COMMITTEE SUBSTITUTE
FOR
H. B. 4004
(By
Mr. Speaker, Mr. Kiss, and Delegate Trump)
[By Request of the Executive
]Delegates Name
(Originating in the Committee on the JudiciaryCommittee)
[Month and DayJanuary 20, 2004]
A BILL
to repeal §33-2-18 of the code of West Virginia, 1931, as
amended; to amend and reenact §33-2-17
of said code; to amend
said code by adding thereto a new article, designated §33-2A-
1, §33-2A-2, §33-2A-3, §33-2A-4, §33-2A-5, §33-2A-6 and §33-
2A-7; to amend said code by adding thereto a new section,
designated
§33-6-31g; to amend and reenact §33-6A-4
of said
code; to amend said code by adding thereto a new section,
designated §33-22-2a; to amend said code by adding thereto a
new section, designated §33-23-2a; to amend said code by
adding thereto a new section, designated §33-24-4b; to amend
said code by adding thereto a new section, designated §33-25-
6a; to amend said code by adding thereto a new section,
designated §33-25A-24b; to amend and reenact §33-41-1,
§33-41-
2 and §33-41-3; to amend said code by adding thereto eleven new sections, designated §33-41-4,
§33-41-5,
§33-41-6,
§33-41-
7,
§33-41-8,
§33-41-9,
§33-41-10,
§33-41-11,
§33-41-12,
§33-
41-13 and
§33-41-14; and to amend and reenact §55-7-13 of said
code
, all relating to indemnification for losses generally;
deleting language dealing with funding of the office of
consumer advocacy;
striking language limiting the authority of
the office of consumer advocacy to health related matters;
authorizing the office of consumer advocacy to coordinate the
consumer service functions within the office of the insurance
commissioner
prohibiting the use of credit scoring to
determine scoring of certain premiums; creating a legislative
oversight commission on insurance;
adding additional instances
when an insurers may elect to nonrenew automobile insurance
policies due to at-fault accidents; restricting the amount of
time in which an insured may apply for renewal beyond the
original expiration date of the policy; and allowing insurance
companies to impose a processing fee upon insurers who renew
a policy within thirty days beyond the original expiration
date of the policy; creating an insurance fraud unit within
the insurance commission; regulating insurance fraud;
subjecting farmers' mutual insurance companies, fraternal
benefit societies, certain hospital, medical, dental and
health services corporations, health care corporations, and health maintenance organization; defining terms; establishing
an insurance fraud unit within the division of insurance;
authorizing the promulgation of rules and requiring the filing
of annual reports; establishing powers and duties of the unit;
outlining investigative powers and procedures; providing
confidentiality and immunity of the unit operations;
prohibiting insurance fraud; establishing criminal penalties
and fines; authorizing prosecution for fraudulent acts;
authorizing special prosecutors; specifying duties of
insurers; authorizing funding by an assessment of insurers;
establishing the West Virginia insurance fraud prevention act;
defining legislative intent and terms; creating misdemeanor
and felony offenses for the commission of fraudulent acts;
creating penalties, exceptions and immunities; and modifying
joint and several liability by specifying that there is only
joint liability if the liability of a defendant exceeds ten
percent.
Title Language
Be it enacted by the Legislature of West Virginia:
That Enacting Section
§33-2-18 of the c
ode of West Virginia, 1931, as amended,
be repealed; that section §33-2-17
of said code
be amended and
reenacted; that said code be amended by adding thereto a new
article, designated §33-2A-1, §33-2A-2, §33-2A-3, §33-2A-4, §33-2A-
5, §33-2A-6, and §33-2A-7; to amend said code by adding thereto a new section, designated
§33-6-31g; that §33-6A-4
, of said code be
amended and reenacted; that said code be amended by adding thereto
a new section, designated §33-22-2a; that said code be amended by
adding thereto a new section, designated §33-23-2a; that said code
be amended by adding thereto a new section, designated §33-24-4b;
that said code be amended by adding thereto a new section,
designated §33-25-6a; that said code be amended by adding thereto
a new section, designated §33-25A-24b; that §33-41-1,
§33-41-2 and
§33-41-3 of said code be amended and reenacted; that said code be
amended by adding thereto eleven new sections, designated §33-41-4,
§33-41-5,
§33-41-6,
§33-41-7,
§33-41-8,
§33-41-9,
§33-41-10,
§33-
41-11,
§33-41-12,
§33-41-13 and
§33-41-14; and that §55-7-13 of
said code be amended and reenacted, all to read as follows:
CHAPTER 33. INSURANCE.
ARTICLE 2. INSURANCE COMMISSIONER.
§33-2-17. Authority of office of consumer advocacy; retroactive
effect of authority prohibited.
