H. B. 2177
(By Delegates Staton, Butcher, H. White, Kominar and Dempsey)
[Introduced January 13, 1999; referred to the
Committee on Banking and Insurance then Finance.]
A BILL to amend and reenact section three, article twenty,
chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
setting motor vehicle insurance rates in West Virginia; and
eliminating the seven territories and discrepancies in rates
among the territories.
Be it enacted by the Legislature of West Virginia:
That section three, 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.
§33-20-3. Rate making.
All rates shall be made in accordance with the following provisions:
(a) Due consideration shall be given to past and prospective
loss experience within and outside this state, to catastrophe
hazards, if any, to a reasonable margin for underwriting profit
and contingencies, to dividends, savings or unabsorbed premium
deposits allowed or returned by insurers to their policyholders,
members or subscribers, to past and prospective expenses both
countrywide and those specially applicable to this state, and to
all other relevant factors within and outside this state.
(b) Rates shall may not be excessive, inadequate or unfairly
discriminatory.
(c) Rates for casualty and surety insurance to which this
article applies shall also be subject to the following
provisions:
(1) The systems of expense provisions included in the rates
for use by any insurer or group of insurers may differ from those
of other insurers or groups of insurers to reflect the
requirements of the operating methods of any such insurer or
group with respect to any kind of insurance, or with respect to
any subdivision or combination thereof for which subdivision or
combination separate expense provisions are applicable.
(2) Risks shall be grouped by classifications and by
territorial areas for the establishment of rates and minimum
premiums. Classification of rates shall be modified to produce rates for individual risks in a territorial area in accordance
with rating plans which establish standards for measuring
variations in hazards or expense provisions, or both. Such
standards may measure any differences among risks that can be
demonstrated to have a probable effect upon losses or expenses.
Provided, That such standards shall include the establishment of
at least seven territorial rate areas within the state: Provided
further, That such territorial rate established by any insurer or
group of insurers may differ from those of other insurers or
group of insurers
(3) Due consideration shall be given to such factors as
expense, management, individual experience, underwriting
judgment, degree or nature of hazard or any other reasonable
considerations, provided such factors apply to all risks under
the same or substantially the same circumstances or conditions.
(d) Rates for fire and marine insurance to which this
article applies shall also be subject to the following
provisions:
(1) Manual, minimum, class rates, rating schedules or rating
plans shall be made and adopted, except in the case of specific
inland marine rates on risks specially rated.
(2) Due consideration shall be given to the conflagration
hazard, and in the case of fire insurance rates consideration shall be given to the experience of the fire insurance business
during a period of not less than the most recent five-year period
for which such experience is available.
(e) Except to the extent necessary to meet the provisions of
subdivisions (b) and (c) of this section, Uniformity among
insurers in any matters within the scope of this section is shall
be neither required. nor prohibited
(f) Rates made in accordance with this section may be used
subject to the provisions of this article.
NOTE: The purpose of this bill is to prohibit auto insurers
from developing rates for premiums by territories, and instead,
require them to be developed statewide. The bill eliminates the
seven territories created by this section.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.