Senate Bill No. 98
(By Senator Chafin)
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[Introduced February 15, 2001; 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 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 make payments of premium for
such the policy or any installment of the premium when due;
(b) The policy is 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 residing
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 residing
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 reasons:
(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 it 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;
(7) Two or more moving traffic violations committed within
a period of twelve months, each of which results in three or more
points being assessed on the driver's record by the division of
motor vehicles, whether or not the insurer renewed the policy
without knowledge of all such violations. Notice of any
nonrenewal made pursuant to this subsection shall be mailed to
the named insured either during the current policy period or
during the first full policy period following the date that the
second moving traffic violation is recorded by the division of
motor vehicles.
(f) The named insured or any other operator has had a second
at-fault motor vehicle accident within a period of twelve months, whether or not the insurer renewed the policy without knowledge
of all such accidents: 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.
Notice of any nonrenewal made pursuant to this subsection
shall be mailed to the named insured either during the current
policy period or during the first full policy period following
the date of the second accident.
Nonrenewal of such a policy for any reason is subject to a
hearing and review as provided for 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: (1) None of the other grounds for nonrenewal as set forth in
subsections (b) through (f), inclusive, of this section exist;
and (2) the insured makes an application for renewal within
ninety days of the original expiration date of the policy. If a
policy is renewed as provided for in this paragraph, then the
coverage afforded shall not be retroactive to the original
expiration date of the policy, but shall begin on the
reinstatement 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 the filing meets the requirements of this article,
he or she shall require such the insurer to furnish the
information upon which it supports such the 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 a
filing by becoming a member of, or a subscriber to, a licensed
rating organization which makes such the filings, and by
authorizing the commissioner to accept such the 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 and 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 an 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 may 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.