(a) In addition to the authority established under the rules
promulgated by the director, the office of consumer advocacy is
authorized to:
(1) Institute, intervene in, or otherwise participate in, as
an advocate for the public interest and the interests of insurance
consumers, proceedings in state and federal courts, before administrative agencies, or before the health care cost review
authority, concerning applications or proceedings before the health
care cost review authority or the review of any act, failure to act,
or order of the health care cost review authority;
(2) At the request of one or more policyholders, or whenever
the public interest is served, to advocate the interests of those
policyholders in proceedings arising out of any filing made with the
insurance commissioner by any insurance company or relating to any
complaint alleging an unfair or deceptive act or practice in the
business of insurance;
(3) Institute, intervene in, or otherwise participate in, as
an advocate for the public interest and the interests of insurance
consumers, proceedings in state and federal courts, before
administrative agencies, or before the insurance commissioner,
concerning applications or proceedings before the commissioner or
the review of any act, failure to act, or order of the insurance
commissioner;
(4) Review and compile information, data and studies of the
reasonable and customary rate schedules of health care providers and
health insurers, for the purposes of reviewing, establishing,
investigating, or supporting any policy regarding health care
insurance rates;
(5) Exercise all the same rights and powers regarding examination and cross-examination of witnesses, presentation of
evidence, rights of appeal and other matters as any party in
interest appearing before the insurance commissioner or the health
care cost review authority;
(6) Hire consultants, experts, lawyers, actuaries, economists,
statisticians, accountants, clerks, stenographers, support staff,
assistants, and other personnel necessary to carry out the
provisions of this section and sections section sixteen and eighteen
of this article, which personnel shall be paid from special revenue
funds appropriated for the use of the office;
(7) Contract for the services of technically qualified persons
in the area of insurance matters to assist in the preparation and
presentation of matters before the courts, the insurance
commissioner, administrative agencies, or the health care cost
review authority, which persons shall be paid from special revenue
funds appropriated for the use of the office;
(8) Make recommendations to the Legislature concerning
legislation to assist the office in the performance of its duties;
(9) Communicate and exchange data and information with other
federal or state agencies, divisions, departments, or officers, and
with other interested parties including, but not limited to, health
care providers, insurance companies, consumers or other interested
parties; and
(10) Perform other duties to effect the purposes of the office.
(b) The provisions of this section do not apply to any filing
made by an insurance company, or act or order performed or issued
by the commissioner, or complaint filed by a policyholder with the
commissioner prior to the thirtieth day of June, one thousand nine
hundred ninety-one. All proceedings and orders in connection with
these prior matters shall be governed by the law in effect at the
time of the filing, or performance or issuance of the act or order.
(c) The scope of authority granted under this section and
section sixteen of this article is restricted to matters related to
health care costs and health insurance policies, subscriber
contracts issued by organizations under article twenty-four of this
chapter, health care corporations under article twenty-five of this
chapter, health maintenance organizations under article
twenty-five-a of this chapter, contracts supplemental to health
insurance policies, and other matters related to health insurance
issues identified by rules of the commissioner promulgated under
section one of this article and chapter twenty-nine-a of this code.
ARTICLE 2A. LEGISLATIVE OVERSIGHT COMMISSION ON INSURANCE.
§33-2A-1. Findings and purpose.
The Legislature hereby finds and declares that:
(1) A crisis exists in regards to the availability and
affordability of insurance in this state;
(2) Insurance exists to provide protection and financial
stability of the citizens of this state;
(3) The health and well-being of the citizens is jeopardized
when insurance becomes unavailable or unaffordable;
(4) That many factors have contributed to the current crisis
in availability and affordability of insurance in the market of this
state;
(4) The insurance commission is responsible for the regulation
of the insurance industry in a manner that is most beneficial to the
citizens of the state and protects those citizens from unfair
pricing by the insurance industry; and
(5) The problem is exacerbated when various entities make
competing or conflicting policy decisions regarding the regulation
of insurance.
§33-2A-2. Legislative intent.
It is the intent of the Legislature that all actions taken
pursuant to the provisions of this article by the Legislature and
the various programs within the insurance commission serve the
following core set of principles:
(1) That all insurance provided to the citizens of the state
be coordinated to maximize efficiencies, provide various
protections, and to insure that coverage is available and
affordable;
(2) That communication be facilitated between the insurance
commission and the Legislature;
(3) That policy changes, not made by legislative rule, be
discussed with the commission for purposes of coordinating those
policies with existing programs and stated goals;
(4) That programs or policies implemented in accordance with
federal mandates be communicated to the commission;
(5) That in developing new responsibilities for the commission
that all interested parties are heard; and
(6) That the insurance commission advise the commission when
decisions may affect the health and well-being of the citizens of
West Virginia.
§33-2A-3. Definitions.
As used in this article:
(a) "Commission" means the legislative oversight commission on
insurance.
§33-2A-4. Creation of a legislative oversight commission on
insurance.
(a) There is hereby created a joint commission of the
Legislature known as the legislative oversight commission on
insurance. The commission shall be composed of six members of the
Senate appointed by the president of the Senate and six members of
the House of Delegates appointed by the speaker of the House of Delegates. No more than five of the six members appointed by the
president of the Senate and the speaker of the House of Delegates,
respectively, may be members of the same political party. In
addition, the president of the Senate and speaker of the House of
Delegates shall be ex officio nonvoting members of the commission
and shall designate the co-chairpersons. The members shall serve
until their successors have been appointed as heretofore provided.
