Senate Bill No. 377
(By Senators Minard and Jenkins)
____________
[Introduced January 28, 2003; referred to the Committee on
Banking and Insurance; and then to the Committee on Finance.]
____________
A BILL to repeal section twenty-six, article twelve, chapter
thirty-three of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; to amend and reenact section
thirteen, article three of said chapter; to amend and reenact
section eighteen, article four of said chapter; to amend and
reenact sections three, eight, ten, eighteen, twenty-eight and
thirty-two, article twelve of said chapter; to amend and
reenact section two, article twenty-one of said chapter; to
amend and reenact section two, article twenty-two of said
chapter; to amend and reenact sections two and thirty-three,
article twenty-three of said chapter; to amend and reenact
section four, article twenty-four of said chapter; to amend
and reenact section twenty-four, article twenty-five-a of said
chapter; to amend and reenact section twenty-six, article
twenty-five-d of said chapter; and to amend and reenact section twenty-one, article thirty-two of said chapter, all
relating to insurance vending machines; license requirement
for insurance producers; continuing education required; fees
charged; agent appointments and service representatives; and
renumbering chapter relating to the references to article
twelve and excess line brokers.
Be it enacted by the Legislature of West Virginia:
That section twenty-six, article twelve, chapter thirty-three
of the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be repealed; that section thirteen, article three of
said chapter be amended and reenacted; that section eighteen,
article four of said chapter be amended and reenacted; that
sections three, eight, ten, eighteen, twenty-eight and thirty-two,
article twelve of said chapter be amended and reenacted; that
section two, article twenty-one of said chapter be amended and
reenacted; that section two, article twenty-two of said chapter be
amended and reenacted; that sections two and thirty-three, article
twenty-three of said chapter be amended and reenacted; that section
four, article twenty-four of said chapter be amended and reenacted;
that section twenty-four, article twenty-five-a of said chapter be
amended and reenacted; that section twenty-six, article twenty-
five-d of said chapter be amended and reenacted; and that section
twenty-one, article thirty-two of said chapter be amended and
reenacted, all to read as follows:
ARTICLE 3. LICENSING, FEES AND TAXATION OF INSURERS.
§33-3-13. Fees and charges.
(a) Except where it is otherwise specially provided, the
commissioner shall demand and receive the following fees from all
insurers: For annual fee for each license, two hundred dollars;
for receiving and filing annual reports, one hundred dollars; for
valuation of policies of life insurers organized under the laws of
this state, one and one-half cents for each one thousand dollars of
insurance; for valuation of policies of life insurers organized
under the laws of any other state licensed to transact insurance in
this state the rate for each one thousand dollars of insurance
valued as is imposed by the other state upon any similar insurer
organized under the laws of this state licensed to transact
insurance in the other state; for filing certified copy of articles
of incorporation, fifty dollars; for filing copy of its charter,
fifty dollars; for filing statements preliminary to admission, one
hundred dollars; for filing any additional paper required by law or
furnishing copies thereof, one dollar; for every certificate of
valuation, copy of report or certificate of condition of company to
be filed in any other state, fifteen dollars; for each licensed
agent, twenty-five dollars. The commissioner may by regulation set
reasonable charges for printed forms for the annual statements
required by law. He or she may sell at cost publications purchased
by, or printed on behalf of the commissioner.
(b) Such fees and charges collected by the commissioner under
the provisions of this section or elsewhere in this chapter and
designated for use by the commissioner for the operation of the
department of insurance or for the purposes of this section, shall
be paid into a special revenue account, hereby created in the state
treasury, to be expended and used by the commissioner, upon his or
her requisition and after appropriation by the Legislature, for the
operation of the department of insurance. Notwithstanding any
provisions in this code to the contrary, the commissioner may
expend, in accordance with the provisions of section two-a eight,
article twelve of this chapter, from the special revenue account
established pursuant to this section, amounts necessary to
establish and maintain a system of continuing education for agents
as provided in section two-a eight, article twelve of this chapter.
ARTICLE 4. GENERAL PROVISIONS.
§33-4-18. Representation of unlicenced insurers prohibited;
liability; exceptions.
(a) No person in West Virginia shall in any manner, directly
or indirectly, represent or assist any insurer not then duly
licensed to transact insurance in West Virginia, in the soliciting,
procuring, placing or maintenance of any insurance coverage upon or
with relation to any subject of insurance resident, located, or to
be performed in West Virginia, or inspect or examine any risk or
collect or receive any premium on behalf of such insurer.
(b) Any person transacting insurance in violation of this
section shall be personally liable to the insured for the
performance of any contract between the insured and the insurer
resulting from such transactions.
(c) This section shall not apply to reinsurance procured in
accordance with this chapter, to excess line insurance procured
pursuant to the provisions of article twelve twelve-c of this
chapter, to transactions exempt under the provisions of section one
of article three of this chapter, or to professional services of an
adjuster or attorney-at-law.
ARTICLE 12. INSURANCE PRODUCERS AND SOLICITORS.
§33-12-3. License required.
