Fiscal Note — 5798 SB, Insurance Notices (Office of Insurance Commissioner)
Summary
Individual State Agency Fiscal Note from the Office of Insurance Commissioner for 5798 SB, Insurance notices. Part I lists amounts of 100,638 and 15,866 for the Insurance Commissioners Regulatory Account-State. The narrative states that Section 1 requires an insurer to deliver or mail written notice of cancellation to the named insured at least 60 days before the effective date of the cancellation for insurance policies other than medical malpractice or fire insurance policies canceled under RCW 48.53.040. It states that Section 2 requires written notice of nonrenewal at least 60 days before the expiration date of the policy for policies subject to RCW 48.18.290(1)(a).
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“Fiscal Note — 5798 SB, Insurance Notices (Office of Insurance Commissioner).”
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Individual State Agency Fiscal Note
Bill Number: 5798 SB Title: Insurance notices Agency: 160-Office of Insurance
Commissioner
Part I: Estimates
No Fiscal Impact
Estimated Cash Receipts to:
NONE
Estimated Operating Expenditures from:
FY 2024 FY 2025 2023-25 2025-27 2027-29
FTE Staff Years 0.0 0.7 0.4 0.1 0.0
Account
Insurance Commissioners Regulatory 0 100,638 100,638 15,866 0
Account-State 138-1
Total $ 0 100,638 100,638 15,866 0
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
X
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
Capital budget impact, complete Part IV.
Requires new rule making, complete Part V.
Legislative Contact: Kellee Gunn Phone: 786-7429 Date: 01/05/2024
Agency Preparation: David Forte Phone: 360-725-7268 Date: 01/10/2024
Agency Approval: Joyce Brake Phone: 360-725-7041 Date: 01/10/2024
OFM Review: Jason Brown Phone: (360) 742-7277 Date: 01/11/2024
Form FN (Rev 1/00) 188,801.00 Request # 24-11-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 5798 SB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Significant provisions of the bill and any related workload or policy assumptions that have revenue or expenditure impact on the responding agency by
section number.
Section 1(1)(a)(i) requires, for all insurance policies other than medical malpractice insurance policies or fire insurance
policies canceled under RCW 48.53.040, the insurer to deliver or mail written notice of cancellation to the named insured at
least 60 days before the effective date of the cancellation.
Section 2(1)(a)(i)(A) requires, for all insurance policies subject to RCW 48.18.290(1)(a), the insurer to deliver or mail
written notice of nonrenewal to the named insured at least 60 days before the expiration date of the policy.
Section 3 prohibits a contract of insurance predicated wholly or in part upon the use of a private passenger automobile from
being terminated by cancellation by the insurer until at least 60 days after mailing written notice of cancellation to the named
insured.
Section 4 (1)(a)&(b) requires each insurer to renew any contract of insurance subject to RCW 48.18.291 unless:
• the insurer gives named insured at least 60 days of notice in writing as provided for in
RCW 48.18.291(1), that it proposes to refuse to renew the insurance contract upon its expiration date.
• at least 60 days prior to its expiration date, the insurer has communicated its willingness to renew in writing to the
named insured.
II. B - Cash receipts Impact
Cash receipts impact of the legislation on the responding agency with the cash receipts provisions identified by section number and when appropriate, the
detail of the revenue sources. Description of the factual basis of the assumptions and the method by which the cash receipts impact is derived. Explanation
of how workload assumptions translate into estimates. Distinguished between one time and ongoing functions.
II. C - Expenditures
Agency expenditures necessary to implement this legislation (or savings resulting from this legislation), with the provisions of the legislation that result in
the expenditures (or savings) identified by section number. Description of the factual basis of the assumptions and the method by which the expenditure
impact is derived. Explanation of how workload assumptions translate into cost estimates. Distinguished between one time and ongoing functions.
Section 1(1)(a)(i) requires, for all insurance policies other than medical malpractice insurance policies or fire insurance
policies canceled under RCW 48.53.040, the insurer to deliver or mail written notice of cancellation to the named insured at
least 60 days before the effective date of the cancellation.
Section 2(1)(a)(i)(A) requires, for all insurance policies subject to RCW 48.18.290(1)(a), the insurer to deliver or mail
written notice of nonrenewal to the named insured at least 60 days before the expiration date of the policy.
