Industrial insurance/duties

AN ACT Relating to the duties of industrial insurance self-1
insured employers and third-party administrators; amending RCW 2
51.14.080 and 51.14.180; creating a new section; and providing an 3
effective date. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
Sec. 1. RCW 51.14.080 and 2023 c 293 s 4 are each amended to 6
read as follows: 7
(1) Certification of a self-insurer shall be withdrawn by the 8
director upon one or more of the following grounds:9
(a) The employer no longer meets the requirements of a self-10
insurer; or 11
(b) The self-insurer's deposit is insufficient; or12
(c) The self-insurer intentionally or repeatedly induces 13
employees to fail to report injuries, induces claimants to treat 14
injuries in the course of employment as off-the-job injuries, 15
persuades claimants to accept less than the compensation due, or 16
unreasonably makes it necessary for claimants to resort to 17
proceedings against the employer to obtain compensation; or18
(d) The self-insurer habitually fails to comply with rules and 19
regulations of the director regarding reports or other requirements 20
necessary to carry out the purposes of this title; or21
H-0235.1
HOUSE BILL 1059
State of Washington 69th Legislature 2025 Regular Session
By Representatives Alvarado, Low, Leavitt, Cortes, Berry, Macri,
Scott, Doglio, Bronoske, Ormsby, Reeves, Farivar, Fosse, Ryu, Ramel,
Fitzgibbon, Ortiz-Self, Simmons, Street, Goodman, Pollet, Berg,
Lekanoff, Bernbaum, and Hill
Prefiled 12/13/24. Read first time 01/13/25. Referred to Committee
on Labor & Workplace Standards.
p. 1 HB 1059
(e) The self-insurer habitually engages in a practice of 1
arbitrarily or unreasonably refusing employment to applicants for 2
employment or discharging employees because of nondisabling bodily 3
conditions; or 4
(f) The self-insurer fails to pay an insolvency assessment under 5
the procedures established pursuant to RCW 51.14.077; or6
(g)(((i) For a self-insured municipal employer, the )) The self-7
insurer has been found to have violated the ((self-insurer's)) duty 8
of good faith and fair dealing under RCW 51.14.180 three times within 9
a three-year period. 10
(((ii))) (i) For purposes of determining whether there have been 11
three violations within a three-year period, the director must use 12
the date of the department's order. Any subsequent order of the 13
department, board of industrial insurance appeals, or courts 14
affirming a violation occurred relates back to the date of the 15
department's order. 16
(((iii))) (ii) Errors or delays that are inadvertent or minor are 17
not considered violations of good faith and fair dealing for purposes 18
of this subsection (1)(g). 19
(2) The director may delay withdrawing the certification of the 20
self-insured ((municipal)) employer while the employer has an 21
enforceable contract with a licensed third-party administrator that 22
may not be legally terminated. However, the self-insured 23
((municipal)) employer may not renew or extend the contract.24
(((3) For the purposes of this section, "municipal" has the same 25
meaning as defined in RCW 51.14.180.))26
Sec. 2. RCW 51.14.180 and 2023 c 293 s 3 are each amended to 27
read as follows: 28
(1) All self-insured ((municipal employers and self-insured 29
private sector firefighter )) employers and ((their)) third-party 30
administrators have a duty of good faith and fair dealing to workers 31
relating to all aspects of this title. The duty of good faith 32
requires fair dealing and equal consideration for the worker's 33
interests. 34
(2) ((A self-insured municipal employer or self-insured private 35
sector firefighter )) An employer or ((their)) third-party 36
administrator violates its duty to the worker if it coerces a worker 37
to accept less than the compensation due under this title, or 38
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otherwise fails to act in good faith and fair dealing regarding its 1
obligations under this title. 2
(3) The department shall adopt by rule additional applications of 3
the duty of good faith and fair dealing as well as criteria for 4
determining appropriate penalties for violations. In adopting a rule 5
under this subsection, the department shall consider, among other 6
factors, recognized and approved claim processing practices within 7
the insurance industry, the department's own experience, and the 8
industrial insurance and insurance laws and rules of this state.9
(4) The department shall investigate each alleged violation of 10
this section upon the filing of a written complaint or upon its own 11
motion. After receiving notice and a request for a response from the 12
department, the ((municipal employer or private sector firefighter )) 13
employer or ((their)) third-party administrator may file a written 14
response within 10 working days. If the ((municipal employer or 15
private sector firefighter )) employer or ((their)) third-party 16
administrator fails to file a timely response, the department shall 17
issue an order based on available information. 18
(5) The department shall issue an order determining whether a 19
violation of this section has occurred, in conformance with RCW 20
51.52.050, within 30 calendar days of receipt of a complete complaint 21
or its own motion. An order finding that a violation has occurred 22
must also order the ((municipal employer or private sector 23
firefighter)) employer to pay a penalty of one to 52 times the 24
average weekly wage at the time of the order, depending upon the 25
severity of the violation, which accrues for the benefit of the 26
worker. 27
(((6) The definitions in this subsection apply throughout this 28
section unless the context clearly requires otherwise.29
(a) "Municipal" means any counties, cities, towns, port 30
districts, water-sewer districts, school districts, metropolitan park 31
districts, fire districts, public hospital districts, regional fire 32
protection service authorities, education service districts, or such 33
other units of local government.34
(b) "Private sector firefighter employer" means any private 35
sector employer who employs over 50 firefighters, including 36
supervisors, on a full-time, fully compensated basis as a firefighter 37
of the employer's fire department, only with respect to their 38
firefighters.))39
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NEW SECTION. Sec. 3. This act applies to all claims regardless 1
of the date of injury.2
NEW SECTION. Sec. 4. This act takes effect January 1, 2026.3
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