Senate Bill No. 267
(By Senator Minard)
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[Introduced February 4, 1994; referred to the Committee
on Banking and Insurance.]
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A BILL to amend and reenact section six, article twenty, chapter
thirty-three of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to insurance;
requiring a rating organization to complete a fire rate
classification, including notification and publication,
within one hundred eighty days after the initial request for
a classification inspection is made; and setting forth the
publication and filing requirements for such
classifications.
Be it enacted by the Legislature of West Virginia:
That section six, 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 33. LICENSING, FEES AND TAXATION OF INSURERS.
§33-20-6. Rating organizations.
(a) A corporation, an unincorporated association, a
partnership or an individual, whether located within or outsidethis state, may make application to the commissioner for license
as a rating organization for such kinds of casualty insurance or
subdivisions thereof, or for such kinds of fire and marine
insurance or subdivision or class of risk or a part or
combination thereof as are specified in its application and shall
file therewith (1) a copy of its constitution, its articles of
agreement or association or its certificates of incorporation,
and of its bylaws, rules and regulations governing the conduct of
its business, (2) a list of its members and subscribers, (3) the
name and address of a resident of this state as attorney-in-fact
upon whom notices or orders of the commissioner or process
affecting such rating organization may be served and (4) a
statement of its qualifications as a rating organization. If the
commissioner finds that the applicant is competent, trustworthy
and otherwise qualified to act as a rating organization and that
its constitution, articles of agreement or association or
certificate of incorporation, and its bylaws, rules and
regulations governing the conduct of its business conform to the
requirements of law, he shall issue a license specifying the
kinds of insurance or subdivisions thereof for which the
applicant is authorized to act as a rating organization. Every
application shall be granted or denied in whole or in part by the
commissioner within sixty days of the date of its filing with
him. Licenses issued pursuant to this section shall remain in
effect for three years unless sooner suspended or revoked by the
commissioner. The fee for the license shall be one hundreddollars, and the fee shall be in lieu of all other fees, licenses
or taxes to which a rating organization might otherwise be
subject, all fees so collected to be used for the purposes
specified in section thirteen, article three of this chapter.
Licenses issued pursuant to this section may be suspended or
revoked by the commissioner, after notice and hearing, in the
event the rating organization ceases to meet the requirements of
this article. Every rating organization shall notify the
commissioner promptly of every change in (1) its constitution,
its articles of agreement or association or its certificate of
incorporation, and its bylaws, rules and regulations governing
the conduct of its business, (2) its list of members and
subscribers and (3) the name and address of the resident of this
state designated as attorney-in-fact by it upon whom notices or
orders of the commissioner or process affecting such rating
organization may be served.
(b) Subject to rules and regulations which have been
approved by the commissioner as reasonable, each rating
organization shall permit any insurer, not a member, to be a
subscriber to its rating services for any kind of casualty
insurance or subdivision thereof, or for any kind of fire and
marine insurance or subdivision or class of risk or a part or
combination thereof, or any kind of surety insurance or
subdivision thereof, for which it is authorized to act as a
rating organization. Notice of proposed changes in such rules
and regulations shall be given to subscribers. Each ratingorganization shall furnish its rating services without
discrimination to its members and subscribers. The
reasonableness of any rule or regulation in its application to
subscribers, or the refusal of any rating organization to admit
an insurer as a subscriber, shall, at the request of any
subscriber or any such insurer, be reviewed by the commissioner.
If, after notice and hearing, the commissioner finds that the
rule or regulation is unreasonable in its application to
subscribers, he shall order that such rule or regulation shall
not be applicable to subscribers. If the rating organization
fails to grant or reject an insurer's application for
subscribership within thirty days after it was made, the insurer
may request a review by the commissioner as if the application
had been rejected. If, after notice and hearing, the commissioner
finds that the insurer has been refused admittance to the rating
organization as a subscriber without justification, he shall
order the rating organization to admit the insurer as a
subscriber. If he finds that the action of the rating
organization was justified, he shall make an order affirming its
action.
(c) No rating organization shall adopt any rule the effect
of which would be to prohibit or regulate the payment of
dividends, savings or unabsorbed premium deposits allowed or
returned by insurers to their policyholders, members or
subscribers.
(d) Cooperation among rating organizations or among ratingorganizations and insurers in rate making or in other matters
within the scope of this article is hereby authorized, provided
the filings resulting from such cooperation are subject to all
the provisions of this article which are applicable to filings
generally. The commissioner may review such cooperative
activities and practices, and if after a hearing he finds that
any such activity or practice is unfair or unreasonable or
otherwise inconsistent with the provisions of this article, he
may issue a written order specifying in what respects such
activity or practice is unfair or unreasonable or otherwise
inconsistent with the provisions of this article, and requiring
the discontinuance of such activity or practice.
(e) Any rating organization for casualty, marine or surety
insurance may provide for the examination of policies, daily
reports, binders, renewal certificates, endorsements or other
evidences of insurance, or the cancellation thereof, and may make
reasonable rules governing their submission. The rules shall
contain a provision that in the event any insurer does not within
sixty days furnish satisfactory evidence to the rating
organization of the correction of any error or omission
previously called to its attention by the rating organization, it
shall be the duty of the rating organization to notify the
commissioner thereof. All information so submitted for
examination shall be confidential. Such services for fire
insurance shall be governed by the provisions of section ten,
article seventeen of this chapter.
(f) Any rating organization may subscribe for or purchase
actuarial, technical or other services, and these services shall
be available to all members and subscribers without
discrimination.
(g) Any rating organization responsible for establishing
fire rate classifications for West Virginia cities, towns and
fire districts shall:
(1) Commence a classification inspection within ninety days
after requested to do so in writing by any entity for which the
rating organization is responsible. Within ninety days after
commencement of the inspection, such inspection shall be
completed, the entity inspected shall be notified of any
necessary adjustments, a comprehensive written evaluation shall
be provided to the entity inspected, and publication of the
classification established shall be undertaken; and
(2) File the following with the insurance commissioner:
(A) Within thirty days of its publication:
(i) A copy of a current list of all classifications
established in West Virginia. Such list shall be published on a
quarterly basis; and
(ii) All changes in established classifications during the
previous month. Such list shall be published on a monthly basis.
(B) Within thirty days after being requested by the
insurance commissioner pursuant to this paragraph, a copy of
guidelines used to establish classifications, stating the minimum
qualifications, standards and requirements for eachclassification (classes one through ten).
NOTE: The purpose of this bill is to require fire rating
organizations to perform fire rate classification inspections of
towns, cities and fire districts in a timely manner; and to file
with the Insurance Commissioner all classifications, changes in
classifications, and guidelines used in establishing
classifications. The bill would also eliminate language
referring to W. Va. Code § 33-17-10, which has been repealed.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.