Shortly after we published Khalid Aziz's post discussing the Washington Office of the Insurance Commissioner’s (“OIC”) proposed changes to the state’s claims-handling regulations, the OIC released an updated version. As promised, our Insurance Recovery Team has been monitoring the amendment process and provides below the notable differences for policyholders.
Insurers must disclose any refusal to withhold claim file documents.
Under the proposed amendment, an insurer who refuses to produce any part of the claim file for the foregoing reasons must advise the insured of the basis for the insurer’s failure to produce the same (i.e., the information is legally privileged, contains third-party financial information, or non-disclosure is essential to a criminal investigation). This iteration of the proposed rule removes the requirement that an insurer provide a privilege log in all instances.
Insureds are entitled to prompt payment for an “undisputed loss.”
A proposed addition to the claims handling regulations (WAC § 284-30-330) would prohibit insurers from failing to “timely” issue payment for an “undisputed amount” to a “first-party claimant.” If adopted, the failure to issue such payments would constitute an unfair claim practice under proposed subsection (23).
This version also adds a definition of “undisputed amount” at WAC § 284-30-320(19) which provides in relevant part:
“Undisputed amount” means the insurance proceeds the insurer and the claimant acknowledge is the minimum amount owed for the loss under the applicable policy. For example, if one party evaluates the loss value at $5,000 dollars and the other party evaluates the loss at $4,000 dollars, then $4,000 is the undisputed amount. Paying or receiving an undisputed amount of insurance proceeds does not prohibit either party from continuing the claim process.
As such, this regulation would apply when both the insured and insurer: (1) agree the insured has suffered a covered loss; but (2) disagree on the value of the loss. Notably, an insured’s acceptance of an undisputed loss payment does not impair the insured’s ability to pursue the balance of its claim.
Finally, the OIC is currently requesting comments from the public regarding all proposed rule changes. Input must be provided input to rulescoordinator@oic.wa.gov by close of business February 3rd, 2026.
To review all of the proposed changes in the OIC’s current draft, visit this webpage.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.
