Senate Bill No. 369
(By Senator Chafin)
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[Introduced February 2, 2000; referred to the Committee
on the 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 than 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,
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 consider 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 to 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.