(a) A person shall not sell, solicit or negotiate insurance in
this state for any class or classes of insurance unless the person
is licensed for that line of authority in accordance with this
article No person may act, and no insurer or licensed insurance
producer shall knowingly permit a person to act, covering subjects
of insurance resident, located or to be performed in this state as
an insurance producer of an insurer licensed to transact the
business of insurance in this state without first obtaining a
license in a manner and in a form prescribed by the commissioner.
As used in this section, "act as an agent" means selling,
soliciting, or negotiating contracts of insurance on behalf of an
insurer licensed in this state or receiving or sharing, directly or indirectly, any commission or other valuable consideration arising
from the sale, solicitation, or negotiation of any such contract,
or both. No person shall submit business to any joint underwriting
association or any plan established under this chapter for the
equitable distribution of risks among insurers unless the person
holds a valid license to transact the class of insurance involved.
(b) No person shall in West Virginia may act as or hold
himself or herself out to be an agent or insurance agency or
solicitor unless then licensed therefor pursuant to this article.
(c) No agent, insurance agency or solicitor or any
representative or employee thereof shall may solicit or take
application for, negotiate, procure or place for others any kind of
insurance for which that person is not then licensed.
(d) No insurer shall may accept any business from any agent
who does not then hold an appointment as agent for such insurer
pursuant to this article.
§33-12-8. Continuing education required.
The purpose of this provision is to provide continuing
education under guidelines set up under the insurance
commissioner's office, with the guidelines to be set up under the
board of insurance agent education. Nothing in this section
prohibits an individual from receiving commissions which have been
vested and earned while that individual maintained an approved
insurance agent's license.
(a) This section applies to individual producers licensed to
engage in the sale of the following types of insurance:
(1) Life insurance coverage on human lives including benefits
of endowment and annuities, and may include benefits in the event
of death or dismemberment by accident and benefits for disability
income;
(2) Accident and health or sickness. -- Insurance coverage for
sickness, bodily injury or accidental death and may include
benefits for disability income;
(3) Property insurance coverage for the direct or
consequential loss or damage to property of every kind;
(4) Casualty. -- Insurance coverage against legal liability,
including that for death, injury or disability or damage to real or
personal property;
(5) Variable life and variable annuity products. -- Insurance
coverage provided under variable life insurance contracts and
variable annuities;
(6) Personal lines. -- Property and casualty insurance
coverage sold to individuals and families for primarily
noncommercial purposes; and
(7) Any other line of insurance permitted under state laws or
regulations.
(b) This section does not apply to:
(1) Individual producers holding limited line credit insurance licenses for any kind or kinds of insurance offered in connection
with loans or other credit transactions or insurance for which an
examination is not required by the commissioner, nor does it apply
to any limited or restricted license as the commissioner may
exempt; and
(2) Individual producers selling credit life or credit
accident and health insurance.
(c) (1) The board of insurance agent education as established
by section seven of this article shall develop a program of
continuing insurance education and submit the proposal for the
approval of the commissioner on or before the thirty-first day of
December of each year. No program may be approved by the
commissioner that includes a requirement that any agent complete
more than twenty-four hours of continuing insurance education
triennially biennially. No program may be approved by the
commissioner that includes a requirement that any of the following
individual producers complete more than six hours of continuing
insurance education biennially:
(A) Individual insurance producers who sell only preneed
burial insurance contracts; and
(B) Individual insurance producers who engage solely in
telemarketing insurance products by a scripted presentation which
scripted presentation has been filed with and approved by the
commissioner.
(C) The biennium mandatory continuing insurance education
provisions of this section become effective on the reporting period
beginning the first day of July, two thousand three.
(2) The commissioner and the board, under standards
established by the board, may approve any course or program of
instruction developed or sponsored by an authorized insurer,
accredited college or university, agents' association, insurance
trade association or independent program of instruction that
presents the criteria and the number of hours that the board and
commissioner determine appropriate for the purpose of this section.
(d) Individual insurance producers licensed to sell insurance
and who are not otherwise exempt shall satisfactorily complete the
courses or programs of instructions the commissioner may prescribe.
(e) Every individual insurance producer subject to the
continuing education requirements shall furnish, at intervals and
on forms as may be prescribed by the commissioner, written
certification listing the courses, programs or seminars of
instruction successfully completed by the person. The
certification shall be executed by, or on behalf of, the
organization sponsoring the courses, programs or seminars of
instruction.
(f) Any individual insurance producer failing to meet the
requirements mandated in this section, and who has not been granted
an extension of time, with respect to the requirements, or who has submitted to the commissioner a false or fraudulent certificate of
compliance shall have his or her license automatically suspended
and no further license may be issued to the person for any kind or
kinds of insurance until the person demonstrates to the
satisfaction of the commissioner that he or she has complied with
all of the requirements mandated by this section and all other
applicable laws or rules.
(g) The commissioner shall notify the individual insurance
producer of his or her suspension pursuant to subsection (f) of
this section by certified mail, return receipt requested, to the
last address on file with the commissioner pursuant to subsection
(e), section nine of this article. Any individual insurance
producer who has had a suspension order entered against him or her
pursuant to this section may, within thirty calendar days of
receipt of the order, file with the commissioner a request for a
hearing for reconsideration of the matter.