At least one of the Senate appointees and one of the House of
Delegates appointees shall be:
(1) The chairperson of the committee on insurance of the Senate
and House of Delegates respectively;
(2) A member of the committee on finance of the Senate and
House of Delegates, respectively; and,
(3) A member of the committee on the judiciary of the Senate
and House of Delegates, respectively
.
(b) Members of the commission shall receive such compensation
and expenses as provided in article two-a, chapter four of this
code. Such expenses and all other expenses including those incurred
in the employment of legal, technical, investigative, clerical,
stenographic, advisory and other personnel shall be paid from an
appropriation to be made expressly for the legislative oversight
commission on insurance: Provided, That if no such appropriation be
made, such expenses shall be paid from the appropriation under "Fund No. 0175 for Joint Expenses" created pursuant to the provisions of
said chapter: Provided, however, That no expense of any kind payable
under the account for joint expenses shall be incurred unless first
approved by the joint committee on government and finance.
(c) The commission may meet at any time both during sessions
of the Legislature and in the interim or as often as may be
necessary.
§33-2A-5. Powers and duties of commission.
(a) The powers, duties and responsibilities of the commission
shall include the following:
(1) Make a continuing investigation, study and review of the
practices, policies and procedures of the insurance commission in
this state;
(2) Make a continuing investigation, study and review of all
matters related to the regulated insurance industry in the state;
(3) Review program development by the insurance commission and
how those programs impact the availability and affordability of
insurance to the citizens of West Virginia;
(4) Conduct studies on:
(A) The current insurance environment in the state to determine
if all necessary actions are being taken by the insurance commission
to insure availability and affordability of insurance to the
citizens of the state;
(B) The extent to which persons in this state are negatively
or positively affected by actions taken by the insurance commission;
(D) The operation of the programs and funds created by article
two of this chapter; and
(5) Review and study the laws of the state to determine if the
laws are having a negative effect on availability and affordability
of insurance or are not providing adequate protection to the
citizens of the state;
(6) Review and study the feasibility and financial impact upon
the state of assuring increased access to insurance for the
uninsured;
(7) Review and study the feasibility and financial impact upon
the state of the establishment of different types of insurance that
can provide coverage to those who are currently uninsured; and
(8) Review and study the data collection to insure that all
data needed to make proper policy decisions is available.
(b) The commission shall make annual reports to the Legislature
regarding the results of all investigations, studies and reviews
pursuant to the provisions of section seven of this article.
§33-2A-6. Examination and subpoena powers; contempt proceedings.
(a) For purposes of carrying out its duties, the commission is
hereby empowered and authorized to examine witnesses and to subpoena
such persons and books, records, documents, papers or any other tangible things as it believes should be examined to make a complete
investigation.
(b) All witnesses appearing before the commission under
subpoena shall testify under oath or affirmation. Any member of the
commission may administer oaths or affirmations to such witnesses.
(c) To compel the attendance of witnesses at hearings or the
production of any books, records, documents, papers or any other
tangible thing, the commission is hereby empowered and authorized
to issue subpoenas, signed by one of the cochairpersons, in
accordance with section five, article one, chapter four of this
code. Subpoenas shall be served by any person authorized by law to
serve and execute legal process and service shall be made without
charge. Witnesses subpoenaed to attend hearings shall be allowed
the same mileage and per diem as is allowed witnesses before any
petit jury in this state.
(d) If any person subpoenaed to appear at any hearing shall
refuse to appear or to answer inquiries there propounded, or shall
fail or refuse to produce books, records, documents, papers or any
other tangible thing within his control when the same are demanded,
the commission shall report the facts to the circuit court of
Kanawha County or any other court of competent jurisdiction and such
court may compel obedience to the subpoena as though such subpoena
had been issued by such court in the first instance.
§33-2A-7. Legislative reports.
(a) The commission shall submit annual reports to the
Legislature, as required by the provisions of section five of this
article, which such reports shall describe and evaluate in a concise
manner:
(1) The major activities of the insurance commission for the
fiscal year immediately past, including important policy decisions
reached on initiatives undertaken during that year, especially as
such activities, decisions and initiatives relate to the need for
legislative action; and
(2) the work of the commission in its oversight
responsibilities with recommendations for legislative action.
ARTICLE 6. THE INSURANCE POLICY.
§33-6-31g. Prohibition of use of credit scoring.
Notwithstanding any other provisions of this code to the
contrary, credit scoring, rating or history may not be used as
grounds for determining the amount of premium charged for a motor
vehicle policy.
ARTICLE 6A.CANCELLATION OR NONRENEWAL OF AUTOMOBILE LIABILITY
POLICIES
.
§33-6A-4. Advance notice of nonrenewal required; assigned risk
policies; reasons for nonrenewal; hearing and review after nonrenewal.
