H. B. 4580

         (By Delegate Diserio)

         [Introduced February 17, 2014; referred to the

         Committee on Banking and Insurance then the Judiciary.]

A BILL to amend and reenact §23-2C-21 of the Code of West Virginia, 1931, as amended, relating to removing immunity language and acknowledging the duty to act in good faith and fair dealing in the administration of insurance claims; providing that an administrative fine is no longer the sole remedy for violations; permitting attorney’s fees and costs to be awarded in certain additional cases; and requiring any attorney’s fees and costs awarded be made jointly to the claimant and the attorney.

Be it enacted by the Legislature of West Virginia:

    That §23-2C-21 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:

ARTICLE 2C. EMPLOYERS’ MUTUAL INSURANCE COMPANY.

§23-2C-21. Limitation Obligation of liability of insurer or third-party administrator; administrative fines; are exclusive available remedies.

    (a) No civil action may be brought or maintained by an employee against a private carrier or a third-party administrator, or any employee or agent of a private carrier or third-party administrator, who violates any provision of this chapter or chapter thirty-three of this code.

    (a) In light of the self-administration of claims by an insurer or third-party administrator for an insurer or self-insured employer, there is adopted herein an express duty of good faith and fair dealing in its activities undertaken in the administration of claims. This express duty includes, but is not limited to, avoidance of those unfair claim settlement practices found in chapter thirty-three of this code.

    (b) Any Administrative fines or remedies provided in this chapter or chapter thirty-three of this code or rules promulgated by the Workers' Compensation Commission or the Insurance Commissioner are the exclusive civil among the available remedies for any violation of this chapter committed by a private carrier or a third-party administrator or any agent or employee of a private carrier or a third-party administrator.

    (c) Upon a determination by the Office of Judges or the Insurance Commissioner that a denial of compensability, a denial of an award of temporary total disability, or a denial of an authorization for medical benefits or a denial of permanent partial or permanent total disability benefits was unreasonable, reasonable attorney's fees and the costs actually incurred in the process of obtaining a reversal of the denial shall be awarded to the claimant and paid by the private carrier or self-insured employer which issued the unreasonable denial. A denial is unreasonable if, after submission by or on behalf of the claimant, of evidence of the compensability of the claim, the entitlement to temporary total disability benefits or medical benefits, the private carrier or self-insured employer is unable to demonstrate that it had evidence or a legal basis supported by legal authority at the time of the denial which is relevant and probative and supports the denial of the award or authorization. Payment of attorney's fees and costs awarded under this subsection will be made jointly to the claimant and his or her counsel at the conclusion of litigation, including all appeals, of the claimant's protest of the denial.

    NOTE: The purpose of this bill is to remove immunity language and acknowledge the duty to act in good faith and fair dealing in the administration of insurance claims. The bill provides that an administrative fine is no longer the sole remedy for violations. The bill permits the award of attorney’s fees and costs in certain additional cases. Requiring any attorney’s fees and costs awarded be made jointly to the claimant and the attorney.

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