Newly-sworn-in Washington Insurance commissioner Patty Kuderer is advocating for new measures to enhance consumer protections, increase transparency in insurance pricing, and expand regulatory authority.
According to AM Best report, a key priority for Kuderer is a bill that would allow her office to require insurers to pay restitution directly to policyholders for insurance code violations.
Under current law, fines imposed by the commissioner are directed to the state’s general fund, and there is no mechanism to ensure affected consumers receive compensation.
The proposed legislation would also add 8% simple interest to restitution payments.
Kuderer told AM Best that the measure would allow consumers to recover losses without needing to file lawsuits. She said that while some insurers voluntarily pay restitution, others do not, and state regulators currently lack authority to enforce it.
Industry trade groups argue that insurers are already required to compensate policyholders in addition to paying fines. However, Kuderer’s office contends that Washington law does not mandate restitution, meaning consumers have no guaranteed recourse in cases of fraud or other violations.
Kuderer is also supporting House Bill 1199 and a related Senate bill that would allow regulators to impose fines on a per-violation basis for property and casualty insurers, aligning them with penalties faced by health insurers.
Industry representatives have opposed the measure, stating that regulators can already negotiate penalties exceeding the current $10,000 limit. They argue that per-violation fines could significantly increase penalties and create regulatory uncertainty.
Kuderer said concerns about excessive fines are unfounded, noting that similar regulations exist in 40 other states and that Washington already applies per-violation penalties in other insurance sectors.
To address rising consumer complaints, Kuderer is requesting a $470,000 budget increase to establish a claims review team. The funding would support three full-time employees focused on resolving disputes related to claim denials and delays.
She is also advocating for a review of underwriting practices that may disproportionately affect policyholders based on race, gender, income, or national origin. This follows previous attempts to prohibit credit-based insurance scoring, which were blocked by a state court.
Beyond legislative efforts, Kuderer is working with lawmakers to strengthen community-wide disaster resilience. She emphasized that individual property protections are not enough if entire neighborhoods remain vulnerable.
With these proposed changes, how do you think they will impact policyholders and insurers? Share your thoughts in the comments.
