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Introduced Version House Bill 2632 History

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33-16-2
H. B.2632


(By Delegates H.K. White, R.M. Thompson, Hrutkay,

Perry, Azinger and G. White)


[Introduced February 24, 2005; referred to the Committee on Banking and Insurance then the Judiciary.]



A BILL to amend and reenact §33-6-8 of the code of West Virginia, 1931, as amended; to amend and reenact §33-16B-1 and §33-16B-3 of said code; to amend and reenact §33-17-8 of said code; and to amend and reenact §33-20-4 of said code, all relating to the filing of insurance rates and forms; exempting commercial lines from the requirement of prior approval of rates and forms; creating a presumption of prospective relief when forms are disapproved and providing factors to be considered in determining whether relief should be retroactive; defining terms; clarifying that certain health insurance forms marketed to associations must be filed with the commissioner; providing that commercial and certain health insurance forms marketed to associations are effective upon first use after filing; clarifying that prior rate approval applies to health insurance certificates and endorsements; certain all certificates and providing that commercial lines rates are not subject to prior approval.

Be it enacted by the Legislature of West Virginia:
That §33-6-8 of the code of West Virginia, 1931, as amended, be amended and reenacted; that §33-16B-1 and §33-16B-3 of said code be amended and reenacted; that §33-17-8 of said code be amended and reenacted; and that §33-20-4 of said code be amended and reenacted, all to read as follows:
ARTICLE 6. THE INSURANCE POLICY.
§33-6-8. Filing of forms.
(a) Except as provided in section eight, article seventeen of this chapter (fire and marine forms), no No insurance policy form, no group certificate form, no insurance application form where written application is required and is to be made a part of the policy, and no rider, endorsement or other form to be attached to any policy, shall be delivered or issued for delivery in this state by an insurer unless it has been filed with the commissioner and, to the extent required by paragraph (1), subsection (b) of this section, approved by the commissioner, except that as to group insurance policies delivered outside this state, only the group certificates to be delivered or issued for delivery in this state shall be filed for approval with the commissioner. This section shall not apply to policies, riders, endorsements or forms of unique character designed for and used with relation to insurance upon a particular subject, or which relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or accident and sickness insurance policies, and are used at the request of the individual policyholder, contract holder or certificate holder, nor to the surety bond forms. (b) Every such filing shall be made specified in subsection (a) of this section shall be subject to the following:
(1) Forms for personal lines shall be filed not less than sixty days in advance of any such delivery At and at the expiration of such sixty days, unless such period has been extended by the commissioner for the purpose of obtaining additional information from the insurer, the form so filed shall be deemed approved unless prior thereto it has been affirmatively approved or disapproved by the commissioner. Approval of any such form by the commissioner shall constitute a waiver of any unexpired portion of such waiting period. The commissioner may at any time, after notice and for cause shown, withdraw any such approval.
(2) Forms for (A) commercial lines property and casualty risks and (B) any mass marketed life and/or health insurance policy offered to members of any association by the association, need not be approved by the commissioner prior to use, although the commissioner may at any time request information to ensure compliance with applicable statutory provisions or to disapprove form filings not in compliance with applicable statutory provisions within the first thirty days after receipt of the form filing. If the commissioner does not disapprove the filing within such thirty day period, the form filing is effective upon first usage after filing.
(c) Any order of the commissioner disapproving any such form or withdrawing a previous approval shall state the grounds therefor.
(c) When a filing is not accompanied by the information upon which the insurer supports such filing, and the commissioner does not have sufficient information to determine whether such filing meets the requirements of this article, he or she shall require such insurer to furnish the information upon which it supports such filing and in such event the waiting period shall, with respect to a filing involving personal lines risks, commence as of the date such information is furnished: Provided, That the commissioner may request additional information after the initial sixty-day period (with respect to personal lines) or thirty-day period (with respect to commercial lines and mass-marketed life and/or health insurance to associations) to ensure continuing compliance with applicable statutory provisions and may at any time, after notice and for cause shown, withdraw any approval or disapprove any filing: Provided, however, That any disapproval by the commissioner of any such form or withdrawal of a previous approval shall state the grounds therefor.
(d) Any disapproval by the commissioner or withdrawal of prior approval is presumed to be prospective only and shall not affect the validity of forms already in use unless the commissioner determines that retroactive action is necessary after consideration of the nature and extent of harm to the consumers if the forms in use are permitted to remain in use, whether any violation of law by the insurer was willful, and the costs to the insurer.
(d)(e) The commissioner may, by order, exempt from the requirements of this section for so long as he or she deems proper any insurance document or form or type thereof as specified in such order, to which, in his or her opinion, this section may not practicably be applied, or the filing and approval of which are, in his or her opinion, not desirable or necessary for the protection of the public.
