Washington Insurance Commissioner Patty Kuderer is preparing a 2026 legislative agenda centered on restitution authority, limits on post-loss assignment of benefits (AOB) and wildfire mitigation.
Her priorities include banning AOB in repair contracts, expanding the regulator’s ability to order restitution and creating a home hardening program.
Since taking office in 2025, Kuderer has framed these proposals as part of a broader push to strengthen consumer protections, improve transparency in insurance pricing and expand regulatory tools in the state.
Kuderer is backing a bill that would let the Office of the Insurance Commissioner order carriers to pay compensation directly to policyholders for violations of the insurance code. It would also allow fines of up to $10,000 per property/casualty violation, bringing those penalties in line with life and health insurance.
The measure passed the state Senate but stalled in the House Consumer Protection and Business Committee after an aggregate cap on penalties was added at industry request.
“Aggregate caps are anti-consumer, and they only benefit the companies that engage in the most egregious conduct,” Kuderer said at a recent event, calling them “unfair to consumers and ... other entities that we regulate.”
She said the bill would make Washington comparable to 38 other states that have some form of per-violation penalties for property/casualty carriers. Under the state’s two-year legislative cycle, the proposal remains alive and can be taken up again in the 2026 session.
Parallel to the legislative effort, the OIC has opened a rulemaking process to update claims-handling standards for the first time in nearly 20 years, including fire loss reporting rules and registration of umpires in auto appraisal disputes.
Kuderer has also formed an artificial intelligence advisory board to study regulatory issues tied to emerging technologies in underwriting and claims. Findings from the group are expected to inform future guidance on the use of AI and automation in areas such as documentation, explainability and oversight.
The commissioner’s office is seeking a statutory ban on post-loss AOBs in repair contracts, which staff say are appearing more often. David Forte, senior property/casualty policy adviser, said these clauses differ from common direct payment authorizations and instead allow contractors to assume the role of a de facto first-party claimant.
In such cases, “all the consumer protections that the legislature has provided consumers in the insurance code no longer go to the insured,” Forte said, noting contractors can block communications, accept claim payments and file lawsuits without policyholder recourse. He said the proposal would not affect policyholders’ ability to work with public adjusters, attorneys or other insurance professionals.
The office is also asking lawmakers to establish a pilot Strengthen Washington Homes Program, supported by a wildfire grant initiative. Using Insurance Institute for Business and Home Safety Wildfire Prepared Home standards, the program would support projects such as ember-resistant vents, ignition-resistant materials and defensible space.
Separately, the regulator backs a measure requiring carriers to disclose a home’s wildfire risk score, explain how it is calculated and outline steps to improve it.
“Ultimately the bottom line is homeowners deserve to know when wildfire risk scores affect their insurance and how they can reduce their risk,” said Lauren Burnes, senior property/casualty policy analyst.