(a) No insurer shall fail to renew an outstanding automobile
liability or physical damage insurance policy unless such nonrenewal
is preceded by at least forty-five days of advance notice to the
named insured of such the insurer's election not to renew such the
policy: Provided, That subject to this section, nothing contained
in this article shall be construed so as to prevent an insurer from
refusing to issue an automobile liability or physical damage
insurance policy upon application to such the insurer, nor shall any
provision of this article be construed to prevent an insurer from
refusing to renew such a policy upon expiration, except as to the
notice requirements of this section, and except further as to those
applicants lawfully submitted pursuant to the West Virginia assigned
risk plan: Provided, however,.
(b) That an An insurer may not fail to renew an outstanding
automobile liability or physical damage insurance policy which has
been in existence for two consecutive years or longer except for the
following reasons:
(a) (1) The named insured fails to make payments of premium for
such policy or any installment of the premium when due;
(b)(2) The policy is obtained through material
misrepresentation;
(c) (3)The insured violates any of the material terms and conditions of the policy;
(d) (4) The named insured or any other operator, either
residing in the same household or who customarily operates an
automobile insured under such policy:
(1) (A)Has had his or her operator's license suspended or
revoked during the policy period; or
(2) (B)Is or becomes subject to epilepsy or heart attacks and
such individual cannot produce a certificate from a physician
testifying to his ability to operate a motor vehicle;
(e) (5) The named insured or any other operator, either
residing in the same household or who customarily operates an
automobile insured under such policy, is convicted of or forfeits
bail during the policy period for any of the following reasons:
(1) (A) Any felony or assault involving the use of a motor
vehicle;
(2) (B) Negligent homicide arising out of the operation of a
motor vehicle;
(3) (C) Operating a motor vehicle while under the influence of
intoxicating liquor or of any narcotic drug;
(4) (D) Leaving the scene of a motor vehicle accident in which
the insured is involved without reporting it as required by law;
(5) (E) Theft of a motor vehicle or the unlawful taking of a
motor vehicle;
(6) (F) Making false statements in an application for a motor
vehicle operator's license;
(7) (G) Two or more moving traffic violations committed within
a period of twelve months, each of which results in three or more
points being assessed on the driver's record by the division of
motor vehicles, whether or not the insurer renewed the policy
without knowledge of all such violations. Notice of any nonrenewal
made pursuant to this subsection shall be mailed to the named
insured either during the current policy period or during the first
full policy period following the date that the second moving traffic
violation is recorded by the division of motor vehicles.
(f) (6) The named insured or any other operator,
has had a
second at-fault motor vehicle accident within a period of twelve
months
At-fault motor vehicle accidents may be grounds for
nonrenewal when the following conditions are present:
(A) The named insured has a third-at fault motor vehicle
accident within a period of thirty-six months prior to the notice
of nonrenewal
and claims are paid by the insurer in excess of one
thousand dollars per vehicle accident. If more than one person is
a named insured, then for purposes of calculating the number of at-
fault accidents, the accidents of each driver may not be
attributable to the other;
or,
(B) Any other operator, either residing in the same household or who customarily operates an automobile insured under the policy
has a third-at fault motor vehicle accident within a period of
thirty-six months prior to the notice of nonrenewal
, and claims are
paid by the insurer in excess of one thousand dollars per vehicle
accident;
(C)Nonrenewal is permissible under this subdivision
whether or not the insurer renewed the policy without knowledge of
all such the accidents;
(D) Notice of any nonrenewal made pursuant to this subsection
subdivision shall be mailed to the named insured either during the
current policy period or during the first full policy period
following the date of the second third accident.
(7) The insurer which issues said policy of insurance ceases
to write private passenger automobile insurance throughout the state
and the following requirements have been fulfilled:
(A) The insurer has filed and received approval of a line of
business or line of authority withdrawal plan with the insurance
commissioner, and,
(B) The insurer has fewer than five hundred in-force policies
when the withdrawal plan is filed.
(c) Nonrenewal of such a policy for any reason is subject to
a hearing and review as provided for in section five of this
article. Cost of the hearing shall be assessed against the losing party but shall not exceed seventy-five dollars.
(d) Notwithstanding the provisions of subsection (a) of this
section, the insurer shall renew any automobile liability or
physical damage insurance policy that has not been renewed due to
the insured's failure to pay the renewal premium when due if: (1)
None of the other grounds for nonrenewal as set forth in
subsections (b) through (f), inclusive, of this section this
section exist; and (2) the insured makes an application for renewal
within ninety thirty days of the original expiration date of the
policy. If a policy is renewed as provided for in this paragraph,
then the coverage afforded shall not be is not retroactive to the
original expiration date of the policy, but shall begin on the
reinstatement date at the current premium levels offered by the
company. The insurer may charge a fifteen dollar processing fee to
insureds electing to renew within thirty days of the expiration
date of the policy.
ARTICLE 22. FARMERS' MUTUAL FIRE INSURANCE COMPANIES.
§33-22-2a. Applicability of Insurance Fraud Prevention Act.
Notwithstanding any provision of this code to the contrary,
article forty-one, chapter thirty-three is applicable to farmers'
mutual fire insurance companies.
ARTICLE 23. FRATERNAL BENEFIT SOCIETIES.
§33-23-2a. Applicability of Insurance Fraud Prevention Act.