(e)(f) Notwithstanding any other provisions of this section, any mass marketed life and/or health insurance policy offered to members of any association by the association shall be exempt from the provision requiring prior approval under this section: Provided, That for For purposes of this section: the association shall
(1) An association must have a minimum of sixty-one members at the outset of the issuance of the mass marketed life and/or health insurance policy and shall have been organized and maintained in good faith for purposes other than that of obtaining or providing insurance. Provided, however, That the The association shall also have been in active existence for at least two years and shall have a constitution and bylaws which provide that: (1) The association holds annual meetings to further purposes of its members; (2) except in the case of credit unions, the association collects dues or solicits contributions from members; and (3) the members have voting privileges and representation on the governing board and committees that exist under the authority of the association: Provided, further, That upon written application by an association and for good cause shown, the commissioner may grant an exemption to the association from the minimum member requirements of this section.
(2) "Commercial lines" means insurance for business and professional interests, except that it does not include medical malpractice insurance.
(3) "Personal lines" means insurance for personal, family or household needs.
(f)(g) This section shall apply also to any form used by domestic insurers for delivery in a jurisdiction outside West Virginia, if the insurance supervisory official of such jurisdiction informs the commissioner that such form is not subject to approval or disapproval by such official, and upon the commissioner's order requiring the form to be submitted to him or her for the that purpose. The applicable same standards shall apply to such forms as apply to forms for domestic use.
ARTICLE 16B. ACCIDENT AND SICKNESS RATES.
§33-16B-1. Filing and approval of accident and sickness rates.
Premium rate charges for any individual or group accident and sickness insurance policy, or for any group accident and sickness insurance policy issued pursuant to this chapter certificate or other evidence of insurance issued, endorsed, or delivered in this state shall be filed with the commissioner for a waiting period of sixty days before such charges become effective. At the expiration of such sixty days the premium rate charges so filed shall be deemed approved unless prior thereto the charges have been affirmatively approved or disapproved by the commissioner.
The commissioner shall disapprove accident and health insurance premium rates which are not in compliance with the requirements of this chapter or any rule promulgated by the commissioner pursuant to section two of this article. The commissioner shall send written notice of such disapproval to the insurer. The commissioner may approve the premium rates before the sixty-day period expires by giving written notice of approval.
§33-16B-3. Exceptions.
This article shall not apply to policies issued to group accident and health insurance plans upon which premiums are negotiated with the individual group policyholder and are based on the historic and projected loss experience of the group to be insured experienced rated.
ARTICLE 17. FIRE AND MARINE INSURANCE.
§33-17-8. Filing of forms.
(a) No fire or marine policy, rider, or endorsement to be attached to any policy, covering any risk located or to be performed in West Virginia shall be delivered or issued for delivery in this state unless either that form is (1) filed with and approved by the commissioner, or (2) conforms to applicable rules approved by the commissioner or is identical as to language to a policy, rider or endorsement approved by the commissioner, or (3) qualifies under subsection (c) of this section. If the use of any such form under the provisions of clause (2) above by any insurer or by the members and subscribers of any rating organization shall be so extensive that in the opinion of the commissioner the public interest requires, the commissioner may require that such form be filed with him or her by such insurer or by such rating organization on behalf of its members and subscribers. (b) The procedure for filing and approval or disapproval of forms under this section shall be that provided in paragraphs (b), (c), (d), and (e) of section eight, of article six of this chapter. Grounds for disapproval shall be those set forth in section nine, of article six of this chapter. Such filings may be made on behalf of any insurer by a rating organization licensed as such under the provisions of article twenty of this chapter. This section shall not apply to ocean marine policies, riders or endorsements, or to forms on specially rated inland marine risks.
(c) For commercial lines risks, a fire or marine policy, rider, or endorsement is subject to the provisions of section six, article eight of this chapter governing other commercial lines form filings.
ARTICLE 20. RATES AND RATING ORGANIZATIONS.
§33-20-4. Rate filings.
(a)(1) Every insurer shall file with the commissioner every manual of classifications, territorial rate areas established pursuant to subdivision (2), subsection (c), section three of this article, rules and rates, every rating plan and every modification of any of the foregoing which it proposes to use for casualty insurance to which this article applies. (2) Every insurer shall file with the commissioner, except as to inland marine risks which by general custom of the business are not written according to manual rates or rating plans, every manual, minimum, class rate, rating schedule or rating plan and every other rating rule and every modification of any of the foregoing which it proposes to use for fire and marine insurance to which this article applies. Specific inland marine rates on risks specially rated, made by a rating organization, shall be filed with the commissioner. (b) Every such filing shall state the proposed effective date thereof and shall indicate the character and extent of the coverage contemplated. When a filing is not accompanied by the information upon which the insurer supports such filing, and the