(h) Any individual insurance producer who does not
satisfactorily demonstrate compliance with this section and all
other laws applicable thereto as of the last day of the biennium
following his or her suspension shall have his or her license
automatically canceled and is subject to the education and
examination requirements of section five of this article.
(i) The commissioner is authorized to hire personnel and make
reasonable expenditures considered necessary for purposes of establishing and maintaining a system of continuing education for
insurers. The commissioner shall charge a fee of twenty-five
dollars to continuing education providers for each continuing
education course submitted for approval which shall be used to
maintain the continuing education system. The commissioner may, at
his or her discretion, designate an outside administrator to
provide all of or part of the administrative duties of the
continuing education system subject to direction and approval by
the commissioner. The fees charged by the outside administrator
shall be paid by the continuing education providers. In addition
to fees charged by the outside administrator, the outside
administrator shall collect and remit to the commissioner the
twenty-five dollar course submission fee.
§33-12-10. Fees.
The fee for an agent's license shall be twenty-five dollars as
provided in section thirteen, article three of this chapter, the
fee for a solicitor's license shall be twenty-five dollars, and the
fee for an insurance agency producer license shall be two hundred
dollars. The commissioner shall receive the following fees from
individual insurance agents producers, solicitors, and insurance
agencies: and excess line brokers For letters of certification,
five dollars; for letters of clearance, ten dollars; for duplicate
license, five dollars. All fees and moneys so collected shall be
used for the purposes set forth in section thirteen, article three of this chapter.
§33-12-18. Agent to deal only with licensed insurer or solicitor;
appointment as agent required.
(a) An individual insurance producer may not act as an agent
of an insurer unless the insurance producer becomes an appointed
agent of that insurer. An insurance producer who is not acting as
an agent of an insurer is not required to become appointed.
(b) To appoint an individual producer as its agent, the
appointing insurer shall file, in a format approved by the
insurance commissioner, a notice of appointment within fifteen days
from the date the agency contract is executed or the first
insurance application is submitted. An insurer may also elect to
appoint an individual producer to all or some insurers within the
insurer's holding company system or group by the filing of a single
appointment request.
(c) Upon receipt of the notice of appointment, the insurance
commissioner shall verify within a reasonable time not to exceed
thirty days that the individual insurance producer is eligible for
appointment. If the individual insurance producer is determined to
be ineligible for appointment, the insurance commissioner shall
notify the insurer within five days of its determination.
(d) An insurer shall pay a nonrefundable appointment
processing fee, in the amount and method of payment set forth in
section thirteen, article three of this chapter, for each appointment notification submitted by the insurer to the
commissioner.
(e) An insurer shall remit, in a manner prescribed by the
insurance commissioner, a renewal appointment fee in the amount set
forth in section thirteen, article three of this chapter no later
than midnight the thirty-first day of May annually.
(f) Each insurer shall maintain a current list of individual
insurance producers appointed to accept applications on behalf of
the insurer. Each insurer shall make a list available to the
commissioner upon reasonable request for purposes of conducting
investigations and enforcing the provisions of this chapter.
(g) Insurance agencies licensed as producers are not subject
to the provisions of this section.
§33-12-28. Service representative permit.
Individual nonresidents of West Virginia, employed on salary
by an insurer, who enter the state to assist and advise resident
agents in the solicitation, negotiation, making or procuring of
contracts of insurance on risks resident, located or to be
performed in West Virginia shall obtain a service representative
permit. The commissioner may, upon receipt of a properly prepared
application, issue the permit without requiring a written
examination therefor. On or after the first day of June, two
thousand three, no service representative license will be issued
which is not a renewal of an existing license. The fee for a service representative permit shall be twenty-five dollars and the
permit shall expire at midnight on the thirty-first day of March
next following the date of issuance. Issuance of a service
representative permit may not entitle the holder to countersign
policies. The representative may not in any manner solicit,
negotiate, make or procure insurance in this state except when in
the actual company of the licensed resident agent whom he or she
has been assigned to assist. All fees collected under this section
shall be used for the purposes set forth in section thirteen,
article three of this chapter.
§33-12-32. Limited licenses for rental companies.
(a) Purpose. -- This section authorizes the insurance
commissioner to issue limited licenses for the sale of automobile
rental coverage.
(b) Definitions. -- The following words when used in this
section shall have the following meanings:
(1) "Authorized insurer" means an insurer that is licensed by
the commissioner to transact insurance in West Virginia.
(2) "Automobile rental coverage" or "rental coverage" is
insurance offered incidental to the rental of a vehicle as
described in this section.
(3) "Limited license" means the authorization by the
commissioner for a person to sell rental coverage as agent of an
authorized insurer pursuant to the provisions of this section without the necessity of agent prelicensing education, examination,
or continuing education.
(4) "Limited licensee" is an individual resident of this state
or nonresident who obtains a limited license.
(5) "Rental agreement" means any written agreement setting
forth the terms and conditions governing the use of a vehicle
provided by the rental company for rental or lease.
