Fiscal Note — 2428 HB, Life Insurance Policy Lapses (Office of Insurance Commissioner)
Summary
This is an Individual State Agency Fiscal Note for Bill Number 2428 HB, titled Life insurance policy lapses, prepared by agency 160, the Office of Insurance Commissioner. Part I marks the box that the fiscal impact is less than $50,000 per fiscal year and the box that the bill requires new rule making. Part II says Section 1(2) requires insurers to provide written notice to a policyholder or designee 30 days prior to terminating coverage under an individual life insurance policy. It says Section 2(1) requires insurers to notify applicants of the right to designate a third party to receive notice of a pending lapse and of the right to reinstate the policy after lapse.
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“Fiscal Note — 2428 HB, Life Insurance Policy Lapses (Office of Insurance Commissioner).”
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Individual State Agency Fiscal Note
Bill Number: 2428 HB Title: Life insurance policy lapses Agency: 160-Office of Insurance
Commissioner
Part I: Estimates
No Fiscal Impact
Estimated Cash Receipts to:
NONE
Estimated Operating Expenditures from:
FY 2026 FY 2027 2025-27 2027-29 2029-31
FTE Staff Years 0.2 0.2 0.2 0.1 0.1
Account
General Fund-State 001-1 30,734 23,668 54,402 17,736 17,736
Total $ 30,734 23,668 54,402 17,736 17,736
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
form Parts I-V.
X 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.
X Requires new rule making, complete Part V.
Legislative Contact: Peter Clodfelter Phone: 360-786-7127 Date: 01/14/2026
Agency Preparation: Tyler Langford Phone: 360-725-7173 Date: 01/19/2026
Agency Approval: Tom Zuvela Phone: (800) 562-6900 Date: 01/19/2026
OFM Review: Jason Brown Phone: (360) 742-7277 Date: 01/21/2026
Form FN (Rev 1/00) 208,485.00 Request # FN 26-24-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 2428 HB
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(2) requires that insurers provide written notice to a policyholder or their designee 30 days prior to terminating
coverage under an individual life insurance policy. The insurer must obtain and demonstrate, upon request, proof of
delivery of the notice.
Section 2(1) requires that insurers who issue individual life insurance policies notify applicants of their right to designate
a third party to receive notice of a pending lapse due to nonpayment of premium and their right to reinstate the policy after
lapse. Applicants/policyholders may make the third party designation at the time of application, or at any time the policy is
in force.
Section 3clarifies that the act applies prospectively only and not retroactively.
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.
NONE
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(2) requires that insurers provide written notice to a policyholder or their designee 30 days prior to terminating
coverage under an individual life insurance policy. The insurer must obtain and demonstrate, upon request, proof of
delivery of the notice.
Section 2(1) requires that insurers who issue individual life insurance policies notify applicants of their right to designate
a third party to receive notice of a pending lapse due to nonpayment of premium and their right to reinstate the policy after
lapse. Applicants/policyholders may make the third party designation at the time of application, or at any time the policy is
in force.
Section 3clarifies that the act applies prospectively only and not retroactively.
One-Time Expense(s):
The OIC receives an average of 915 Life Insurance Form Filings each year. This bill would impact approximately 360
form filings of the aforementioned 915 form filings. Moreover, the agency also receives an average of 360 life insurance
filings each year that would be affected by this legislation. Therefore, the agency would require 2.00 hours of a
Washington Management Services 3 (WMS3) and 94.00 hours of a Functional Program Analyst 4 (FPA4) in FY2027.
The agency anticipates a minor increase (4%) in calls, written inquiries, and complaints because of this bill. This would
require 44.6 hours of a Functional Program Analyst 3 (FPA3) and 10.00 hours of a FPA4 in FY2027.
The OIC would be asked to provide legal advice to its divisions relating to the implementation of this bill. And so, it
would require 10.00 hours of an Insurance Attorney (IA) and 2.00 hours of a Paralegal (PL) in FY2027.
In summation, total FY2027(one-time expense) for the OIC is:
Life insurance policy lapses 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 208,485.00 Request # FN 26-24-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 2428 HB
WMS3: 2.00 hours (1hr checklists/1hr training)
FPA4: 104.00 hours (94hrs checklists/training-10hrs calls)
FPA3: 44.6 hours (calls and advice)
IA: 10.00 hours (calls and advice)
PL: 2.00 hours (calls and advice)
Ongoing Expense(s):
It is expected that new insurers may enter the market in future because of this bill. Therefore, the OIC would require 7.08
hours of a FPA4 in FY2027 and thereafter to process these new filings.
The OIC investigates violations of the Insurance Code, Title 48 RCW. The agency would realize two enforcement actions
per year. Therefore, the OIC would require 20.00 hours of PL and 60.00 hours of an IA FY2027 and thereafter.
In summation, total ongoing expenses for the OIC are:
FPA4: 7.08 hours (new filings)
Paralegal: 20.00 hours (20hrs for two?enforcement actions)
IA: 60.00 hours (60hrs for two enforcement actions)
Sections 1(2) and 2(1) would require simple rulemaking to ensure that the new notice requirement is incorporated into the
disclosure form in WAC 284-97-910.
Part III: Expenditure Detail
III. A - Operating Budget Expenditures
Account Account Title Type FY 2026 FY 2027 2025-27 2027-29 2029-31
001-1 General Fund State 30,734 23,668 54,402 17,736 17,736
Total $ 30,734 23,668 54,402 17,736 17,736
III. B - Expenditures by Object Or Purpose
FY 2026 FY 2027 2025-27 2027-29 2029-31
FTE Staff Years 0.2 0.2 0.2 0.1 0.1
A-Salaries and Wages 19,401 14,359 33,760 10,882 10,882
B-Employee Benefits 5,186 4,575 9,761 3,306 3,306
C-Professional Service Contracts
E-Goods and Other Services 6,147 4,734 10,881 3,548 3,548
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-OVERHEAD
Total $ 30,734 23,668 54,402 17,736 17,736
Life insurance policy lapses 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 208,485.00 Request # FN 26-24-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 2428 HB
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 2026 FY 2027 2025-27 2027-29 2029-31
FPA 3 80,820 0.0 0.0
FPA 4 89,316 0.1 0.1 0.1
Insurance Attorney 106,608 0.0 0.0 0.0 0.0
Paralegal 89,316 0.0 0.0 0.0 0.0
Sr. Policy Analyst 149,352 0.1 0.1
Total FTEs 0.2 0.2 0.2 0.1 0.1
III. D - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
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
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.
Sections 1(2) and 2(1) will require simple rulemaking to ensure that the new notice requirement is incorporated into the
disclosure form in WAC 284-97-910.
Life insurance policy lapses 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 208,485.00 Request # FN 26-24-1
FNS063 Individual State Agency Fiscal Note 4 Bill # 2428 HB
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