ENROLLED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 459
(Senators Minard and Kessler, original sponsors)
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[Passed March 8, 2002; in effect ninety days from passage.]
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AN ACT 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 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) A record of traffic accidents;
(B) 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 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 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) 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) All insurers selling or which have in force substandard
risk motor vehicle insurance policies shall provide a one-time
notice in writing to 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 any other
procedures that are required by this section.
(g) This section, as amended in the year two thousand two,
shall take effect on the first day of July, two thousand two.