The bill establishes new regulations for nonprofit health insurance carriers in Washington State, focusing on their surplus funds. It mandates that by July 1, 2026, and annually thereafter, these carriers must report their surplus to the state commissioner. The commissioner is tasked with determining if a carrier's surplus is excessive, defined as exceeding 600 percent of the carrier's risk-based capital (RBC) requirements. If deemed excessive, the carrier must pay three percent of the surplus to the state health care affordability account to support a premium assistance program, unless they can demonstrate that such a payment would jeopardize their financial stability.

Additionally, the bill allows nonprofit health carriers to request a hearing if they believe the required payment is too burdensome. The commissioner can reduce the payment only if the carrier provides compelling evidence of potential financial impairment. The bill also includes definitions for key terms such as "excessive surplus," "RBC," and "surplus." The act is set to take effect on January 1, 2026.