Legislation sponsored by Sen. Steve Conway targets the billions of dollars in surpluses held by the state's three major health insurers in an effort to help put consumers ahead of profits and stabilize insurance premiums.

Senate Bill 5247 would cap insurance company reserves to provide for three months worth of claims. If a three-month cap is put in place, estimates are that it could save Washington consumers up to $1 billion.

Non-profit health insurers like Premera Blue Cross, Regence Blue Shield and Group Health use reserves to pay claims and earn returns on investments. Surpluses are the amounts above that. During his testimony on the bill last month, Insurance Commissioner Mike Kreidler said these three companies have combined reserves in the neighborhood of $2.4 billion, which Kreidler said is about a billion more than they need.

“Health insurance premiums continue to rise while these health insurers continue to amass enormous surpluses,” Conway said. “This bill is an important tool for consumer protection in that it allows the insurance commissioner to consider these large surpluses when approving or rejecting rate hikes.”

Eleven states have similar laws on the books. Oregon recently passed similar legislation and is already reporting more stable rates.

SB 5247 was supported in editorials which appeared in both the Seattle Times and Spokesman Review.