Senate Bill No. 576
(By Senators Love, Sharpe, Bailey, Bowman, Dugan, White,
Hunter, Ball, Fanning, Macnaughtan, Dittmar, Boley, Scott,
Schoonover, Ross, Sprouse, Helmick, Minear, Anderson, Plymale,
Chafin, Jackson, Snyder, Kessler, McKenzie and Tomblin, Mr.
President)
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[Introduced February 17, 1998; referred to the Committee
on Banking and Insurance.]
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A BILL to amend and reenact section four, article six-a, chapter
thirty-three of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; and to amend and reenact
section four, article twenty of said chapter, all relating
to insurance; nonrenewal of outstanding automobile liability
or physical damage insurance policy; providing that motor
vehicle policies may not be canceled for having a second at- fault accident within a twelve-month period unless
aggregated cost of damage to persons other than the insured
in both accidents exceeds two thousand dollars; providing
that aggregated cost of such damage must exceed one thousand dollars before insurer may raise the insured's premium or
designate the insured as an at-risk driver; providing that
no increase in insurance premium, based on any class rate,
rating schedule, plan or rule, may be imposed based on an
accident surcharge until a threshold limit in damages of one
thousand dollars is reached, and then the increase may be no
more that ten percent of the existing premium; requiring the
commissioner to review and, if appropriate, readjust the one
thousand dollar threshold limit by determining changes in
costs of parts and labor; and providing that an insurer may
not increase a premium or make an at-risk designation for an
insured involved in their first accident after maintaining
a policy for five years or longer with the insurer if the
accident is the result of no more than simple negligence of
the insured.
Be it enacted by the Legislature of West Virginia:
That section four, article six-a, chapter thirty-three of
the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted; and that section four,
article twenty of said chapter 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.
No insurer shall may fail to renew an outstanding automobile
liability or physical damage insurance policy unless such the
nonrenewal is preceded by at least forty-five days of advance
notice to the named insured of such the insurer's election not to
renew such the policy: Provided, That subject to this section,
nothing contained in this article shall may be construed so as to
prevent an insurer from refusing to issue an automobile liability
or physical damage insurance policy upon application to such
insurer it, nor shall may any provision of this article be
construed to prevent an insurer from refusing to renew such 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 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:
(a) The named insured fails to discharge when due any of his
or her obligations in connection with the payment of premium for
such the policy or any installment thereof;
(b) The policy was obtained through material
misrepresentation;
(c) The insured violates any of the material terms and
conditions of the policy;
(d) The named insured or any other operator, either resident
in the same household or who customarily operates an automobile
insured under such the policy:
(1) Has had his or her operator's license suspended or
revoked during the policy period; or
(2) Is or becomes subject to epilepsy or heart attacks, and
such the individual cannot produce a certificate from a physician
testifying to his or her ability to operate a motor vehicle;
(e) The named insured or any other operator, either resident
in the same household or who customarily operates an automobile
insured under such the policy is convicted of or forfeits bail
during the policy period for any of the following:
(1) Any felony or assault involving the use of a motor
vehicle;
(2) Negligent homicide arising out of the operation of a
motor vehicle;
(3) Operating a motor vehicle while under the influence of
intoxicating liquor or of any narcotic drug;
(4) Leaving the scene of a motor vehicle accident in which
the insured is involved without reporting as required by law;
(5) Theft of a motor vehicle or the unlawful taking of a
motor vehicle;
(6) Making false statements in an application for a motor
vehicle operator's license; or
(7) A second violation, committed within a period of twelve
months, of any moving traffic violation which constitutes a
misdemeanor, whether or not the violations were repetitions of
the same offense or were different offenses;
(f) The named insured or any other operator has had a second
at-fault motor vehicle accident within a period of twelve months:
Provided, That the aggregated cost of damages sustained by
persons other than the insured in both at-fault motor vehicle
accidents exceeds two thousand dollars: Provided, however, That
unless the total cost of damages sustained by persons other than
the insured in the two at-fault motor vehicle accidents exceeds
one thousand dollars, the insurer may not increase the insured's
premium nor designate him or her as an at-risk driver.
Nonrenewal of such a policy for any reason is subject to
hearing and review as provided in section five of this article.
Cost of the hearing shall be assessed against the losing party
but shall may not exceed seventy-five dollars.
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
none of the other grounds for nonrenewal as set forth in subsections (b) through (f) of this section exist and the insured
makes application for renewal within ninety days of the original
expiration date of the policy. If a policy be is renewed as
provided in this paragraph, the coverage afforded shall is not
be retroactive to the original expiration date of the policy, but
shall resume resumes upon the renewal date at the current premium
levels offered by the company.
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
or she 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. 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 or her position concerning the filing. Any person
or organization may file with the commissioner a signed statement
declaring and supporting his or her 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 or she 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 or she 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 or she 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
or her 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.
(l) No rate manual, class rate, rating schedule, rating plan
rating rule or any modification of any of the foregoing may
provide that a motor vehicle insurance policy may charge an
increased rate or payment increment based on any accident
surcharge until a threshold limit in damages caused by the
insured reaches a level of one thousand dollars and in such
event, the maximum increased rate or increment that may be
charged is ten percent: Provided, That the threshold limit in
damages for auto collision claims shall be reviewed and readjusted by the commissioner at two-year intervals from the
effective date of this amendment to reflect any changes in costs
of replacement parts and labor that occur over time:
Provided,
however, That the insurer may not increase the premium nor make
an at-risk driver designation for any insured who has maintained
insurance coverage with that insurer for a minimum of five years
and who is involved in his or her first accident after such
period when the accident has not been caused by the insured's
intentional acts or gross negligence.
NOTE: The purpose of this bill is to provide that an
outstanding auto liability or physical damage insurance policy
may not be canceled because the insured has two at-fault
accidents within a twelve-month period unless the aggregate cost
of damage to persons other than the insured exceeds $2,000. The
bill also provides that the insurer may not raise the insured's
premiums or designate the insured as an at-risk driver unless the
aggregate cost of damage to persons other than the insured in the
two at-fault accidents exceeds $1,000. The bill, additionally,
prohibits the imposition of any increased rate or payment
increment based on an accident surcharge until a threshold limit
in damages caused by an insured reaches a level of $1,000 while
requiring the commissioner of insurance review and readjust the
threshold limit in damages at two year intervals to reflect
changes in costs of replacement parts and labor. Finally, the
bill would prohibit an insurer from increasing the premium or
making an at-risk driver designation for an insured who has been
insured by the insurer for five years, accident-free, but due to
no more than simple negligence, has become involved in their
first accident after the five years has elapsed.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.