H. B. 3327
(By Delegate R. Thompson, Staton, Walters, H. White, Moore,
Ellem, DeLong, Caputo and Beane)
[Introduced March 25, 2005; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact §23-4-2 of the Code of West Virginia,
1931, as amended; to amend and reenact §33-2-16 and §33-2-17
of said code; to amend said code by adding thereto a new
section, designated §33-11-4a; to amend and reenact §33-11-6
of said code; and to amend and reenact §33-20-4 of said code;
and to amend said code by adding thereto a new section,
designated §55-7-23, all relating generally to the regulation
of insurance; providing that the Director of Consumer Advocacy
shall be appointed by the Governor; expanding the authority of
the Office of Consumer Advocacy; eliminating a cause of
action for unfair claims settlement practices by third
parties; establishing procedures for the filing, investigation
and processing of administrative complaints by third-party
claimants; providing for penalties for engaging in unfair
claims settlement practices; and establishing that certain insurers shall submit rate filings biannually.
Be it enacted by the Legislature of West Virginia:
That §23-4-2 of the Code of West Virginia, 1931, as amended,
be amended and reenacted; that §33-2-16 and §33-2-17 of said code
be amended and reenacted; that said code be amended by adding
thereto a new section, designated §33-11-4a; that §33-11-6 of said
code be amended and reenacted; that §33-20-4 of said code be
amended and reenacted; and that said code be amended by adding
thereto a new section, designated §55-7-23, all to read as follows:
CHAPTER 23. WORKERS' COMPENSATION.
ARTICLE 4. DISABILITY AND DEATH BENEFITS.
§23-4-2. Disbursement where injury is self-inflicted or
intentionally caused by employer; legislative
declarations and findings; "deliberate intention"
defined.
(a) Notwithstanding anything contained in this chapter, no
employee or dependent of any employee is entitled to receive any
sum from the workers' compensation fund, from a self-insured
employer, or otherwise under the provisions of this chapter, on
account of any personal injury to or death to any employee caused
by a self-inflicted injury or the intoxication of the employee.
Upon the occurrence of an injury which the employee asserts, or
which reasonably appears to have, occurred in the course of and
resulting from the employee's employment, the employer may require the employee to undergo a blood test for the purpose of determining
the existence or nonexistence of evidence of intoxication pursuant
to rules for the administration of the test promulgated by the
board of managers: Provided, That the employer must have a
reasonable and good faith objective suspicion of the employee's
intoxication and may only test for the purpose of determinating
whether the person is intoxicated.
(b) For the purpose of this chapter, the commission may
cooperate with the office of miners' health, safety and training
and the State Division of Labor in promoting general safety
programs and in formulating rules to govern hazardous employments.
(c) If injury or death result to any employee from the
deliberate intention of his or her employer to produce the injury
or death, the employee, the widow, widower, child or dependent of
the employee has the privilege to take under this chapter and has
a cause of action against the employer, as if this chapter had not
been enacted, for any excess of damages over the amount received or
receivable over the amount received or receivable in a claim for
benefits under this chapter, whether filed or not.
(d) (1) It is declared that enactment of this chapter and the
establishment of the Workers' Compensation System in this chapter
was and is intended to remove from the common law tort system all
disputes between or among employers and employees regarding the
compensation to be received for injury or death to an employee except as expressly provided in this chapter and to establish a
system which compensates even though the injury or death of an
employee may be caused by his or her own fault or the fault of a
coemployee; that the immunity established in sections six and
six-a, article two of this chapter is an essential aspect of this
Workers' Compensation System; that the intent of the Legislature in
providing immunity from common lawsuit was and is to protect those
immunized from litigation outside the Workers' Compensation System
except as expressly provided in this chapter; that, in enacting the
immunity provisions of this chapter, the Legislature intended to
create a legislative standard for loss of that immunity of more
narrow application and containing more specific mandatory elements
than the Common Law Tort System concept and standard of willful,
wanton and reckless misconduct; and that it was and is the
legislative intent to promote prompt judicial resolution of the
question of whether a suit prosecuted under the asserted authority
of this section is or is not prohibited by the immunity granted
under this chapter.
