wa-law.org > bill > 2025-26 > SB 6031 > Original Bill
For purposes of this chapter, unless the context clearly requires otherwise, "insurer" means an entity described in RCW 48.01.050 and includes, but is not limited to, an insurance company authorized under chapter 48.05 RCW, a disability insurer regulated under chapter 48.20 or 48.21 RCW, a health care service contractor registered under chapter 48.44 RCW, and a health maintenance organization registered under chapter 48.46 RCW.
The purpose of this chapter and sections 14 through 17, chapter 284, Laws of 2006 is to confront the problem of insurance fraud and other crimes that impact the insurance industry, or insurance consumers or beneficiaries in this state by updating definitions to address recurring or technologically sophisticated fraud schemes, and making a concerted effort to: Detect such crimes, reduce their occurrence through criminal enforcement and deterrence; require restitution of expenses incurred by an insurer in investigating or paying fraudulent claims or resulting from other crimes; require restitution to insurance consumers victimized by insurance fraud and other insurance-related crimes; and reduce the amount of premium dollars used to pay fraudulent claims. The primary focus of the insurance fraud program is on organized or collusive criminal schemes that fraudulent activities committed against impact insurance companies or insurance consumers.
A person is guilty of insurance fraud if the person knowingly, and with intent to defraud, commits, or conceals any material information concerning, one or more of the following:
Presenting, causing to be presented, or preparing with knowledge or belief that it will be presented to or by an insurer, insurance producer, or surplus line broker, false information as part of, in support of, or concerning a fact material to one or more of the following:
An application for the issuance or renewal of an insurance policy;
The rating of an insurance policy or contract;
A claim for payment or benefit pursuant to an insurance policy;
Premiums paid on an insurance policy;
Payments made in accordance with the terms of an insurance policy; or
, or insurance consumer or beneficiary;
c. Submitting of a bill or claim to an insurer or insurance consumer:
i. For medical, vehicle, or property services not rendered, vehicle or property repairs not made, or supplies not provided;
ii. Using a current procedural terminology (CPT) code or health care common procedure coding system (HCPCS) code not reasonably appropriate to the service provided or procedure performed; or
iii. Using the name, credentials, or national provider identifier (NPI) of a health care provider who neither rendered nor supervised the billed service;
d. Submitting a statement, estimate, invoice, bid, proposal, proof of loss, or any other document that misrepresents the scope of damages or costs of repairs associated with a property insurance claim;
e. Falsifying diagnostic or treatment information in a patient's medical file to bill for treatments or prescriptions that would not otherwise have been covered by the insurer;
f. Misrepresenting the identity of, or impersonating, a person, government representative, or business in connection with an insurance policy application, premium payment, claim, or the solicitation or performance of mitigation, restoration, or repair services;
g. Procuring or handling funds intended for payment of premium in any of the following ways:
i. Collecting or receiving funds intended for the payment of premium from an individual or entity, or under a premium finance agreement, but misappropriating or converting the funds, or failing to remit the funds to the insurer in a prompt manner;
ii. Misrepresenting the amount of premium owed or the terms of a premium finance agreement; or
iii. Submitting falsified or forged premium finance agreements or insurance policy information to obtain premium finance loan proceeds;
h. When appraising or umpiring under the appraisal clause of an insurance contract, failing to do so in an impartial manner, including:
i. In a self-interested manner, such as on a contingency fee basis, or to secure additional appraisal or umpiring opportunities; or
ii. According to influence from an insurer, policyholder, claimant, or other; or
i. Attempting to commit, aiding or abetting in the commission of, or conspiracy to commit the acts or omissions specified in this subsection (1).
[Empty]
Insurance fraud is a class B felony.
For purposes of this section, each instance of insurance fraud constitutes a separate offense.
Insurance fraud may be charged and prosecuted in any county where the crime occurred, the accused resides, an insurance consumer or beneficiary victimized by the crime resides, or an impacted insurer has its primary place of business within the state.
[Empty]
For purposes of determining under subsection (1)(c)(ii) of this section whether a current procedural terminology code was reasonably appropriate for the service provided or procedure performed, the trier of fact must consider any evidence presented, and the applicable current procedural terminology code set published by the American medical association.
