HB 1199
In CommitteeHouse
Insurance code violations
Strengthening consumer protection through increased insurer accountability for violations of the insurance code.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill strengthens the insurance commissioner’s authority to enforce insurance laws by expanding tools to stop violations, require restitution to consumers, and impose fines on insurers. It clarifies how restitution and fines are handled and ensures violations are referred to prosecutors when needed.
- The insurance commissioner can now issue cease and desist orders, sue insurers in court to stop violations, and order restitution (repayment with 8% interest) to harmed consumers—all in one action.
- The commissioner must refer criminal insurance violations to local prosecutors and can request the attorney general or local prosecutors to handle court cases.
- The commissioner can now order restitution when an insurer holds money or property that belongs to someone else (e.g., overcharged fees or unreturned premiums).
- Fines for insurers violating insurance laws increase in enforceability: fines range from $250 to $10,000 per violation, must be paid within 15–30 days, and failure to pay triggers automatic license revocation and civil collection by the attorney general.
- All collected fines go to the state general fund, and restitution must be paid to affected individuals within 30 days of the order.
Who is affected
- Insurance companies — Insurance companies operating in Washington State may face stronger enforcement actions—including fines, restitution orders, and license suspension—if they violate insurance laws.
- Insurance consumers — Consumers who have overpaid fees, been denied rightful refunds, or otherwise suffered financial harm due to insurer misconduct may receive restitution (repayment with interest) directly from the insurance commissioner’s office.
- State and local law enforcement agencies — State and local prosecutors and the attorney general will be called on more frequently to enforce insurance laws when the insurance commissioner refers cases.
Pro/Con Analysis
Potential Benefits (5)
Authorizes the commissioner to issue cease-and-desist orders, sue insurers in court, and order restitution — all in a single action — giving consumers faster, more effective relief from financial harm.
FinancialPeopleRef: Sec. 1(3)(a), (b), (c)Increases fines for insurers to $250–$10,000 per violation and ties nonpayment to automatic license revocation, strengthening enforcement leverage against bad actors while deterring future violations.
Business & EmploymentPeopleRef: Sec. 2Expands restitution authority to cover situations where insurers hold money or property belonging to others (e.g., overcharged fees, unreturned premiums), directly benefiting consumers who lost funds.
FinancialPeopleRef: Sec. 1(5)Requires local prosecutors and the attorney general to assist in enforcement, potentially increasing workload for local legal offices but ensuring more robust prosecution of violations.
Local GovernmentPeopleRef: Sec. 2Fines collected go to the state general fund, potentially offsetting some enforcement costs and contributing to public revenue — though this is a minor benefit relative to consumer restitution.
FinancialLean peopleRef: Sec. 2
Potential Concerns (5)
Mandates 8% simple interest on restitution, significantly increasing the financial burden on insurers found to have wrongfully withheld consumer funds — this creates a strong disincentive for bad practices and improves recovery for harmed consumers.
FinancialPeopleRef: Sec. 1(5)Empowers the commissioner to order restitution and impose fines ($250–$10,000 per violation) without requiring a criminal conviction, enabling faster and more direct financial redress to consumers.
FinancialPeopleRef: Sec. 1(3)(c) and Sec. 2Requires restitution to be paid to affected individuals within 30 days of the order, strengthening consumer rights by ensuring timely return of wrongly held funds.
Rights & LibertiesPeopleRef: Sec. 1(5)Mandates referral of criminal insurance violations to prosecutors and authorizes the attorney general or local prosecutors to handle enforcement, improving accountability for serious misconduct.
Public SafetyPeopleRef: Sec. 1(2) and Sec. 1(4)Increases administrative and legal exposure for insurers violating laws, potentially deterring predatory practices but imposing compliance costs on the industry.
Business & EmploymentLean peopleRef: Sec. 2
Who Is Most Affected
Insurance companies face higher enforcement risk, including fines, restitution orders, and license revocation for violations — especially those with weak compliance or past misconduct.
Consumers who have overpaid fees, been denied refunds, or suffered financial harm due to insurer misconduct gain a faster, more direct path to restitution with interest and stronger regulatory enforcement.
State and local prosecutors and the attorney general gain expanded authority and responsibility to enforce insurance laws, increasing their role in consumer protection but also workload.