(2) The immunity from suit provided under this section six and
under section six-a, article two of this chapter may be lost only
if the employer or person against whom liability is asserted acted
with "deliberate intention". This requirement may be satisfied
only if:
(i) It is proved that the employer or person against whom liability is asserted acted with a consciously, subjectively and
deliberately formed intention to produce the specific result of
injury or death to an employee. This standard requires a showing
of an actual, specific intent and may not be satisfied by
allegation or proof of: (A) Conduct which produces a result that
was not specifically intended; (B) conduct which constitutes
negligence, no matter how gross or aggravated; or (C) willful,
wanton or reckless misconduct; or
(ii) The trier of fact determines, either through specific
findings of fact made by the court in a trial without a jury, or
through special interrogatories to the jury in a jury trial, that
all of the following facts are proven:
(A) That a specific unsafe working condition existed in the
workplace which presented a high degree of risk and a strong
probability of serious injury or death;
(B) That the employer, prior to the injury, had a subjective
realization and an appreciation of the existence of actual
knowledge of the specific unsafe working condition and of the high
degree of risk and the strong probability of serious injury or
death presented by the specific unsafe working condition;
(C) That the specific unsafe working condition was a violation
of a state or federal safety statute, rule or regulation, whether
cited or not, or of a commonly accepted and well-known safety
standard within the industry or business of the employer, as demonstrated by competent evidence of written standards or
guidelines which reflect a consensus safety standard in the
industry or business, which statute, rule, regulation or standard
was specifically applicable to the particular work and working
condition involved, as contrasted with a statute, rule or
regulation or standard generally requiring safe workplaces,
equipment or working conditions;
(D) That notwithstanding the existence of the facts set forth
in subparagraphs (A) through (C), inclusive, of this paragraph, the
employer nevertheless intentionally thereafter exposed an employee
to the specific unsafe working condition; intentionally; and
(E) That the employee exposed suffered serious compensable
injury or compensable death, as defined in section one, article
four, chapter twenty-three of this code, whether a claim for
benefits under this chapter is filed or not, as a direct and
proximate result of the specific unsafe working condition.
(iii) In cases alleging liability under the provisions of
paragraph (ii) of this subdivision:
(A) No punitive or exemplary damages shall be awarded to the
employee or other plaintiff;
(B) Notwithstanding any other provision of law or rule to the
contrary, and consistent with the legislative findings of intent to
promote prompt judicial resolution of issues of immunity from
litigation under this chapter, the court shall dismiss the action upon motion for summary judgment if it finds, pursuant to rule 56
of the rules of civil procedure that one or more of the facts
required to be proved by the provisions of subparagraphs (A)
through (E), inclusive, paragraph (ii) of this subdivision do not
exist, and the court shall dismiss the action upon a timely motion
for a directed verdict against the plaintiff if after considering
all the evidence and every inference legitimately and reasonably
raised thereby most favorably to the plaintiff, the court
determines that there is not sufficient evidence to find each and
every one of the facts required to be proven by the provisions of
subparagraphs (A) through (E), inclusive, paragraph (ii) of this
subdivision; and
(C) The provisions of this paragraph and of each subparagraph
thereof are severable from the provisions of each other
subparagraph, subsection, section, article or chapter of this code
so that if any provision of a subparagraph of this paragraph is
held void, the remaining provisions of this act and this code
remain valid.
(e) The reenactment of this section in the regular session of
the Legislature during the year one thousand nine hundred
eighty-three does not in any way affect the right of any person to
bring an action with respect to or upon any cause of action which
arose or accrued prior to the effective date of the reenactment.
(e) It is the intent of the Legislature that the enactment of this section during the two thousand five legislative session shall
be effective to all injuries which occurred on or after the
effective date.
CHAPTER 33. INSURANCE.
ARTICLE 2. INSURANCE COMMISSIONER.
§33-2-16. Office of Consumer Advocacy established; director of
consumer advocacy; promulgation of rules and
regulations.
(a) There is hereby created within the agency of the Insurance
Commissioner the Office of Consumer Advocacy. The position of
Director of the Office of Consumer Advocacy shall be is a full-time
position. and The director shall be appointed by the commissioner
Governor for a term of four years to coincide with the term of the
Governor and may be discharged only for failure to carry out the
duties of the office or for other good and sufficient cause:
Provided, That the current Director of Consumer Advocacy or other
appointee of the Commissioner shall continue in the position until
the Governor appoints a new Director.
