WSR 16-08-024
PROPOSED RULES
OFFICE OF
INSURANCE COMMISSIONER
[Insurance Commissioner Matter No. R 2015-06-Filed March 29, 2016, 3:42 p.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 15-13-068.
Title of Rule and Other Identifying Information: Notice of payment of settlements by insurers.
Hearing Location(s): Insurance Commissioner's Office, 5000 Capitol Boulevard, TR 120, Tumwater, WA 98504-0255, on May 10, 2016, at 10:00 a.m.
Date of Intended Adoption: May 11, 2016.
Submit Written Comments to: Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, e-mail rulescoordinator@oic.wa.gov, fax (360) 586-3109, by May 9, 2016.
Assistance for Persons with Disabilities: Contact Lori [Lorie] Villaflores by May 9, 2016, TTY (360) 586-0241 or (360) 725-7087.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rules will consider requiring insurance companies to provide notice to individual third-party claimants of a settlement.
Reasons Supporting Proposal: The commissioner recently had a situation in which the insurance company settled a claim with a third-party claimant to its insured and sent the settlement funds to the claimant's attorney. Rather than pay the funds onto the claimant, the attorney misappropriated the funds. By requiring insurance companies to give notice to the claimant when there has been a settlement of their claim, it may help to reduce a potential fraud.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Mike Kreidler, insurance commissioner, governmental.
Name of Agency Personnel Responsible for Drafting: Jim Tompkins, P.O. Box 98504-0260 [40260], Olympia, WA 98504-0260, (360) 725-7036; Implementation and Enforcement: Doug Hartz, P.O. Box 98504-0255 [40255], Olympia, WA 98504-0255, (360) 725-7214.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The entities that must comply with the proposed rule are not small businesses under chapter
19.85 RCW.
A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Jim Tompkins, P.O. Box 40260, Olympia, WA 98504-0260, phone (360) 725-7036, fax (360) 586-3109, e-mail
rulescoordinator@oic.wa.gov.
March 29, 2016
Mike Kreidler
Insurance Commissioner
NEW SECTION
WAC 284-30-396 Payee notification.
(1) Upon the payment of five thousand dollars or more in settlement of any third-party liability claim, where the claimant is a natural person, the insurer must provide written notice to the claimant at the same time payment is made, by the insurer or its representative (including the insurer's attorney), to the claimant's attorney or other representative of the claimant by draft, check or otherwise.
(2) This section does not create any cause of action for any person against the insurer, other than a government agency, based upon the insurer's failure to provide notice to a claimant as required by this section; nor does this section create a defense for any party to any cause of action based upon the insurer's failure to provide the notice.