(6) "Rental company" means any person or entity in the
business of providing private motor vehicles to the public under a
rental agreement for a period not to exceed ninety days.
(7) "Renter" means any person obtaining the use of a vehicle
from a rental company under the terms of a rental agreement for a
period not to exceed ninety days.
(8) "Vehicle" or "rental vehicle" means a motor vehicle of the
private passenger type including passenger vans, minivans and sport
utility vehicles and of the cargo type, including cargo vans,
pick-up trucks and trucks with a gross vehicle weight of twenty-six
thousand pounds or less and which do not require the operator to
possess a commercial driver's license.
(9) "Rental period" means the term of the rental agreement.
(c) The commissioner may issue a limited license for the sale
of automobile rental coverage to an employee of a rental company,
who has satisfied the requirements of this section.
(d) As a prerequisite for issuance of a limited license under this section, there shall be filed with the commissioner a written
application for a limited license, signed by the applicant, in a
form or forms and supplements thereto, and containing any
information, as the commissioner may prescribe. The limited
licensee shall pay to the insurance commissioner an annual fee of
twenty-five dollars.
(e) The limited licensee shall be appointed by the licensed
insurer or insurers for the sale of automobile rental coverage.
The employer of the limited licensee shall maintain at each
insurance sales location a list of the names and addresses of
employees which are selling insurance at the location.
(f) In the event that any provision of this section or
applicable provisions of the insurance code is violated by a
limited licensee or other employees operating under his or her
direction, the commissioner may:
(1) After notice and a hearing, revoke or suspend a limited
license issued under this section in accordance with the provisions
of section thirteen, article two of this chapter; or
(2) After notice and hearing, impose any other penalties,
including suspending the transaction of insurance at specific
locations where applicable violations of the insurance code have
occurred, as the commissioner considers to be necessary or
convenient to carry out the purposes of this section.
(g) Any limited license issued under this section shall also authorize any other employee working for the same employer and at
the same location as the limited licensee to act individually, on
behalf, and under the supervision, of the limited licensee with
respect to the kinds of coverage authorized in this section. In
order to sell insurance products under this section at least one
employee who has obtained a limited license must be present at each
location where insurance is sold. All other employees working at
that location may offer or sell insurance consistent with this
section without obtaining a limited license. However, the limited
licensee shall directly supervise and be responsible for the
actions of all other employees at that location related to the
offer or sale of insurance as authorized by this section. No
limited licensee under this section shall may advertise, represent,
or otherwise hold himself or herself or any other employees out as
licensed insurers, insurance agents or insurance brokers.
(h) No automobile rental coverage insurance may be issued by
a limited licensee pursuant to this section unless:
(1) The rental period of the rental agreement does not exceed
ninety consecutive days; and
(2) At every rental location where rental agreements are
executed, brochures or other written material are readily available
to the prospective renter that:
(A) Summarize clearly and correctly, the material terms of
coverage offered to renters, including the identity of the insurer;
(B) Disclose that the coverage offered by the rental company
may provide a duplication of coverage provided by a renter's
personal automobile insurance policy, homeowner's insurance policy,
personal liability insurance policy, or other source of coverage;
(C) State that the purchase by the renter of the kinds of
coverage specified in this section is not required in order to rent
a vehicle; and
(D) Describe the process for filing a claim in the event the
renter elects to purchase coverage and in the event of a claim.
(3) Any evidence of coverage on the face of the rental
agreement is disclosed to every renter who elects to purchase the
coverage.
(4) The limited licensee to sell automobile rental coverage
may offer or sell insurance only in connection with and incidental
to the rental of vehicles, whether at the rental office or by
preselection of coverage in a master, corporate, group rental, or
individual agreements in any of the following general categories:
(A) Personal accident insurance covering the risks of travel,
including, but not limited to, accident and health insurance that
provides coverage, as applicable, to renters and other rental
vehicle occupants for accidental death or dismemberment and
reimbursement for medical expenses resulting from an accident that
occurs during the rental period;
(B) Liability insurance (which may include uninsured and underinsured motorist coverage whether offered separately or in
combination with other liability insurance) that provides coverage,
as applicable, to renters and other authorized drivers of rental
vehicles for liability arising from the operation of the rental
vehicle;
(C) Personal effects insurance that provides coverage,
applicable to renters and other vehicle occupants of the loss of,
or damage to, personal effects that occurs during the rental
period;
(D) Roadside assistance and emergency sickness protection
programs; and
(E) Any other travel or auto-related coverage that a rental
company offers in connection with and incidental to the rental of
vehicles.
(i) Each rental company for which an employee has received a
limited license pursuant to this section shall conduct a training
program in which its employees being trained shall receive basic
instruction about the kinds of coverage specified in this section
and offered for purchase by prospective renters of rental vehicles:
Provided, That limited licensees and employees working hereunder
are not subject to the agent prelicensing education, examination or
continuing education requirements of this article.
