H. B. 2845


(By Delegates Thompson, H. White, Romine,
Angotti and L. White)

[Introduced February 19, 1999; referred to the
Committee on Banking and Insurance.]


A BILL to repeal sections seven and seven-a, article twelve, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact sections eight, eight-a and twenty-four of said article, all relating to the repeal of the countersignature requirement and to the payment of commissions to agents.

Be it enacted by the Legislature of West Virginia:
That sections seven and seven-a, article twelve, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be repealed; and that sections eight, eight-a and twenty-four of said article be amended and reenacted, all to read as follows:
ARTICLE 12. AGENTS, BROKERS, SOLICITORS AND EXCESS LINE.
§33-12-8. Licensing of nonresident life and accident and sickness agents.

(a) Nonresidents otherwise complying with the provisions of this chapter may be licensed as life agents. but all policies issued as a result of solicitation on the part of such nonresidents, in the state, shall be reported, placed, countersigned, and consummated by and through a duly licensed resident agent of the issuing insurer.
(b) An individual otherwise complying with the provisions of this chapter, who is a resident of another state and who is a licensed accident and sickness agent of such state, may be licensed as a nonresident accident and sickness agent in this state, if the state of residence of such nonresident has established, by law or regulation like requirements for the licensing of a resident of this state as a nonresident accident and sickness agent. All policies issued as a result of solicitation by such nonresident accident and sickness agents shall be reported, placed, countersigned and consummated by and through a duly licensed resident agent of the issuing insurer.
§33-12-8a. Licensing of nonresident property casualty agents.

(a) Nonresidents otherwise complying with the provisions of this chapter may be licensed as a property casualty agent. but all policies issued as a result of solicitation on the part of such nonresident in this state shall be reported, placed, countersigned, and consummated by and through a duly licensed resident agent of the issuing insurer.
(b) An individual otherwise complying with the provisions of this chapter, who is a resident of another state and who is a licensed property casualty agent of such state, may be licensed as a nonresident property casualty agent in this state, if the state of residence of such nonresident has established, by law or regulation, like requirements for the licensing of a resident of this state as a nonresident property casualty agent. All policies issued as a result of solicitation by such nonresident property casualty agents shall be reported, placed, countersigned and consummated by and through a duly licensed resident agent of the issuing insurer.
§33-12-24. Payment of commissions.

(a) The entire commission payable by any insurer licensed to transact insurance in this state on any insurance policy shall be paid directly to the licensed resident agent who countersigns signs the policy. The countersigning agent shall not pay any part of such commission to any person other than a licensed agent or broker. Provided, That the portion of such commission retained by the countersigning resident agent shall not be less than ten percent of the gross policy premium or fifty percent of the commission payable by the insurer as provided herein, whichever is the lesser amount. The term "commission" as used herein shall include engineering fees, service fees or any other compensation incident to the issuance of a policy payable by or to any insurer, agent or broker.
(b) It shall be unlawful for any insurer or agent to pay, and any person to accept, directly or indirectly, any commission except as provided in this section: Provided, That any licensed resident agent may pay his or her commissions, or direct that his or her commissions be paid, to a partnership of which he or she is a member, employee or agent, or to a corporation of which he or she is an officer, employee or agent, if:
(1) The commissioner finds that such partnership or corporation is engaged, through its licensed resident agents, in conducting an insurance agency business with respect to the general public.
(2) If a partnership, each partner satisfies the commissioner that he or she meets the licensing qualifications as set forth in sections two, four, eight or eight-a of this article.
(3) If a corporation, each officer, employee or any one or more stockholders owning, directly or indirectly, the controlling interest in such corporation satisfies the commissioner that he or she meets the licensing qualifications as set forth in sections two, four, eight, or eight-a of this article. The requirements set forth in this subdivision shall not apply to clerical employees, or other employees not directly engaged in the selling or servicing of insurance.
(c) This section shall not apply to reinsurance, life insurance or accident or health insurance; nor to excess line insurance procured in accordance with the provisions of this article relating thereto; nor to credit insurance, any contract of insurance covering the rolling stock of any railroad or covering any vessel, aircraft or motor carrier used in interstate or foreign commerce, any liability or other risks incident to the ownership, maintenance or operation thereof, any contract of insurance covering any property in interstate or foreign commerce, or any liability or risks incident thereto.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
BANKING AND INSURANCE COMMITTEE AMENDMENT

On page one, following the enacting clause, by striking out the remainder of the bill and inserting in lieu thereof the following:
That sections seven, seven-a, eight, eight-a and twenty-four, article twelve, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:

ARTICLE 12. AGENTS, BROKERS, SOLICITORS AND EXCESS LINE.

