“Virtual” 2022 Legislative Session Convenes with Five Members of the Senate Testing Positive for COVID
The 2022 Legislative Session convened on Monday, January 10 for a short 60-day Legislative session that is operating almost entirely in “virtual space”. With five of the 49 members of the Washington State Senate testing positive for COVID during the first week of the session, Legislative leaders have indicated that operations will be conducted in much the same way as the entire 2021 Legislative session was handled—in virtual space, with no “in-person” meetings with the public, and with limited attendance of legislators on the House and Senate floors. Senate Majority Leader Andy Billig (D, 3rd Legislative District, together with Senators John Lovick (D, 44th District), Mark Mullet (D, 5th District), Yasmin Trudeau (D, 27th District), and Shelly Short (R, 7th District) all tested positive for COVID during the first week of the 2022 Legislative Session.
The Capital Campus, including the Legislative Building and all House/Senate office buildings and hearings rooms, are entirely closed to the public, and all “in person” meetings with the public have been suspended. All hearings are being conducted through Zoom or other virtual formats. Legislative leaders have indicated that they will review the current operations every two weeks to determine if changes can be made, but many observers anticipate that the restrictions are likely to last until the 2022 Legislative Session adjourns in March.
Senate Committee Considers Bill Allowing Insurers to Use Credit-Based Insurance Scores, But Only if the Credit Information Improves the Consumer’s Rate
The Senate Business, Financial Services & Trade Committee held a hearing on Tuesday, January 11 to consider SB 5623—a measure that has been introduced Senator Mark Mullet (D, 5th District). The bill would establish a “better only” structure for the use of credit-based insurance scores, modeled after legislation that has been enacted in Oregon. The bill would allow Credit-Based Insurance Scores (CBIS) as a factor in rating new personal lines policies, but for renewals, CBIS would only be able to be used as a factor if it improves the consumer’s rate.
Licensed insurance producers representing the Professional Insurance Agents WA/AK and the Independent Insurance Agents and Brokers of Washington testified in support of the measure. They pointed to the premium increases that consumers experienced immediately after the OIC’s emergency rules were adopted that banned credit-based insurance scores, and expressed strong support for the restoration of consumers’ “good credit discounts”. The Northwest Insurance Council also provided testimony, indicating that although insurers would likely prefer to retain full risk-based underwriting, the bill is workable, based on the experience in Oregon.
Representatives from the Office of the Insurance Commissioner and the Consumer Federation of America testified against the bill, arguing that insurers should be restricted from using credit.
On his website, Insurance Commissioner Kreidler, continues to express support for SB 5010, which was introduced in the 2021 Legislative Session. As introduced, SB 5010 would have banned the use of CBIS in personal lines of property and casualty insurance. Following hearings on the bill, the measure was amended to provide that CBIS could be used, but only if it improves a consumer’s insurance score and lowers premiums. Commissioner Kreidler expressed vigorous opposition to the amended version of the bill. The amended bill died on the Senate floor at the end of the 2021 Legislative session, when it was not brought to a vote on the Senate floor. The measure has been referred to the “X file” in the Senate Rules Committee, and it appears unlikely to be considered during the 2022 Legislative session.
The Senate Business, Financial Services & Trade Committee has not yet scheduled a vote for SB 5623 following the hearing for the measure.
Early Activity for Controversial Prejudgment Interest Bills in the House and Senate
On Tuesday, January 11, the House Civil Rights and Judiciary Committee held a hearing to consider HB 1754—a measure that was introduced by Rep. David Hackney (D, 11th District) that would establish prejudgment interest on most actions accruing from the date of the cause of action. The bill sets the interest to run at two points above the prime interest rate. The Liability Reform Coalition, together with the Washington State Medical Association, Washington State Hospital Association, Washington School Risk Management Pool, Schools Insurance Association, Washington Defense Trial Lawyers, the City of Tacoma, the Association of Washington Cities, and the American Property Casualty Insurance Association all testified against the bill. They argued that the bill would increase costs for defendants, and that defendants have no control over when a plaintiff decides to file a lawsuit.
The bill is similar to SSB 5155, which was considered and approved by the Senate Law and Justice Committee in the 2021 Legislative session, but it died in the Senate Rules Committee at the end of the 2021 Legislative Session. On Friday, January 14, SSB 5155 was pulled from the Senate Rules Committee, and it was placed on the Senate Floor Calendar. The measure could come to a vote at any time. SSB 5155 is similar to HB 1754 except that the measure was amended in committee last year to provide that interest on judgments involving medical malpractice claims runs from the date of the entry of judgment, and not from the date that the cause of action accrued.
Bill Dealing with Auto Insurance Claims and Appraisers Introduced
Representative Steve Kirby (D, 27th Legislative District) has introduced HB 1979—a measure that would impose new requirements regarding adjusters and auto insurance claims, which would appear to provide auto repair shops with more leverage in dealing with insurers, increasing the likelihood of questionable claims or unreasonable charges being paid. For insurers that dispute these claims and charges, the costs of the dispute could exceed the amount of the repairs. The bill remains under review, but insurance stakeholders are expected to oppose the measure if it is scheduled for a hearing.
