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Washington Legislature moves quickly in election year

Washington’s legislature wrapped up a short session in March, addressing its budgets and tackling “many controversial issues,” including Columbia River water, medical malpractice and gay rights, according to a report by the Insurance Agents and Brokers of the West (IBA West). Among the final actions the legislature took were bills making a fifth drunk driving offense in a decade a felony, and a program giving small employers help in providing health insurance to low-income workers.

The election-year session featured bitter fights in the House between Democrats and a badly outnumbered Republican minority, IBA West said. The association tracked insurance bills addressing everything from fraud to taxes.

Among the bills deemed “high priority” by IBA West is bill S2482, which attempted to confront insurance fraud by establishing an insurance fraud program within the state’s Office of the Insurance Commissioner (OIC).

The bill provides that any insurer or licensee of the commissioner that has a reasonable belief that an act of insurance fraud, which is or may be a crime under Washington law, has been, is being, or is about to be committed, shall furnish and disclose the knowledge and information to the commissioner or the National Crime Bureau, the National Association of Insurance Commissioners, or similar organizations.

The legislation also requires the commissioner to prepare an annual report of the activities of the fraud program, detailing the number of fraud cases reported, prosecuted, convictions obtained, and money recovered.

•Another bill deemed a high priority, S2880, finds that exempting insurers from excise taxes on the purchase or sale of services is inequitable and results from the inadvertent failure to revise insurance premiums tax statutes to be consistent with other excise tax statutes. The bill declared an intent to require insurers to pay retail sales and use taxes on purchase of both tangible personal property or services, on the same terms as other taxpayers.

•Bill 2791 established provisions regulating insurance overpayment recovery practices.

•Bill S2405 regulates the compensation paid by an insurer to an insurance broker.

•Bill 6764 streamlined the administration of tax incentive programs. According to the bill summary, the state’s retail sales tax on construction discourages capital investment by new and existing Washington businesses. Without relief from the retail sales tax on construction, Washington businesses in certain sectors would be adversely impacted. The legislature recognized the importance of those businesses for employment and economic development in the state, and thus reaffirmed policies providing tax incentives for manufacturing and research and development businesses in distressed areas to promote economic stimulation, growth, and new employment opportunities.

One of the closely watched bills was Insurance Fraud legislation (ESSB 6234) that passed the last day of the session. It was amended on a number of steps through the legislative process. The final version appears to be satisfactory to the parties involved in the bill.

However, the OIC’s Broker Compensation Disclosure bill was not moved out of the Senate Rules committee. “Apparently the OIC did not focus their attention on the bill and it was left in the Senate Rules committee to whither away,” IBA West noted.

For IBA West’s analysis of the Washington legislative session, visit www.ibawest.com/pdf/ Articles/PNWLegislativeReport 031306.pdf.

Topics Fraud Washington