Senate Bill 5720, Risk Mitigation in Property Insurance (Washington, 2023 Regular Session)

Summary

Senate Bill 5720 of the 68th Legislature, 2023 Regular Session, State of Washington, by Senator Stanford, an act relating to risk mitigation in property insurance that amends RCW 48.18.558 and 48.19.530. Section 1 amends RCW 48.18.558, under which, with the prior approval of the commissioner, a property insurer may include goods or services intended to reduce the probability or extent of loss from a covered event as part of a policy of property insurance. The section lists examples including a water monitor, foundation strapping to mitigate losses due to earthquake, and brush clearing to mitigate losses due to wildfire. It also provides that a property insurer may conduct a pilot program as a risk mitigation or prevention strategy.

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Full text

     S-1265.1

                               SENATE BILL 5720


     State of Washington       68th Legislature       2023 Regular Session

     By Senator Stanford




1        AN ACT Relating to risk mitigation in property insurance; and
2    amending RCW 48.18.558 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 in value in the aggregate in any
21   twelve-month period.
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 1       (4) In order to receive prior approval of the commissioner, and
 2   except as provided in subsection (6) of this section, the property
 3   insurer must include the following in its rate filing:
 4       (a) A description of either the specific goods or services, or
 5   both, to be offered;
 6       (b) A description of the method of delivering either the specific
 7   goods or services, or both, being offered; and
 8       (c) The selection criteria for insureds receiving either the
 9   specific goods or services, or both, being offered.
10       (5) This section does not require the commissioner to approve any
11   particular proposed benefit. The commissioner may disapprove any
12   proposed noninsurance benefit that the commissioner determines may
13   tend to promote or facilitate the violation of any other section of
14   this title. However, if the commissioner approves the inclusion of
15   either the goods or services, or both, in a policy of property
16   insurance((, except commercial property insurance,)) it does not
17   constitute a violation of RCW 48.30.140 or 48.30.150.
18       (6)(a) A property insurer may conduct a pilot program as either a
19   risk mitigation or prevention, or both, strategy through which the
20   insurer offers or provides risk mitigation and/or prevention goods
21   and/or services identified in subsection (1) of this section in
22   connection with an insurance policy covering property risks((, except
23   commercial property insurance,)) in accordance with rules adopted by
24   the commissioner.
25       (b) A property insurer offering or providing risk mitigation
26   and/or prevention goods and/or services through a pilot program under
27   this subsection is exempt from including information about the risk
28   mitigation and/or prevention goods and/or services in its rate filing
29   as is otherwise required under subsection (4) of this section and RCW
30   48.19.530.
31       (c) A property insurer's pilot program may last no longer than
32   two years.
33       (7) This section does not apply to disaster or emergency response
34   activities of a property insurer.


35       Sec. 2.   RCW 48.19.530 and 2018 c 239 s 3 are each amended to
36   read as follows:
37       (1) Except as provided in subsection (2) of this section, in
38   addition to other information required by this chapter, a rate filing
39   by a property insurer for a policy((, except commercial property
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 1   insurance,)) that includes risk mitigation and/or prevention goods
 2   and/or services under RCW 48.18.558, must demonstrate that its rates
 3   account for the expected costs of the goods and services and the
 4   reduction in expected claims costs resulting from either the goods or
 5   services, or both.
 6       (2) This section does not apply to:
 7       (a) A property insurer offering or providing risk mitigation
 8   and/or prevention goods and/or services through a pilot program
 9   established in RCW 48.18.558(6); or
10       (b) Disaster or emergency response activities of a property
11   insurer.

                                  --- END ---




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