ENGROSSED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 459
(By Senators Minard and Kessler)
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[Originating in the Committee on Finance;
reported February 22, 2002.]
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A BILL to amend and reenact section thirty-one-c, article six,
chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
imposing a money penalty on insurers who write substandard
insurance for failing to notify policyholders, under certain
circumstances, that they may be eligible for a standard or
preferred policy.
Be it enacted by the Legislature of West Virginia:
That section thirty-one-c, article six, chapter thirty-three
of the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted to read as follows:
ARTICLE 6. THE INSURANCE POLICY.
§33-6-31c. Substandard risk motor vehicle insurance policies;
definitions; required notices and provisions; promulgation of
rules; effective date; money penalty for failure to give
required notice.
(a) For purposes of this section, the following definitions
shall apply:
(1) A "substandard risk" means an applicant for insurance who
presents a greater exposure to loss than that contemplated by
commonly used rate classifications, as evidenced by one or more of
the following conditions:
(A) Record A record of traffic accidents;
(B) Record A record of traffic law violations;
(C) Undesirable occupational circumstances; or
(D) Any other valid underwriting consideration.
(2) "Substandard risk rate" means a rate or premium charge
that reflects the greater than normal exposure to loss which is
assumed by an insurer writing insurance for a substandard risk.
(b) Every application for a motor vehicle insurance policy to
be issued in this state and written on the basis of a substandard
risk rate schedule shall have printed thereon on the application,
in bold-faced type in a contrasting color or in reverse print, a
statement reading substantially as follows: THE POLICY FOR WHICH
YOU ARE APPLYING HAS BEEN RATED IN ACCORDANCE WITH A SPECIAL RATING
SCHEDULE FILED WITH THE COMMISSIONER OF INSURANCE PROVIDING FOR
HIGHER PREMIUM CHARGES THAN THOSE GENERALLY APPLICABLE FOR AVERAGE
RISKS. IF THE COVERAGE OR PREMIUM IS NOT SATISFACTORY, YOU MAY BE
ELIGIBLE FOR OTHER INSURANCE. IF THIS COVERAGE OR PREMIUM IS
SATISFACTORY, YOU MAY BE ELIGIBLE FOR COVERAGE UNDER A STANDARD OR
PREFERRED POLICY IF DURING THE NEXT THREE YEARS YOU HAVE NO TRAFFIC
VIOLATIONS OR ACCIDENTS AND YOU MAINTAIN CONTINUOUS INSURANCE COVERAGE.
(c) Every motor vehicle insurance policy issued in this state
and written on the basis of a substandard risk rate schedule shall
have printed thereon on the policy, in bold-faced type in a
contrasting color or in reverse print, a statement reading
substantially as follows: THIS POLICY HAS BEEN RATED IN ACCORDANCE
WITH A SPECIAL RATING SCHEDULE FILED WITH THE COMMISSIONER OF
INSURANCE PROVIDING FOR HIGHER PREMIUM CHARGES THAN THOSE GENERALLY
APPLICABLE FOR AVERAGE RISKS. IF THE COVERAGE OR PREMIUM IS NOT
SATISFACTORY, YOU MAY BE ELIGIBLE FOR OTHER INSURANCE. IF THIS
COVERAGE OR PREMIUM IS SATISFACTORY, YOU MAY BE ELIGIBLE FOR
COVERAGE UNDER A STANDARD OR PREFERRED POLICY IF DURING THE NEXT
THREE YEARS YOU HAVE NO TRAFFIC VIOLATIONS OR ACCIDENTS AND YOU
MAINTAIN CONTINUOUS INSURANCE COVERAGE.
(d) On or before the first day of July, one thousand nine
hundred ninety-three, all All insurers licensed or registered in
this state to market or sell substandard risk motor vehicle
insurance policies shall submit all applications and policies for
substandard risk insurance to the commissioner of insurance for
approval prior to being used by the insurer.
(e) On or after the first day of July, one thousand nine
hundred ninety-five, all All insurers selling or which have in
force substandard risk motor vehicle insurance policies shall
provide a one-time notice in writing to such the policyholders who
have maintained continuous insurance coverage for three years, have
not been convicted of any moving traffic violations and had no at fault accidents that they may be eligible for coverage under a
standard or preferred policy. The commissioner may levy an
administrative penalty not to exceed one thousand dollars for each
incidence where an insurer fails to give notice in accordance with
the provisions in this subsection.
(f) The commissioner shall promulgate rules in accordance with
the provisions of article three, chapter twenty-nine-a of this code
regarding the format, style, design and approval of substandard
risk insurance applications, notices and policies and such any
other procedures as may be that are required by this section.
(g) The effective date of this shall be the first day of July,
one thousand nine hundred ninety-five. This section, as amended in
the year two thousand two, shall take effect on the first day of
July, two thousand two.