Current through Register Vol. 24-06, March 15, 2024
(1) Every joint
self-insurance program formed under this chapter shall require the claims
auditor, the private third-party administrator, the actuary, and the broker of
record to contract separately with the joint self-insurance program. Each
contract shall require that a written statement be submitted to the program on
a form provided by the state risk manager providing assurance that no conflict
of interest exists prior to acceptance of the contract by the joint
self-insurance program.
(2) All
joint self-insurance programs shall meet the following standards regarding
restrictions on the financial interests of the program administrators:
(a) No member of the board of directors,
private business, including a third-party administrator, or any other person
having responsibility for the management or administration of a joint
self-insurance program or the investment or other handling of the program's
money shall:
(i) Receive directly or
indirectly or be pecuniarily interested in any fee, commission, compensation,
or emolument arising out of any transaction to which the program is or is
expected to be a party except for salary or other similar compensation
regularly fixed and allowed for because of services regularly rendered to the
program.
(ii) Receive compensation
as a consultant to the program while also acting as a member of the board of
directors, private third-party administrator, or as an employee.
(iii) Have any direct or indirect pecuniary
interest in any loan or investment of the program.
(b) No consultant or legal counsel to the
joint self-insurance program shall directly or indirectly receive or be
pecuniarily interested in any commission or other compensation arising out of
any contract or transaction between the joint self-insurance program and any
insurer or consultant except for salary and other similar compensation
regularly fixed and allowed for because of services regularly rendered to the
program.
(c) Brokers of record for
the joint self-insurance programs may receive compensation for insurance
transactions performed within the scope of their licenses. The amount and other
terms of compensation of a broker of record shall be provided for in a written
contract approved by the board of directors. Any such contract shall include a
provision that contingent commissions or other forms of compensation not
specified in the contract shall not be paid to the broker of record as a result
of any joint self-insurance program insurance transactions. The joint
self-insurance program shall establish a contract provision which requires the
broker provide to the board of directors of the joint self-insurance program a
written annual report on a form provided by the state risk manager which
discloses the actual financial compensation received. The report shall include
verification that no undisclosed commission was received as a result of any
such insurance transaction made on behalf of the program.
(d) No employee or other representative of a
broker of record, insurer or private third-party administrator shall serve as
an officer or on the board of directors of a self-insurance program.
Statutory Authority: 2011 c 43. 11-23-093, recodified as
WAC 200-120-250, filed 11/17/11,
effective 11/17/11. Statutory Authority: Chapter 48.64 RCW, RCW 48.64.015, and
42.64.020. 11-06-001, § 82-70-250, filed 2/16/11, effective
3/19/11.