H. B. 4201


(By Delegates Phillips, L. White, Beane,
Gallagher and Mezzatesta)

[Introduced January 28, 1994; referred to the
Committee on Banking and Insurance then Finance.]



A BILL to amend and reenact section four, article twenty, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to insurance rates and rating organizations; and requiring insurance companies to wait at least one year from their last rate increase before filing for another rate increase, and to provide specified financial data on a territorial basis to justify the need for the rate increase.
Be it enacted by the Legislature of West Virginia:

That section four, 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 - 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 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. In addition, if a filing pertains to personal automobile and homeowner policies, the information furnished in support of a filing shall include the amounts of premiums collected and claims paid on a territorial basis, for a period of at least one year beginning on the date the most recent rate increase became effective. 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 position concerning the filing. Any person or organization may file with the commissioner a signed statement declaring and supporting his 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) 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 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) Under such rules and regulations as he 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 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) Upon the written application of the insured, stating his 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) 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) 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.



NOTE: The purpose of this bill is to require property and casualty insurance companies to provide the Insurance Commission with the information needed to assess whether a rate increase is needed, or whether the additional premiums resulting from the previous rate increase are sufficient to cover claim losses.

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