Insurance Oversight in Washington

There is a long history of efforts to regulate the insurance industry, in particular to determine whether insurance should be regulated at the state or federal level.   In the 1860’s Paul vs. Virginia went to the Supreme Court which concluded that insurance was not interstate commerce and should be regulated under the laws of each under each state.  Eighty years later in the case of South-Eastern Underwriters, the court reversed its decision in an anti-trust case and decided that insurance was commerce and, it was, subject to federal regulation.

The court’s decision did not last long as Congress passed the McCarran-Ferguson Act which returned regulatory power to the states – provided they passed anti-trust legislation.   At the end of 1999, Congress passed the Gramm-Leach-Bliley Financial Services Modernization Act that took away some distinctions between insurance companies, banks, and investment services and exposed the industry to the prospect of increasing regulation at the federal level. 

While the ball was bouncing back and forth at the federal level, Washington State has had a regulatory process since the state was first established.   The Office of the Washington State Insurance Commissioner was created by the first state legislature in the 1889-1890 session.  Its first duty was registering the insurers who were doing business in Washington.  The first insurance commissioner was elected in 1907 and the position has been remarkably stable since then.  Commissioners serve a four year term and there have only been eight different commissioners in more than 100 years. 

The business of the office today is to protect consumers, make certain the insurance industry is regulated in the public interest and that companies, agents and brokers act according to the rules.  The office licenses and audits more than 50 insurers based here in the state and they monitor over 2000 more.  They do testing and license almost 120,000 agents, brokers and businesses that sell insurance in Washington.  Some of the agencies important consumer related functions include looking into insurance related problems for thousands of consumers every year and helping advise consumers on health care issues through a volunteer network of Statewide Health Insurance Benefits Advisors (SHIBA). 

The Office of the Commissioner employs about 200 people and is actually funded though administrative fees paid by the insurance companies.   The Office handles Washington Home Insurance, auto, life and health insurance and any other form of insurance sold in the state.   

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