H. B. 2949
(By Delegates H. White, Kominar, R. M. Thompson,
Hrutkay, Browning, Perdue and Yeager)
[Introduced February 10, 2003; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact section three, article twenty, chapter
thirty-three of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to setting motor
vehicle insurance rates in West Virginia; eliminating the
seven territories and discrepancies in rates among the
territories; and creating new rating territories which will
correspond in number and geographical make up to the West
Virginia congressional districts.
Be it enacted by the Legislature of West Virginia:
That section three, article twenty, 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 20. RATES AND RATING ORGANIZATIONS.
§33-20-3. Rate making.
All rates shall be made in accordance with the following
provisions:
(a) Due consideration shall be given to past and prospective
loss experience within and outside this state, to catastrophe
hazards, if any, to a reasonable margin for underwriting profit and
contingencies, to dividends, savings or unabsorbed premium deposits
allowed or returned by insurers to their policyholders, members or
subscribers, to past and prospective expenses both countrywide and
those specially applicable to this state, and to all other relevant
factors within and outside this state.
(b) Rates shall not be excessive, inadequate or unfairly
discriminatory.
(c) Rates for casualty and surety insurance to which this
article applies shall also be subject to the following provisions:
(1) The systems of expense provisions included in the rates
for use by any insurer or group of insurers may differ from those
of other insurers or groups of insurers to reflect the requirements
of the operating methods of any such insurer or group with respect
to any kind of insurance, or with respect to any subdivision or
combination thereof for which subdivision or combination separate expense provisions are applicable.
(2) Risks shall be grouped by classifications and by
territorial areas for the establishment of rates and minimum
premiums. Classification of rates shall be modified to produce
rates for individual risks in a territorial area in accordance with
rating plans which establish standards for measuring variations in
hazards or expense provisions, or both. Such standards may measure
any differences among risks that can be demonstrated to have a
probable effect upon losses or expenses: Provided, That such
standards shall include the establishment of at least seven
territorial rate areas within the state: Provided further, That
such territorial rate established by any insurer or group of
insurers may differ from those of other insurers or group of
insurers the standards shall include the establishment of
territorial rate areas within the state: Provided, however, That
the number and geographical boundaries of the territorial rate
areas shall correspond to the number and geographical boundaries of
the congressional districts in this state.
(3) Due consideration shall be given to such factors as
expense, management, individual experience, underwriting judgment,
degree or nature of hazard or any other reasonable considerations, provided such factors apply to all risks under the same or
substantially the same circumstances or conditions.
(d) Rates for fire and marine insurance to which this article
applies shall also be subject to the following provisions:
(1) Manual, minimum, class rates, rating schedules or rating
plans shall be made and adopted, except in the case of specific
inland marine rates on risks specially rated.
(2) Due consideration shall be given to the conflagration
hazard, and in the case of fire insurance rates consideration shall
be given to the experience of the fire insurance business during a
period of not less than the most recent five-year period for which
such experience is available.
(e) Except to the extent necessary to meet the provisions of
subdivisions (b) and (c) of this section, Uniformity among insurers
in any matters within the scope of this section is neither shall be
required. nor prohibited
(f) Rates made in accordance with this section may be used
subject to the provisions of this article.
NOTE: The purpose of this bill is to prohibit auto insurers
from developing rates for premiums by territories, and instead, require them to be developed consistent with the congressional
districts. The bill eliminates the seven territories created by
this section.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.