(b) The Insurance Commissioner shall provide office space,
equipment and supplies for the office.
(c) The Director shall may promulgate rules pursuant to
article three, chapter twenty-nine-a of this code, in order to
effect the purposes of this section, section seventeen and section
eighteen of this article.
(d) On or before the first day of each regular session of the Legislature, the Director shall file with the Governor, the clerk
of the Senate and the clerk of the House of Delegates, a report
detailing the actions taken by the division in the preceding
calendar year.
§33-2-17. Authority of Office of Consumer Advocacy; retroactive
effect of authority prohibited.
(a) In addition to the authority established under the rules
promulgated by the Director, the Office of Consumer Advocacy is
authorized to:
(1) Institute, intervene in, or otherwise participate in, as
an advocate for the public interest and the interests of insurance
consumers, proceedings in state and federal courts, before
administrative agencies, or before the Health Care Cost Review
Authority, concerning applications or proceedings before the Health
Care Cost Review Authority or the review of any act, failure to
act, or order of the Health Care Cost Review Authority;
(2) At the request of one or more policyholders, or whenever
the public interest is served, to advocate the interests of those
policyholders in proceedings arising out of any filing made with
the Insurance Commissioner by any insurance company or relating to
any complaint alleging an unfair or deceptive act or practice in
the business of insurance;
(3) Institute, intervene in, or otherwise participate in, as
an advocate for the public interest and the interests of insurance
consumers, proceedings in state and federal courts, before
administrative agencies, or before the Insurance Commissioner, concerning applications or proceedings before the Commissioner or
the review of any act, failure to act, or order of the Insurance
Commissioner;
(4) Review and compile information, data and studies of the
reasonable and customary rate schedules of health care providers
and health insurers, for the purposes of reviewing, establishing,
investigating, or supporting any policy regarding health care
insurance rates;
(5) Exercise all the same rights and powers regarding
examination and cross-examination of witnesses, presentation of
evidence, rights of appeal and other matters as any party in
interest appearing before the Insurance Commissioner or the Health
Care Cost Review Authority;
(6) Hire consultants, experts, lawyers, actuaries, economists,
statisticians, accountants, clerks, stenographers, support staff,
assistants, and other personnel necessary to carry out the
provisions of this section and sections sixteen and eighteen of
this article, which personnel shall be paid from special revenue
funds appropriated for the use of the office;
(7) Contract for the services of technically qualified persons
in the area of insurance matters to assist in the preparation and
presentation of matters before the courts, the Insurance
Commissioner, administrative agencies, or the Health Care Cost
Review Authority, which persons shall be paid from special revenue
funds appropriated for the use of the office;
(8) Make recommendations to the Legislature concerning legislation to assist the office in the performance of its duties;
(9) Communicate and exchange data and information with other
federal or state agencies, divisions, departments, or officers, and
with other interested parties including, but not limited to, health
care providers, insurance companies, consumers or other interested
parties; and
(10) Perform other duties to effect the purposes of the
office.
(b) The provisions of this section do not apply to any filing
made by an insurance company, or act or order performed or issued
by the Commissioner, or complaint filed by a policyholder with the
Commissioner prior to the thirtieth day of June, one thousand nine
hundred ninety-one. All proceedings and orders in connection with
these prior matters shall be governed by the law in effect at the
time of the filing, or performance or issuance of the act or order.
(c) The scope of authority granted under this section and
section sixteen of this article is restricted to matters related to
health care costs and health insurance policies, subscriber
contracts issued by organizations under article twenty-four of this
chapter, health care corporations under article twenty-five of this
chapter, health maintenance organizations under article
twenty-five-a of this chapter, contracts supplemental to health
insurance policies, and other matters related to health insurance
issues identified by rules of the commissioner promulgated under
section one of this article and chapter twenty-nine-a of this code.
ARTICLE 11. UNFAIR TRADE PRACTICES.
§33-11-4a. Complaints by third party claimants; elimination of
private cause of action.