Notwithstanding any provision of this code to the contrary,
article forty-one, chapter thirty-three is applicable to fraternal
benefit societies.
ARTICLE 24. HOSPITAL SERVICE CORPORATIONS, MEDICAL SERVICE
CORPORATIONS, DENTAL SERVICE CORPORATIONS AND
HEALTH SERVICE CORPORATIONS.
§33-24-4b. Applicability of Insurance Fraud Prevention Act.
Notwithstanding any provision of this code to the contrary,
article forty-one, chapter thirty-three is applicable to hospital
service corporations, medical service corporations, dental service
corporations and health service corporations.
ARTICLE 25. HEALTH CARE CORPORATIONS.
§33-25-6a. Applicability of Insurance Fraud Prevention Act.
Notwithstanding any provision of this code to the contrary,
article forty-one, chapter thirty-three is applicable to health
care corporations.
ARTICLE 25A. HEALTH MAINTENANCE ORGANIZATION ACT.
§33-25A-24b. Applicability of Insurance Fraud Prevention Act.
Notwithstanding any provision of this code to the contrary,
article forty-one, chapter thirty-three is applicable to health
maintenance organizations.
ARTICLE 41. INSURANCE FRAUD PREVENTION ACT.
§33-41-1. Legislative purpose and findings.
This article may be cited as the West Virginia Insurance Fraud
Prevention Act. The West Virginia Legislature finds that the
business of insurance involves many transactions that have
potential for fraud, abuse and other illegal activities. This
article is intended to permit full utilization of the expertise of
the commissioner to investigate and discover fraudulent insurance
acts more effectively, halt fraudulent insurance acts and assist
and receive assistance from state, local and federal law
enforcement and regulatory agencies in enforcing laws prohibiting
fraudulent insurance acts.
§33-41-2. Definitions.
As used in this article:
(a) "Benefits" mean money payments, goods, services or any
other thing of value.
(b) "Business of insurance" means the writing of insurance or
the reinsuring of risks by an insurer, including acts necessary or
incidental to writing insurance or reinsuring risks and the
activities of persons who act as or are officers, directors, agents
or employees of insurers, or who are other persons authorized to
act on their behalf.
(c) "Claim" means an application or request for payment or
benefits provided under an insurance policy.
(d) "Commissioner" means the commissioner of insurance, the
commissioner's designees or the office of the insurance
commissioner.
(e) "Financial loss" includes, but is not limited to, loss of
earnings, out-of-pocket and other expenses, repair and replacement
costs and claims payments made by any insurer, provider or person.
(f) "Fraudulent insurance act" means an act or omission
committed by a person who, knowingly and with intent to injure,
defraud, or deceive any person commits, or conceals any material
information concerning, one or more of the following:
(1) Presenting, causing to be presented or preparing with
knowledge or belief that it will be presented to or by an insurer,
a reinsurer, broker or its agent, false information as part of, in
support of or concerning a fact material to one or more of the
following:
(A) An application for the issuance or renewal of an
insurance policy or reinsurance contract;
(B) The rating of an insurance policy or reinsurance
contract;
(C) A claim for payment or benefit pursuant to an insurance
policy or reinsurance contract;
(D) Premiums paid on an insurance policy or reinsurance
contract;
(E) Payments made in accordance with the terms of an
insurance policy or reinsurance contract;
(F) A document filed with the commissioner or the chief
insurance regulatory official of another jurisdiction;
(G) The financial condition of an insurer or reinsurer;
(H) The formation, acquisition, merger, reconsolidation,
dissolution or withdrawal from one or more lines of insurance or
reinsurance in all or part of this state by an insurer or
reinsurer;
(I) The issuance of written evidence of insurance; or
(J) The reinstatement of an insurance policy;
(2) Solicitation or acceptance of new or renewal insurance
risks on behalf of an insurer, reinsurer or other person engaged in
the business of insurance by a person who knows or should know that
the insurer or other person responsible for the risk is insolvent
at the time of the transaction;
(3) Removal, concealment, alteration or destruction of the
assets or records of an insurer, reinsurer or other person engaged
in the business of insurance;
(4) Willful embezzlement, abstracting, purloining or
conversion of moneys, funds, premiums, credits or other property of
an insurer, reinsurer or person engaged in the business of
insurance;
(5) Transaction of the business of insurance in violation of
laws requiring a license, certificate of authority or other legal
authority for the transaction of the business of insurance;
(6) Soliciting, offering or receiving any remuneration,
including any kickback, rebate or bribe, directly or indirectly,
with the intent of causing an expenditure of moneys from any person
which would not otherwise be payable under an applicable insurance
policy; or
(7) Attempting to commit, aiding or abetting in the
commission of, or conspiracy to commit the acts or omissions
specified in this subsection.
(g) "Health care provider" means any person, firm or
corporation rendering health care services or goods.
(h) "Insurance" means a contract or arrangement in which one
undertakes to:
(1) Pay or indemnify another as to loss from certain
contingencies called "risks," including through reinsurance;
(2) Pay or grant a specified amount or determinable benefit
to another in connection with ascertainable risk contingencies;
(3) Pay an annuity to another; or
(4) Act as surety.
