ENGROSSED


COMMITTEE SUBSTITUTE

FOR

Senate Bill No. 516

(By Senators Minard and Kessler)

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[Originating in the Committee on Banking and Insurance;

reported February 13, 2002.]

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A BILL to amend and reenact sections one and three, article twenty-d, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, all relating to tail insurance and malpractice insurance generally; extending scope of article to include hospital coverage; and requiring malpractice insurers to submit plan for determination of partial limits in event of default on amortized payment.

Be it enacted by the Legislature of West Virginia:
That sections one and three, article twenty-d, chapter thirty- three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:
ARTICLE 20D. TAIL INSURANCE.
§33-20D-1. Scope of article.

This article applies to malpractice insurance as defined in subdivision (9), subsection (e), section ten, article one of this chapter insuring a medical physician, osteopathic physician, podiatric physician, chiropractic physician, dentist, midwife, or nurse practitioner or hospital which has been in effect for at least sixty days.
§33-20D-3. Tail insurance to be offered upon cancellation; availability of amortization; minimum premium rates; penalties for noncompliance.

(a) Upon cancellation, nonrenewal or termination of any claims made professional malpractice insurance policy, the insurer shall offer to the insured tail insurance coverage.
(b) Upon cancellation, nonrenewal or termination of any claims made professional malpractice insurance policy, the insurer shall offer to any professional licensed and practicing in the state of West Virginia, or who, upon retirement, last practiced in the state of West Virginia, the opportunity to amortize the payment of premiums for tail insurance over a period of not more than thirty-six months, in quarterly payments, at a rate to be established by the insurance commissioner: Provided, That quarterly premiums paid pursuant to this subsection shall not be less than seven hundred fifty dollars.
(c) The first quarterly payment shall be payable contemporaneous with the issuance of the tail coverage policy. Subsequent payments shall be due and payable quarterly thereafter. Upon default in making a payment when due, tail coverage shall terminate, and the unpaid portion of the amortized premium shall be immediately due and payable in full. Each licensed malpractice insurer shall submit for approval, by the commissioner, a plan for determination of partial limits in the event of default on amortized payment.
(d) Any insurer who fails to offer tail insurance or in any other way violates the provisions of this article shall be assessed a penalty equal to the amount of the premium due.
(e) The offer of tail insurance coverage required by this section shall expire forty-five days after the cancellation, termination or other expiration of the claims made professional malpractice insurance policy, unless sooner accepted, in writing, by the insured.