A committee of the Washington Legislature has approved a measure creating an antifraud unit in the state insurance commissioner's office after reaching a deal over secrecy of insurers' data.
A last minute amendment, crafted to assuage concerns expressed by plaintiffs' lawyers and the state's news media, allows only information submitted to the antifraud bureau, rather than the insurance department as a whole, to be protected.
Kenton Brine, Northwest regional manager for the Property Casualty Insurers Association of America, said the language inserted into the bill was based on similar provisions elsewhere in the state's laws.
Mr. Brine said the attorneys and media representatives expressed "grudging support" once the deal was set, adding that it would be a "surprise, and something of a betrayal," if those groups made any further effort to change the bill.
"I'm not aware of any major hurdles" blocking its passage, he said.
Although there have not been any problems with the media reporting on fraud investigations, Mr. Brine said assuring confidentiality for information submitted during a fraud investigation was essential to ensure that insurers would participate in those investigations, rather than conducting their own.
In addition, the bill also establishes a ten-member advisory board, half of which would be composed of industry representatives, to ensure the antifraud program is operating properly and efficiently.
With the Financial Institutions and Insurance committee's approval, the bill now moves to the House Appropriations committee. Mr. Brine said it would likely win approval there easily, as the antifraud bureau is funded by the insurance commissioner's regulatory account that insurers fund themselves.
Once the measure clears Appropriations, it would be moved to the House Rules committee, which can schedule a vote on the House floor.
The amended bill after House passage would move back to the state Senate. Although some senators expressed a preference that the antifraud bureau be placed under the state attorney general rather than the insurance commissioner, Mr. Brine noted that amendments to that effect had been offered during the bill's first trip through the Senate, and "they didn't hang."
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