HB 1230
In CommitteeHouse
Disability insurer filings
Requiring that experience-rated group disability income insurers include all applicable rating factors and credibility formulas in rate manual filings with the insurance commissioner.
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 requires disability insurers that sell experience-rated group disability income insurance to submit detailed rate manuals—including all rating factors and credibility formulas—to the Insurance Commissioner. The goal is to ensure transparency and allow state regulators to verify how premiums are calculated for employer-sponsored disability plans.
- Requires insurers selling experience-rated group disability income insurance to include all rating factors and credibility formulas in their rate manual filings with the Insurance Commissioner.
- Mandates that filings be detailed enough to let the commissioner verify whether a group is fully or partially credible (i.e., whether the group’s past claims data is sufficient to predict future risk).
- Requires that the commissioner be able to replicate premium rates for an experience-rated group if provided with the group’s claims history and demographic information.
- Clarifies that this requirement applies specifically to experience-rated group disability income insurance, not other types of disability insurance (e.g., individual policies).
- Amends RCW 48.19.010 to explicitly include this requirement within the chapter governing insurance regulation.
Who is affected
- Disability insurers — Insurance companies that sell experience-rated group disability income insurance to employers or associations must now submit more detailed rate filing materials, including specific formulas used to calculate premiums based on the group's past claims experience.
- Employers and associations buying group disability insurance — Employers and associations that purchase group disability insurance may benefit from greater transparency and oversight of how their premium rates are calculated, potentially leading to more consistent and understandable pricing.
- Workers covered under group disability plans — State residents who rely on disability income insurance through their employer may gain confidence in the fairness and consistency of rate-setting practices due to increased regulatory scrutiny.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (3)
By requiring full transparency of rating factors and credibility formulas, the bill empowers regulators—and indirectly, the public—to scrutinize whether disability insurance premiums are being set fairly and without discriminatory or arbitrary adjustments, strengthening accountability in a market where consumers have little ability to shop around for coverage.
Rights & LibertiesPeopleRef: Sec. 1, amending RCW 48.19.010(2)Employers purchasing experience-rated group disability insurance gain greater clarity on how their premiums are calculated, enabling more informed contract negotiations and reducing the risk of unexpected or opaque rate hikes that could strain small-business budgets.
Business & EmploymentPeopleRef: Sec. 1, amending RCW 48.19.010(2)Workers covered under employer-sponsored disability plans benefit from increased confidence that premium pricing is actuarially sound and not manipulated to disproportionately burden certain groups (e.g., older workers or those with chronic conditions), supporting equitable access to income protection.
HealthcarePeopleRef: Sec. 1, amending RCW 48.19.010(2)
Potential Concerns (1)
The bill imposes new administrative burdens on the Office of the Insurance Commissioner, requiring additional staff time and technical expertise to review and verify detailed rate manuals—including complex credibility formulas—without providing new funding to cover these costs.
Local GovernmentLean peopleRef: Sec. 1, amending RCW 48.19.010(2)
Who Is Most Affected
Insurers must invest in more detailed actuarial documentation and may face longer review timelines for rate filings, increasing compliance costs—especially for smaller carriers without in-house regulatory expertise.
Employers—particularly small and mid-sized businesses—gain greater visibility into premium calculations, enabling more strategic budgeting and potentially reducing the risk of unexplained rate spikes, though they may face slightly higher upfront costs if insurers pass on compliance expenses.
Workers, especially those in lower-wage jobs or with precarious health conditions, benefit from reduced risk of discriminatory or opaque rate-setting, though the actual impact on their out-of-pocket costs depends on whether insurers absorb compliance costs or shift them into premiums.
State regulators gain a stronger evidentiary basis to detect potential unfair practices (e.g., age-based discrimination, arbitrary group exclusions), but must allocate existing resources to manage increased filing review volume.
Actuarial consultants and data vendors may see increased demand for services related to transparency documentation and regulatory modeling, though this is a minor secondary effect.