For purposes of determining under subsection (1)(c)(ii) of this section whether a health care common procedure coding system code was reasonably appropriate for the service provided or the procedure performed, the trier of fact must consider any evidence presented, and the applicable current procedural terminology code set published by the department of health and human services, centers for medicare and medicaid services.
There is established an insurance fraud program within the office of the insurance commissioner. The commissioner may employ supervisory, legal, investigative, and other personnel for the program, who must be qualified by training and experience in the areas of detection, investigation, or prosecution of fraud and other crimes in which the insurance industry or an insurance consumer or beneficiary is a victim or is impacted. The chief of the fraud program is a full‑time position that is appointed by the commissioner. The chief serves at the pleasure of the commissioner. The commissioner shall provide office space, equipment, supplies, investigators, clerical staff, and other staff that are necessary for the program to carry out its duties and responsibilities under this chapter.
The commissioner may fund one or more state patrol officers to work with the insurance fraud program and the funding for the officers must be paid out of the budget of the insurance fraud program.
The commissioner may fund one or more assistant attorneys general and support staff to work with the insurance fraud program and the funding for the assistant attorneys general and support staff must be paid out of the budget of the insurance fraud program.
The commissioner may make grants to or reimburse local prosecuting attorneys to assist in the prosecution of insurance fraud. The grants must be paid out of the budget of the insurance fraud program. The commissioner may investigate and seek prosecution of crimes involving insurance fraud upon the request of or with the concurrence of the county prosecuting attorney of the jurisdiction in which the offense has occurred. Before such a prosecution, the commissioner and the county in which the offense occurred shall reach an agreement regarding the payment of all costs, including expert witness fees, and defense attorneys' fees associated with any such prosecution.
The commissioner may:
Employ and train personnel, and contract for goods and services, to achieve the purposes of this chapter and to employ legal counsel, investigators, auditors, financial or digital forensic staff, and clerical support personnel and other personnel as the commissioner determines necessary from time to time to accomplish the purposes of this chapter;
Initiate inquiries and conduct investigations when the commissioner has cause to believe that insurance fraud or other crimes that impact the insurance industry or insurance consumers or beneficiaries, has been, is being, or is about to be committed;
Conduct independent investigations of alleged insurance fraud or other crimes that impact the insurance industry or insurance consumers or beneficiaries;
Review notices, reports, or complaints of suspected insurance fraud or other crimes that impact the insurance industry or insurance consumers or beneficiaries, from federal, state, and local law enforcement and regulatory agencies, persons engaged in the business of insurance, and any other person to determine whether the reports require further investigation;
Share records and evidence with federal, state, or local law enforcement , prosecutorial, or regulatory entities, and enter into interagency, joint operation, or cross commission agreements;
Conduct investigations outside this state. If the information the commissioner seeks to obtain is located outside this state, the person from whom the information is sought may make the information available to the commissioner to examine at the place where the information is located. The commissioner may designate representatives, including officials of the state in which the matter is located, to inspect the information on behalf of the commissioner, and the commissioner may respond to similar requests from officials of other states;
Administer oaths and affirmations, subpoena witnesses, compel their attendance, obtain evidence, and require and compel the production of any books, papers, correspondence, memoranda, agreements, data, or other documents or records that the commissioner deems relevant or material to an inquiry concerning insurance fraud or other crimes that impact the insurance industry or insurance consumers or beneficiaries;
Report incidents of alleged insurance fraud or other crimes that impact the insurance industry or insurance consumers or beneficiaries, disclosed by its investigations to the appropriate prosecutorial authority including, but not limited to, the attorney general, a county or federal prosecuting authority, and to any other appropriate law enforcement, administrative, regulatory, or licensing agency;
Undertake independent studies to determine the extent of criminal acts that impact the insurance industry or insurance consumers or beneficiaries; and
Acquire and use technology to accomplish the purposes of this chapter including, but not limited to, detecting crime and collusive schemes, and organizing and analyzing data, evidence, investigations, and exhibits.
The fraud program investigators who have obtained certification as a peace officer under RCW 43.101.095 have the powers and status of a limited authority Washington peace officer.