(i) "Insurer" means a person entering into arrangements or
contracts of insurance or reinsurance. Insurer includes, but is not limited to, any domestic or foreign stock company, mutual
company, mutual protective association, farmers' mutual fire
companies, fraternal benefit society, reciprocal or interinsurance
exchange, nonprofit medical care corporation, nonprofit health care
corporation, nonprofit hospital service association, nonprofit
dental care corporation, health maintenance organization, captive
insurance company, risk retention group or other insurer,
regardless of the type of coverage written, benefits provided or
guarantees made by each. A person is an insurer regardless of
whether the person is acting in violation of laws requiring a
certificate of authority or regardless of whether the person denies
being an insurer.
(j) "Insurance representative" means any person, firm or
corporation acting on an insurer's behalf, including, but not
limited to, any agent, adjuster, officer, director, employee or
investigator.
(k) "NAIC" means the national association of insurance
commissioners.
(l) "Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a joint stock
company, a trust, trustees, an unincorporated organization, or any
similar business entity or any combination of the foregoing.
"Person" also includes hospital service corporations, medical service corporations and dental service corporations as defined in
article twenty-four of this chapter, health care corporations as
defined in article twenty-five of this chapter, or a health
maintenance organization organized pursuant to article twenty-five-
a of this chapter.
(m) "Policy" means an individual or group policy, group
certificate, contract or arrangement of insurance or reinsurance
affecting the rights of a resident of this state or bearing a
reasonable relation to this state, regardless of whether delivered
or issued for delivery in this state.
(n) "Reinsurance" means a contract, binder of coverage
(including placement slip) or arrangement under which an insurer
procures insurance for itself in another insurer as to all or part
of an insurance risk of the originating insurer.
(o) "Statement" means any written or oral representation made
to any person, insurer or authorized agency. A statement includes,
but is not limited to, any oral report or representation; any
insurance application, policy, notice or statement; any proof of
loss, bill of lading, receipt for payment, invoice, account,
estimate of property damages, or other evidence of loss, injury or
expense; any bill for services, diagnosis, prescription, hospital
or doctor record, x-ray, test result or other evidence of
treatment, services or expense; and any application, report, actuarial study, rate request or other document submitted or
required to be submitted to any authorized agency. A statement
also includes any of the above recorded by electronic or other
media.
(p) "Unit" means the insurance fraud unit established
pursuant to the provisions of this article acting collectively or
by its duly authorized representatives.
§33-41-3. Fraudulent insurance acts, interference and
participation of convicted felons prohibited.
(a) A person may not commit a fraudulent insurance act.
(b) A person may not knowingly or intentionally interfere
with the enforcement of the provisions of this article or
investigations of suspected or actual violations of this article.
(c)(1) A person convicted of a felony involving dishonesty or
breach of trust may not participate in the business of insurance.
(2) A person in the business of insurance may not knowingly
or intentionally permit a person convicted of a felony involving
dishonesty or breach of trust to participate in the business of
insurance.
§33-41-4. Fraud warning required.
(a) Claim forms and applications for insurance, regardless of
the form of transmission, shall contain the following statement or
a substantially similar statement:
"Any person who knowingly presents a false or fraudulent claim
for payment of a loss or benefit or knowingly presents false
information in an application for insurance is guilty of a crime
and may be subject to fines and confinement in prison."
(b) The lack of a statement as required in subsection (a) of
this section does not constitute a defense in any prosecution for
a fraudulent insurance act.
(c) Policies issued by nonadmitted insurers pursuant to
article twelve-c of this chapter shall contain a statement
disclosing the status of the insurer to do business in the state
where the policy is delivered or issued for delivery or the state
where coverage is in force. The requirement of this subsection may
be satisfied by a disclosure specifically required by section five,
article twelve-c of this chapter; section nine, article thirty-two
of this chapter; and section eighteen, article thirty-two for this
chapter.
(d) The requirements of this section shall not apply to
reinsurance claim forms or reinsurance applications.
§33-41-5. Investigative and prosecution authority of the
commissioner.
(a) The commissioner may investigate
suspected fraudulent
insurance acts.
(b) If the commissioner finds as the result of an investigation that a violation has occurred, then the commissioner
may petition the appropriate circuit court for the appointment of
a special prosecutor in accordance with the provisions of chapter
seven, article seven, section eight;
(c)
The commissioner may negotiate with an attorney
representing the state to prosecute violations of the article, to
provide technical and litigation assistance to the county
prosecutors, and to allocate resources for the purpose of insurance
fraud prosecution as identified in this article
.
(d) The commissioner may employ attorneys to assist in the
prosecution of violations of this article, or to act as special
prosecutor if the attorney is appointed to act in accordance with
the provisions of chapter seven, article seven, section eight
.
(e) Funds allocated for insurance fraud prevention may be
dispersed by the commissioner, at his or her discretion, to
prosecution authorities for the purpose of insurance fraud
enforcement as identified in this article.