Prior to the effective date of this bill, an insurer may elect
an alternative method of resolution of third-party complaints and,
if so elected, the following provisions apply to all third-party
claims and actions against an insurer for a violation of this
article: Provided, That the insurer files for, and obtains,
approval for reduced rates which the Commissioner shall determine
reflect appropriate adjustments for the savings in the cost of
litigation and damage exposure under current law with respect to
each such coverage:
(1) A cause of action by a third-party for a violation of this
article does not arise and a complaint may not be filed until the
underlying action or claim is resolved and all appeals are
exhausted.
(2) A complaint alleging a third-party cause of action under
the provisions of this article shall contain specific factual
allegations setting forth the violations of this article which
constitute a general business practice. Any third-party complaint
failing to specifically allege each fact necessary to support a
prima facie cause of action shall be dismissed by the court.
(3) Notwithstanding any provision of the law to the contrary,
the standard of proof in actions alleging a third-party cause of
action shall be clear and convincing evidence.
(4) For a violation of this article to be such or to be
sufficient significance to support a finding of bad faith:
(A) It must be a violation of a substantive statute, rule or
regulation rather than a merely procedural statute, rule or
regulation; and
(B) It must be sufficiently related as to time and type of
behavior to the act allegedly committed against the plaintiff as to
constitute pattern of practice if committed on two or more
occasions.
(5) Unless reversed on appeal, a judgment in favor of a
defendant in any civil action extinguishes all related claims and
actions for violation of the provisions of this article.
(6) The settlement of any claim or action may include
settlement of all potential third-party claims or actions which are
related thereto or which may arise therefrom. A release given in
consideration for settlement of a claim or action may include a
release of any and all persons who may be potentially liable for
violations of this article arising out of or related to the
underlying claim or action which was settled and released.
§33-11-6. Violations, cease and desist and penalty orders and
modifications thereof.
If, after notice and hearing, the Commissioner determines that
any person has engaged in or is engaging in any method of
competition, act or practice in violation of the provisions of this article or any rules or regulations promulgated by the Commissioner
thereunder, the Commissioner shall issue an order directing such
person to cease and desist from engaging in such method of
competition, act or practice, and in addition thereto, the
Commissioner may at his or her discretion order any one or more of
the following:
(a) Require the payment to the State of West Virginia of a
penalty in a sum not exceeding one thousand dollars for each and
every act or violation, but not to exceed an aggregate penalty of
ten thousand dollars, unless the person knew or reasonably should
have known he or she was in violation of this article, in which
case the penalty shall be not more than five thousand dollars for
each and every act or violation, but not to exceed an aggregate
penalty of fifty one hundred thousand dollars in any six-month
period.
(b) In the event the act involves an intentional violation of
subdivision (9), section four of this article, and even though it
has not been established that the person engaged in a general
business practice, require the payment to the State of West
Virginia of a penalty in a sum not to exceed ten thousand dollars.
(c) Require the payment to the State of West Virginia of a
penalty in a sum not exceeding two hundred fifty thousand dollars
if the Commissioner finds that the insurer committed or performed
such unfair claims settlement practices with such frequency as to indicate a general business practice.
(b) (d) Revoke or suspend the license of such person if he or
she knew, or reasonably should have known, that he or she was in
violation of this article.
(e) Any person aggrieved by an order of the Commission under
this article may seek judicial review of such order as is provided
in section fourteen, article two of this chapter.
(c) (f) No order of the Commissioner pursuant to this article
or order of court to enforce it, or holding of a hearing, shall in
any manner relieve or absolve any person affected by such order or
hearing from any other liability, penalty or forfeiture under law.
ARTICLE 20. RATES AND RATING ORGANIZATIONS.
§33-20-4. Rate filings.
(a) On or before the first day of July, two thousand five, the
Commissioner shall promulgate legislative rules pursuant to article
three, chapter twenty-nine-a of this code establishing procedures
whereby each insurer providing five percent or more of insurance
coverage in this state for private passenger automobile insurance
and property insurance obtained for personal or family needs shall
biannually submit rate filings required under this section:
Provided, That the requirements under this subsection shall
terminate on the first day of July, two thousand nine.
(a) (b) (1) Every insurer shall file with the Commissioner
every manual of classifications, territorial rate areas established
pursuant to subdivision (2), subsection (c), section three of this article, rules and rates, every rating plan and every modification
of any of the foregoing which it proposes to use for casualty
insurance to which this article applies.