§33-12-7. Countersignature.
No contract of insurance covering a subject of insurance, resident, located, or to be performed in this State, shall be executed, issued or delivered by any insurer unless the contract, or in the case of an interstate risk a countersignature endorsement carrying full information as to the West Virginia risk, is signed or countersigned in writing by a licensed resident agent of the insurer except that excess line insurance shall be countersigned by a duly licensed excess line broker. This section does not apply to: Reinsurance; credit insurance; any contract of insurance covering the rolling stock of any railroad or covering any vessel, aircraft or motor carrier used in interstate or foreign commerce, or covering any liability or other risks incident to the ownership, maintenance or operation thereof; any contract of insurance covering any property interstate or foreign commerce, or any liability or risks incident thereto. Countersignature of a duly licensed resident agent of the company originating a contract of insurance participated in by other companies as cosureties or co-indemnitors shall satisfy all countersignature requirements in respect to such contract of insurance. The provisions of this section shall remain in effect until the first day of July, two thousand two.

§33-12-7a. Countersignature by salaried employee prohibited.

No salaried employee of any foreign or alien insurer shall countersign any contract of insurance submitted by a licensed nonresident broker covering a subject of insurance, resident, located or to be performed in this State. This section shall not apply if all West Virginia agents of the insurer are salaried employees, nor to life or health and accident and sickness insurance contracts. The provisions of this section shall remain in effect until the first day of July, two thousand two.

§33-12-8.Licensing of nonresident life and accident and sickness agents.


(a) Nonresidents otherwise complying with the provisions of this chapter may be licensed as life agents, but all policies issued as a result of solicitation on the part of such nonresidents, in the State, shall be reported, placed, countersigned, and consummated by and through a duly licensed resident agent of the issuing insurer.

(b) An individual otherwise complying with the provisions of this chapter, who is a resident of another state and who is a licensed accident and sickness agent of such state, may be licensed as a nonresident accident and sickness agent in this State, if the state of residence of such nonresident has established, by law or regulation like requirements for the licensing of a resident of this State as a nonresident accident and sickness agent. All policies issued as a result of solicitation by such nonresident accident and sickness agents shall be reported, placed, countersigned and consummated by and through a duly licensed resident agent of the issuing insurer.
(c) The provisions of this section relating to countersignatures shall remain in effect until the first day of July, two thousand two.

§33-12-8a. Licensing of nonresident property casualty agents.

(a) Nonresidents otherwise complying with the provisions of this chapter may be licensed as a property casualty agent but all policies issued as a result of solicitation on the part of such nonresident in this state shall be reported, placed, countersigned, and consummated by and through a duly licensed resident agent of the issuing insurer.

(b) An individual otherwise complying with the provisions of this chapter, who is a resident of another state and who is a licensed property casualty agent of such state, may be licensed as a nonresident property casualty agent in this state, if the state of residence of such nonresident has established, by law or regulation, like requirements for the licensing of a resident of this state as a nonresident property casualty agent. All policies issued as a result of solicitation by such nonresident property casualty agents shall be reported, placed, countersigned and consummated by and through a duly licensed resident agent of the issuing insurer.

(c) The provisions of this section relating to countersignatures shall remain in effect until the first day of July, two thousand two.

§33-12-24. Payment of commissions.

(a) The entire commission payable by any insurer licensed to transact insurance in this State on any insurance policy shall be paid directly to the licensed resident agent who countersigns signs the policy. The countersigning agent shall not pay any part of such commission to any person other than a licensed agent or broker: Provided, That the portion of such commission retained by the countersigning resident agent shall not be less than ten percent of the gross policy premium or fifty percent of the commission payable by the insurer as provided herein, whichever is the lesser amount. The term "commission" as used herein shall include engineering fees, service fees or any other compensation incident to the issuance of a policy payable by or to any insurer, agent or broker.

(b) It shall be unlawful for any insurer or agent to pay, and any person to accept, directly or indirectly, any commission except as provided in this section: Provided, That any licensed resident agent may pay his commissions, or direct that his commissions be paid, to a partnership of which he is a member, employee or agent, or to a corporation of which he is an officer, employee or agent, if:

(1) The commissioner finds that such partnership or corporation is engaged, through its licensed resident agents, in conducting an insurance agency business with respect to the general public.

(2) If a partnership, each partner satisfies the commissioner that he meets the licensing qualifications as set forth in section two of this article.

(3) If a corporation, each officer, employee or any one or more stockholders owning, directly or indirectly, the controlling interest in such corporation satisfies the commissioner that he meets the licensing qualifications as set forth in section two of this article. The requirements set forth in this subdivision shall not apply to clerical employees, or other employees not directly engaged in the selling or servicing of insurance.

(c) This section shall not apply to reinsurance, life insurance or accident or health insurance; nor to excess line insurance procured in accordance with the provisions of this article relating thereto; nor to credit insurance, any contract of insurance covering the rolling stock of any railroad or covering any vessel, aircraft or motor carrier used in interstate or foreign commerce, any liability or other risks incident to the ownership, maintenance or operation thereof, any contract of insurance covering any property in interstate or foreign commerce, or any liability or risks incident thereto.

(d) The provisions of this section relating to countersignatures shall remain in effect until the first day of July, two thousand two.
BANKING AND INSURANCE COMMITTEE TITLE AMENDMENT


H. B. 2845 -- " A Bill to amend and reenact sections seven, seven-a, eight, eight-a and twenty-four, article twelve, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, all relating to countersignature requirements and th e payment of commissions to agents."