(j) Notwithstanding any other provision of this section, or
any rule adopted by the commissioner neither the rental company, the limited licensee, nor the other employees working with the
limited licensee at the rental company, shall be required to treat
moneys collected from renters purchasing such insurance when
renting vehicles as funds received in a fiduciary capacity,
provided that the charges for coverage shall be itemized and be
ancillary to a rental transaction. The sale of insurance not in
conjunction with a rental transaction may not be permitted.
ARTICLE 21. RECIPROCAL INSURERS.
§33-21-2. General laws applicable.
Except as otherwise provided, and except where the context
clearly requires otherwise, all the provisions of this chapter
relating to insurers generally, and all the provisions of this
chapter relating to insurers transacting the same kinds of
insurance which reciprocal insurers are permitted to transact, are
applicable to reciprocal insurers, except that article articles
twelve and twelve-c of this chapter shall not apply to reciprocal
insurers.
ARTICLE 22. FARMERS' MUTUAL FIRE INSURANCE COMPANIES.
§33-22-2. Applicability of other provisions.
Each company to the same extent such provisions are applicable
to domestic mutual insurers shall be governed by and be subject to
the following articles of this chapter: Article one (definitions);
article two (insurance commissioner); article four (general
provisions) except that section sixteen of said article may not be applicable thereto; article seven (assets and liabilities); article
eight-a (use of clearing corporations and federal book-entry
system); article ten (rehabilitation and liquidation) except that
under the provisions of section thirty-two of said article
assessments may not be levied against any former member of a
farmers' mutual fire insurance company who is no longer a member of
the company at the time the order to show cause was issued; article
eleven (unfair trade practices); article twelve (agents, brokers
insurance producers and solicitors) except that the agent's license
fee shall be five dollars; article twelve-c (excess line); article
twenty-six (West Virginia insurance guaranty association act);
article twenty-seven (insurance holding company systems); article
thirty (mine subsidence insurance) except that under the provisions
of section six of said article, a farmers' mutual insurance company
shall have the option of offering mine subsidence coverage to all
of its policyholders but may not be required to do so; article
thirty-three (annual audited financial report); article thirty-four
(administrative supervision); article thirty-four-a (standards and
commissioner's authority for companies considered to be in
hazardous financial condition); article thirty-five (criminal
sanctions for failure to report impairment); article thirty-six
(business transacted with producer-controlled property-casualty
insurer); article thirty-seven (managing general agents); article
thirty-nine (disclosure of material transactions); article forty (risk-based capital for insurers); and article forty-one
(privileges and immunity); but only to the extent these provisions
are not inconsistent with the provisions of this article.
ARTICLE 23. FRATERNAL BENEFIT SOCIETIES.
§33-23-2. Applicability of other provisions.
Every fraternal benefit society shall be governed and be
subject to the same extent as other insurers transacting like kinds
of insurance, to the following articles of this chapter: Article
one (definitions); article two (insurance commissioner); article
four (general provisions); section thirty thirty-four, article six
(fee for form and rate filing); article seven (assets and
liabilities); article ten (rehabilitation and liquidation); article
eleven (unfair trade practices); article twelve (agents, brokers,
insurance producers and solicitors); and excess lines article
twelve-c (excess line); article thirteen (life insurance); article
thirteen-a (variable contracts); article fifteen-a (long-term care
insurance); article twenty-seven (insurance holding company
systems); article thirty-three (annual audited financial report);
article thirty-four (administrative supervision); article
thirty-four-a (standards and commissioner's authority for companies
considered to be in hazardous financial condition); article
thirty-five (criminal sanctions for failure to report impairment);
article thirty-seven (managing general agents); and article
thirty-nine (disclosure of material transactions).
§33-23-33. Agents.
Commencing on the first day of June, one thousand nine hundred
eighty-nine, agents for fraternal benefit societies shall be
required to be licensed pursuant to chapter thirty-three of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended: Provided, That any person who was acting as or serving in
the role of an agent for a fraternal benefit society on or before
the first day of July, one thousand nine hundred eighty-nine, shall
be exempt from the examination requirement of subsection (e),
section two section five, article twelve of this chapter:
Provided, however, That any person who is a salaried officer,
employee or member of a fraternal benefit society, and who as an
occasional and incidental duty of such his or her position may
solicit a fraternal insurance contract from a member of such the
fraternal benefit society, such the person shall be exempt from the
continuing education requirements otherwise made subject to
insurance agents by this chapter and the examination requirements
of subsection (e), section two section five, article twelve of this
chapter if such the person receives no commission or other
compensation based directly on such the solicitation of fraternal
insurance contracts and if such the person makes no solicitation of
insurance of any kind to or from persons who are not members of
such fraternal benefit society. For the purpose of this article
the solicitation of a fraternal insurance contract by such salaried officer, employee, or member from a new member of such the society
simultaneously with such the new member's joining such society
shall be deemed considered the solicitation of a member.
ARTICLE 24. HOSPITAL SERVICE CORPORATIONS, MEDICAL SERVICE
CORPORATIONS, DENTAL SERVICE CORPORATIONS AND
HEALTH SERVICE CORPORATIONS.
