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Introduced Version House Bill 2397 History

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Key: Green = existing Code. Red = new code to be enacted


H. B.2397


(By Delegates Staton, Butcher, H. White,

Dempsey and Kominar)


[Introduced February 21, 2001; referred to the

Committee on Banking and Insurance then the Judiciary.]




A BILL to amend and reenact section three, article twenty, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to setting motor vehicle insurance rates in West Virginia; and eliminating the seven territories and discrepancies in rates among the territories.

Be it enacted by the Legislature of West Virginia:
That section three, article twenty, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 20. RATES AND RATING ORGANIZATIONS.

§33-20-3. Rate making.

All rates shall be made in accordance with the following provisions:
(a) Due consideration shall be given to past and prospective loss experience within and outside this state, to catastrophe hazards, if any, to a reasonable margin for underwriting profit and contingencies, to dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers, to past and prospective expenses both countrywide and those specially applicable to this state, and to all other relevant factors within and outside this state.
(b) Rates shall may not be excessive, inadequate or unfairly discriminatory.
(c) Rates for casualty and surety insurance to which this article applies shall also be subject to the following provisions:
(1) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.
(2) Risks shall be grouped by classifications and by territorial areas for the establishment of rates and minimum premiums. Classification of rates shall be modified to produce rates for individual risks in a territorial area in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses. Provided, That such standards shall include the establishment of at least seven territorial rate areas within the state: Provided further, That such territorial rate established by any insurer or group of insurers may differ from those of other insurers or group of insurers
(3) Due consideration shall be given to such factors as expense, management, individual experience, underwriting judgment, degree or nature of hazard or any other reasonable considerations, provided such factors apply to all risks under the same or substantially the same circumstances or conditions.
(d) Rates for fire and marine insurance to which this article applies shall also be subject to the following provisions:
(1) Manual, minimum, class rates, rating schedules or rating plans shall be made and adopted, except in the case of specific inland marine rates on risks specially rated.
(2) Due consideration shall be given to the conflagration hazard, and in the case of fire insurance rates consideration shall be given to the experience of the fire insurance business during a period of not less than the most recent five-year period for which such experience is available.
(e) Except to the extent necessary to meet the provisions of subdivisions (b) and (c) of this section, Uniformity among insurers in any matters within the scope of this section is shall be neither required. nor prohibited
(f) Rates made in accordance with this section may be used subject to the provisions of this article.

NOTE: The purpose of this bill is to prohibit auto insurers from developing rates for premiums by territories, and instead, require them to be developed statewide. The bill eliminates the seven territories created by this section.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
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