Washington’s insurance regulator is warning lawmakers that a joint underwriting association would not resolve liability insurance coverage problems reported by child housing providers, including placing agencies and group foster homes.
The Office of the Insurance Commissioner for Washington State reported that providers are facing availability and affordability constraints, particularly for professional liability, sexual abuse liability and excess or umbrella coverage.
The regulator noted that organizations can often obtain liability coverage for future events, but many insurers are declining to write policies that include prior-acts coverage for conduct that may have occurred in the past.
Without that coverage, the office reported, providers could face significant financial exposure if sued.
“The legislature has some tough decisions ahead, especially considering our current budget environment,” Washington Insurance Commissioner Patty Kuderer (pictured above) said. “With the national trends we’re seeing with these critical organizations, we may need federal action as well.”
The report found that a joint underwriting association would not be a viable fix under current conditions because premiums would likely need to be set at high levels to cover expected losses. The office added that such a structure could be more workable if it were permitted to limit prior-acts coverage, cover only prospective acts, or operate across jurisdictions.
The study was required under Washington’s 2025 supplemental budget and focused primarily on whether a joint underwriting association could be feasible, the commissioner’s office reported.
While the report did not back creating a joint underwriting association, it laid out options for lawmakers, including increasing the rates paid to these organizations so they can better absorb higher premiums.
It also recommended reviewing regulator-mandated coverage requirements for child housing service providers, updating standards of fault, and creating a settlement fund to address historic losses after policy limits are reached.
Separately, Kuderer is preparing a 2026 legislative agenda that includes expanded restitution authority and limits on post-loss assignment of benefits, alongside wildfire mitigation proposals.
She has described those priorities as part of a broader push to improve transparency in insurance pricing and expand regulatory tools in the state.
