SB 6257 — Concerning the underground storage tank reinsurance program.

S-5648.1SUBSTITUTEZ-0831.1SENATE SENATE BILL 6257State of Washington66th Legislature2020 Regular SessionBySenateSessionBySenators Environment, Energy & Technology (originally sponsored by Senators Wellman and Short;

by request of Pollution Liability Insurance Agency)READAgencyAN FIRST TIME 01/27/20.AN ACT Relating to the underground storage tank reinsurance program;

In no event may the program be liable for or provide coverage for that portion of any covered loss that is the responsibility of the insurer whether or not the insurer is able to fulfill the responsibility.(c) The total limit of liability for reinsurance coverage shall not exceed one million dollars per occurrence and two million dollars annual aggregate for each policy underwritten by the insurer less the ultimate net loss retained by the insurer as defined and provided for in the reinsurance contract.(d) Disputes between the insurer and the insurance program shall be settled through arbitration.(2) To design and implement a structure of periodic premiums due the director from the insurer that takes full advantage of revenue collections and projected revenue collections to ensure affordable premiums to the insured consistent with sound actuarial principles.(3) To periodically review premium rates for reinsurance to determine whether revenue appropriations supporting the program can be reduced without substantially increasing the insured's premium costs.(4) To solicit bids from insurers and select an insurer to provide pollution liability insurance to owners and operators of underground storage tanks for third party bodily injury and property damage and corrective action.(5) To monitor the activities of the insurer to ensure compliance with this chapter and protect the program from excessive loss exposure resulting from claims mismanagement by the insurer.(6) To monitor the success of the program and periodically make such reports and recommendations to the legislature as the director deems appropriate, and to annually publish a financial report on the pollution liability insurance program trust account showing, among other things, administrative and other expenses paid from the fund.(7) To annually report the financial and loss experience of the insurer as to policies issued under the program and the financial and loss experience of the program to the legislature.(8) To enter into contracts with public and private agencies to assist the director in his or her duties to design, revise, monitor, and evaluate the program and to provide technical or professional assistance to the director.(9) To examine the affairs, transactions, accounts, records, documents, and assets of insurers as the director deems advisable.(10) To design, in consultation with the office of financial management, an emergency program to assist owners and operators of underground storage tanks in meeting the federal financial responsibility requirementsrequirements.(11) To implement the emergency program in the event that a private insurer withdraws from the Washington pollution liability insurance program.(11)program.(12) To determine, assess, and collect moneys sufficient to cover the direct and indirect costs of implementing the emergency program, including initial program development costs.

A new section is added to chapter 70.148 RCW to read as follows:(1) The directordirector, mayin implementconsultation anwith emergencythe program,office asof designedfinancial undermanagement, RCWmay 70.148.050.(2)design Atand theapprove legislative session following implementation of an emergency program,program theunder directorwhich must provide to the legislaturestate ashall report on the options available to assist owners and operators of underground storage tanks in usingmeeting onethe orfederal afinancial combinationresponsibility ofrequirements.(2) mechanismsThe toemergency demonstrateprogram financialis responsibilitydesigned forto undergroundbe storagetime tanks.limited.

TheIf reportthe mustdirector include,implements butthe approved emergency program, then at the legislative session following implementation, the director is notrequired limitedto to:provide the legislature with a report on the options available to assist owners and operators in using one or a combination of mechanisms to demonstrate financial responsibility for underground storage tanks.

DiscussionThis includes, but is not limited to, discussion of a state run insurance program;program, alternative options to a state run insurance program, and an evaluation and recommendation of the finances required to develop and implement a new financial responsibility model that complies with the federal financial responsibility requirements in 40 C.F.R.

alternativePart options280 tosubpart aH.Sec. state run insurance program;

an evaluation and recommendation of the finances required to develop and implement a new financial responsibility model that complies with the federal financial responsibility requirements in 40 C.F.R.

Part 280, subpart H;

and recommendations for legislation necessary to implement actions needed to meet federal financial responsibility requirements in 40 C.F.R.

Part 280, subpart H.Sec.