The Prime Sponsor of the bill is Representative Steve Kirby, who is the Chair of the House Consumer Protection & Business Committee. HB 1979 has been referred to Rep. Kirby’s committee, and it is expected that the measure will be scheduled for a hearing in the near future. Insurance stakeholders have scheduled a meeting with Representative Kirby to discuss the industry’s concerns about the bill.
New Data Privacy Bills Introduced
Representative Vandana Slatter (D, 48th District) has introduced HB 1850, which appears to be the most recent effort to enact privacy standards for consumer data that are similar to protections that have been approved in California and Europe. HB 1850 remains under review by interested stakeholders, and there will be keen interest and concern within the business community about provisions that would appear to establish a private right of action for violations of the bill. The bill has not yet been scheduled for a hearing.
The measure is similar to previous measures on the issue that have been introduced by Senator Reuvan Carlyle (D, 36th District). 2SSB 5062, in 2021, was Senator Carlyle’s third data privacy bill in three legislative sessions to have been introduced by Senator Carlyle, and all have failed to be enacted due to unresolved disagreements. In 2021, the disagreements were concentrated within the House. Large portions of the technology industry and the general business community have consistently expressed support for the substance of Senator Carlyle’s proposals dealing the data privacy, but they have made it clear that they cannot support a proposal that includes a private right of action. In prior years the measure failed due to disagreements between the House and Senate over whether a private right of action should be included in the bill.
This year, Senator Carlyle has introduced SB 5813—a measure that would appear intended to regulate “data brokers”. Business, technology, insurance, and banking stakeholders are review the measure to determine its impacts. Legislation on data brokers has apparently been enacted in California, Vermont, and Colorado, but it appears that SB 5813 is more substantive than any of those measures. Entities that are subject to Gramm-Leach-Bliley privacy protections have expressed preliminary concern about possible overlapping and conflicting implications that the bill poses with respect to these federal requirements.
Insurance Stakeholders Testify In Opposition to Measure Restricting State Agencies from Selling Data
On Monday, January 10, the House State Government & Tribal Affairs Committee held a hearing to consider HB 1552—a measure that would prohibit the state from selling personal data to third parties. APCIA, NAMIC, and NWIC testified in opposition to the measure, noting that insurers and data vendors purchase over 2 million motor vehicle record abstracts each year that are used for underwriting and rating purposes, and that prohibiting access to these records would have adverse impacts on insurance consumers who rely on accurate risk classification. The Consumer Data Industry Association also testified in opposition to the bill. The bill has not been set for a vote of the committee.
OIC Will Not Seek Enactment of NAIC Cybersecurity Model Bill in 2022
Although the Insurance Commissioner Kreidler previously indicated that the OIC would seek the passage of the NAIC Cybersecurity Model Act in the 2022 Legislative session, the OIC has now stated that they will not bring the bill forward this year. In December, APCIA, together with AHIP, the ACLI, and NAMIC jointly offered red-line revisions to the OIC’s draft bill, consistent with revisions that have been jointly supported in other states that have considered the measure. Apparently the issue is off of the table for the 2022 Legislative session.
OIC Prepares Legislative Proposals
Insurance Commissioner Mike Kreidler has prepared a package of legislative proposals that he intends to submit to the 2022 Legislature. A link to the OIC’s legislative priorities can be found at https://www.insurance.wa.gov/legislative-priorities .
The OIC’s request bills include:
-Updates to the Balance Billing Protection Act (HB 1688/SB 5618 Protecting consumers from charges for out-of-network health care services). Insurance Commissioner Kreidler is proposing legislation to align state and federal law, while preserving critical consumer protections in Washington’s Balance Billing Protection Act.
-Washington Life and Disability Insurance Guaranty Association (SB 5508 Concerning the insurance guaranty fund). The OIC’s proposal expands the Washington State Life and Disability Guaranty Association membership, adding HMO’s and Health Care Service Contractors to the membership of the WLDGA to provide for larger assessment capacity. The measure also provides equitable distributions of assessments, in order to protect Washington state insurance policyholders.
-A proposal to prohibit property and casualty insurers from using credit-based insurance scoring in personal lines of insurance. See SB 5010;
-Insurance Data Security. Insurance Commissioner Kriedler previously suggested they would seek legislation to enact the NAIC cybersecurity model act. It now appears that the OIC will not introduce the proposal.
Legislature Approves Cut-Off Resolution for the Consideration of Bills
The House and Senate have approved SCR 8404—a cut-off resolution establishing dates for the consideration of bills. The cut-off dates that are included in this resolution are as follows:
February 3—the last day for committees in the House of origin to take action on bills;
February 7—the last day for Fiscal committees in the House of origin to take action on bills;
February 15—the last day for the House of origin to take action on bills;
February 24—the last day for committees in the opposite House to take action on bills;
February 28—the last day for Fiscal committees in the opposite House to take action on bills;
March 4—the last day for the opposite House to take action on bills (except exempt bills and bills passed by both Houses in different forms);
March 10—the last day of the 2021 Regular Legislative Session
Washington Legislative Update for January 15, 2022
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