WA Insurance Commission Supports ‘Restitution’ Bill

Insurance has been a hot-button topic nationally, and in WA over the last year or so, due to rising rates. Now, there's an interesting bill being pushed in the legislature.

  WA Insurance Commissioner supports a bill forcing restitution

WA Insurance Commission Patty Kuderer has been supporting a bill she suggested be filed this legislative session. Senate Bill (SB) 5331 would allow the state to force insurance companies to reimburse consumers any money they paid to the business if it was part of an illegal, misleading. or fraudulent action.

According to Kuderer:

"Senate Bill 5331 grants the Insurance Commissioner the authority to order restitution be paid to the victims of insurance entities’ illegal actions"

The state already has a form of restitution, which are done through consent orders. These are agreed-upon 'penalties' that can include money for consumers following negotiations between insurance companies and the Commissioner's office.

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Insurance firms argue this is already in place, but the Commissioner says restitution does not occur if a company refuses to work with them. She wants the state to be able to force the company to return monies paid to clients.

Kuderer used the example of $777,000 paid by subscribers to the Quick Health company, also known as Seguro Medico.  She said 120 complaints were filed by consumers who found their policies did not cover medical expenses they thought they were paying for.  Kuderer says they were able to shut them down and fine them, but don't have a way to return the $777,000 to the clients.

Kurderer claims a number of insurance agents support the bill, however, others oppose it because they worry the definition of 'misleading' business practices could be used to penalize more and more insurers.

  The bill has passed out of committee, and appears to be headed to the Senate floor after what's called a second reading.