Report - 2025 02 13 A32754 D279251 Bill Report 5262 Sbr Bft Ta 25

Summary

A Senate Bill Report on SB 5262, prepared by non-partisan legislative staff for the Senate Committee on Business, Financial Services & Trade as of January 30, 2025. The bill, sponsored by Senators Kauffman, Wilson, J., Nobles, Shewmake and Trudeau by request of the Insurance Commissioner, corrects obsolete or erroneous references in insurance statutes. It summarizes provisions repealing one-time studies and reports in the Washington Insurance Code, creating a public records exception for annual statements of direct patient-provider primary care practices, revising maternity care and hearing aid coverage mandates, and repealing annual reporting requirements. It states that for health plans issued or renewed on or after January 1, 2026, a carrier must cover hearing instruments every 36 months per ear with hearing loss. It lists no appropriation and an available fiscal note.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

                            SENATE BILL REPORT
                                  SB 5262

                                      As of January 30, 2025

Title: An act relating to correcting obsolete or erroneous references in statutes administered by
     the insurance commissioner, by repealing defunct statutes and reports, aligning policy with
     federal law and current interpretations, making timeline adjustments, protecting patient
     data, and making technical corrections.

Brief Description: Correcting obsolete or erroneous references in statutes administered by the
     insurance commissioner.

Sponsors: Senators Kauffman, Wilson, J., Nobles, Shewmake and Trudeau; by request of
    Insurance Commissioner.

Brief History:
     Committee Activity: Business, Financial Services & Trade: 1/30/25.


                                     Brief Summary of Bill
           • Repeals provisions in the Washington Insurance Code relating to one-
             time studies and reports.
           • Revises various timeframes in the code.
           • Revises certain accounts, and makes technical changes.
           • Creates a public records exception for annual statements submitted by
             direct patient-provider primary care practices.
           • Revises coverage mandates regarding maternity care and hearing aids
             and associated services.
           • Repeals requirements for insurers to consider certain factors in making
             rates for motor vehicle insurance.
           • Repeals certain annual reporting requirements for the Office of the
             Insurance Commissioner and for health carriers.




     This analysis was prepared by non-partisan legislative staff for the use of legislative
     members in their deliberations. This analysis is not part of the legislation nor does it
     constitute a statement of legislative intent.

Senate Bill Report                              -1-                                             SB 5262
SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE

     Staff: John Kim (786-7453)

     Background: The Office of the Insurance Commissioner (OIC) administers the
     Washington Insurance Code (code), which regulates insurance companies and insurance
     professionals conducting business in the state.

     Individual Health Insurance Market Stability Program. In 2017, a public records exemption
     was created in the Public Records Act (PRA) for certain information submitted by health
     carriers to the Federal Government as part of a risk adjustment or reinsurance program for
     the purposes of developing or implementing an individual health insurance market stability
     program. The exemption applied to materials obtained by the OIC as of December 31,
     2019, and the OIC was required to conduct a one-time study.

     Direct Patient-Provider Primary Care Practices. A direct patient-provider primary care
     practice (direct practice) is a provider, group, or entity that furnishes primary care services
     through direct agreements with patients or parents or legal guardians of patients; that does
     not accept payment from regulated insurers or health plans; and that does not provide
     specified services, procedures, or supplies.

     Beginning in 2007, direct practices must submit to the OIC annual statements, currently
     subject to public disclosure, specifying:
        • the number of providers in each practice;
        • total number of patients being served;
        • the average direct fee being charged;
        • providers' names; and
        • the business address for each direct practice.

     The OIC must annually report to the Legislature on direct practices, including, but not
     limited to, participation trends, complaints received, voluntary data reported, and any
     necessary modifications to current law.

     Refunds by the Office of the Insurance Commissioner. Current law requires the OIC, upon
     written request, to refund any tax, license fee, or other charge paid in error or in excess of a
     legal obligation. A person may request a refund of taxes only within six years from the date
     the taxes are paid and may request a refund of fees or charges only within 13 months of the
     date the fees or charges are paid. To facilitate such refunds, the OIC may establish a
     revolving fund out of legislatively appropriated funds.

     Motor Vehicle Insurance Rates. In making rates for motor vehicle insurance, current law
     requires, among other considerations:
        • that an insurer's schedule of rates or rating plan submitted to the OIC provide for an
           appropriate premium reduction for older insureds completing an accident prevention


Senate Bill Report                              -2-                                          SB 5262
           course;
         • that due consideration be given to anticipated changes in losses attributable to
           antitheft devices and the use of lights and lighting devices for increasing visibility;
           and
         • that due consideration be given to an anticipated change in losses attributable to the
           use of seat belts, child restraints, and other lifesaving devices.

     Fire Alarms and Smoke Detection Devices and the Impact on Residential Property
     Insurance Rates. A 2019 state law required insurers of dwelling units to consider the impact
     of fire alarms and smoke detection devices in making rates. The OIC was required to
     submit a one-time report to the Legislature by December 31, 2020, on any credits or
     discounts provided on insurance premiums for fire alarms and smoke detection devices
     installed in dwelling units.