(f) It shall be the duty of the West Virginia state police,
municipal police departments and the sheriffs of the counties in
West Virginia to assist fraud investigators in making arrests and
the duty of the prosecuting attorneys of the several counties to
assist in the prosecution of all violations of this article.
(g) The commissioner is hereby authorized to apply for a temporary or permanent injunction in any appropriate circuit court
of this state seeking to enjoin and restrain a person from
violating or continuing to violate the provisions of this article
or rule promulgated thereunder, notwithstanding the existence of
other remedies at law. The circuit court shall have jurisdiction
of the proceeding and have the power to make and enter an order or
judgment awarding temporary or permanent injunctive relief as in
its judgment is proper
.
§33-41-6. Mandatory reporting of fraudulent insurance acts.
(a) A person engaged in the business of insurance having
knowledge or a reasonable belief that a fraudulent insurance act is
being, will be or has been committed shall provide to the
commissioner the information required by, and in a manner
prescribed by, the commissioner.
(b) Any other person having knowledge or a reasonable belief
that a fraudulent insurance act is being, will be or has been
committed may provide to the commissioner the information required
by, and in a manner prescribed by, the commissioner.
§33-41-7. Immunity from liability.
(a) There shall be no civil liability imposed on and no cause
of action shall arise from a person's furnishing information
concerning suspected, anticipated or completed fraudulent insurance
acts, if the information is provided to or received from:
(1) The commissioner or the commissioner's employees, agents
or representatives;
(2) Federal, state, or local law enforcement or regulatory
officials or their employees, agents or representatives;
(3) A person involved in the prevention and detection of
fraudulent insurance acts or that person's agents, employees or
representatives; or
(4) The national association of insurance commissioners or
its employees, agents or representatives.
(b) Subsection (a) of this section shall not apply to
statements made willfully, wantonly and recklessly. In an action
brought against a person for filing a report or furnishing other
information concerning a fraudulent insurance act, the party
bringing the action shall plead specifically any allegation that
subsection (a) of this section does not apply because the person
filing the report or furnishing the information did so willfully,
wantonly and recklessly
.
(c) This section does not abrogate or modify common law or
statutory privileges or immunities.
§33-41-8. Confidentiality.
(a) Documents, materials or other information in the
possession or control of the office of the insurance commissioner
that are provided pursuant to section six of this article or obtained by the commissioner in an investigation of suspected or
actual fraudulent insurance acts shall be confidential by law and
privileged, may not be subject to article one, chapter twenty-nine-
b of the West Virginia code, one thousand nine hundred thirty-one,
as amended, are not open to public inspection, may not be subject
to subpoena, and may not be subject to discovery or admissible in
evidence in any private civil action. However, the commissioner is
authorized to use the documents, materials or other information in
the furtherance of any regulatory or legal action brought as a part
of the commissioner's official duties. The commissioner is
authorized to use the documents, materials or other information if
they are required for evidence in criminal proceedings or other
action by the state.
(b) Neither the commissioner nor any person who receives
documents, materials or other information while acting under the
authority of the commissioner may be permitted or required to
testify in any private civil action concerning any confidential
documents, materials or information subject to subsection (a) of
this section.
(c) In order to assist in the performance of the
commissioner's duties, the commissioner:
(1) May share documents, materials or other information,
including the confidential and privileged documents, materials or information subject to subsection (a) of this section with other
state, federal and international regulatory agencies, with the
national association of insurance commissioners and its affiliates
and subsidiaries, and with local, state, federal and international
law-enforcement authorities, provided that the recipient agrees to
maintain the confidentiality and privileged status of the document,
material or other information;
(2) May receive documents, materials or information,
including otherwise confidential and privileged documents,
materials or information, from the national association of
insurance commissioners and its affiliates and subsidiaries, and
from regulatory and law-enforcement officials of other foreign or
domestic jurisdictions, and shall maintain as confidential or
privileged any document, material or information received with
notice or the understanding that it is confidential or privileged
under the laws of the jurisdiction that is the source of the
document, material or information;
(3) May enter into agreements governing sharing and use of
information including the furtherance of any regulatory or legal
action brought as part of the recipient's official duties; and
(d) No waiver of any applicable privilege or claim of
confidentiality in the documents, materials or information shall
occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (c)
of this section.
§33-41-9. Creation and purpose of the insurance fraud unit.
(a) The West Virginia insurance commissioner shall establish
a fraud investigation unit within his or her office. The insurance
commissioner shall appoint a person to serve as the director of the
fraud unit.
The commissioner shall provide office space, equipment,
supplies, clerical and other staff necessary for the insurance
fraud investigation unit to carry out its duties and
responsibilities under this article. The investigative personnel
shall be qualified by training and experience to perform the duties
of their positions.
(b) The fraud unit may:
(1) Initiate independent inquiries and conduct independent
investigations when the insurance fraud unit has cause to believe
that a fraudulent insurance act may be, is being or has been
committed;
(2) Review reports or complaints of alleged fraudulent
insurance activities from federal, state and local law enforcement
and regulatory agencies, persons engaged in the business of
insurance, and the public to determine whether the reports require
further investigation and to conduct these investigations; and
(3) Conduct independent examinations of alleged fraudulent insurance acts and undertake independent studies to determine the
extent of fraudulent insurance acts.
