Senate Bill No. 247
(By Senator Minard)
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[Introduced February 2, 1994; referred to the Committee
on Banking and Insurance.]
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A BILL to amend and reenact section thirty-one-c, article six,
chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
substandard risk motor vehicle insurance policies; and
requiring notice to such policyholders of potential
eligibility for standard or preferred coverage for driving
without additional traffic violations or accidents.
Be it enacted by the Legislature of West Virginia:
That section thirty-one-c, article six, 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 6. THE INSURANCE POLICY.
§33-6-31c. Substandard risk motor vehicle insurance policies;
definitions; required notices and provisions;
promulgation of rules; effective date.
(a) For purposes of this section, the following definitions
shall apply:
(1) A "substandard risk" means an applicant for insurance
who presents a greater exposure to loss than that contemplated by
commonly used rate classifications, as evidenced by one or more
of the following conditions:
(A) Record of traffic accidents;
(B) Record of traffic law violations;
(C) Undesirable occupational circumstances;
(D) Undesirable moral characteristics.
(2) "Substandard risk rate" means a rate or premium charge
that reflects the greater than normal exposure to loss which is
assumed by an insurer writing insurance for a substandard risk.
(b) Every application for a motor vehicle insurance policy
to be issued in this state and written on the basis of a
substandard risk rate schedule shall have printed thereon, in
bold-faced type in a contrasting color, a statement reading
substantially as follows: THE POLICY FOR WHICH YOU ARE APPLYING
HAS BEEN RATED IN ACCORDANCE WITH A SPECIAL RATING SCHEDULE FILED
WITH THE COMMISSIONER OF INSURANCE PROVIDING FOR HIGHER PREMIUM
CHARGES THAN THOSE GENERALLY APPLICABLE FOR AVERAGE RISKS. IF
THE COVERAGE OR PREMIUM IS NOT SATISFACTORY, YOU MAY BE ELIGIBLE
FOR OTHER INSURANCE. IF THIS COVERAGE OR PREMIUM IS
SATISFACTORY, YOU MAY BE ELIGIBLE FOR COVERAGE UNDER A STANDARD
OR PREFERRED POLICY IF YOU HAVE NO NEW TRAFFIC VIOLATIONS OR
ACCIDENTS DURING THE LAST THREE YEARS.
(c) Every motor vehicle insurance policy issued in this
state and written on the basis of a substandard risk rateschedule shall have printed thereon, in bold-faced type in a
contrasting color, a statement reading substantially as follows:
THIS POLICY HAS BEEN RATED IN ACCORDANCE WITH A SPECIAL RATING
SCHEDULE FILED WITH THE COMMISSIONER OF INSURANCE PROVIDING FOR
HIGHER PREMIUM CHARGES THAN THOSE GENERALLY APPLICABLE FOR
AVERAGE RISKS. IF THE COVERAGE OR PREMIUM IS NOT SATISFACTORY,
YOU MAY BE ELIGIBLE FOR OTHER INSURANCE. IF THIS COVERAGE OR
PREMIUM IS SATISFACTORY, YOU MAY BE ELIGIBLE FOR COVERAGE UNDER
A STANDARD OR PREFERRED POLICY IF YOU HAVE NO NEW TRAFFIC
VIOLATIONS OR ACCIDENTS DURING THE NEXT THREE YEARS.
(d) (1) On or before the first day of July, one thousand
nine hundred ninety-three, all insurers licensed or registered in
this state to market or sell substandard risk motor vehicle
insurance policies shall submit all applications and policies for
substandard risk insurance to the commissioner of insurance for
approval prior to being used by the insurer.
(2) On or after the first day of July, one thousand nine
hundred ninety-four, all insurers selling substandard risk motor
vehicle insurance policies shall provide notice in writing to
such policyholders when they become eligible for coverage under
a standard or preferred policy.
(e) The commissioner shall promulgate rules in accordance
with the provisions of chapter twenty-nine-a of this code
regarding the format, style, design and approval of substandard
risk insurance applications and policies and such other
procedures as may be required by this section.
(f) The effective date of this section shall be the first
day of July, one thousand nine hundred ninety-three ninety-four.
NOTE: The purpose of this bill is to require insurance
companies to modify their substandard risk motor vehicle policy
holders that they may be eligible for better coverage after a
three year period of time with a clean driving record.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.