H. B. 4473
(By Delegate R. M. Thompson)
[Introduced February 13, 2002; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact sections seven, seven-a, eight, eight-a
and twenty-four, article twelve, chapter thirty-three of the
code of West Virginia, one thousand nine hundred thirty-one,
as amended, all relating to insurance; eliminating the
countersignature requirement; the payment of commissions to
agents; and maintaining the countersignature requirement with
regard to surety insurance.
Be it enacted by the Legislature of West Virginia:
That sections seven, seven-a, eight, eight-a and twenty-four,
article twelve, chapter thirty-three of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, be amended and
reenacted, all to read as follows:
ARTICLE 12. AGENTS, BROKERS, SOLICITORS AND EXCESS LINE.
§33-12-7. Countersignature.
No contract of insurance covering a subject of surety
insurance, resident, located or to be performed in this state,
shall may be executed, issued or delivered by any insurer unless
the contract, or in the case of an interstate risk a
countersignature endorsement carrying full information as to the
West Virginia risk, is signed or countersigned in writing by a
licensed resident agent of the insurer except that excess line
insurance shall be countersigned by a duly licensed excess line
broker. This section does not apply to: Reinsurance; credit
insurance; any contract of insurance covering the rolling stock of
any railroad or covering any vessel, aircraft or motor carrier used
in interstate or foreign commerce, or covering any liability or
other risks incident to the ownership, maintenance or operation
thereof; any contract of insurance covering any property in
interstate or foreign commerce, or any liability or risks incident
thereto. Countersignature of a duly licensed resident agent of the
company originating a contract of surety insurance participated in
by other companies as cosureties or coindemnitors shall satisfy
all countersignature requirements in respect to such contract of
surety insurance.
§33-12-7a. Countersignature by salaried employee prohibited.
No salaried employee of any foreign or alien insurer shall may
countersign any contract of surety insurance submitted by a
licensed nonresident broker covering a subject of insurance,
resident, located or to be performed in this state. This section
shall does not apply if all West Virginia agents of the insurer are
salaried employees. nor to life or health and accident and
sickness insurance contracts.
§33-12-8. Licensing of nonresident life and accident and sickness
agents.
(a) Nonresidents otherwise complying with the provisions of
this chapter may be licensed as life agents. but all policies
issued as a result of solicitation on the part of such
nonresidents, in the state, shall be reported, placed,
countersigned, and consummated by and through a duly licensed
resident agent of the issuing insurer.
(b) An individual otherwise complying with the provisions of
this chapter, who is a resident of another state and who is a
licensed accident and sickness agent of such state, may be licensed
as a nonresident accident and sickness agent in this state, if the
state of residence of such nonresident has established, by law or
regulation like requirements for the licensing of a resident of this state as a nonresident accident and sickness agent. All
policies issued as a result of solicitation by such nonresident
accident and sickness agents shall be reported, placed,
countersigned and consummated by and through a duly licensed
resident agent of the issuing insurer.
§33-12-8a. Licensing of nonresident property casualty agents.
(a) Nonresidents otherwise complying with the provisions of
this chapter may be licensed as a property casualty agent. but
all All surety
policies issued as a result of solicitation on the
part of such the nonresident in this state shall be reported,
placed, countersigned and consummated by and through a duly
licensed resident agent of the issuing insurer.
(b) An individual otherwise complying with the provisions of
this chapter, who is a resident of another state and who is a
licensed property casualty agent of such that state, may be
licensed as a nonresident property casualty agent in this state, if
the state of residence of such the nonresident has established, by
law or regulation, like requirements for the licensing of a
resident of this state as a nonresident property casualty agent.
All surety
policies issued as a result of solicitation by such
nonresident property casualty agents shall be reported, placed, countersigned and consummated by and through a duly licensed
resident agent of the issuing insurer.
§33-12-24. Payment of commissions.
(a) The entire commission payable by any insurer licensed to
transact insurance in this state on any insurance policy involving
surety insurance shall be paid directly to the licensed resident
agent who countersigns the policy. The countersigning agent shall
may not pay any part of such the commission to any person other
than a licensed agent or broker: Provided, That the portion of
such the commission retained by the countersigning resident agent
shall may not be less than ten percent of the gross policy premium
or fifty percent of the commission payable by the insurer as
provided herein, whichever is the lesser amount. The term
"commission" as used herein shall include includes engineering
fees, service fees or any other compensation incident to the
issuance of a policy of surety
insurance payable by or to any
insurer, agent or broker. The provisions of this subsection apply
only to surety insurance.
(b) It shall be is unlawful for any insurer or agent to pay,
and any person to accept, directly or indirectly, any commission
except as provided in this section: Provided, That any licensed resident agent may pay his or her commissions, or direct that his
or her commissions be paid, to a partnership of which he or she is
a member, employee or agent, or to a corporation of which he or she
is an officer, employee or agent, if:
(1) The commissioner finds that such the partnership or
corporation is engaged, through its licensed resident agents, in
conducting an insurance agency business with respect to the general
public.
(2) If a partnership, each partner satisfies the commissioner
that he or she meets the licensing qualifications as set forth in
section two of this article.
(3) If a corporation, each officer, employee or any one or
more stockholders owning, directly or indirectly, the controlling
interest in such the corporation satisfies the commissioner that he
or she meets the licensing qualifications as set forth in section
two of this article. The requirements set forth in this
subdivision shall may not apply to clerical employees, or other
employees not directly engaged in the selling or servicing of
insurance.
(c) This section shall The provisions of subsection (b) of
this section do not apply to reinsurance, life insurance or accident or health insurance; nor to excess line insurance procured
in accordance with the provisions of this article relating thereto;
nor to credit insurance, any contract of insurance covering the
rolling stock of any railroad or covering any vessel, aircraft or
motor carrier used in interstate or foreign commerce, any liability
or other risks incident to the ownership, maintenance or operation
thereof, any contract of insurance covering any property in
interstate or foreign commerce, or any liability or risks incident
thereto.
NOTE: The purpose of this bill is to eliminate the
countersignature requirement with respect to all types of
insurance, with the exception of surety insurance, and to allow
surety agents to share their commissions with a company that
employs them or in which they are members.
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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