§33-24-4. Tax exemptions; applicability of insurance laws.
Every corporation defined in section two of this article is
hereby declared to be a scientific, nonprofit institution and
exempt from the payment of all property and other taxes. Every
corporation, to the same extent the provisions are applicable to
insurers transacting similar kinds of insurance and not
inconsistent with the provisions of this article, shall be governed
by and be subject to the provisions as hereinbelow indicated, of
the following articles of this chapter: Article two (insurance
commissioner), except that, under section nine of said article,
examinations shall be conducted at least once every four years;
article four (general provisions), except that section sixteen of
said article may not be applicable thereto; section twenty, article
five (borrowing by insurers); section thirty-four, article six (fee
for form and rate filing); article six-c (guaranteed loss ratio);
article seven (assets and liabilities); article eight-a (use of
clearing corporations and federal reserve book-entry system);
article eleven (unfair trade practices); article twelve (agents, brokers insurance producers and solicitors), except that the
agent's license fee shall be twenty-five dollars; article twelve-c
(excess lines); section two-a, article fifteen (definitions);
section two-b, article fifteen (guaranteed issue); section two-d,
article fifteen (exception to guaranteed renewability); section
two-e, article fifteen (discontinuation of coverage); section
two-f, article fifteen (certification of creditable coverage);
section two-g, article fifteen (applicability); section four-e,
article fifteen (benefits for mothers and newborns); section
fourteen, article fifteen (individual accident and sickness
insurance); section sixteen, article fifteen (coverage of
children); section eighteen, article fifteen (equal treatment of
state agency); section nineteen, article fifteen (coordination of
benefits with medicaid); article fifteen-a (long-term care
insurance); article fifteen-c (diabetes insurance); section three,
article sixteen (required policy provisions); section three-a,
article sixteen (mental health); section three-c, article sixteen
(group accident and sickness insurance); section three-d, article
sixteen (medicare supplement insurance); section three-f, article
sixteen (treatment of temporomandibular joint disorder and
craniomandibular disorder); section three-j, article sixteen
(benefits for mothers and newborns); section three-k, article
sixteen (preexisting condition exclusions); section three-l,
article sixteen (guaranteed renewability); section three-m, article sixteen (creditable coverage); section three-n, article sixteen
(eligibility for enrollment); section eleven, article sixteen
(coverage of children); section thirteen, article sixteen (equal
treatment of state agency); section fourteen, article sixteen
(coordination of benefits with medicaid); section sixteen, article
sixteen (diabetes insurance); article sixteen-a (group health
insurance conversion); article sixteen-c (small employer group
policies); article sixteen-d (marketing and rate practices for
small employers); article twenty-six-a (West Virginia life and
health insurance guaranty association act), after the first day of
October, one thousand nine hundred ninety-one; article twenty-seven
(insurance holding company systems); article twenty-eight
(individual accident and sickness insurance minimum standards);
article thirty-three (annual audited financial report); article
thirty-four (administrative supervision); article thirty-four-a
(standards and commissioner's authority for companies considered to
be in hazardous financial condition); article thirty-five (criminal
sanctions for failure to report impairment); article thirty-seven
(managing general agents); and article forty-one (privileges and
immunity); and no other provision of this chapter may apply to
these corporations unless specifically made applicable by the
provisions of this article. If, however, the corporation is
converted into a corporation organized for a pecuniary profit or if
it transacts business without having obtained a license as required by section five of this article, it shall thereupon forfeit its
right to these exemptions.
ARTICLE 25A. HEALTH MAINTENANCE ORGANIZATION ACT.
§33-25A-24. Scope of provisions; applicability of other laws.
(a) Except as otherwise provided in this article, provisions
of the insurance laws and provisions of hospital or medical service
corporation laws are not applicable to any health maintenance
organization granted a certificate of authority under this article.
The provisions of this article shall not apply to an insurer or
hospital or medical service corporation licensed and regulated
pursuant to the insurance laws or the hospital or medical service
corporation laws of this state except with respect to its health
maintenance corporation activities authorized and regulated
pursuant to this article. The provisions of this article may not
apply to an entity properly licensed by a reciprocal state to
provide health care services to employer groups, where residents of
West Virginia are members of an employer group and the employer
group contract is entered into in the reciprocal state. For
purposes of this subsection, a "reciprocal state" means a state
which physically borders West Virginia and which has subscriber or
enrollee hold harmless requirements substantially similar to those
set out in section seven-a of this article.
(b) Factually accurate advertising or solicitation regarding
the range of services provided, the premiums and copayments charged, the sites of services and hours of operation and any other
quantifiable, nonprofessional aspects of its operation by a health
maintenance organization granted a certificate of authority, or its
representative may not be construed to violate any provision of law
relating to solicitation or advertising by health professions:
Provided, That nothing contained in this subsection shall be
construed as authorizing any solicitation or advertising which
identifies or refers to any individual provider or makes any
qualitative judgment concerning any provider.
(c) Any health maintenance organization authorized under this
article may not be considered to be practicing medicine and is
exempt from the provisions of chapter thirty of this code, relating
to the practice of medicine.
