H. B. 4600
(By Delegates Beane, Ashley, Azinger,
Facemyer, Johnson, L. White and Jenkins)
[Introduced February 27, 1998; referred to the
Committee on Banking and Insurance.]
A BILL to amend article twelve, chapter thirty-three of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
thirty-three, relating to authorizing insurance commissioner
to issue limited licenses for rental companies; and
providing remedies for noncompliance.
Be it enacted by the Legislature of West Virginia:
That article twelve, chapter thirty-three of the code of
West Virginia, one thousand nine hundred thirty-one, as amended,
be amended by adding thereto a new section, designated section
thirty-three, to read as follows:
ARTICLE 12. AGENTS, BROKERS, SOLICITORS AND EXCESS LINE.
§33-12-33. Limited license for rental companies.
(a)This section is intended solely to clarify chapter
thirty-three of this code, by providing that rental companies are not and have never been engaged in the transaction of an
insurance business when they sell travel or auto related products
or coverage in connection with and incidental to the rental of
vehicles. Nothing in this section creates any rights, claims or
causes of action for conduct prior to the effective date of this
section.
(b)(1) As used in this section:
(A) "Limited license" means a person or entity authorized to
sell certain coverages relating to the rental of vehicles
pursuant to the provisions of this section;
(B) "Rental agreement" means any written agreement setting
forth the terms and conditions governing the use of a vehicle
provided by the rental company for rental or lease;
(C) "Rental company" means any person or entity in the
business of providing primarily private passenger vehicles to the
public under a rental agreement for a period not to exceed ninety
days;
(D) "Renter" means any person obtaining the use of a vehicle
from a rental company under the terms of a rental agreement for
a period not to exceed ninety days;
(E) "Vehicle" or "rental vehicle" means a motor vehicle of
the private passenger type including passenger vans, minivans and
sport utility vehicles, and of the cargo type, including cargo
vans, pick-up trucks and trucks with a gross vehicle weight of less than twenty-six thousand pounds and which do not require the
operator to possess a commercial driver's license;
(F) "Rental period" means the term of the rental agreement.
(2) The commissioner may issue to a rental company that has
compiled with the requirements of this section, a limited license
authorizing the limited license to offer or sell insurance in
connection with the rental of vehicles.
(3) As a prerequisite for issuance of a limited license
under this section, there shall be filed with the commissioner a
written application for a limited license, signed by an officer
of the applicant, in a form or forms, and supplements thereto,
and containing information, as the commissioner may prescribe.
(4) In the event that any provision of this section is
violated by a limited licensee, the commissioner may:
(A) After notice and a hearing, revoke or suspend a limited
license issued under this section in accordance with the
provisions of section thirteen, article two of this chapter; or
(B) After notice and hearing, impose other penalties,
including suspending the transaction of insurance at specific
rental locations where violations of this section have occurred,
as the commissioner considers necessary or convenient to carry
out the purposes of this section.
(5) The rental company licensed pursuant to this subsection
may offer or sell insurance only in connection with and incidental to the rental of vehicles, whether at the rental
office or by preselection of coverage in a master, corporate,
group rental or individual agreements in any of the following
general categories:
(A) Personal accident insurance covering the risks of
travel, including, but not limited to, accident and health
insurance that provides coverage, as applicable, to renters and
other rental vehicle occupants for accidental death or
dismemberment and reimbursement for medical expenses resulting
from an accident that occurs during the rental period;
(B) Liability insurance, including uninsured and
underinsured motorist coverage whether offered separately or in
combination with other liability insurance, that provides
coverage, as applicable, to renters and other authorized drivers
of rental vehicles for liability arising from the operation of
the rental vehicle;
(C) Personal effects insurance that provides coverage,
applicable to renters and other vehicle occupants for the loss
of, or damage to, personal effects that occurs during the rental
period;
(D) Roadside assistance and emergency sickness protection
programs; and
(E) Any other travel or auto-related coverage that a rental
company offers in connection with and incidental to the rental of vehicles.
(6) No insurance may be issued by a issued by a limited
licensee pursuant to this section unless:
(A) The rental period of the rental agreement does not
exceed ninety consecutive days; and
(B) At every rental location where rental agreements are
executed, brochures or other written material are readily
available to the prospective renter that:
(i) Summarize clearly and correctly, the material terms of
coverage offered to renters, including the identity of the
insurer;
(ii) Disclose that the coverage offered by the rental
company may provide a duplication of coverage already provided by
a renter's personal automobile insurance policy, homeowner's
insurance policy, personal liability insurance policy or other
source of coverage;
(iii) State that the purchase by the renter of the kinds of
coverage specified in this section is not required in order to
rent a vehicle; and
(iv) Describe the process for filing a claim in the event
the renter elects to purchase coverage and in the event of a
claim; and
(C) Evidence of coverage on the face of the rental agreement
is disclosed to every renter who elects to purchase such coverage.
(7) Any limited license issued under this section shall also
authorize any employee of the limited licensee to act
individually on behalf, and under the supervision, of the limited
licensee with respect to the kinds of coverage specified in this
section.
(8) Each rental company licensed pursuant to this section
shall conduct a training program in which employees being trained
shall receive basic instruction about the kinds of coverage
specified in this section and offered for purchase by prospective
renters of rental vehicles.
(9) Notwithstanding any other provision of this section, or
any rule adopted by the commissioner, a limited licensee,
pursuant to this section, is not required to treat moneys
collected from renters purchasing the insurance when renting
vehicles as funds received in a fiduciary capacity: Providing,
That the charges for coverage shall be itemized and be ancillary
to a rental transaction. The sale of insurance not in
conjunction with a rental transaction is not permitted.
(10) No limited licensee under this section may advertise,
represent or otherwise hold itself or any of its employees out as
licensed insurers, insurance agents or insurance brokers.
NOTE: The purpose of this bill is to provide a limited
license for rental companies and those employed by them for the
sale of insurance in conjunction with the rental of automobiles.
This section is new; therefore, strike-throughs and
underscoring have been omitted.