Tuesday, April 5, 2011

Stanford’s consumer-protection measure feels unanimous legislative love

In these growling economic times dogged by reports of monetary mange, how about a pound of good consumer-protection news?

One of state Rep. Derek Stanford’s consumer-protection bills, House Bill 1694, has passed both legislative chambers unanimously. The legislation awaits only the gubernatorial ink of approval to become the law of the state. Stanford’s bill brings Washington into compliance with the federal Wall Street Reform and Consumer Protection Act. What we’re talking about here is updating and streamlining many of our state’s insurance regulations, specifically rules regarding surplus-lines insurance.

What the heck, you demand to know, are “surplus lines”? Glad you asked. This type of coverage must be purchased from a company that isn’t licensed here because it isn’t available through licensed companies. Make sense? For example, surplus lines might be used when unusual coverage is needed, or for a particularly complicated policy that insurers licensed here are not able to cover.

This bill will also make sure Washington doesn’t miss out on revenue as other states switch to the new system. Tax provisions in the legislation change the basis of taxation for some types of insurance coverage. Washington state will be able to tax certain out-of-state risks. Although the amount of money is hard to calculate, the current estimate is about $100,000 a month in revenue. The surplus-lines brokers have monitored implementation of the federal law. Many of these brokers worked with the state Insurance Commissioner’s office in helping develop this bill.

Stanford’s diligent work on the legislation earned praise from state Rep. Steve Kirby, who chairs the House Business & Financial Services Committee of which Stanford is a member. Kirby said Stanford did a great job helping make sure the measure was steered properly through the legislative labyrinth.