(2) Every insurer shall file with the Commissioner, except as
to inland marine risks which by general custom of the business are
not written according to manual rates or rating plans, every
manual, minimum, class rate, rating schedule or rating plan and
every other rating rule and every modification of any of the
foregoing which it proposes to use for fire and marine insurance to
which this article applies. Specific inland marine rates on risks
specially rated, made by a rating organization, shall be filed with
the Commissioner.
(b) (c) Every such filing shall state the proposed effective
date thereof and shall indicate the character and extent of the
coverage contemplated. When a filing is not accompanied by the
information upon which the insurer supports such filing, and the
Commissioner does not have sufficient information to determine
whether such filing meets the requirements of this article, he or
she shall require such insurer to furnish the information upon
which it supports such filing and in such event the waiting period
shall commence as of the date such information is furnished. The
information furnished in support of a filing may include: (1) The
experience or judgment of the insurer or rating organization making
the filing; (2) the experience or judgment of the insurer or rating
organization in the territorial rate areas established by
subdivision (2), subsection (c), section three of this article; (3) its interpretation of any statistical data it relies upon; (4) the
experience of other insurers or rating organizations; or (5) any
other relevant factors. A filing and any supporting information
shall be open to public inspection as soon as the filing is
received by the Commissioner. Any interested party may file a
brief with the Commissioner supporting his or her position
concerning the filing. Any person or organization may file with
the Commissioner a signed statement declaring and supporting his or
her or its position concerning the filing. Upon receipt of such
statement prior to the effective date of the filing, the
Commissioner shall mail or deliver a copy of such statement to the
filer, which may file such reply as it may desire to make. This
section shall not be applicable to any memorandum or statement of
any kind by any employee of the Commissioner.
(c)
(d)
An insurer may satisfy its obligation to make such
filing by becoming a member of, or a subscriber to, a licensed
rating organization which makes such filings, and by authorizing
the Commissioner to accept such filings on its behalf: Provided,
That nothing contained in this article shall be construed as
requiring any insurer to become a member of or a subscriber to any
rating organization.
(d)
(e)
The Commissioner shall review filings as soon as
reasonably possible after they have been made in order to determine
whether they meet the requirements of this article.
(e)
(f)
Subject to the exceptions specified in subsections (f)
(g) and (g) (h) of this section, each filing shall be on file for a waiting period of sixty days before it becomes effective. Upon
written application by such insurer or rating organization, the
Commissioner may authorize a filing which he or she has reviewed to
become effective before the expiration of the waiting period. A
filing shall be deemed to meet the requirements of this article
unless disapproved by the Commissioner within the waiting period.
(f)
(g)
Any special filing with respect to a surety bond
required by law or by court or executive order or by order, rule or
regulation of a public body, not covered by a previous filing,
shall become effective when filed and shall be deemed to meet the
requirements of this article until such time as the Commissioner
reviews the filing and so long thereafter as the filing remains in
effect.
(g)
(h)
Specific inland marine rates on risks specially rated
by a rating organization shall become effective when filed and
shall be deemed to meet the requirements of this article until such
time as the Commissioner reviews the filing and so long thereafter
as the filing remains in effect.
(h)
(i)
Under such rules and regulations as he or she shall
adopt, the Commissioner may, by written order, suspend or modify
the requirement of filing as to any kind of insurance, subdivision
or combination thereof, or as to classes of risks, the rates for
which cannot practicably be filed before they are used. Such
orders, rules and regulations shall be made known to insurers and
rating organizations affected thereby. The Commissioner may make
such examination as he or she may deem advisable to ascertain whether any rates affected by such order meet the standards set
forth in subsection (b), section three of this article.
(
i)
(j)
Upon the written application of the insured, stating
his or her reasons therefor, filed with and approved by the
Commissioner, a rate in excess of that provided by a filing
otherwise applicable may be used on any specific risks.
(j)
(k)
No insurer shall make or issue a contract or policy
except in accordance with the filings which are in effect for said
insurer as provided in this article or in accordance with
subsection (h) (i) or (i) (j) of this section. This subsection
shall not apply to contracts or policies for inland marine risks as
to which filings are not required.
