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Introduced Version House Bill 2863 History

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hb2863 intr
H. B. 2863


(By Delegate Poling)
[Introduced March 3, 2005; referred to the
Committee on Banking and Insurance then the Judiciary.]




A BILL to amend and reenact §33-20-3 of the Code of West Virginia, 1931, as amended, relating to prohibiting the use of credit scoring as a consideration in calculating insurance rates in homeowners or automobile liability policies.

Be it enacted by the Legislature of West Virginia:
That §33-20-3 of the Code of West Virginia, 1931, 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 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 however, 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.
(4) In the case of any homeowners or automobile liability policy, credit scoring may not be considered as a factor to calculate rates.
(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 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 the use of credit scoring as a consideration in calculating insurance rates in homeowners or automobile liability policies.

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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