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Committee advances study directive to insurance commissioner on lowering condo construction-defect liability costs
Summary
The committee recommended Second Substitute House Bill 1516, which directs the Office of the Insurance Commissioner to study insurance and liability options to reduce condominium construction-defect costs for permanently affordable homeownership units and report back to the Legislature by December 2026.
The Washington State Senate Business, Financial Services & Trade Committee voted March 26 to give Second Substitute House Bill 1516 a due-pass recommendation and send it to the rules committee.
Committee staff, John Kim, summarized the bill as requiring the Office of the Insurance Commissioner to study options for developers of permanently affordable homeownership units to reduce condominium construction-defect liability costs. The bill authorizes the OIC to contract with actuaries and other consultants, requires insurers and risk retention groups to provide requested information to the OIC, and requires the OIC to report to the Legislature by December 2026.
Kim told the committee the OIC estimated $368,000 in operating expenditures from its regulatory account for the current biennium to conduct the study; a fiscal note is available. The committee did not adopt amendments to the bill at the March 26 meeting.
A committee member moved the bill receive a due-pass recommendation and be sent to the rules committee; the committee approved the motion by voice vote. The chair announced the bill passed subject to signature.
The bill’s study requirement and the December 2026 reporting deadline were recorded by committee staff; the committee did not provide additional direction to staff beyond the reported fiscal and scope details.
