Bill Summary – FastDemocracy

CERTIFICATION OF ENROLLMENT
                      SUBSTITUTE SENATE BILL 5720
                       Chapter 446, Laws of 2023
                               68th Legislature
                             2023 Regular Session
COMMERCIAL PROPERTY INSURANCE—RISK MITIGATION GOODS AND SERVICES
                     EFFECTIVE DATE: July 23, 2023
Passed by the Senate April 19, 2023                 CERTIFICATE
  Yeas 49 Nays 0
                                       I, Sarah Bannister, Secretary of
                                       the   Senate   of   the   State  of
              DENNY HECK               Washington, do hereby certify that
President of the Senate                the attached is SUBSTITUTE SENATE
                                       BILL 5720 as passed by the Senate
                                       and the House of Representatives on
                                       the dates hereon set forth.
Passed by the House April 7, 2023
  Yeas 97 Nays 0
                                                 SARAH BANNISTER
            LAURIE JINKINS                                         Secretary
Speaker of the House of
Representatives
Approved May 11, 2023 10:14 AM                         FILED
                                                    May 11, 2023
                                               Secretary of State
              JAY INSLEE                       State of Washington
Governor of the State of Washington
                           SUBSTITUTE SENATE BILL 5720
                             AS AMENDED BY THE HOUSE
                   Passed Legislature - 2023 Regular Session
     State of Washington         68th Legislature        2023 Regular Session
     By Senate Business, Financial Services, Gaming & Trade (originally
     sponsored by Senator Stanford)
     READ FIRST TIME 02/17/23.
1        AN ACT Relating to risk mitigation in property insurance; and
2    amending RCW 48.18.558, 48.18.559, and 48.19.530.
3    BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
 4       Sec. 1.   RCW 48.18.558 and 2018 c 239 s 2 are each amended to
 5   read as follows:
 6       (1) With the prior approval of the commissioner, a property
 7   insurer may include the following either goods or services, or both,
 8   intended to reduce either the probability of loss, or the extent of
 9   loss, or both, from a covered event as part of a policy of property
10   insurance((, except commercial property insurance)):
11       (a) Goods, including a water monitor;
12       (b) Foundation strapping to mitigate losses due to earthquake;
13       (c) Ongoing services, including home safety monitoring or brush
14   clearing to mitigate losses due to wildfire; and
15       (d) Other either goods or services, or both, as the commissioner
16   may identify by rule.
17       (2) Any goods provided are owned by the insured, even if the
18   insurance is subsequently canceled.
19       (3) The value of goods and services to be provided is limited to
20   ((one thousand five hundred dollars)) $7,500 or ten percent of the
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 1   annual policy premium, whichever is greater, in value in the
 2   aggregate in any ((twelve-month)) 12-month period.
 3       (4) In order to receive prior approval of the commissioner, and
 4   except as provided in subsection (6) of this section, the property
 5   insurer must include the following in its rate filing:
 6       (a) A description of either the specific goods or services, or
 7   both, to be offered;
 8       (b) A description of the method of delivering either the specific
 9   goods or services, or both, being offered; and
10       (c) The selection criteria for insureds receiving either the
11   specific goods or services, or both, being offered.
12       (5) This section does not require the commissioner to approve any
13   particular proposed benefit. The commissioner may disapprove any
14   proposed noninsurance benefit that the commissioner determines may
15   tend to promote or facilitate the violation of any other section of
16   this title. However, if the commissioner approves the inclusion of
17   either the goods or services, or both, in a policy of property
18   insurance((, except commercial property insurance,)) it does not
19   constitute a violation of RCW 48.30.140 or 48.30.150.
20       (6)(a) A property insurer may conduct a pilot program as either a
21   risk mitigation or prevention, or both, strategy through which the
22   insurer offers or provides risk mitigation and/or prevention goods
23   and/or services identified in subsection (1) of this section in
24   connection with an insurance policy covering property risks((, except
25   commercial property insurance,)) in accordance with rules adopted by
26   the commissioner.
27       (b) A property insurer offering or providing risk mitigation
28   and/or prevention goods and/or services through a pilot program under
29   this subsection is exempt from including information about the risk
30   mitigation and/or prevention goods and/or services in its rate filing
31   as is otherwise required under subsection (4) of this section and RCW
32   48.19.530.
33       (c) A property insurer's pilot program may last no longer than
34   two years.
35       (7) This section does not apply to disaster or emergency response
36   activities of a property insurer.
37       Sec. 2.   RCW 48.18.559 and 2018 c 239 s 4 are each amended to
38   read as follows:
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 1       The commissioner may adopt rules as necessary to implement RCW
 2   48.18.558 and 48.19.530, including but not limited to:
 3       (1) Rules requiring a notice to insureds or potential insureds
 4   regarding their ability to opt out of receiving any risk mitigation
 5   and/or prevention goods and/or services;
 6       (2) ((Rules increasing the value of either the goods or services,
 7   or both, permitted under RCW 48.18.558(1);
 8       (3)))   Rules  establishing   requirements   for   pilot programs
 9   authorized under RCW 48.18.558(6); and
10       (((4))) (3) Rules identifying which insurer disaster or emergency
11   response activities are exempt from RCW 48.18.558 and 48.19.530 and
12   RCW 48.30.140 and 48.30.150.
13       Sec. 3.   RCW 48.19.530 and 2018 c 239 s 3 are each amended to
14   read as follows:
15       (1) Except as provided in subsection (2) of this section, in
16   addition to other information required by this chapter, a rate filing
17   by a property insurer for a policy((, except commercial property
18   insurance,)) that includes risk mitigation and/or prevention goods
19   and/or services under RCW 48.18.558, must demonstrate that its rates
20   account for the expected costs of the goods and services and the
21   reduction in expected claims costs resulting from either the goods or
22   services, or both.
23       (2) This section does not apply to:
24       (a) A property insurer offering or providing risk mitigation
25   and/or prevention goods and/or services through a pilot program
26   established in RCW 48.18.558(6); or
27       (b) Disaster or emergency response activities of a property
28   insurer.
         Passed by the Senate April 19, 2023.
         Passed by the House April 7, 2023.
         Approved by the Governor May 11, 2023.
         Filed in Office of Secretary of State May 11, 2023.
                                  --- END ---
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Statutes affected: 
Original Bill: 48.18.558, 48.19.530
Substitute Bill: 48.18.558, 48.19.530
Bill as Passed Legislature: 48.18.558, 48.18.559
Session Law: 48.18.558, 48.18.559