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Introduced Version Senate Bill 108 History

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sb108 intr
Senate Bill No. 108

(By Senators Minard and Deem)

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[Introduced February 9, 2004; referred to the Committee

on Banking and Insurance; then to the Committee on the Judiciary.]

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A BILL to amend and reenact §33-6A-4 of the Code of West Virginia, 1931, as amended; and to amend and reenact §33-17A-4 and §33-17A-5 of said code, all relating to insurance generally; additional reasons for nonrenewal of automobile liability, physical damage and property insurance; and providing that any policy issued after the effective date of the bill may be nonrenewed by an insurer for any reason with proper notice to the insured.

Be it enacted by the Legislature of West Virginia:
That §33-6A-4 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that
§33-17A-4 and §33-17A-5 of said code be amended and reenacted, all to read as follows:
ARTICLE 6A. CANCELLATION OR NONRENEWAL OF AUTOMOBILE LIABILITY POLICIES.

§33-6A-4. Advance notice of nonrenewal required; assigned risk policies; reasons for nonrenewal; hearing and review after nonrenewal.

(a) No insurer shall fail to renew an outstanding automobile liability or physical damage insurance policy unless the nonrenewal is preceded by at least forty-five days advance notice to the named insured of the insurer's election not to renew the policy: Provided, That subject to this section, nothing contained in this article shall be construed to prevent an insurer from refusing to issue an automobile liability or physical damage insurance policy upon application to the insurer, nor shall any provision of this article be construed to prevent an insurer from refusing to renew a policy upon expiration, except as to the notice requirements of this section, and except further as to those applicants lawfully submitted pursuant to the West Virginia assigned risk plan: Provided, however, That subject to the provisions of subsection (j) of this section.
(b) An insurer may not fail to renew an outstanding automobile liability or physical damage insurance policy which has been in existence for two consecutive years or longer except for the following reasons:
(1) (a) The named insured fails to make payments of premium for the policy or any installment of the premium when due;
(2) (b) The policy is obtained through material misrepresentation;
(3) (c) The insured violates any of the material terms and conditions of the policy;
(4) (d) The named insured or any other operator, either residing in the same household or who customarily operates an automobile insured under the policy:
(A) (1) Has had his or her operator's license suspended or revoked during the policy period; or
(B) (2) Is or becomes subject to a physical epilepsy, heart attacks, or mental any other health condition that prevents the insured or operator from safely operating a motor vehicle and the individual cannot produce a certificate from a physician testifying to his or her ability to safely operate a motor vehicle;
(5) (e) The named insured or any other operator, either residing in the same household or who customarily operates an automobile insured under the policy, is convicted of or forfeits bail during the policy period for any of the following reasons:
(A) (1) Any felony or assault involving the use of a motor vehicle;
(B) (2) Negligent homicide arising out of the operation of a motor vehicle;
(C) (3) Operating a motor vehicle while under the influence of intoxicating liquor or of any narcotic drug;
(D) (4) Leaving the scene of a motor vehicle accident in which the insured is involved without reporting it as required by law;
(E) (5) Theft of a motor vehicle or the unlawful taking of a motor vehicle; or
(F) (6) Making false statements in an application for a motor vehicle operator's license;
(6) (f) The named insured or any other operator, either residing in the same household or who customarily operates an automobile insured under the policy, is convicted of or forfeits bail during the policy period for two or more moving traffic violations committed within a period of twelve months thirty-six, each of which results in three or more points being assessed on the driver's record by the Division of Motor Vehicles, whether or not the insurer renewed the policy without knowledge of all of the violations: Provided, That an insurer that makes an election pursuant to section four-b of this article to issue all nonrenewal notices pursuant to this section, may nonrenew an automobile liability or physical damage insurance policy if the named insured, or any other operator, either residing in the same household or who customarily operates an automobile insured under the policy is convicted of or forfeits bail during the policy period for two or more moving traffic violations committed within a period of twenty- four months, each of which occurs on or after the first day of July, two thousand four, and after the date that the insurer makes an election pursuant to section four-b of this article, and results in three or more points being assessed on the driver's record by the division of motor vehicles, whether or not the insurer renewed the policy without knowledge of all of the violations. Notice of any nonrenewal made pursuant to this subdivision subsection shall be mailed to the named insured either during the current policy period or during the first full policy period following the date that the second moving traffic violation is recorded by the Division of Motor Vehicles;
(7) (g) The named insured or any other operator either residing in the same household or who customarily operates an automobile insured under the policy has had a second at-fault motor vehicle accident within a period of twelve thirty-six months, whether or not the insurer renewed the policy without knowledge of all of the accidents: Provided, That an insurer that makes an election pursuant to section four-b of this article to issue all nonrenewal notices pursuant to this section, may nonrenew an automobile liability or physical damage insurance policy under this subsection if the named insured or any other operator either residing in the same household or who customarily operates an automobile insured under such policy has had two at-fault motor vehicle accidents within a period of thirty-six months, each of which occurs after the first day of July, two thousand four, and after the date that the insurer makes an election pursuant to section four-b of this article, and results in a claim paid by the insurer for each accident, whether or not the insurer renewed the policy without knowledge of all of the accidents. Notice of any nonrenewal made pursuant to this subsection shall be mailed to the named insured either during the current policy period or during the first full policy period following the date of the second accident. or
(8) (h) The insurer ceases writing automobile liability or physical damage insurance policies throughout the state after submission to and approval by the commissioner of a withdrawal plan or discontinues operations within the state pursuant to a withdrawal plan approved by the commissioner the particular type or line of insurance coverage contained in the policy throughout the State or should the insurer discontinue operations within the State.
(i) Nonrenewal of the policy for any reason is subject to a hearing and review as provided in section five of this article. Cost of the hearing shall be assessed against the losing party but may not exceed seventy-five dollars.
(j) The requirements of this section do not apply to any policy of automobile liability or physical damage insurance issued on or after the date the provisions of this subsection become law. Any policy of automobile liability or physical damage insurance issued on and after the date the provisions of this subsection become law, may be nonrenewed by the insurer for any reason upon forty-five days' notice to the named insured.

