H. B. 2737
(By Delegates Michael and Walters)
[Introduced February 24, 1995; referred to the
Committee on Banking and Insurance.]
A BILL to amend and reenact sections ten and thirteen, article
twelve, chapter thirty-three of the code of West Virginia,
one thousand nine hundred thirty-one, as amended; and to
further amend said article by adding thereto a new section,
designated section thirteen-a, all relating to excess lines
insurance; providing for expansion of the definition of
excess lines insurance; clarifying that excess lines brokers
who are general agents may procure insurance from licensed
insurers for which they are appointed; clarifying that the
excess line broker's affidavit and report are not required
for insurance placed with licensed insurers; increasing excess line broker's bond from two thousand to fifty
thousand dollars; and clarifying meaning of property and
casualty general agent.
Be it enacted by the Legislature of West Virginia:
That sections ten and thirteen, article twelve, chapter
thirty-three of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted; and to
further amend said article by adding thereto a new section,
designated section thirteen-a, all to read as follows:
ARTICLE 12. AGENTS, BROKERS, SOLICITORS AND EXCESS LINE.
§33-12-10. Excess lines.
Any portion or all of an insurance coverage against loss or
damage to property or person from any cause which cannot be
procured from licensed insurers for which an agent is appointed
pursuant to this article, which coverages are hereinafter
designated as "excess line," may be procured from unlicensed
insurers, or from a licensed insurer through an excess line
broker who is licensed in this state and is a general agent
pursuant to this article, subject to the following conditions:
(a) The insurance must be procured only through a licensed
excess line broker;
(b) The Any insurance coverage by an unlicensed insurer
must not be procurable, after diligent effort has been made to do
so, from licensed insurers authorized to transact that kind of
insurance in this state with the excess line broker, or has been
procured to the full extent such licensed insurers are willing to
insure, and the placing of insurance with an unlicensed insurer
must not be for the purpose of securing advantages either as to
premium rate or terms of the insurance contract;
(c) Private passenger automobile liability insurance may
only be obtained from licensed insurers authorized to transact
that kind of insurance in this state and through a properly
licensed and appointed agent for that insurer; and
(d) For purpose of this section, agents may forward
information or copies of applications to excess line brokers for
the purpose of determining whether coverages are available:
Provided, That agents may not make any representation to any
applicant for insurance that coverage is bound, when in fact an
application forwarded to an excess lines broker is only for
determining what coverage is available. If coverages are
available and acceptable to the applicant the excess line broker shall advise the agent or the applicant, or both, when and if
coverage is bound.
§33-12-13. Agent licensing.
(a) Any licensed insurance agent determined by the
commissioner to be competent and trustworthy for the purpose, may
be licensed as an excess line broker.
(b) The license fee shall be two hundred dollars, all fees
so collected are to be used for the purposes set forth in section
thirteen, article three of this chapter.
(c) Prior to issuance of the license, the applicant therefor
shall file with the commissioner and thereafter maintain in force
for so long as the license or any renewal thereof remains in
effect, a bond in favor of the state of West Virginia in the
penal sum of two fifty thousand dollars, with an authorized
corporate surety approved by the commissioner, conditioned that
he will conduct business under the license in accordance with
this article, that he will promptly remit the taxes provided by
section sixteen of this article, and that he will properly
account to the person entitled thereto for funds received by him
through transactions under the license. No bond shall be terminated unless at least thirty days' prior written notice
thereof is filed with the commissioner.
§33-12-13a. Property and casualty general agent.
For purpose of this article, "property and casualty general
agent" means an individual who is an excess line broker and a
licensed resident property and casualty agent in this state, and
appointed pursuant to this article with one or more licensed
insurers. Such individual must be authorized by the insurers to:
(a) Accept applications from other insurance agents who
represent insureds;
(b) Underwrite;
(c) Bind coverages;
(d) Issue policies;
(e) Pay commissioner to other licensed agents; and
(f) Make material changes in coverages.
NOTE: The purpose of this bill is to enhance the ability of
licensed, resident, West Virginia insurance agents to place
coverages for consumers within the state by expanding the
definition of excess line insurance to include insurers who are
licensed in the state, and clarifying that excess line brokers
who are general agents may place insurance with licensed insurers
for which they are appointed as agents. This bill will also increase the excess line broker's bond from $2,000 to $50,000,
and require that affidavits be filed quarterly.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
§33-12-13a is new; therefore, strike-throughs and
underscoring have been omitted.