H. B.2632
(By Delegates H.K. White, R.M. Thompson, Hrutkay,
Perry, Azinger and G. White)
[Introduced February 24, 2005; referred to the Committee on
Banking and Insurance then the Judiciary.]
A BILL to amend and reenact §33-6-8 of the code of West Virginia,
1931, as amended; to amend and reenact §33-16B-1 and §33-16B-3
of said code; to amend and reenact §33-17-8 of said code; and
to amend and reenact §33-20-4 of said code, all relating to
the filing of insurance rates and forms; exempting commercial
lines from the requirement of prior approval of rates and
forms; creating a presumption of prospective relief when forms
are disapproved and providing factors to be considered in
determining whether relief should be retroactive; defining
terms; clarifying that certain health insurance forms marketed
to associations must be filed with the commissioner; providing
that commercial and certain health insurance forms marketed to
associations are effective upon first use after filing;
clarifying that prior rate approval applies to health
insurance certificates and endorsements; certain all
certificates and providing that commercial lines rates are not subject to prior approval.
Be it enacted by the Legislature of West Virginia:
That §33-6-8 of the code of West Virginia, 1931, as amended,
be amended and reenacted; that §33-16B-1 and §33-16B-3 of said code
be amended and reenacted; that §33-17-8 of said code be amended and
reenacted; and that §33-20-4 of said code be amended and reenacted,
all to read as follows:
ARTICLE 6. THE INSURANCE POLICY.
§33-6-8. Filing of forms.
(a)
Except as provided in section eight, article seventeen of
this chapter (fire and marine forms), no No insurance policy form,
no group certificate form, no insurance application form where
written application is required and is to be made a part of the
policy, and no rider, endorsement or other form to be attached to
any policy, shall be delivered or issued for delivery in this state
by an insurer unless it has been filed with
the commissioner and,
to the extent required by paragraph (1), subsection (b) of this
section, approved by the commissioner, except that as to group
insurance policies delivered outside this state, only the group
certificates to be delivered or issued for delivery in this state
shall be filed for approval with the commissioner. This section
shall not apply to policies, riders, endorsements or forms of
unique character designed for and used with relation to insurance
upon a particular subject, or which relate to the manner of distribution of benefits or to the reservation of rights and
benefits under life or accident and sickness insurance policies,
and are used at the request of the individual policyholder,
contract holder or certificate holder, nor to the surety bond forms.
(b) Every such filing
shall be made specified in subsection
(a) of this section shall be subject to the following:
(1) Forms for personal lines shall be filed not less than
sixty days in advance of any such delivery
At and at the
expiration of such sixty days,
unless such period has been extended
by the commissioner for the purpose of obtaining additional
information from the insurer, the form so filed shall be deemed
approved unless prior thereto it has been affirmatively approved or
disapproved by the commissioner. Approval of any such form by the
commissioner shall constitute a waiver of any unexpired portion of
such waiting period.
The commissioner may at any time, after
notice and for cause shown, withdraw any such approval.
(2) Forms for (A) commercial lines property and casualty
risks and (B) any mass marketed life and/or health insurance policy
offered to members of any association by the association, need not
be approved by the commissioner prior to use, although the
commissioner may at any time request information to ensure
compliance with applicable statutory provisions or to disapprove
form filings not in compliance with applicable statutory provisions
within the first thirty days after receipt of the form filing. If the commissioner does not disapprove the filing within such thirty
day period, the form filing is effective upon first usage after
filing.
(c) Any order of the commissioner disapproving any such form
or withdrawing a previous approval shall state the grounds
therefor.
(c) 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, with respect to
a filing involving personal lines risks, commence as of the date
such information is furnished: Provided, That the commissioner may
request additional information after the initial sixty-day period
(with respect to personal lines) or thirty-day period (with respect
to commercial lines and mass-marketed life and/or health insurance
to associations) to ensure continuing compliance with applicable
statutory provisions and may at any time, after notice and for
cause shown, withdraw any approval or disapprove any filing:
Provided, however, That any disapproval by the commissioner of any
such form or withdrawal of a previous approval shall state the
grounds therefor.
(d) Any disapproval by the commissioner or withdrawal of prior approval is presumed to be prospective only and shall not
affect the validity of forms already in use unless the commissioner
determines that retroactive action is necessary after consideration
of the nature and extent of harm to the consumers if the forms in
use are permitted to remain in use, whether any violation of law
by the insurer was willful, and the costs to the insurer.
(d)(e) The commissioner may, by order, exempt from the
requirements of this section for so long as he
or she deems proper
any insurance document or form or type thereof as specified in such
order, to which, in his
or her opinion, this section may not
practicably be applied, or the filing and approval of which are, in
his
or her opinion, not desirable or necessary for the protection
of the public.
(e)(f) Notwithstanding any other provisions of this section,
any mass marketed life and/or health insurance policy offered to
members of any association by the association shall be exempt from
the provision requiring prior approval under this section:
Provided, That for For purposes of this section:
the association
shall
(1) An association must have a minimum of sixty-one members
at the outset of the issuance of the mass marketed life and/or
health insurance policy and shall have been organized and
maintained in good faith for purposes other than that of obtaining
or providing insurance.
