Report - 2025 02 13 A32754 D279253 Bill Report 5419 Sbr Bft Ta 25

Summary

A Washington Senate Bill Report on SB 5419, an act relating to reports of fire losses, prepared by staff of the Senate Committee on Business, Financial Services & Trade and dated as of January 29, 2025. It summarizes a bill requiring authorized insurers to report fire losses to the Office of the Insurance Commissioner within 30 days of closing a claim, rather than to the chief of the Washington State Patrol. The report describes duties to report known or suspected criminal activity to law enforcement, civil immunity for insurers absent actual malice, fraud, or bad faith, confidentiality of fire loss information, and a Public Records Act exemption. It lists no appropriation, notes a fiscal note requested on January 22, 2025, and summarizes pro and other public testimony.

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                             SENATE BILL REPORT
                                   SB 5419

                                       As of January 29, 2025

Title: An act relating to reports of fire losses.

Brief Description: Modifying reports of fire losses.

Sponsors: Senators Lovick, Muzzall, Nobles and Shewmake; by request of Insurance
    Commissioner.

Brief History:
     Committee Activity: Business, Financial Services & Trade: 1/29/25.


                                      Brief Summary of Bill
           • Revises requirements for authorized insurers in reporting fire losses,
             including those known or suspected to be due to criminal activity.
           • Requires that fire loss reports be made directly to the Office of the
             Insurance Commissioner rather than to the chief of the Washington State
             Patrol.
           • Specifies requirements and restrictions regarding the confidentiality and
             privilege of fire loss information and provides a public records
             exemption for fire loss information.
           • Provides civil immunity to an insurer for certain reports and cooperation.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE

     Staff: John Kim (786-7453)

     Background: Reports of Fire Loss by Authorized Insurers. An authorized insurer is an
     insurer transacting insurance through a certificate of authority issued by the Office of the
     Insurance Commissioner (OIC). Each authorized insurer must promptly report to the chief




     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 5419
     of the Washington State Patrol each fire loss of property in this state reported to it and
     whether the loss is due to criminal activity or to undetermined causes, as well as claims paid
     by it for loss or damage by fire in this state.

     If the insurer has reason to believe that a fire loss reported to the insurer may be of other
     than accidental cause, it must include any and all relevant material developed from the
     insurer's inquiry. Copies of such reports must be promptly transmitted to the OIC.

     Public Records Act. The Public Records Act requires state and local agencies to make all
     public records available for public inspection and copying unless exempted.

     Summary of Bill: Fire Loss Reporting Requirements. The bill specifies that rather than
     promptly, an authorized insurer must report fire losses within 30 days of closing a claim or
     any subsequent adjustment or further investigation related to a fire loss or damage.

     The insurer must report fire losses directly to the OIC in a manner prescribed by the OIC,
     rather than to the chief of the Washington State Patrol.

     The reported information must include, at a minimum:
        • the property address;
        • the date of loss;
        • the amount that the insurer paid on each coverage;
        • the known or suspected origin and cause of the loss or damage, including whether the
           loss is due to criminal activity or to undetermined causes; and
        • any other information required by the OIC.

     Reporting Requirements for Known or Suspected Criminal Activity. Whenever an insurer
     knows or suspects that a fire loss or damage may be due to criminal activity, the insurer
     must immediately report to the local or tribal law enforcement agency of jurisdiction and
     the OIC the details of the loss or damage and the basis for the insurer's knowledge or
     suspicion that it may be due to criminal activity. Upon request, it must provide a complete
     copy of any full or partial investigation of the claim or loss.

     The receiving local or tribal law enforcement agency must timely share such information
     and coordinate with the responsible fire department chief or county fire marshal or other
     designated fire official.

     Civil Immunity. Unless actual malice, fraud, or bad faith is shown, an insurer is immune
     from civil liability for its reports of known or suspected criminal activity or for cooperation
     with a duly issued subpoena for a criminal investigation or prosecution.

