Committee Substitute House Bill 4260 History

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HB4260 SUB


H. B. 4260

(By Delegates Perry, Ashley)

[By Request of the Insurance Commissioner]

(Originating in the Committee on the Judiciary)

[February 26, 2010]

A BILL to repeal §33-12B-2 and §33-12B-13 of the Code of West Virginia, 1931, as amended; to amend and reenact §33-12B-1, §33-12B-3, §33-12B-5, §33-12B-9, and 33-12B-11 of said code; to amend said code by adding thereto a new section, designated §33-12B-10a, all relating to insurance adjusters; defining "home state", "company adjuster" and "crop adjuster"; permitting an adjuster to designate a home state; establishing a new crop adjuster license and its qualifications; revising the requirements for nonresident adjusters; granting the Commissioner of Insurance the authority to examine the business practices of persons holding or applying for adjuster licenses; revising the licensing renewal requirements; requiring notification by adjusters of legal actions taken against them; clarifying the process to be used concerning adverse administrative actions; and increasing maximum administrative penalty for violations.

Be it enacted by the Legislature of West Virginia:
That §33-12B-2 and §33-12B-13 of the Code of West Virginia, 1931, as amended, be repealed; that §33-12B-1, §33-12B-3, §33-12B-5, §33-12B-9,§33-12B-10 and §33-12B-11 of said code be amended and reenacted; that said code be amended by adding thereto a new section, designated §33-12B-10a, all to read as follows:
§33-12B-1. Definitions.
(a) An "adjuster" is any individual who, for compensation, fee or commission, investigates and settles claims arising under property, casualty or surety insurance contracts, on behalf solely of either the insurer or insured. A licensed attorney who is qualified to practice law in this state is deemed not to be an adjuster for the purposes of this article.
(b) "Company adjuster" means an adjuster representing the interests of the insurer, including an independent contractor and a salaried employee of the insurer.
(c) "Home state" means the District of Columbia or any state or territory of the United States in which an adjuster maintains his or her principal place of residence or business and in which he or she is licensed to act as a resident adjuster. If a person's principal place of residence or business does not license adjusters for the type of adjuster license sought in this state, he or she shall designate as his or her home state any state in which he or she has such a license.
(d) "Public adjuster" means an independent contractor representing solely the financial interests of the insured named in the policy.
(e) "Crop adjuster" means a person who adjusts crop insurance claims under the federal crop insurance program administered by the United States Department of Agriculture.
§33-12B-3. Company, public and crop adjusters; concurrency; direct conflict prohibited.
The commissioner shall license an individual as either a company adjuster, or a public adjuster An or crop adjuster. An individual may be licensed concurrently under the same license or separate licenses as a company adjuster and as a public adjuster but shall not act as a company an adjuster and a public adjuster representing the interests of the insured and the insurer with respect to the same claim.
§33-12B-5. Qualifications for adjuster's license; examinations; exemptions.
(a) For the protection of the people of West Virginia, the commissioner shall not issue, renew or permit to exist any adjuster's license, except to an individual who:
(1) Is eighteen years of age or more.
(2) Is a resident of West Virginia, except for nonresident adjusters as provided in section nine of this article.
(3) Satisfies the commissioner that he or she is trustworthy and competent.
(b) For purposes of subdivision (3) of subsection (a) herein, the (b)(1) The commissioner may, at his or her discretion, test the competency of an applicant for a license under this section by examination. However, in order to qualify for a crop adjuster license, an applicant must pass a written examination that tests the knowledge of the individual concerning the insurance laws of this state and the duties and responsibilities of a multi-peril crop adjuster. In lieu of such an examination, the commissioner may accept certification that the individual has passed a proficiency examination approved by the federal Risk Management Agency.
(2) If such an examination is required by the commissioner, each examinee shall pay a $25 examination fee for each examination to the commissioner, which fees shall be used for the purposes set forth in section thirteen, article three of this chapter. The commissioner may, at his or her discretion, designate an independent testing service to prepare and administer such examination subject to direction and approval by the commissioner, and examination fees charged by such service shall be paid by the applicant.
(c) Any applicant who is engaged in the practice of professional insurance adjusting prior to the first day of July, one thousand nine hundred eighty-nine, shall be exempt from the examination requirement of subsection (b) of this section (d) The requirements of this section shall do not apply to licenses issued to emergency adjusters. as defined in section eleven-a of this article.
§33-12B-9. Licensing of nonresident adjusters.
An individual otherwise complying with the provisions of this chapter, who is a resident of another state and who is a licensed adjuster of such A nonresident applicant for an adjuster license who holds a similar license in his or her home state may be licensed as a nonresident adjuster in this state if the applicant's home state of resident of such nonresident has established, by law or regulation like requirements for the licensing of a resident of this state as a nonresident adjuster.
(b) As a condition of continuing a nonresident adjuster license, the licensee must maintain a license in his or her home state.
(c) If a nonresident adjuster desires to become a resident adjuster he or she must apply to become one within ninety days of establishing legal residency in this state.
(d) If a nonresident adjuster has his or her license suspended, terminated or revoked by his or her home state, the adjuster must immediately notify the commissioner of that action.
§33-12B-10. Expiration of license; renewal.
(a) All licenses of adjusters shall expire at midnight on the May 31 next following the date of issuance The and the commissioner shall renew annually the license of all such licensees who qualify and make application therefor. However, the commissioner may, in his or her discretion, establish the dates of expiration of licenses in any manner deemed advisable for an efficient distribution of the workload of his or her office.
(b) An adjuster whose license expires may, if application is made within one year of the expiration date, be reissued a license upon payment of twice the renewal fee.
(c) The commissioner may waive any renewal requirement for any adjuster who is unable to comply due to military service, long-term medical disability or other extenuating circumstance.
(d) As a condition of the renewal of a crop adjuster license, the commissioner may require that the licensee demonstrate that he or she has maintained certification of proficiency issued or approved by the federal Risk Management Agency.
§33-12B-10a. Reporting of actions.
(a) An adjuster shall report to the commissioner any administrative action taken against the adjuster in another jurisdiction or by another governmental agency in this state within thirty days of the final disposition of the matter, including decertification or other action related to the adjuster's proficiency to adjust multi-peril crop insurance claims. The report shall include a copy of the order, consent to order and any other relevant legal documents.
(b) Within thirty days of the initial pretrial hearing date, an adjuster shall report to the commissioner any criminal prosecution of the adjuster in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing and any other relevant legal documents.
§33-12B-11. Denial, revocation, suspension, probation or refusal to renew license; penalties.

