Washington State Bill Enhances Insurance Regulation and Consumer Protections

Washington state has introduced a legislative bill aimed at strengthening consumer protections and regulatory enforcement in the insurance sector. The bill empowers the state insurance commissioner with the authority to order restitution with an 8% simple interest rate to consumers harmed by insurance law violations. It also aligns the fine structure for insurers with other regulated entities, allowing fines up to $10,000 per violation, removing the current cap that applies collectively rather than per violation for property and casualty insurers. The legislation prohibits post-loss Assignment of Benefits (AOB) agreements, practices that have led to inflated claims and higher premiums in other states. This prohibition intends to maintain market stability and protect consumers by preventing third parties from directly receiving insurance payments without policyholder control.\n\nThe bill further defines insurance fraud explicitly in state law, listing offenses such as fraudulent billing, impersonation in claims, and theft of premiums or premium financing loans. It expands the category of fraud victims to include both insurance consumers and beneficiaries, enabling criminal restitution. Additional enforcement powers are granted to the Office of the Insurance Commissioner (OIC), including broader investigative authority and mandatory reporting requirements extended to health and financial regulators, law enforcement, and public safety agencies. This includes requiring businesses to report premium financing agreements to the OIC.\n\nIn terms of law enforcement training, the bill clarifies the inclusion of state and federal peace officers employed by the Insurance Commissioner in equivalency academies provided by the Criminal Justice Training Commission. On the coverage side, the bill preserves key Affordable Care Act provisions already embedded in Washington law, particularly regarding no-cost preventive services coverage. It updates immunization coverage mandates to rely on recommendations from the state Department of Health, diverging from recent federal changes that narrow vaccine accessibility. Coverage standards for preventive services will align with guidelines from the U.S. Preventive Health Services Task Force and Health Resources and Services Administration as of mid-2025.\n\nOverall, the bill reflects a comprehensive effort to enhance regulatory clarity, consumer restitution frameworks, anti-fraud measures, and health coverage protections within Washington's insurance landscape. It supports a transparent and equitable insurance market while ensuring regulatory entities have appropriate enforcement capacities to address violations. The public rulemaking process remains active, offering guidance to stakeholders including consumers, insurers, and producers to comply with evolving insurance laws and regulations.