An insurance trade group is asking Washington’s governor to veto a bill seeking to poach $10 million in insurance funds to help offset state budget shortfalls.

Chris Gregoire

The American Insurance Association sent a letter to Gov. Chris Gregoire, asking her to veto the portion of SB 644 claiming the funds from the Office of the Insurance Commissioner (OIC) Regulatory Account. The $10 million is part more than $900 million in gross premium tax paid biennially to Washington State.

“We are requesting a veto because a properly funded and functional OIC is needed to maintain a viable, competitive and sound insurance market in Washington,” said the letter, signed by Steven Suchil, AIA assistant vice president. “Underfunding the OIC could result in a reduction of staff that lessens these essential services, and impinge on the ability of the OIC to act fully in its supervisory role.”

Suchil added that the group, representing nearly 300 property-casualty insurers, also is “concerned that moving funds away from the OIC will adversely affect the accreditation of the OIC” by the National Association of Insurance Commissioners.

The $10 million in insurance funds is part of about $631 million in “new revenue that will help support critical state programs, according to a statement from Gregoire’s office.

The governor said the General Assembly’s special session to resolve budget issues required “tough choices.” The resulting bill preserves many programs, including the state’s Basic Health Program, providing health insurance to more than 60,000 state residents, “while balancing the budget with a mix of tightly targeted revenues,” according to a statement.