H. B. 2503
(By Delegates Kominar, Frederick, Hartman, Long, Tabb,
Ron Thompson and H.K. White)
[Introduced February 18, 2005; referred to the Committee the
Judiciary.]
A BILL to amend the code of West Virginia, 1931, as amended, by
adding thereto three new sections, designated §33-17A-4a, §33-
17A-4b and §33-17A-4c, relating to providing an alternative
method for nonrenewal of property insurance; manner of
electing alternative method; and requiring report to the
Legislature.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended
by adding thereto three new sections, designated §33-17A-4a, §33-
17A-4b and §33-17A-4c, all to read as follows:
ARTICLE 17A. PROPERTY INSURANCE DECLINATION, TERMINATION AND
DISCLOSURE.
§33-17A-4a. Alternative method for nonrenewal for property
insurance.
(a) On or after the first day of July, two thousand five, an insurer may nonrenew a property insurance policy for any reason
which is consistent with its underwriting standards.
(b) Notwithstanding any other provisions in this section, race,
religion, nationality, ethnic group, age, sex, marital status, or
other reason prohibited by the provisions of this chapter may not
be considered as a reason for nonrenewal;
(c) Notwithstanding the provisions of section four of this
article, a nonrenewal may only be issued pursuant to the provisions
of this section upon notice to the named insured at least thirty
days before the end of the policy period of the insurer's election
not to renew the policy.
(d) Commencing the first day of July, two thousand five, the
total number of nonrenewal notices issued by the insurer each year
pursuant to this section, resulting in nonrenewal, may not exceed
one percent per year of the total number of outstanding policies of
the insurer as of the end of the previous calendar year that have
been in existence for four years or longer in this state:
Provided, That the total number of such nonrenewal notices issued
each year to insureds within any given county in this state
resulting in nonrenewal may not exceed one percent per year of the
total number of the policies of the insurer in force in that county
at the end of the previous calendar year: Provided, however, That
an insurer may nonrenew one policy per year in any county if the
applicable percentage limitation results in less than one policy.
(e) A notice issued pursuant to this section shall be
delivered or sent by first class mail to the named insured at the
last known address of the named insured and shall include an
explanation of the specific reasons for refusal to renew. The
notice shall also advise the insured of possible eligibility for
coverage through the West Virginia Essential Property Insurance
Association.
(f) Each insurer licensed to write property insurance policies
in this state and having elected to issue all nonrenewal notices
pursuant to the percentage limitations provided in this section
shall file with the commissioner a copy of its underwriting
standards, including any amendments or supplements. The
commissioner shall review and examine the underwriting standards to
ensure that they are consistent with generally accepted
underwriting principles. The underwriting standards filed with the
commissioner shall
be considered confidential by law and
privileged, are exempt from disclosure pursuant to chapter twenty-
nine-b of this code, are not open to public inspection, are not
subject to subpoena, and are not subject to discovery or admissible
in evidence in any criminal, civil or administrative action and are
not subject to production pursuant to court order.
(g) Each insurer that has elected to issue nonrenewal notices
pursuant to the percentage limitations provided in this section
shall report to the commissioner, on a form prescribed by the commissioner, on or before the thirtieth day of September of each
year the total number of nonrenewal notices issued in this state
and in each county of this state for the preceding year. The
insurer shall also report to the commissioner the specific reason
or reasons for the nonrenewals by county which have been issued
pursuant to this section.
§33-17A-4b. Manner of making election relating to nonrenewals.
(a) Each insurer licensed to write property insurance policies
in this state, as of the first day of July, two thousand five, may
elect to issue all nonrenewal notices either pursuant to section
four or section four-a of this article. Each insurer may notify the
commissioner of its election on or before the first day of July, two
thousand five, and shall remain bound by the election for a period
of five years. For each subsequent five-year period each insurer
shall notify the commissioner of its election to issue all
nonrenewal notices either pursuant to section four or section four-a
of this article. The failure of an insurer to notify the
commissioner of its election by the first day of July, two thousand
five, will be considered to be an election by the insurer to issue
all nonrenewal notices pursuant to section four of this article and
the insurer will be bound by the election for a period of five
years.
(b) An insurer that is not licensed to write property insurance
policies in this state as of the first day of July, two thousand five, but which becomes licensed to write such policies after that
date shall, no later than four years after the date the insurer
becomes licensed to write such policies, make an election to issue
all nonrenewal notices either pursuant to section four or section
four-a of this article, and shall notify the commissioner of its
election. If the insurer elects to issue all nonrenewal notices
pursuant to section four-a of this article, the total number of
nonrenewals may not exceed the percentage limitations set forth in
section four-a of this article. An insurer first becoming licensed
to issue property insurance policies in this state after the first
day of July, two thousand five, shall be bound by its election for
a period of five years, and for each subsequent five-year period
shall notify the commissioner of its election to issue all
nonrenewal notices either pursuant to section four or section four-a
of this article.
§33-17A-4c. Report to the Legislature.
By the first day of January, two thousand ten, the
commissioner shall submit a report to the Legislature. The report
shall contain the following:
(1) An analysis of the impact of legislation enacted during
the two thousand five legislative session upon rates and insurance
availability in the state;
(2) Statistics reflecting the rate history of insurers
conducting business in West Virginia from the first day of July, two thousand five, until the first day of July, two thousand nine.
Note: The purpose of this bill is to allow Insurance Companies
providing homeowners insurance to drop up to 1% of their customers
annually; providing for registration requirements for companies that
so elect; and providing that the Insurance Commissioner report back
to the Legislature on the impact of this law change by 2010.