Section 3 prohibits a contract of insurance predicated wholly or in part upon the use of a private passenger automobile from
being terminated by cancellation by the insurer until at least 60 days after mailing written notice of cancellation to the named
insured.
Section 4 (1)(a)&(b) requires each insurer to renew any contract of insurance subject to RCW 48.18.291 unless:
• the insurer gives named insured at least 60 days of notice in writing as provided for in
RCW 48.18.291(1), that it proposes to refuse to renew the insurance contract upon its expiration date.
• at least 60 days prior to its expiration date, the insurer has communicated its willingness to renew in writing to the
named insured.
Sections 1 through 4 requires each Life and Disability (L&D) and Property and Casualty (P&C) insurer with forms that
provide for the current 45-day or 20-day notice periods to submit a one-time form filing to update the notice period to the
new 60-day notice period requirement. Based on the OIC’s 2022 Market Information report, the OIC assumes 888 L&D
Insurance notices 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 188,801.00 Request # 24-11-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 5798 SB
and 3,873 P&C insurers will be impacted. It is further assumed that 30% of impacted insurers will have more than one form
filing per product type resulting in 1,154 L&D form filings (888 form filings x 30% + 888 form filings) and 5,035 P&C
filings (3,873 form filings x 30% + 3,873 form filings). Each form filing will require 10 minutes to review requiring one-time
costs of 1,032 hours (6,189 form filings x 10 minutes), of a Functional Program Analyst 3 (696 hours) and Functional
Program Analyst 4 (336 hours) in FY2025.
The provisions in sections 1 through 4 will lead to an increase in enforcement actions, including hearing demands, as
companies adjust to the new requirements. The OIC anticipates an average of an additional 2 enforcement cases in
FY2025, FY2026, and FY2027, and one additional hearing in FY2025, to address the change to a 60-day notice period.
Enforcement actions require the equivalent of approximately 40 hours per case and hearings require an average of 50 hours
per case requiring 130 hours (2 cases x 40 hours + 1 hearing x 50 hours) in FY2025 and 80 hours (2 cases x 40 hours) in
FY2026 and FY2027, of an Insurance Attorney.
Part III: Expenditure Detail
III. A - Operating Budget Expenditures
Account Account Title Type FY 2024 FY 2025 2023-25 2025-27 2027-29
138-1 Insurance State 0 100,638 100,638 15,866 0
Commissioners
Regulatory Account
Total $ 0 100,638 100,638 15,866 0
III. B - Expenditures by Object Or Purpose
FY 2024 FY 2025 2023-25 2025-27 2027-29
FTE Staff Years 0.7 0.4 0.1
A-Salaries and Wages 59,603 59,603 9,566
B-Employee Benefits 20,907 20,907 3,126
C-Professional Service Contracts
E-Goods and Other Services 20,128 20,128 3,174
G-Travel
J-Capital Outlays
M-Inter Agency/Fund Transfers
N-Grants, Benefits & Client Services
P-Debt Service
S-Interagency Reimbursements
T-Intra-Agency Reimbursements
9-
Total $ 0 100,638 100,638 15,866 0
III. C - Operating FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part I and Part IIIA
Job Classification Salary FY 2024 FY 2025 2023-25 2025-27 2027-29
Functional Program Analyst 3 78,468 0.4 0.2
Functional Program Analyst 4 86,712 0.2 0.1
Insurance Attorney 95,652 0.1 0.0 0.1
Total FTEs 0.7 0.4 0.1 0.0
III. D - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
Insurance notices 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 188,801.00 Request # 24-11-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 5798 SB
NONE
IV. B - Expenditures by Object Or Purpose
NONE
IV. C - Capital Budget Breakout
Acquisition and construction costs not reflected elsewhere on the fiscal note and description of potential financing methods.
NONE
IV. D - Capital FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part IVB.
NONE
Part V: New Rule Making Required
Provisions of the bill that require the agency to adopt new administrative rules or repeal/revise existing rules.
Insurance notices 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 188,801.00 Request # 24-11-1
FNS063 Individual State Agency Fiscal Note 4 Bill # 5798 SB
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