Any insurer or licensee of the commissioner that has reasonable belief that an act of insurance fraud or other crimes that impact the insurance industry or insurance consumers or beneficiaries, has been, is being, or is about to be committed shall furnish and disclose the knowledge and information to the commissioner or the national insurance crime bureau, the national association of insurance commissioners, or similar organization, who shall disclose the information to the commissioner. The insurer and any licensee of the commissioner shall cooperate fully with any investigation conducted by the commissioner.
Any person that has a reasonable belief that an act of insurance fraud or other crimes that impact the insurance industry or insurance consumers or beneficiaries, has been, is being, or is about to be committed; or any person who collects, reviews, or analyzes information concerning insurance fraud or other crimes that impact the insurance industry or insurance consumers or beneficiaries, may furnish and disclose any information in its possession concerning such an act to the commissioner or to an authorized representative of an insurer that requests the information for the purpose of detecting, prosecuting, or preventing crime that impacts the insurance industry, or insurance consumers or beneficiaries.
Any certified public accountant, state or local law enforcement agency, public safety entity, or regulatory entity for health care or financial service providers, that has reasonable belief that an act of insurance fraud or other crime that impacts the insurance industry or insurance consumers or beneficiaries, has been, is being, or is about to be committed, shall furnish and disclose any information in its possession concerning such an act to the commissioner.
Any business entity registered to do business in this state under chapter 23.95 RCW that executes an agreement to finance the payment of a premium for an insurance policy shall send a copy of the executed agreement and the associated insurance policy to the commissioner within 30 calendar days of executing the agreement.
Documents, materials, or other information as described in subsection (3), (4), or both of this section are exempt from public inspection and copying under chapter 42.56 RCW. The commissioner is authorized to use such documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties.
The commissioner:
May share documents, materials, or other information, including the documents, materials, or information subject to subsection (1) of this section, with (i) the national association of insurance commissioners and its affiliates and subsidiaries, (ii) regulatory and law enforcement officials of other states and nations, the federal government, and international authorities, (iii) the national insurance crime bureau, and (iv) an insurer with respect to whom the suspected fraudulent claim may be perpetrated;
May receive documents, materials, or information from any source including, but not limited to: (i) The national association of insurance commissioners and its affiliates and subsidiaries, (ii) regulatory and law enforcement officials of other states and nations, the federal government, and international authorities, (iii) the national insurance crime bureau, and (iv) an insurer with respect to whom the suspected fraudulent claim may be perpetrated and any such documents, materials, or information as described in subsection (3), (4), or both of this section are exempt from public inspection and copying; and
May enter into agreements governing the sharing and use of information consistent with this subsection.
Specific intelligence information and specific investigative records compiled by investigative, law enforcement, and penology agencies, the fraud program of the office of the insurance commissioner, and state agencies vested with the responsibility to discipline members of any profession, the nondisclosure of which is essential to effective law enforcement or for the protection of any person's right to privacy, are exempt under subsection (1) of this section.
Information revealing the identity of persons who are witnesses to or victims of crime or who file complaints with investigative, law enforcement, and penology agencies, or the fraud program of the office of the insurance commissioner, if disclosure would endanger any person's life, physical safety, or property, is exempt under subsection (1) of this section. If at the time a complaint is filed the complainant, victim, or witness indicates a desire for disclosure or nondisclosure, such desire shall govern.
No waiver of an existing privilege or claim of confidentiality in the documents, materials, or information may occur as a result of disclosure to the commissioner under this section or as a result of sharing documents, materials, or information as authorized in subsection (2) of this section.
Documents, materials, or other information that is in the possession of persons other than the commissioner that would otherwise not be confidential by law or privileged do not become confidential by law or privileged by providing the documents, materials, or other information to the commissioner.
In a criminal prosecution for any crime under Washington law in which an insured person or an insurance company, consumer, or beneficiary is a victim, the insured person, insurance company, consumer, or beneficiary is entitled to be considered as a victim in any restitution ordered by the court under RCW 9.94A.753 or 9.94A.750, as part of the criminal penalty imposed against the defendant convicted for such a violation.
(1) Prosecutions for criminal offenses shall not be commenced after the periods prescribed in this section.
If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.