H. B. 4069
(By Delegates Swartzmiller, Ennis and Boggs)
[Introduced January 19, 2004; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact §33-17A-4 and §33-17A-5 of the code of
West Virginia, 1931, as amended, all relating to declination
or termination of property insurance policies and permissible
cancellations; changing from four years to two years the time
a policy has been in effect and requiring renewal except for
specific reasons for permissible cancellation; and deleting
ceasing business in this state as a reason for permissible
cancellation.
Be it enacted by the Legislature of West Virginia:
That §33-17A-4 and §33-17A-5
of the code of West Virginia,
1931, as amended, be amended and reenacted, all to read as follows:
ARTICLE 17A. PROPERTY INSURANCE DECLINATION, TERMINATION AND
DISCLOSURE.
§33-17A-4. Notification and reasons for a transfer, declination or termination.
(a) Upon declining to insure any real or personal property,
subject to this article, the insurer making a declination shall
provide the insurance applicant with a written explanation of the
specific reason or reasons for the declination at the time of the
declination. The provision of such insurance application form by
an insurer shall create no right to coverage on the behalf of the
insured to which the insured is not otherwise entitled.
(b) A notice of cancellation of property insurance coverage by
an insurer shall be in writing, shall be delivered to the named
insured or sent by first class mail to the named insured at the
last known address of the named insured, shall state the effective
date of the cancellation and shall be accompanied by a written
explanation of the specific reason or reasons for the cancellation.
(c) At least thirty days before the end of a policy period, as
described in subsection (c), section three of this article, an
insurer shall deliver or send by first class mail to the named
insured at the last known address of the named insured, notice of
its intention regarding the renewal of the property insurance
policy. Notice of an intention not to renew a property insurance
policy shall be accompanied by an explanation of the specific
reasons for the nonrenewal: Provided, That no insurer shall may
fail to renew an outstanding property insurance policy which has
been in existence for four two years or longer except for the reasons as set forth in section five of this article; or for other
valid underwriting reasons which involve a substantial increase in
the risk.
§33-17A-5. Permissible cancellations.
After coverage has been in effect for more than sixty days or
after the effective date of a renewal policy, a notice of
cancellation may not be issued unless it is based on at least one
of the following reasons:
(a) Nonpayment of premium;
(b) Conviction of the insured of any crime having as one of
its necessary elements an act increasing any hazard insured
against;
(c) Discovery of fraud or material misrepresentation made by
or with the knowledge of the named insured in obtaining the policy,
continuing the policy or in presenting a claim under the policy;
(d) Discovery of willful or reckless acts or omissions on the
part of the named insured which increase any hazard insured
against;
(e) The occurrence of a change in the risk which substantially
increases any hazard insured against after insurance coverage has
been issued or renewed;
(f) A violation of any local fire, health, safety, building or
construction regulation or ordinance with respect to any insured
property or the occupancy thereof which substantially increases any hazard insured against;
(g) A determination by the commissioner that the continuation
of the policy would place the insurer in violation of the insurance
laws of this state;
(h) Real property taxes owing on the insured property have
been delinquent for two or more years and continue delinquent at
the time notice of cancellation is issued; or
(i) The insurer which issues said policy of insurance ceases
writing the particular type or line of insurance coverage contained
in said policy throughout the state or should such insurer
discontinue operations within the state; or
(j) (i) Substantial breach of the provisions of the policy.
NOTE: The purpose of this bill is to
change from four years
to two years the time a policy has been in effect when requiring
renewal of the property insurance policy, except for specific
reasons for permissible cancellation. It also deletes ceasing
business in this state by an insurer as a reason for permissible
cancellation.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.