(d) The provisions of sections fifteen and twenty, article
four (general provisions); section seventeen, article six
(noncomplying forms); section twenty, article five (borrowing by
insurers), article six-c (guaranteed loss ratio); article seven
(assets and liabilities); article eight (investments); article
eight-a (use of clearing corporations and federal reserve
book-entry system); article nine (administration of deposits);
article twelve (agents, brokers, insurance producers and
solicitors); and excess line article twelve-c (excess lines);
section fourteen, article fifteen (individual accident and sickness
insurance); section sixteen, article fifteen (coverage of children); section eighteen, article fifteen (equal treatment of
state agency); section nineteen, article fifteen (coordination of
benefits with medicaid); article fifteen-b (uniform health care
administration act); section three, article sixteen (required
policy provisions); section three-f, article sixteen (treatment of
temporomandibular disorder and craniomandibular disorder); section
eleven, article sixteen (coverage of children); section thirteen,
article sixteen (equal treatment of state agency); section
fourteen, article sixteen (coordination of benefits with medicaid);
article sixteen-a (group health insurance conversion); article
sixteen-d (marketing and rate practices for small employers);
article twenty-five-c (health maintenance organization patient bill
of rights); article twenty-seven (insurance holding company
systems); article thirty-four-a (standards and commissioner's
authority for companies considered to be in hazardous financial
condition); article thirty-five (criminal sanctions for failure to
report impairment); article thirty-seven (managing general agents);
article thirty-nine (disclosure of material transactions); article
forty-one (privileges and immunity); and article forty-two (women's
access to health care) shall be applicable to any health
maintenance organization granted a certificate of authority under
this article. In circumstances where the code provisions made
applicable to health maintenance organizations by this section
refer to the "insurer," the "corporation" or words of similar import, the language shall be construed to include health
maintenance organizations.
(e) Any long-term care insurance policy delivered or issued
for delivery in this state by a health maintenance organization
shall comply with the provisions of article fifteen-a of this
chapter.
(f) A health maintenance organization granted a certificate of
authority under this article shall be exempt from paying municipal
business and occupation taxes on gross income it receives from its
enrollees, or from their employers or others on their behalf, for
health care items or services provided directly or indirectly by
the health maintenance organization. This exemption applies to all
taxable years through the thirty-first day of December, one
thousand nine hundred ninety-six. The commissioner and the tax
department shall conduct a study of the appropriations of
imposition of the municipal business and occupation tax or other
tax on health maintenance organizations, and shall report to the
regular session of the Legislature, one thousand nine hundred
ninety-seven, on their findings, conclusions and recommendations,
together with drafts of any legislation necessary to effectuate
their recommendations.
ARTICLE 25D. PREPAID LIMITED HEALTH SERVICE ORGANIZATION.
§33-25D-26. Statutory construction and relationship to other laws.
(a) Except as otherwise provided in this article, provisions of the insurance laws, provisions of hospital, medical, dental or
health service corporation laws and provisions of health
maintenance organization laws are not applicable to any prepaid
limited health service organization granted a certificate of
authority under this article. The provisions of this article do
not apply to an insurer, hospital, medical, dental or health
service corporation, or health maintenance organization licensed
and regulated pursuant to the insurance laws, hospital, medical,
dental or health service corporation laws or health maintenance
organization laws of this state except with respect to its prepaid
limited health service corporation activities authorized and
regulated pursuant to this article. The provisions of this article
do not apply to an entity properly licensed by a reciprocal state
to provide a limited health care service to employer groups, where
residents of West Virginia are members of an employer group, and
the employer group contract is entered into in the reciprocal
state. For purposes of this subsection, a "reciprocal state" means
a state which physically borders West Virginia and which has
subscriber or enrollee hold harmless requirements substantially
similar to those set out in section ten of this article.
(b) Factually accurate advertising or solicitation regarding
the range of services provided, the premiums and copayments
charged, the sites of services and hours of operation, and any
other quantifiable, nonprofessional aspects of its operation by a prepaid limited health service organization granted a certificate
of authority, or its representative do not violate any provision of
law relating to solicitation or advertising by health professions:
Provided, That nothing contained in this subsection authorizes any
solicitation or advertising which identifies or refers to any
individual provider or makes any qualitative judgment concerning
any provider.
(c) Any prepaid limited health service organization authorized
under this article is not considered to be practicing medicine and
is exempt from the provision of chapter thirty of this code,
relating to the practice of medicine.