     Confidentiality and Privilege of Fire Loss Information. Documents, materials, reports, data,
     investigations, and other information relating to fire loss reports and known or suspected
     criminal activity reports are confidential and privileged and are not subject to a civil matter


Senate Bill Report                              -2-                                         SB 5419
     subpoena directed to the OIC commissioner or any person who processes information
     received. The OIC commissioner, OIC staff, or anyone receiving or processing such
     information may not testify in any private civil action concerning such information. Such
     persons may cooperate with subpoenas for documents or testimony in criminal matters.

     The OIC may share such information with:
        • the National Association of Insurance Commissioners and its affiliates and
          subsidiaries;
        • regulatory, law enforcement, and prosecutorial officials of other states and nations,
          the Federal Government, tribal governments, and international authorities;
        • agencies of this state;
        • rating bureaus;
        • the State Fire Marshal's office; and
        • local or tribal law enforcement officials, prosecutors, or fire chiefs in this state.

     The OIC must require a recipient of information to maintain the confidentiality and
     privileged status of the information, with the following exceptions:
         • the State Fire Marshal's office may use the shared information for wildfire and
            resiliency planning purposes, so long as it does not publicly disclose information that
            contains personally identifiable information about properties, property owners,
            policyholders, losses, claimants, or claims;
         • rating bureaus may use the shared information to analyze and inform rating
            classifications, so long as they do not publicly disclose, other than to rating
            subscribers, information that contains personally identifiable information about
            property owners, policyholders, losses, claimants, claims, or properties, other than
            aggregated by zip code or fire district boundary;
         • local or tribal law enforcement officials, prosecutors, and fire chiefs in this state may
            use the shared information for public safety planning purposes, so long as they do not
            publicly disclose information that contains personally identifiable information about
            properties, property owners, policyholders, losses, claimants, or claims, other than
            aggregated by zip code; and
         • local, tribal, state, or federal law enforcement officials, prosecutors, and fire chiefs in
            this state and limited authority peace officers employed by the OIC may use the
            shared information to investigate and prosecute crime. In so doing, they may release
            the information as is necessary for investigative and prosecutorial purposes to comply
            with all due process rights of criminally accused individuals and to comply with
            public records obligations applicable to criminal investigations or prosecutions.

     Public Records Exemption. Data, information, and documents obtained from an insurer, or
     by or from the OIC, relating to fire loss reports and known or suspected criminal activity
     reports are exempt from public disclosure under the Public Records Act.

     Rulemaking. The OIC may adopt rules as necessary for implementation.



Senate Bill Report                              -3-                                           SB 5419
     Appropriation: None.

     Fiscal Note: Requested on January 22, 2025.

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

     Effective Date: Ninety days after adjournment of session in which bill is passed.

     Staff Summary of Public Testimony: PRO: The current statute is a remnant of when the
     State Fire Marshal was the Insurance Commissioner. The data hasn't been actively collected
     in many respects. The bill allows for a more efficient use of data collection and improved
     timeliness. This will help with public safety planning and accurate pricing of homeowners'
     insurance. In the future, this data can be used for safety planning and insurance analytics.
     The OIC worked with the State Fire Marshal's office, the Washington State Patrol, and the
     Washington Association of Sheriffs & Police Chiefs on the language of the bill. The bill
     allows the OIC to look at data and work with communities to raise awareness about
     preventing different types of fires. Things we can do to reduce loss frequency and severity
     will be for the benefit of all Washingtonians.

     OTHER: We support the goals of reducing and preventing fires. We appreciate the
     protection from public disclosure of sometimes sensitive information that we are required to
     provide. We have concerns about the breadth of the bill and how much information is being
     asked for. The open-ended nature of some of the definitions and the extent of the
     information could be very burdensome. Companies already report suspected fraud and
     suspected criminal activity to a variety of different agencies. Certain references in the bill
     are vague and ambiguous, including the requirement to provide any subsequent adjustment
     or further investigation related to fire loss and to provide any other information required by
     the Insurance Commissioner.

     Persons Testifying: PRO: Senator John Lovick, Prime Sponsor; Rory Paine-Donovan,
     Office of the Insurance Commissioner; David Forte, Office of the Insurance Commissioner.

     OTHER: Jean Leonard, WA Insurers.

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




Senate Bill Report                             -4-                                         SB 5419


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