April 3, 2025
OLYMPIA, Wash. — Substitute Senate Bill 5331, which would have authorized the state insurance commissioner to order an insurance company or person under OIC jurisdiction that violates state insurance laws to pay consumers back their money, failed to pass out of the House Consumer Protection and Business Committee on Wednesday. The bill also would have created fine enforcement parity among those same entities.
The bill was requested by Insurance Commissioner Patty Kuderer and prime sponsored by Senator Adrian Cortes (D - Battle Ground).
“The Senate passed a strong consumer protection bill,” said Kuderer. “Unfortunately, an anti-consumer amendment to cap total fines caused members who would have otherwise supported the bill to vote against it.”
Kuderer testified in favor of SSB 5331 on March 19.
Under current law, insurance-related fines go to the state’s general fund, not consumers, who instead must start a separate lawsuit to get their money back from an insurance company or professional who violates the insurance code.
SSB 5331 would have changed that in all types of insurance-related law violations, for example:
- When an insurance company uses rates that haven’t been approved by the Insurance Commissioner, there is no mechanism to order repayment to policyholders who have overpaid.
- If an unauthorized insurer, like an illegal health insurer, defrauds policyholders, the Insurance Commissioner can fine the company but cannot order them to repay the money they took.
- If an insurance agent collects premiums but doesn’t forward that money to the insurance company — leaving the policyholder without coverage — the Insurance Commissioner can’t require them to repay the money they took.
The bill also would have brought the state’s auto and homeowner insurers into parity with other regulated entities by including them in the “per violation or offense” fine schedule. The bill’s failure means the Insurance Commissioner’s current authority to fine home and auto insurance companies remains limited to $10,000, regardless of the number of violations or how egregious the conduct is.
“Putting a cap on total fines is unfair to consumers and protects bad actors,” Kuderer said. “Fines are intended to deter future illegal conduct, and caps undermine that intent, because then it can be cheaper to pay the fine than to follow the law. So, while I am disappointed the Committee did not pass a strong consumer protection bill, I am glad the bill as amended did not advance this session.”