Provided, however, That the The association shall also have been in active existence for at least
two years and shall have a constitution and bylaws which provide
that: (1) The association holds annual meetings to further purposes
of its members; (2) except in the case of credit unions, the
association collects dues or solicits contributions from members;
and (3) the members have voting privileges and representation on
the governing board and committees that exist under the authority
of the association:
Provided, further, That upon written
application by an association and for good cause shown, the
commissioner may grant an exemption to the association from the
minimum member requirements of this section.
(2) "Commercial lines" means insurance for business and
professional interests, except that it does not include medical
malpractice insurance.
(3) "Personal lines" means insurance for personal, family or
household needs.
(f)(g) This section shall apply also to any form used by
domestic insurers for delivery in a jurisdiction outside West
Virginia, if the insurance supervisory official of such
jurisdiction informs the commissioner that such form is not subject
to approval or disapproval by such official, and upon the
commissioner's order requiring the form to be submitted to him
or
her for
the that purpose. The applicable same standards shall
apply to such forms as apply to forms for domestic use.
ARTICLE 16B. ACCIDENT AND SICKNESS RATES.
§33-16B-1. Filing and approval of accident and sickness rates.
Premium rate charges for any individual
or group accident and
sickness insurance policy,
or for any group accident and sickness
insurance policy issued pursuant to this chapter certificate or
other evidence of insurance issued, endorsed, or delivered in this
state shall be filed with the commissioner for a waiting period of
sixty days before such charges become effective. At the expiration
of such sixty days the premium rate charges so filed shall be
deemed approved unless prior thereto the charges have been
affirmatively approved or disapproved by the commissioner.
The commissioner shall disapprove accident and health
insurance premium rates which are not in compliance with the
requirements of this chapter or any rule promulgated by the
commissioner pursuant to section two of this article. The
commissioner shall send written notice of such disapproval to the
insurer. The commissioner may approve the premium rates before the
sixty-day period expires by giving written notice of approval.
§33-16B-3. Exceptions.
This article shall not apply to
policies issued to group
accident and health insurance plans upon which premiums are
negotiated with the
individual group policyholder and are
based on
the historic and projected loss experience of the group to be
insured experienced rated.
ARTICLE 17. FIRE AND MARINE INSURANCE.
§33-17-8. Filing of forms.
(a) No fire or marine policy, rider, or endorsement to be
attached to any policy, covering any risk located or to be
performed in West Virginia shall be delivered or issued for
delivery in this state unless
either that form is (1) filed with
and approved by the commissioner,
or (2) conforms to applicable
rules approved by the commissioner or is identical as to language
to a policy, rider or endorsement approved by the commissioner
, or
(3) qualifies under subsection (c) of this section. If the use of
any such form under the provisions of clause (2) above by any
insurer or by the members and subscribers of any rating
organization shall be so extensive that in the opinion of the
commissioner the public interest requires, the commissioner may
require that such form be filed with him
or her by such insurer or
by such rating organization on behalf of its members and subscribers.
(b) The procedure for filing and approval or disapproval of
forms under this section shall be that provided in
paragraphs (b),
(c), (d), and (e) of section eight,
of article six of this chapter.
Grounds for disapproval shall be those set forth in section nine,
of article six of this chapter. Such filings may be made on behalf
of any insurer by a rating organization licensed as such under the
provisions of article twenty of this chapter. This section shall
not apply to ocean marine policies, riders or endorsements, or to forms on specially rated inland marine risks.
(c) For commercial lines risks, a fire or marine policy,
rider, or endorsement is subject to the provisions of section six,
article eight of this chapter governing other commercial lines form
filings.
ARTICLE 20. RATES AND RATING ORGANIZATIONS.
§33-20-4. Rate filings.
(a)(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) 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
,
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) 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) 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) Subject to the exceptions specified in subsections (f),
and (g)
and (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) 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) 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) Rates for commercial lines property and casualty risks
must be filed with the commissioner and such filings need not be
approved by the commissioner. The commissioner may request
additional information to ensure compliance with applicable
statutory standards, but if the commissioner does not disapprove
the filing within the initial thirty-day period after receipt, the
rate filing will become effective upon first usage after filing:
Provided, That the commissioner may at any time thereafter, after
notice and for cause shown, disapprove any rate filing.
(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) or (i) 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.
(m) For purposes of this section, "commercial" is defined as
insurance for business and professional interests.
NOTE: The purpose of this bill is to amend the insurance code
to discontinue the use of the prior approval system of rate and
form filings for most commercial insurance line risks. In lieu of the aforementioned system, this bill will establish a file and use
system, while reserving the right for the commissioner to request
additional information or to disapprove filings altogether if not
meeting statutorily applicable provisions. These amendments are
intended to create long-term effects in the commercial lines
insurance market, by foregoing such strenuous methods of approval,
and thereby encouraging insurers to enter into the West Virginia
market to do business.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.