For Producers

Charitable contributions

The Legislature enacted amendments to Washington state laws relating to charitable contributions that were effective in July 2015. The following is a brief summary of the amendments and rule changes along with some suggested best-practices guidelines and examples to assist in promoting compliance and minimizing confusion.

Summary

An insurance producer may pay all or a portion of the commission earnings, a fee, or other consideration in connection with an insurance transaction to a bona fide charitable or nonprofit organization as long as the contribution is not conditioned upon the organization applying for or obtaining insurance through the producer, referring insurance business to the producer, or endorsing the producer or an insurance product. The producer may also sponsor events for such an organization. Certain conditions apply:

  • An insured or prospective insured cannot direct which organization receives the contribution;
  • The contribution cannot be made in the name of an insured or prospective insured;
  • An insured or prospective insured must not become entitled to a tax benefit as a result of the contribution;
  • An insured or prospective insured cannot influence selection of the person that receives benefits from the organization; and
  • The contribution or sponsorship must not be conditioned upon a person who is affiliated or interested in the organization applying or obtaining insurance through the producer.

See RCW 48.30.135 and WAC 284-17-805 (leg.wa.gov).

Examples


1. An insurance producer donates a portion of their commission earnings to a charity in the name of the insured who purchased insurance through them.

This is not permitted.

See WAC 284-17-805(1)(b) (leg.wa.gov).

2. An insurance producer sponsors an event for the American Cancer Society by donating funds to the Society.

This is permitted.

See RCW 48.30.135(1) and WAC 284-17-805(2) and (3) (leg.wa.gov).