H. B. 2264
(By Delegates Gallagher, Cann, Greear, Hall, Hunt, McGraw
and Thompson)
(Originating in the House Committee on Banking and Insurance)
(January 25, l995)
A BILL to amend and reenact section thirty-one-c, article six,
chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
substandard risk motor vehicle insurance policies; requiring
contrasting color or reverse print notices on applications and
policies; advising policyholders of future eligibility for
standard or preferred policies; and requiring notice to such
policyholders of potential eligibility for standard or
preferred coverage for driving without additional traffic
violations or accidents over a three-year period while being
continuously insured.
Be it enacted by the Legislature of West Virginia:
That section thirty-one-c, article six, chapter thirty-three
of the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted to read as follows:
ARTICLE 6. THE INSURANCE POLICY.
§33-6-31c. Substandard risk motor vehicle insurance policies;
definitions; required notices and provisions;
promulgation of rules; effective date.
(a) For purposes of this section, the following definitions
shall apply:
(1) A "substandard risk" means an applicant for insurance who
presents a greater exposure to loss than that contemplated by
commonly used rate classifications, as evidenced by one or more of
the following conditions:
(A) Record of traffic accidents;
(B) Record of traffic law violations;
(C) Undesirable occupational circumstances;
(D) Undesirable moral characteristics. Any other valid
underwriting consideration.
(2) "Substandard risk rate" means a rate or premium charge
that reflects the greater than normal exposure to loss which is
assumed by an insurer writing insurance for a substandard risk.
(b) Every application for a motor vehicle insurance policy to
be issued in this state and written on the basis of a substandard
risk rate schedule shall have printed thereon, in bold-faced type
in a contrasting color or in reverse print, a statement reading
substantially as follows: THE POLICY FOR WHICH YOU ARE APPLYING HAS
BEEN RATED IN ACCORDANCE WITH A SPECIAL RATING SCHEDULE FILED WITH
THE COMMISSIONER OF INSURANCE PROVIDING FOR HIGHER PREMIUM CHARGES THAN THOSE GENERALLY APPLICABLE FOR AVERAGE RISKS. IF THE COVERAGE
OR PREMIUM IS NOT SATISFACTORY, YOU MAY BE ELIGIBLE FOR OTHER
INSURANCE. IF THIS COVERAGE OR PREMIUM IS SATISFACTORY, YOU MAY BE
ELIGIBLE FOR COVERAGE UNDER A STANDARD OR PREFERRED POLICY IF
DURING THE NEXT THREE YEARS YOU HAVE NO TRAFFIC VIOLATIONS OR
ACCIDENTS AND YOU MAINTAIN CONTINUOUS INSURANCE COVERAGE.
(c) Every motor vehicle insurance policy issued in this state
and written on the basis of a substandard risk rate schedule shall
have printed thereon, in bold-faced type in a contrasting color or
in reverse print, a statement reading substantially as follows:
THIS POLICY HAS BEEN RATED IN ACCORDANCE WITH A SPECIAL RATING
SCHEDULE FILED WITH THE COMMISSIONER OF INSURANCE PROVIDING FOR
HIGHER PREMIUM CHARGES THAN THOSE GENERALLY APPLICABLE FOR AVERAGE
RISKS. IF THE COVERAGE OR PREMIUM IS NOT SATISFACTORY, YOU MAY BE
ELIGIBLE FOR OTHER INSURANCE. IF THIS COVERAGE OR PREMIUM IS
SATISFACTORY, YOU MAY BE ELIGIBLE FOR COVERAGE UNDER A STANDARD OR
PREFERRED POLICY IF DURING THE NEXT THREE YEARS YOU HAVE NO TRAFFIC
VIOLATIONS OR ACCIDENTS AND YOU MAINTAIN CONTINUOUS INSURANCE
COVERAGE.
(d) On or before the first day of July, one thousand nine
hundred ninety-three, all insurers licensed or registered in this
state to market or sell substandard risk motor vehicle insurance
policies shall submit all applications and policies for substandard
risk insurance to the commissioner of insurance for approval prior to being used by the insurer.
(e) On or after the first day of July, one thousand nine
hundred ninety-five, all insurers selling or which have in force
substandard risk motor vehicle insurance policies shall provide a
one time notice in writing to such policyholders who have
maintained continuous insurance coverage for three years, have not
been convicted of any moving traffic violations and had no at fault
accidents, that they may be eligible for coverage under a standard
or preferred policy.
(e) (f) The commissioner shall promulgate rules in accordance
with the provisions of chapter twenty-nine-a of this code regarding
the format, style, design and approval of substandard risk
insurance applications, notices and policies and such other
procedures as may be required by this section.
(f) (g) The effective date of this section shall be the first
day of July, one thousand nine hundred ninety-three ninety-five.