     Protocols for Market Conduct Actions. A 2007 state law established a market conduct
     oversight program within the OIC. The law required the OIC to adopt certain rules and
     provide a report to the Legislature in the legislative session after the rules were adopted.

     Charitable Gift Annuity Businesses. A charitable gift annuity is a contract between a donor
     and a charity in which the donor makes a tax-advantaged donation of cash, securities, or
     other assets to a single charity, which is set aside in a reserve account and invested. The
     donor receives a fixed month or quarterly payout, typically supported by the investment
     account, for the rest of the donor's life. At the end of the donor's life, the charity receives the
     remainder of the gift.

     The OIC may grant a certificate of exemption from most provisions of the code to any
     insurer or educational, religious, charitable, or scientific institution conducting a charitable
     gift annuity business that meets specified conditions. Among such conditions are a
     minimum unrestricted net asset level and the annual filing with the OIC of a financial report
     and payment of a filing fee. The financial report is due within 60 days of the end of the
     business' fiscal year and the filing fee is due on or before March 1 of each year.

     Report on Geographic Access to Gender-Affirming Treatment. A 2022 state law created a
     health plan coverage mandate for gender-affirming treatment. The OIC was required to
     issue a report on geographic access to gender-affirming treatment across the state by
     December 1, 2022, and update the report biannually, or twice a year.

     Coverage of Maternity Services. A 1996 state law specified requirements for health carriers
     providing coverage for maternity services. Among such requirements was that coverage for
     the newly born child must be no less than the coverage of the child's mother for no less than
     three weeks, even if there are separate hospital admissions.

     Coverage of Hearing Aids by Individual and Small Employer Health Plans. Under the
     federal Affordable Care Act, certain benefits, items, and services called Essential Health


Senate Bill Report                               -3-                                           SB 5262
     Benefits (EHBs) must be covered by all individual and small employer health plans
     purchased after a certain date. A state must select its own EHB benchmark plan and use it
     to determine its EHBs. A state that wishes to make changes to its EHB benchmark plan
     must apply for federal approval.

     A 2023 state law directed the OIC to review the state's EHB benchmark plan and decide
     whether to request federal approval to modify the plan to include a number of benefits as
     EHBs, but required that hearing instruments and associated services be included as EHBs if
     the state plan was modified.

     After completing requirements for an analysis, public meetings, and public comment, in
     April 2024, the OIC applied for federal approval to revise the state's EHB benchmark plan
     for plan years beginning on or after January 1, 2026. The application was approved by the
     federal government in October 2024.

     Under federal regulation, annual or lifetime dollar limits cannot be applied to EHBs.

     Dental-Only Plans. A health carrier offering a dental-only plan must submit an annual data
     statement to the OIC with specified information.

     Insurance Fraud Program. A 2006 state law created an Insurance Fraud Program within the
     OIC and specified that the annual cost of operating the program is funded from the OIC's
     regulatory account, subject to legislative appropriation.

     Medical Malpractice Closed Claim Reporting. A 2006 state law created closed claim
     reporting requirements for insuring entities or self-insurers providing medical malpractice
     insurance. The OIC must prepare aggregate statistical summaries of closed claims based on
     submitted data and submit an annual report to the Legislature by June 30th. The OIC was
     also required to report to the Legislature regarding model statistical reporting standards if
     adopted by the National Association of Insurance Commissioners.

     Guaranteed Asset Protection Waivers. A guaranteed asset protection waiver (GAP waiver)
     is an agreement where a creditor agrees, for a charge, to cancel or waive all or part of the
     amounts due on a borrower's motor vehicle finance agreement with that creditor in the event
     of a total physical damage loss or unrecovered theft of the motor vehicle. A 2009 state law
     adopted a model act regulating GAP waivers. Persons selling GAP waivers must register
     with OIC and pay a $250 application fee, which is deposited in the guaranteed asset
     protection waiver account.

     Natural Disaster and Resiliency Work Group. A 2019 state law created a work group to
     study and make recommendations on natural disaster and resiliency activities, chaired by
     the OIC commissioner. The work group was required to submit a preliminary report to the
     Legislature in 2019 and a final report by December 1, 2020.



Senate Bill Report                             -4-                                           SB 5262
     Annual Report on Health Carrier Data. A 2006 state law required each health carrier
     offering a health benefit plan to annually submit to the OIC specified financial information.

     Annual Report on Fixed Payment Insurance Products. A 2007 state law required the OIC to
     collect information from insurers offering fixed payment insurance products and annually
     report aggregated data including the number of groups purchasing the products, the number
     of enrollees, and the number of consumer complaints filed.

     Summary of Bill: Individual Health Insurance Market Stability Program. Provisions
     relating to the one-time study and the associated public records exception are repealed.

     Direct Patient-Provider Primary Care Practices. The bill creates a public records exception
     for annual statements submitted by direct practices and the data reported in them. Such
     information is confidential and exempt from public disclosure under the PRA.

     The OIC's annual report to the Legislature and the data in it must be in aggregate form that
     does not permit the identification of individual direct practices.

     Refunds by the Office of the Insurance Commissioner. A person requesting a refund of
     taxes to the OIC must do so within six years of the end of the calendar year for which the
     taxes are owed, rather than six years from the date the taxes were paid.