commissioner does not have sufficient information to determine whether such filing meets the requirements of this article, he or she shall require such insurer to furnish the information upon which it supports such filing and in such event the waiting period shall commence as of the date such information is furnished. The information furnished in support of a filing may include (1) the experience or judgment of the insurer or rating organization making the filing, (2) the experience or judgment of the insurer or rating organization in the territorial rate areas established by subdivision (2), subsection (c), section three of this article, (3) its interpretation of any statistical data it relies upon, (4) the experience of other insurers or rating organizations or (5) any other relevant factors. A filing and any supporting information shall be open to public inspection as soon as the filing is received by the commissioner. Any interested party may file a brief with the commissioner supporting his or her position concerning the filing. Any person or organization may file with the commissioner a signed statement declaring and supporting his, her or its position concerning the filing. Upon receipt of such statement prior to the effective date of the filing, the commissioner shall mail or deliver a copy of such statement to the filer, which may file such reply as it may desire to make. This section shall not be applicable to any memorandum or statement of any kind by any employee of the commissioner. (c) An insurer may satisfy its obligation to make such filing by becoming a member of, or a subscriber to, a licensed rating organization which makes such filings, and by authorizing the commissioner to accept such filings on its behalf: Provided, That nothing contained in this article shall be construed as requiring any insurer to become a member of or a subscriber to any rating organization. (d) The commissioner shall review filings as soon as reasonably possible after they have been made in order to determine whether they meet the requirements of this article. (e) Subject to the exceptions specified in subsections (f), and (g) and (h) of this section, each filing shall be on file for a waiting period of sixty days before it becomes effective. Upon written application by such insurer or rating organization, the commissioner may authorize a filing which he or she has reviewed to become effective before the expiration of the waiting period. A filing shall be deemed to meet the requirements of this article unless disapproved by the commissioner within the waiting period. (f) Any special filing with respect to a surety bond required by law or by court or executive order or by order, rule or regulation of a public body, not covered by a previous filing, shall become effective when filed and shall be deemed to meet the requirements of this article until such time as the commissioner reviews the filing and so long thereafter as the filing remains in effect. (g) Specific inland marine rates on risks specially rated by a rating organization shall become effective when filed and shall be deemed to meet the requirements of this article until such time as the commissioner reviews the filing and so long thereafter as the filing remains in effect. (h) Rates for commercial lines property and casualty risks must be filed with the commissioner and such filings need not be approved by the commissioner. The commissioner may request additional information to ensure compliance with applicable statutory standards, but if the commissioner does not disapprove the filing within the initial thirty-day period after receipt, the rate filing will become effective upon first usage after filing: Provided, That the commissioner may at any time thereafter, after notice and for cause shown, disapprove any rate filing.
(h)(i) Under such rules and regulations as he or she shall adopt, the commissioner may, by written order, suspend or modify the requirement of filing as to any kind of insurance, subdivision or combination thereof, or as to classes of risks, the rates for which cannot practicably be filed before they are used. Such orders, rules and regulations shall be made known to insurers and rating organizations affected thereby. The commissioner may make such examination as he or she may deem advisable to ascertain whether any rates affected by such order meet the standards set forth in subsection (b), section three of this article. (i)(j) Upon the written application of the insured, stating his or her reasons therefor, filed with and approved by the commissioner, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risks.
(j)(k) No insurer shall make or issue a contract or policy except in accordance with the filings which are in effect for said insurer as provided in this article. or in accordance with subsection (h) or (i) of this section. This subsection shall not apply to contracts or policies for inland marine risks as to which filings are not required.
(k)(l) In instances when an insurer files a request for an increase of automobile liability insurance rates in the amount of fifteen percent or more, the insurance commissioner shall provide notice of such increase with the office of the secretary of state to be filed in the state register and shall provide interested persons the opportunity to comment on such request up to the time the commissioner approves or disapproves such rate increase.
(m) For purposes of this section, "commercial" is defined as insurance for business and professional interests.

NOTE: The purpose of this bill is to amend the insurance code to discontinue the use of the prior approval system of rate and form filings for most commercial insurance line risks. In lieu of the aforementioned system, this bill will establish a file and use system, while reserving the right for the commissioner to request additional information or to disapprove filings altogether if not meeting statutorily applicable provisions. These amendments are intended to create long-term effects in the commercial lines insurance market, by foregoing such strenuous methods of approval, and thereby encouraging insurers to enter into the West Virginia market to do business.

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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