(a) The commissioner may examine and investigate the business affairs and conduct of persons applying for or holding an adjuster license to determine whether such person is trustworthy and competent or has been or is engaged in any violation of the insurance laws or rules of this state or in any unfair or deceptive acts or practices in any state. (b) If the commissioner denies an application for a license, he or she shall notify the applicant or licensee in writing of the reason for such action. The applicant or licensee may, within ten days of receipt of such notice, make written demand for a hearing before the commissioner to determine the reasonableness of the action, and such hearing shall be held in accordance with the provisions of section thirteen, article two of this chapter.
(c) Whenever, after notice and hearing, the commissioner is satisfied that any adjuster has violated any provision of this chapter or of rules promulgated hereunder, or is incompetent or untrustworthy, he or she shall place the adjuster on probation or revoke, suspend, or, if renewal of license is pending, refuse to renew the license of such adjuster. In addition to placing a licensee on probation or revoking, suspending or refusing to renew such his or her license, the commissioner may in his or her discretion order such licensee to pay to the state of West Virginia an administrative penalty in a sum not to exceed $1000 for each violation. Upon the failure of the licensee to pay such penalty within thirty days, his or her license shall be revoked or suspended by the commissioner.
(d) Orders issued pursuant to subsection (b) or (c) of this section are subject to the judicial review provisions of section fourteen, article two of this chapter.

NOTE: The purpose of this bill is to revise the provisions affecting insurance adjusters. The bill defines "home state" and permits an adjuster to designate a home state. The bill establishes a new crop adjuster license and sets forth its qualifications. The bill revises the requirements for nonresident adjusters. The bill also grants the Commissioner of Insurance with the authority to examine the business practices of persons who hold or apply for adjuster licenses. Further, the bill revises the licensing renewal requirements. The bill requires notification by adjusters of legal actions taken against them. The bill clarifies the process to be used concerning adverse administrative actions and increases the maximum administrative penalty for violations.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added
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