Senate Bill No. 135
(By Senator Chafin)
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[Introduced January 10, 2002; 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.