(d) The provisions of section nine, article two, examinations;
section thirteen, article two, hearings; sections fifteen and
twenty, article four, general provisions; section twenty, article
five, borrowing by insurers; section seventeen, article six,
noncomplying forms; article six-c, guaranteed loss ratio; article
seven, assets and liabilities; article eight, investments; article
eight-a (use of clearing corporations and federal book-entry
system); article nine, administration of deposits; article ten,
rehabilitation and liquidation; article twelve, agents, brokers,
insurance producers and solicitors; and excess line article
twelve-c, excess lines; section fourteen, article fifteen,
individual accident and sickness insurance; section sixteen,
article fifteen, coverage of children; section eighteen, article fifteen, equal treatment of state agency; section nineteen, article
fifteen, coordination of benefits with medicaid; article fifteen-b,
uniform health care administration act; section three, article
sixteen, required policy provisions; section eleven, article
sixteen, coverage of children; section thirteen, article sixteen,
equal treatment of state agency; section fourteen, article sixteen,
coordination of benefits with medicaid; article sixteen-a, group
health insurance conversion; article sixteen-d, marketing and rate
practices for small employers; article twenty-seven, insurance
holding company systems; article thirty-three, annual audited
financial report; article thirty-four, administrative supervision;
article thirty-four-a, standards and commissioner's authority for
companies considered to be in hazardous financial condition;
article thirty-five, criminal sanctions for failure to report
impairment; article thirty-seven, managing general agents; article
thirty-nine, disclosure of material transactions; and article
forty-one, privileges and immunity, all of this chapter are
applicable to any prepaid limited health service organization
granted a certificate of authority under this article. In
circumstances where the code provisions made applicable to prepaid
limited health service organizations by this section refer to the
"insurer," the "corporation" or words of similar import, the
language includes prepaid limited health service organizations.
(e) Any long-term care insurance policy delivered or issued for delivery in this state by a prepaid limited health service
organization shall comply with the provisions of article fifteen-a
of this chapter.
(f) A prepaid limited health service organization granted a
certificate of authority under this article is exempt from paying
municipal business and occupation taxes on gross income it receives
from its enrollees, or from their employers or others on their
behalf, for health care items or services provided directly or
indirectly by the prepaid limited health service organization.
ARTICLE 32. RISK RETENTION ACT.
§33-32-21. Duty on agent or broker to obtain license.
(a) A person, or a person working for a firm, association or
corporation, shall not act or aid in any manner in soliciting,
negotiating or procuring liability insurance in this state from a
risk retention group unless such person, or person working for a
firm, association or corporation, is licensed as an individual
insurance agent producer in accordance with article twelve of this
chapter.
(b) A person, or a person working for a firm, association or
corporation, shall not act or aid in any manner in soliciting,
negotiating or procuring liability insurance in this state for a
purchasing group from an authorized insurer or a risk retention
group chartered in a state unless such person, or person working
for a firm, association or corporation, is licensed as an individual insurance agent producer in accordance with article
twelve of this chapter.
(c) A person, or a person working for a firm, association or
corporation, shall not act or aid in any manner in soliciting,
negotiating or procuring liability insurance coverage in this state
for any member of a purchasing group under a purchasing group's
policy unless such person, or person working for a firm,
association or corporation, is licensed as an individual insurance
agent producer in accordance with article twelve of this chapter.
(d) A person, or a person working for a firm, association or
corporation, shall not act or aid in any manner in soliciting,
negotiating or procuring liability insurance from an insurer not
authorized to do business in this state on behalf of a purchasing
group located in this state unless such person, or person working
for a firm, association or corporation, is licensed as an excess
line broker surplus lines licensee in accordance with section
thirteen, article twelve article twelve-c of this chapter.
(e) For purposes of acting as an agent for a risk retention
group or purchasing group pursuant to the provisions of this
section, the requirement of residence in this state shall not
apply.
(f) Every person, or person working for a firm, association or
corporation, licensed pursuant to the provisions of this chapter,
on business placed with risk retention groups or written through a purchasing group, shall inform each prospective insured of the
provisions of the notice required by section nine of this article
in the case of a risk retention group and in the case of a
purchasing group, the notice required by subsection (b), section
eighteen of this article.
NOTE: The purpose of this bill is to repeal section
twenty-six of article twelve because this section is obsolete and
there are no insurance vending machines utilized in this State.
This bill further amends sections three, eight, ten, eighteen,
twenty-eight and thirty-two of article twelve to make technical
corrections in the producer model licensing act. The amendment to
section three of article twelve clarifies when a nonresident
producers license is required. The amendment to section eight of
article twelve changes the continuing education requirement from
twenty-four hours triennially to twenty-four hours biennially.
This amendment would bring West Virginia in to the norm requirement
of twenty-four hours per biennium. The amendment to section ten of
article twelve makes technical corrections by removing excess line
broker and specifying individual insurance producer and insurance
agency. The amendment to section eighteen of article twelve makes
only a change in the title which has caused some confusion in
regard to when an appointment is required. The amendment to
section twenty-eight of article twelve eliminates the issuing of
service representative permits and allows existing service
representatives to retain their permits. The amendment to section
thirty-two of article twelve allows nonresident limited licenses
for rental car company representatives to maintain the reciprocity
status of West Virginia. The amendments to section thirteen,
article three; section eighteen, article four; section two, article
twenty-one; section two, article twenty-two; section two, article
twenty-three; section thirty-three, article twenty-three; section
four, article twenty-four; section twenty-four, article
twenty-five-a; section twenty-six, article twenty-five-d; and
section twenty-one, article thirty-two make corrections to
references to other sections of chapter thirty-three and make no
substantive changes to the statutory text.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.