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Washington Insurance Statutes

Anti-Rebating/Inducement Laws and Rules
Our state’s rebating/Inducement rules and laws have been an issue in the state of Washington. IIABW helped pass a law which went into effect in July 2015 that increases from $25 to $100 per person per year the rebating/inducement expenditure exemptions; created a new $100 per person per year limit for referral thank you gifts; and exempts sponsorships and contributions to nonprofit organizations from these same expenditure limitations.
 
During the summer of 2016, the OIC published 'suggested best-practices guidelines' in hopes of minimizing confusion about our states' rebating/inducement laws: Gifts, dinners, etc.; Referrals; Charitable contributions; Lead cards/mailing lists; Promotional games of chance.
 
In the fall of 2015, the Office of the Insurance Commissioner (OIC) issued a $30,000 fine of a Seattle broker for purchasing sporting event tickets, holiday wreaths, dinners and other items for consumers that exceeded the rebating limit. The OIC passed a rule which went into effect in January 2016 to clarify how the rebating laws (RCW 48.30.140 and RCW 48.30.150) impact charitable contributions and referral gifts.

WAC 284-17-805 states that agents

  • can make donations to charities on behalf of customers as long as the customer has no influence over which charity receives the donation, is not donated in the insured’s name and the insured does not receive any tax benefit.
  • can sponsor or contribute to a charity as long as it is not conditioned on the entity applying for or obtaining insurance, making a referral or endorsing the agency.

WAC 284-17-825 states that

  • referral gifts cannot be dependent upon the referral resulting in a sale.
  • the purchase of insurance cannot impact the value of the referral gift.
  • the person giving the referral cannot make representations about the policy.
  • referral gifts are limited to no more than $100 in value in any 12 month period.

 

New Privacy Statement Rule


The Gramm-Leach-Bliley Act has required for over 15 years that insurance agents provide a privacy policy to its clients explaining how they share nonpublic information to nonaffiliated third parties. A new rule that IIABW worked closely with the OIC on will loosen this annual requirement. Agents continue to need to share a privacy policy with its customer (WAC 284-04-400, 284-04-405, or 284-04-410) but they are not required to shared it afterwards until their policy/practices with regard to disclosing nonpublic information changes.

Record Retention

 Here are recommended record retention recommendations from IIABW's endorsed E & O insurance company, Swiss Re. Records Retention Recommendation.pdf 

 

Disclosure of Compensation

 Producers need to disclose their compensation if they are charging a fee to the customer. For more information and a sample form, go to the OIC's website.

 

Insurance RCWs & WACs

The Revised Code of Washington (RCW) is the compilation of all permanent laws now in force. Title 48 RCW: Insurance is the main section for insurance laws.

The Washington Administrative Code (WAC) are regulations of executive branch. The main WAC for the insurance industry is Title 284: Office of the Insurance Commissioner.