     The bill repeals the authority for the OIC to establish a revolving fund, out of legislatively
     appropriated funds, to facilitate refunds.

     Motor Vehicle Insurance Rates. The bill specifies that the premium reduction for older
     insureds completing an accident prevention course applies to personal auto insurance only.

     The bill repeals the requirement that antitheft devices; the use of lights and lighting devices
     for increasing visibility; and the use of seat belts, child restraints, and other lifesaving
     devices be used in making rates for motor vehicle insurance.

     Fire Alarms and Smoke Detection Devices and Impact on Residential Property Insurance
     Rates. The bill repeals a provision relating to the one-time study due in 2020.

     Protocols for Market Conduct Actions. The bill repeals a provision relating to a one-time
     report regarding adopted rules.

     Charitable Gift Annuity Businesses. The bill revises the name of a term unrestricted net
     assets to net assets without donor restrictions.

     The annual filing fee for charitable gift annuity businesses is due within 60 days of the end
     of its fiscal year rather than on March 1.



Senate Bill Report                              -5-                                         SB 5262
     The changes take effect January 1, 2026.

     Report on Geographic Access to Gender-Affirming Treatment. The OIC is required to
     update its report biennially, or every other year, rather than biannually, or twice a year.

     Coverage of Maternity Services. The bill repeals the requirement that coverage for a newly
     born child be no less than the coverage of the child's mother for no less than three weeks,
     even if there are separate hospital admissions.

     It changes a reference of advanced registered nurse practitioner to advanced practice
     registered nurse to conform to a 2024 law changing the legal title for the profession.

     Coverage of Hearing Aids by Individual and Small Employer Health Plans. For health
     plans issued or renewed on or after January 1, 2026, a health carrier must cover hearing
     instruments every 36 months per ear with hearing loss and may not establish any lifetime or
     annual dollar limit on coverage for associated services for any individual, whether provided
     in-network or out-of-network.

     A health carrier may require prior authorization or adopt other appropriate utilization
     controls in approving coverage for medically necessary hearing instruments.

     Dental-Only Plans. The bill specifies that the annual data statement is limited to dental-only
     plans in Washington and to Washington-specific data.

     It specifies the OIC must make reported information available on its website, rather than in
     a format that allows comparison among carriers through a searchable public website.

     Insurance Fraud Program. The bill revises the account funding the Insurance Fraud Program
     from the OIC's regulatory account to its fraud account.

     Medical Malpractice Closed Claim Reporting. The bill repeals a requirement for the OIC to
     prepare aggregate statistical summaries of closed claims and provides that the OIC must
     complete its annual report by September 1 rather than June 30.

     Provisions regarding the one-time report on model statistical reporting standards are
     repealed.

     Guaranteed Asset Protection Waivers. The bill revises the account in which application fees
     are deposited from the guaranteed asset protection waiver account to the General Fund.

     The guaranteed asset protection waiver account is repealed.

     Natural Disaster and Resiliency Work Group. Provisions regarding the work group and one-
     time study are repealed.


Senate Bill Report                              -6-                                        SB 5262
     Annual Report on Health Carrier Data. The bill repeals the requirement for health carriers to
     annually submit specific financial information to the OIC.

     Annual Report on Fixed Payment Insurance Products. The bill repeals the requirement for
     the OIC to annually report on fixed payment insurance products.

     Appropriation: None.

     Fiscal Note: Available.

     Creates Committee/Commission/Task Force that includes Legislative members: No.

     Effective Date: The bill contains several effective dates. Please refer to the bill.

     Staff Summary of Public Testimony: PRO: This bill focuses on modernizing insurance
     regulations, improving consumer protections, and ensuring fairness and equity in the
     insurance market. The updates are fundamental to ensuring our insurance regulatory
     framework remains efficient, adaptable, and beneficial for our consumers, our businesses,
     and our regulators. The bill removes outdated language and corrects errors but also makes
     maintenance-type changes, including, for example, aligning the statute for hearing aid
     benefits with federal requirements; treating direct medical practice data with similar data
     protections as the Legislature recently prescribed for other data provided to the OIC;
     striking outdated rating discounts for nearly universal vehicle technology such as lights and
     seat belts; and clarifying when requests for refunds must be made. Other than the one
     reference for hearing aids to align with treatment under federal law, nothing in the bill
     expands benefits paid by insurance or changes the regulatory authority of the OIC.

     Persons Testifying: PRO: Senator Claudia Kauffman, Prime Sponsor; Rory Paine-
     Donovan, Office of the Insurance Commissioner.

     Persons Signed In To Testify But Not Testifying: No one.




Senate Bill Report                              -7-                                         SB 5262


File and source

File

2025-02-13_a32754_d279251_bill-report-5262-sbr-bft-ta-25.pdf

Size

18,811 bytes

SHA-256

2364433c844f6584a413a05e2fa9f304209d35b84c010b2bbbdb25394b98ab3b

Our copy

2025-02-13_a32754_d279251_bill-report-5262-sbr-bft-ta-25.pdf

Original

app.leg.wa.gov