The Washington Office of the Insurance Commissioner has calendared a prehearing conference for Alaska Air on 30 September.
Alaska Air’s Hawaii-domiciled captive insurance company recently received a $2.5 million fine from Mike Kreidler, the insurance commissioner for the State of Washington, for unpaid tax, interest and penalties.
The fine handed to ASA Assurance, its insureds and affiliates, included a fee of $1.8 million for unpaid premium tax, $0.2 million in interest, and $0.36 million in penalties.
It also received a fine of $0.1 million against ASA for violating the state’s insurance laws.
Seattle-based insurance lawyer, Steven Beeghly explained that he would be interested to see “in this prehearing conference that is largely related to case scheduling, if either party shows intent to bring a motion to test a legal theory, or if there is an indication of a possible settlement”.
Beeghly said that he would also be interested to see if Alaska Air files for a stay of the administrative hearing “in hopes that potential new legislation may address some or even all of these issues”.
The Washington Insurance Commissioner has published his five legislative priorities for the 2020 legislative session, and one priority is to address captive insurance for Washington State companies.
Beeghly added: “The commissioner has stated that he plans to introduce legislation relative to Washington State-based companies and how they can form and use their own captive insurance company in the 2020 state legislative session.”
A statement, released by the Washington State Office of the Insurance Commissioner, explained that during the past year, the Office of the Insurance Commissioner began investigating Washington state-based companies who had formed their own captive insurance companies.
It said: “These companies have been cooperating in the investigations by the Office of the Insurance Commissioner and are working with the Office of the Insurance Commissioner on legislation for 2020.”