(c) An insurer that makes an election pursuant to section four-b of this article to issue all nonrenewal notices pursuant to this section shall not fail to renew an automobile liability or physical damage insurance policy when an operator other than the named insured has violated the provisions of subdivision (6) or (7), subsection (b) of this section, if the named insured, by restrictive endorsement, specifically excludes the operator who violated the provision. An insurer issuing a nonrenewal notice informing the named insured that the policy will be nonrenewed for the reason that an operator has violated the provisions of subdivision (6) or (7), subsection (b) of this section, shall at that time inform the named insured of his or her option to specifically exclude the operator by restrictive endorsement and shall further inform the named insured that upon obtaining the restrictive endorsement, the insurer will renew the policy or rescind the nonrenewal absent the existence of any other basis for nonrenewal set forth in this section.
(k) Notwithstanding the provisions of subsection (a) of this section, the insurer shall renew any automobile liability or physical damage insurance policy that has not been renewed due to the insured's failure to pay the renewal premium when due if:
(1) None of the other grounds for renewal as set forth in subsections (b) through (h), inclusive, of this section exist; and
(d) A notice provided under this section shall state the specific reason or reasons for nonrenewal and shall advise the named insured that nonrenewal of the policy for any reason is subject to a hearing and review as provided for in section five of this article. Cost of the hearing shall be assessed against the losing party but shall not exceed seventy-five dollars. The notice must also advise the insured of possible eligibility for insurance through the West Virginia assigned risk plan.
(e) Notwithstanding the provisions of subsection (a) of this section, the insurer shall reinstate any automobile liability or physical damage insurance policy that has not been renewed due to the insured's failure to pay the renewal premium when due if:
(1) None of the other grounds for nonrenewal as set forth in this section exist; and

(2) The insured makes an application for reinstatement renewal within forty-five ninety days of the original expiration date of the policy. If a policy is reinstated renewed as provided for in this paragraph, then the coverage afforded shall not be retroactive to the original expiration date of the policy: Provided, That such policy but shall be effective begin on the reinstatement date at the current premium levels offered by the company. and shall not be afforded the protections of this section relating to renewal of an outstanding automobile liability or physical damage insurance policy that has been in existence for at least two consecutive years.

ARTICLE 17A. PROPERTY INSURANCE DECLINATION, TERMINATION AND DISCLOSURE.

§33-17A-4. Notification and reasons for a transfer, declination or termination.

(a) Upon declining to insure any real or personal property, subject to this article, the insurer making a declination shall provide the insurance applicant with a written explanation of the specific reason or reasons for the declination at the time of the declination. The provision of such insurance application form by an insurer shall create no right to coverage on the behalf of the insured to which the insured is not otherwise entitled.
(b) A notice of cancellation of property insurance coverage by an insurer shall be in writing, shall be delivered to the named insured or sent by first class mail to the named insured at the last known address of the named insured, shall state the effective date of the cancellation and shall be accompanied by a written explanation of the specific reason or reasons for the cancellation.
(c) At least thirty days before the end of a policy period, as described in subsection (c), section three of this article, an insurer shall deliver or send by first class mail to the named insured at the last known address of the named insured, notice of its intention regarding the renewal of the property insurance policy. Notice of an intention not to renew a property insurance policy shall be accompanied by an explanation of the specific reasons for the nonrenewal: Provided, That subject to subsection (d) of this section, no insurer shall fail to renew an outstanding property insurance policy which has been in existence for four years or longer except for the reasons as set forth in section five of this article; or for other valid underwriting reasons which involve a substantial increase in the risk.
(d) The requirements of this section do not apply to any policy of property insurance issued on or after the effective date of this subsection. Any policy of property insurance issued on and after the date the provisions of this subsection become law, may be nonrenewed by the insurer for any reason upon thirty days' notice to the named insured
.
§33-17A-5. Permissible cancellations.

After coverage has been in effect for more than sixty days or after the effective date of a renewal policy, a notice of cancellation may not be issued unless it is based on at least one of the following reasons:
(a) Nonpayment of premium;
(b) Conviction of the insured of any crime having as one of its necessary elements an act increasing any hazard insured against;
(c) Discovery of fraud or material misrepresentation made by or with the knowledge of the named insured in obtaining the policy, continuing the policy or in presenting a claim under the policy;
(d) Discovery of willful or reckless acts or omissions on the part of the named insured which increase any hazard insured against;
(e) The occurrence of a change in the risk which substantially increases any hazard insured against after insurance coverage has been issued or renewed;
(f) A violation of any local fire, health, safety, building or construction regulation or ordinance with respect to any insured property or the occupancy thereof which substantially increases any hazard insured against;
(g) A determination by the Commissioner that the continuation of the policy would place the insurer in violation of the insurance laws of this State;
(h) Real property taxes owing on the insured property have been delinquent for two or more years and continue delinquent at the time notice of cancellation is issued;
(i) The insurer which issues said policy of insurance ceases writing the particular type or line of insurance coverage contained in said policy throughout the State or should such insurer discontinue operations within the State; or
(j) Substantial breach of the provisions of the policy; or
(k) Payment by the insurer of two or more claims under the policy within a period of thirty-six months.

NOTE: The purpose of this bill is to add additional reasons for nonrenewal of automobile liability and physical damage insurance and property insurance. The bill provides that any policy issued after the effective date of the bill may be nonrenewed by an insurer for any reason with proper notice to the insured.

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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