to return the money.

Related: Washington Commissioner Tells Thin Blue Line to Stop Selling Unlicensed Coverage

Furthermore, the current authority of the commissioner to fine certain property and casualty insurers is capped at $10,000, irrespective of the number of violations. In contrast, health insurers face a limit of $10,000 per violation or offense. SB 5331 aims to rectify this disparity by allowing per-violation fines of up to $10,000 for property and casualty insurance companies, thereby aligning the penalties across different types of insurers.

With the Senate’s approval, SB 5331 is now set to move to the House Consumer Protection & Business Committee for further consideration.

Topics
Washington
Politics