WEST virginia legislature
2019 regular session
Introduced
Senate Bill 485
By Senator Azinger
[Introduced
January 31, 2019; Referred
to the Committee on Banking and Insurance]
A BILL to amend and reenact §33-17A-3 of the Code of West Virginia, 1931, as amended, relating to defining a reduction in coverage and clarifying what is a termination for property insurance purposes.
Be it enacted by the Legislature of West Virginia:
ARTICLE 17A. PROPERTY INSURANCE DECLINATION, TERMINATION AND DISCLOSURE.
§33-17A-3. Definitions.
(a) “Declination” is the refusal of an insurer to issue a property insurance policy on a written application or written request for coverage. For the purposes of this article, the offering of insurance coverage with a company within an insurance group which is different from the company requested on the application or written request for coverage or the offering of insurance upon different terms than requested in the application or written request for coverage is not considered a declination if such offering of such insurance is based upon any valid underwriting reason which involves a substantial increase in the risk. Each company or groups of companies instituting such transfer shall give notice in the manner provided in subsection (c), section four of this article, to the insured as to the reasons for such transfer.
(b) “Nonpayment of premium” means the failure of the named insured to discharge any obligation in connection with the payment of premiums on policies of property insurance, subject to this article, whether the payments are directly payable to the insurer or its agent or indirectly payable to the insurer or its agent or indirectly payable under a premium finance plan or extension of credit. “Nonpayment of premium” includes the failure to pay dues or fees where payment of dues or fees is a prerequisite to obtaining or continuing property insurance coverage.
(c) “Renewal” or “to renew” means the issuance and delivery by an insurer at the end of a policy period of a policy superseding a policy previously issued and delivered by the same insurer, or the issuance and delivery of a certificate or notice extending the term of an existing policy beyond its policy period or term. For the purpose of this article, any policy period or term of less than six months is considered a policy period or term of six months, and any policy period or term of more than one year or any policy with no fixed expiration date is considered a policy period or term of one year.
(d) “Termination” means either a cancellation or
nonrenewal of property insurance coverage in whole or in part. A cancellation
occurs during the policy term. A nonrenewal occurs at the end of the policy
term as set forth in subsection (c) of this section. For purposes of this
article, the transfer of a policyholder between companies within the same
insurance group is not considered a termination, if such transfer is based upon
any valid underwriting reason which involves a substantial increase in the
risk. Each company or group of companies instituting such transfer shall give
notice in the manner provided in subsection (c), section four of this article,
to the insured as to the reasons for such transfer. Requiring a reduction in
coverage reasonable deductible, reasonable changes in the amount of
insurance or reasonable reductions in policy limits or coverage is not
considered a termination: if the requirements are directly related to the
hazard involved and are made on the renewal date of the policy Provided,
That the insurer has manifest its willingness to renew by issuing or
offering to issue a renewal policy, certificate or other evidence of renewal by
mailing a renewal notice, including a notice of reduction in coverage, if any,
to the insured not less than 30 days in advance of the expiration date of the
policy.
(e) “Reduction in coverage” means a change made by the insurer which results in a removal of coverage, diminution in the scope, or less, coverage, a change in deductible, or the addition of an exclusion. Reduction in coverage does not include any change, reduction, or elimination of coverage made at the request of the insured. The correction of typographical or scrivener's errors or the application of mandated legislative changes is not a reduction in coverage.
NOTE: The purpose of this bill is to define reduction in coverage and to clarify what a termination means in regard to property insurance.
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.