H. B. 2963
(By Delegates Ashley, G. White,
Beane and Angotti)
[Introduced March 22, 2001; referred to the
Committee on the Judiciary.]
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; and to further amend said article by adding
thereto four new sections, designated sections seven-b,
seven-c, eight-b and eight-c, all relating to the repeal of
the countersignature requirement and to the payment of
commissions to agents but maintaining the countersignature
requirement with respect to surety insurance.
Be it enacted by the Legislature of West Virginia:
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; and that said article be further amended by adding
thereto four new sections, designated sections seven-b, seven-c,
eight-b and eight-c, 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 in 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 coindemnitors shall satisfy all countersignature requirements in
respect to such the contract of insurance. The provisions of this
section are repealed effective the first day of July, two thousand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 does
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 are repealed
effective the first day of July, two thousand two.
§33-12-7b. Countersignature for surety insurance.
No contract of insurance covering a subject of surety
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 duly licensed excess
line broker. Countersignature of a duly licensed resident agent of
the company originating a contract of surety insurance participated in by other companies as cosureties or coindemnitors shall satisfy
all countersignature requirements in respect to such the contract.
The effective date of this section is the first day of July, two
thousand two.
§33-12-7c. Countersignature by salaried employee of surety insurer
prohibited.
No salaried employee of any foreign or alien insurer shall
countersign any contract of surety insurance submitted by a
licensed nonresident broker covering a subject of surety insurance,
resident, located or to be performed in this state. This section
does 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 effective date of this section is 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 the
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 that state, may be
licensed as a nonresident accident and sickness agent in this
state, if the state of residence of such the 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 the nonresident accident and sickness agents shall be
reported, placed, countersigned and consummated by and through a
duly licensed resident agent of the issuing insurer. The provisions
of this section are repealed effective 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 the
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 that state, may be
licensed as a nonresident property casualty agent in this state, if
the state of residence of such the 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 the
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 are repealed effective the
first day of July, two thousand two.
§33-12-8b. 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.
(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 that state, may be licensed
as a nonresident accident and sickness agent in this state, if the
state of residence of the 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.
(c) The provisions of this section shall be effective the
first day of July, two thousand two.
§33-12-8c. Licensing of nonresident property casualty agents.
(a) Nonresidents otherwise complying with the provisions of
this chapter may be licensed as property casualty agents.
(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 the nonresident has established, by law or
regulation, like requirements for the licensing of a resident of
this state as a nonresident property casualty agent.
(c) The provisions of this section shall be effective 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 the
policy. The countersigning agent shall may not pay any part of
such the commission to any person other than a licensed agent or broker: Provided, That the portion of such the commission retained
by the countersigning resident agent shall is 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 includes engineering fees, service fees or any other
compensation incident to the issuance of a policy payable by or to
any insurer, agent or broker. The provisions of this subsection
shall only apply to surety insurance effective the first day of
July, two thousand two.
(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
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 the 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
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 the corporation satisfies the commissioner that he
or she meets the licensing qualifications as set forth in section
two of this article. The requirements set forth in this
subdivision shall does not apply to clerical employees, or other
employees not directly engaged in the selling or servicing of
insurance.
(c) This section shall does 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.
NOTE: The purpose of this bill is to eliminate
countersignature requirements with respect to all types of
insurance, with the exception of surety insurance, and to allow
surety agents to share their commissions with a company that
employs them or of which they are members.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§§33-12-7b, 7c, 8b and 8c are new; therefore, strike-throughs
and underscoring have been omitted.