SB 6443 — Addressing joint self-insurance programs for property and liability risks.

S-4289.1SUBSTITUTES-3822.1SENATE SENATE BILL 6443State of Washington65th Legislature2018 Regular SessionBy Senate Financial Institutions & Insurance (originally sponsored by Senators Fortunato, Mullet, and Angel)READAngelAN FIRST TIME 01/26/18.AN ACT Relating to joint self-insurance programs for property and liability risks;

This chapter is not intended to authorize or regulate self-insurance of unemployment compensation under chapter 50.44 RCW, or industrial insurance under chapter 51.14 RCW.(2) This chapter is further intended to enable qualifying state agencies to participate in a local government joint self-insurance program covering property and liability risks.Sec. 2.  RCW 48.62.021 and 2015 c 109 s 2 are each amended to read as follows:Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.(1) "Health and welfare benefits" means a plan or program established by a local government entity or entities for the purpose of providing its employees and their dependents, and in the case of school districts, its district employees, students, directors, or any of their dependents, with health care, accident, disability, death, and salary protection benefits.(2) "Local government entity" or "entity" means every unit of local government, both general purpose and special purpose, and includes, but is not limited to, counties, cities, towns, port districts, public utility districts, water-sewer districts, school districts, fire protection districts, irrigation districts, metropolitan municipal corporations, conservation districts, and other political subdivisions, governmental subdivisions, municipal corporations, quasi-municipal corporations, nonprofit corporations comprised of only units of local government, or a group comprised of local governments joined by an interlocal agreement authorized by chapter 39.34 RCW.(3) "Nonprofit corporation" or "corporation" has the same meaning as defined in RCW 24.03.005(((3)))(16) or a similar statute with similar intent within the entity’s state of domicile.(4) "Property and liability risks" includes the risk of property damage or loss sustained by a local government entity and the risk of claims arising from the tortious or negligent conduct or any error or omission of the local government entity, its officers, employees, agents, or volunteers as a result of which a claim may be made against the local government entity.(5) "Qualifying state agency" or "qualifying state agencies" means a state agency, board, commission, or other entity of the state, other than a local government entity, with a biennial operating budget of not more than five million dollars.(6) "Risk assumption" means a decision to absorb the entity's financial exposure to a risk of loss without the creation of a formal program of advance funding of anticipated losses.(((6))) (7) "Self-insurance" means a formal program of advance funding and management of entity financial exposure to a risk of loss that is not transferred through the purchase of an insurance policy or contract.(((7))) (8) "State risk manager" means the risk manager of the office of risk management within the department of enterprise services.NEW SECTION.  Sec. 3.  A new section is added to chapter 48.62 RCW to read as follows:A qualifying state agency may participate in a local government joint self-insurance program formed or operating in accordance with this chapter.

A qualifying state agency may participate in the program to obtain propertyliability andinsurance liabilitycoverage, but not property insurance coverage.Sec. 4.  RCW 48.62.031 and 2015 c 109 s 3 are each amended to read as follows:(1) The governing body of a local government entity may individually self-insure, may join or form a self-insurance program together with other entities, including qualifying state agencies, and may jointly purchase insurance or reinsurance with those other entities for property and liability risks, and health and welfare benefits only as permitted under this chapter.