(k)
(l)
In instances when an insurer files a request for an
increase of automobile liability insurance rates in the amount of
fifteen percent or more, the Insurance Commissioner shall provide
notice of such increase with the office of the Secretary of State
to be filed in the State Register and shall provide interested
persons the opportunity to comment on such request up to the time
the Commissioner approves or disapproves such rate increase.
CHAPTER 55. ACTIONS, SUITS AND ARBITRATION;
JUDICIAL SALE.
ARTICLE 7. ACTIONS FOR INJURIES.
§55-7-23. Apportionment of damages.
(a) In any cause of action involving the tortuous conduct of
more than one defendant, the trial court shall:
(1) Instruct the jury to determine, or, if there is no jury, find, the total amount of damages sustained by the claimant and the
proportionate fault of each of the parties in the litigation at the
time the verdict is rendered; and
(2) Enter judgment against each defendant found to be liable
on the basis of the rules of joint and several liability, except
that if any defendant is less than twenty-five percent or less at
fault, then that defendant's liability shall be several, and not
joint, and he or she shall be liable only for the damages
attributable to him or her, except as otherwise provided in this
section.
(b) Notwithstanding subdivision (2) of subsection (a) of this
section, the rules of joint and several liability shall apply to:
(1) Any party who acted with the intention of inflicting
injury or damage;
(2) Any party who acted in concert with another person as part
of a common plan or design resulting in harm;
(3) Any party who negligently or willfully caused the unlawful
emission, disposal or spillage of a toxic or hazardous substance;
or
(4) Any party strictly liable for the manufacture and sale of
a defective product.
(c) Notwithstanding subdivision (2) of subsection (a) of this
section, if a claimant through good faith efforts is unable to
collect from a liable defendant, the claimant may, not later than
six months after judgment becomes final through lapse of time for
appeal or through exhaustion of appeal, whichever occurs later, move for reallocation of any uncollectible amount among the other
parties in the litigation at the time the verdict is rendered.
(1) Upon the filing of such a motion, the court shall
determine whether all or part of a defendant's proportionate share
of the verdict is uncollectible from that defendant and shall
reallocate such uncollectible amount among the other parties in the
litigation at the time the verdict is rendered.
(2) If such a motion is filed, the parties may conduct
discovery on the issue of collectability prior to a hearing on such
motion.
(3) Any order regarding such motion shall be entered within
one hundred twenty days after the date of filing such a motion.
(4) A defendant's share of the obligation to a claimant may
not be increased by reason of reallocation under this subsection
if:
(A) The percentage of fault of that defendant is equal to or
less than the claimant's percentage of fault; or
(B) The percentage of fault of that defendant is less than ten
percent.
(5) A party whose liability is reallocated is nonetheless
subject to contribution and to any continuing liability to the
claimant on the judgment.
(6) If any defendant's share of the obligation to a claimant
is not increased by reason of the application of subdivision (4) of
this subsection, the amount of that defendant's share of the
reallocation shall be considered uncollectible and shall be reallocated among all other parties who are not subject to
subdivision (4) of this subsection, including the claimant, in the
same manner as otherwise provided this subsection.
(d) Nothing in this section may be construed to affect, impair
or abrogate any right of indemnity or contribution arising out of
any contract or agreement or any right of indemnity otherwise
provided by law.
(e) Nothing in this section creates or recognizes, either
explicitly or impliedly, any new or different cause of action not
otherwise recognized by law.
(f) Nothing in this section may be construed to affect, impair
or abrogate the provisions of section seven, article twelve-a,
chapter twenty-nine of this code or section nine, article seven-b,
chapter fifty-five of this code.
(g) This section applies only to causes of action that accrue
on or after the first day of July, two thousand five.
NOTE: The purpose of this bill is to provide for insurance
reform by expanding and providing for funding, and expanded powers
for the office of consumer advocacy; to eliminate a cause of action
for an unfair claims settlement practice by third parties; to
provide administrative remedies for such third parties and provide
for greater administrative penalties for unfair claims settlement
practices; to provide for biannual rate filings by certain
insurers; and to limit an insurer from including certain expenses
in a rate base.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§33-11-4a and §55-7-23 are new; therefore, strike-throughs
and underscoring have been omitted.