Introduced Version Senate Bill 271 History

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Senate Bill No. 271

(By Senator Minard)


[Introduced February 24, 2005; referred to the Committee

on Banking and Insurance; and then to the Committee on the Judiciary.]


A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto two new sections, designated §33-41-4a and §33- 41-8a; and to amend and reenact §33-41-8 of said code, all relating to insurance fraud; permitting the fraud unit to investigate the forgery of insurance documents; permitting the Insurance Commissioner to accept gifts and other property; exempting fraud unit employees from liability under certain circumstances; designating the fraud unit a criminal justice agency for purposes of access to information; and requiring background checks of applicants for employment with the fraud unit.

Be it enacted by the Legislature of West Virginia:
That of the Code of West Virginia, 1931, as amended, be amended by adding thereto two new sections, designated §33-41-4a and §33-41-8a; and that §33-41-8 of said code, be amended and reenacted, all to read as follows:
§33-41-4a. Acceptance of grants, gifts and other property by Commissioner.
(a) The Commissioner may accept gifts, grants, the proceeds of court ordered forfeiture proceedings and bequests of funds or property from individuals, foundations, corporations, the federal government, governmental agencies and other organizations or institutions.
(b) Moneys from gifts, grants, proceeds of forfeiture proceedings and bequests received by the Commissioner shall be deposited into the special revenue account established in subsection (b), section thirteen, article three of this chapter, and the Commissioner has the authority to make expenditures from such fund in order to effectuate the purposes of this article.
(c) The director of the unit, acting on behalf of the Commissioner, may enter into and execute any agreements and do and perform any acts that may be necessary, useful, desirable or convenient to effectuate the purposes of this section.
§33-41-8. Creation of insurance fraud unit; purpose; duties; personnel qualifications.
(a) There is established the West Virginia insurance fraud unit within the office of the Insurance Commissioner of West Virginia. The Commissioner may employ full-time supervisory, legal and investigative personnel for the unit, who shall be qualified by training and experience in the areas of detection, investigation or prosecution of fraud within and against the insurance industry to perform the duties of their positions. The director of the fraud unit shall be is a full-time position and shall be appointed by the Commissioner and serve at his or her will and pleasure. The Commissioner shall provide office space, equipment, supplies, clerical and other staff that is necessary for the unit to carry out its duties and responsibilities under this article.
(b) The fraud unit may in its discretion:
(1) Initiate inquiries and conduct investigations when the unit has cause to believe violations of any of the following provisions of this code chapter, the provisions of chapter twenty- three, the provisions of article three chapter sixty one of this code relating to the business of insurance have been or are being committed: Chapter thirty-three; chapter twenty-three; article three of chapter sixty-one; and section five, article four of chapter sixty-one.
(2) Review reports or complaints of alleged fraud related to the business of insurance activities from federal, state and local law-enforcement and regulatory agencies, persons engaged in the business of insurance and the general public to determine whether the reports require further investigation; and
(3) Conduct independent examinations of alleged fraudulent activity related to the business of insurance and undertake independent studies to determine the extent of fraudulent insurance acts.
(c) The insurance fraud unit may:
(1) Employ and train personnel to achieve the purposes of this article and to employ legal counsel, investigators, auditors and clerical support personnel and other personnel as the Commissioner determines necessary from time to time to accomplish the purposes of this article;
(2) Inspect, copy or collect records and evidence;
(3) Serve subpoenas issued by grand juries and trial courts in criminal matters;
(4) Share records and evidence with federal, state or local law-enforcement or regulatory agencies, and enter into interagency agreements. For purposes of carrying out investigations under this article, the unit shall be deemed a criminal justice agency under all federal and state laws and regulations and as such shall have access to any information that is available to other criminal justice agencies concerning violations of the insurance laws of West Virginia or related criminal laws;
(5) Make criminal referrals to the county prosecutors;
(6) Conduct investigations outside this state. If the information the insurance fraud unit seeks to obtain is located outside this state, the person from whom the information is sought may make the information available to the insurance fraud unit to examine at the place where the information is located. The insurance fraud unit may designate representatives, including officials of the state in which the matter is located, to inspect the information on behalf of the insurance fraud unit, and the insurance fraud unit may respond to similar requests from officials of other states;
(7) The fraud unit may initiate investigations and participate in the development of, and if necessary, the prosecution of any health care provider, including a provider of rehabilitation services, suspected of fraudulent activity related to the business of insurance;
(8) Specific personnel, designated by the Commissioner, shall be permitted to operate vehicles owned or leased for the state displaying Class A registration plates;
(9) Notwithstanding any provision of this code to the contrary, specific personnel designated by the Commissioner may carry firearms in the course of their official duties after meeting specialized qualifications established by the Governor's committee on crime, delinquency and correction, which shall include the successful completion of handgun training provided to law- enforcement officers by the West Virginia State Police: Provided, That nothing in this subsection shall be construed to include any person designated by the Commissioner as a law-enforcement officer as that term is defined by the provisions of section one, article twenty-nine, chapter thirty of this code; and
(10) The insurance fraud unit shall not be subject to the provisions of article nine-a, chapter six of this code and the investigations conducted by the insurance fraud unit and the materials placed in the files of the unit as a result of any such investigation are exempt from public disclosure under the provisions of chapter twenty-nine-b of this code.
(d) Any employee of the unit who has the authority to investigate cases of alleged insurance fraud is exempt from civil liability arising from such an investigation as long as such investigation has been made in good faith and on the basis of facts reasonably known or reasonably believed.
§33-41-8a. Fingerprinting and background check for applicants for employment with fraud unit.
(a) The Commissioner shall require any applicant for employment with the fraud unit to be fingerprinted. The Commissioner is authorized to conduct a criminal records check through the criminal identification bureau of the West Virginia State Police and a national criminal history check through the Federal Bureau of Investigation. The results of any criminal records or criminal history check shall be sent to the Commissioner. The West Virginia State Police may exchange this fingerprint data with the Federal Bureau of Investigation.
(b) The Director shall not disclose information obtained pursuant to subsection (a) of this section except for purposes directly related to the employment of the applicant.

NOTE: The purpose of this bill is to clarify that the insurance fraud unit can participate in law-enforcement information exchange, complete criminal background checks on potential employees of the fraud unit and assist other law-enforcement agencies. It also allows the fraud unit to investigate forgery of insurance documents.

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

§§33-41-4a and 33-41-8a are new; therefore, underscoring and strike-throughs have been omitted.
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