(c) The insurance fraud investigation unit shall have the
authority to:
(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
herein;
(2) Inspect, copy or collect records and evidence;
(3) Serve subpoenas;
(4) Administer oaths and affirmations;
(5) Share records and evidence with federal, state or local
law-enforcement or regulatory agencies;
(6) Make criminal referrals to the county prosecuting
authorities; and
(7) Conduct investigations outside of 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.
(d) On or before the first day of each regular session of the
Legislature, the commissioner shall file with the governor, the
clerk of the Senate and the clerk of the House of Delegates a
report detailing the finalized actions taken by the insurance fraud
unit in the preceding fiscal year.
§33-41-10. Other law enforcement or regulatory authority.
This article does not:
(a) Preempt the authority or relieve the duty of other law-
enforcement or regulatory agencies to investigate, examine and
prosecute suspected violations of law;
(b) Prevent or prohibit a person from disclosing voluntarily
information concerning insurance fraud to a law-enforcement or
regulatory agency other than the insurance fraud unit; or
(c) Limit the powers granted elsewhere by the laws of this
state to the commissioner or the insurance fraud unit to
investigate and examine possible violations of law and to take
appropriate action against wrongdoers.
§33-41-11. Antifraud initiatives of insurers.
(a) Insurers shall have antifraud initiatives reasonably
calculated to detect, prosecute and prevent fraudulent insurance acts. Antifraud initiatives may include:
(1) Fraud investigators, who may be insurer employees or
independent contractors; or
(2) An antifraud plan submitted to the commissioner.
Antifraud plans submitted to the commissioner shall be privileged
and confidential and may not be a public record and may not be
subject to discovery or subpoena in a civil or criminal action.
(b) Insurers shall establish antifraud initiatives as
required by this section no later than the first day of July, two
thousand five
.
§33-41-12. Rules.
The insurance commissioner may propose rules for legislative
approval in accordance with the provisions of article three,
chapter twenty-nine-a of this code that are necessary to effectuate
this article.
§33-41-13. Administrative penalties.
(a)A person who is required to include fraud warnings as
required by section four of this article, and who commits an act in
violation of section four of this article may, after notice and
hearing pursuant to section thirteen, article two of this chapter,
be fined by the commissioner a sum not to exceed one thousand
dollars per violation.
(b) A person who commits an act in violation of section three of this article may, after notice and hearing pursuant to section
thirteen, article two of this chapter
, be subject to the following
administrative penalties:
(1) Suspension or revocation of any license or certificate of
authority issued by the insurance commissioner; and,
(2) A fine of up to ten thousand dollars per violation;
(3) An order to pay restitution to the person or entity
injured or damaged in an amount to be determined by the
commissioner.
(c) Any money or other property that is awarded to the
insurance commission or the insurance fraud unit as the result of
an investigation, or administrative penalties which are imposed by
the Commission, shall be credited to the special revenue fund
established in section thirteen, article three of this chapter.
§33-41-14. Criminal Penalties.
(a) A person who commits an act in violation of section three
of this article may
be subject to the following criminal penalties:
(1) If the act results in a payment, benefit or financial loss
to any person with a value of one thousand dollars or more, the
person is
guilty of a felony and, upon conviction thereof, shall be
fined not more than ten thousand dollars, or
imprisoned in a state
correctional facility for not less than one nor more than ten
years, or both fined and imprisoned.
(2) If the act results in a payment, benefit or financial
loss to any person with a value of less than one thousand dollars,
the person
is guilty of a misdemeanor and, upon conviction thereof,
shall be fined not to exceed two thousand five hundred dollars
, or
confined in a county or regional jail for a term not to exceed one
year, or both fined and confined.
(b) In addition to any fine or imprisonment, any person
convicted of a misdemeanor or felony pursuant to the provisions of
this article may be required to make full restitution to the person
injured or damaged in a manner to be determined by the court.
The
court may, in addition to any other penalty, award the insurance
fraud unit the costs of the investigation
.
(c) A person who is convicted of a felony pursuant to the
provisions of this article shall be disqualified from engaging in
the business of insurance.
CHAPTER 55. ACTIONS, SUITS AND ARBITRATION; JUDICIAL SALE.
ARTICLE 7. ACTIONS FOR INJURIES.
§55-7-13. Contribution by joint tort-feasors.
Where a judgment is rendered in an action ex delicto against
several persons jointly, and satisfaction of such judgment is made
by any one or more of such persons, the others shall be liable to
contribution to the same extent as if the judgment were upon an
action ex contractu.
Except that in every such action, the court shall make findings as to the total dollar amount awarded as
damages to each plaintiff. The court shall enter judgment of joint
and several liability against every defendant who bears ten percent
or more of the negligence attributable to all defendants. The court
shall enter judgment of several, but not joint, liability against
and among all defendants who bear less than ten percent of the
negligence attributable to all defendants.