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ENGROSSED
Senate Bill No. 438
(By Senators Minard and Foster)
____________
[Introduced January 31, 2006; referred to the Committee on
Banking and Insurance.]
____________
A BILL to amend and reenact
§33-20-2
and
§33-20-3
of the Code of
West Virginia, 1931, as amended, all relating to providing for
regulation of title insurance rates in the same manner as
casualty insurance rates.
Be it enacted by the Legislature of West Virginia:
That
§33-20-2
and
§33-20-3
of the Code of West Virginia, 1931,
as amended, be amended and reenacted, all to read as follows:
ARTICLE 20. RATES AND RATING ORGANIZATIONS.
§33-20-2. Scope of article.
(a) This article applies to fire, marine, casualty and surety
insurance on risks or operations in this state.
(b) This article shall does not apply:
(1) To reinsurance, other than joint reinsurance to the extent
stated in section eleven of this article;
(2) To life or accident and sickness insurance;
(3) To insurance of vessels or craft, their cargoes, marine
builders' risks, marine protection and indemnity or other risks
commonly insured under marine, as distinguished from inland marine,
insurance policies;
(4) To insurance against loss of or damage to aircraft,
including their accessories and equipment, or against liability,
other than workers' compensation and employer's liability, arising
out of the ownership, maintenance or use of aircraft;
(5) To title insurance;
(6) (5) To malpractice insurance insofar as the provisions of
this article directly conflict and thereby are supplanted by
article twenty-b of this chapter.
(c) If any kind of insurance, subdivision or combination
thereof, or type of coverage, is subject to both the provisions of
this article expressly applicable to casualty and surety insurance
and to those expressly applicable to fire and marine insurance, the
commissioner may apply to filings made for such kind of insurance
the provisions of this article which are in his or her judgment
most suitable.
§33-20-3. Ratemaking.
All rates shall be made in accordance with the following
provisions:
(a) Due consideration shall be given to past and prospective
loss experience within and outside this state, to catastrophe hazards, if any, to a reasonable margin for underwriting profit and
contingencies, to dividends, savings or unabsorbed premium deposits
allowed or returned by insurers to their policyholders, members or
subscribers, to past and prospective expenses both countrywide and
those specially applicable to this state and to all other relevant
factors within and outside this state.
(b) Rates shall may not be excessive, inadequate or unfairly
discriminatory.
(c) Rates for casualty and surety insurance to which this
article applies shall also be subject to the following provisions:
(1) The systems of expense provisions included in the rates
for use by any insurer or group of insurers may differ from those
of other insurers or groups of insurers to reflect the requirements
of the operating methods of any such insurer or group with respect
to any kind of insurance or with respect to any subdivision or
combination thereof for which subdivision or combination separate
expense provisions are applicable.
(2) Risks shall be grouped by classifications and by
territorial areas for the establishment of rates and minimum
premiums. Classification of rates shall be modified to produce
rates for individual risks in a territorial area in accordance with
rating plans which establish standards for measuring variations in
hazards or expense provisions, or both. Such standards may measure
any differences among risks that can be demonstrated to have a
probable effect upon losses or expenses: Provided, That such standards shall include the establishment of at least seven
territorial rate areas within the state: Provided, however, That
such territorial rate established by any insurer or group of
insurers may differ from those of other insurers or group of
insurers.
(3) Due consideration shall be given to such factors as
expense, management, individual experience, underwriting judgment,
degree or nature of hazard or any other reasonable considerations,
provided such factors apply to all risks under the same or
substantially the same circumstances or conditions.
(d) Rates for fire and marine insurance to which this article
applies shall also be subject to the following provisions:
(1) Manual, minimum, class rates, rating schedules or rating
plans shall be made and adopted, except in the case of specific
inland marine rates on risks specially rated.
(2) Due consideration shall be given to the conflagration
hazard and in the case of fire insurance rates, consideration shall
be given to the experience of the fire insurance business during a
period of not less than the most recent five-year period for which
such experience is available.
(e) Rates for title insurance to which this article applies
shall also be subject to the following provisions:
(1) Title insurance risk rates shall be reasonable and
adequate for the class of risks to which they apply. Risk rates
may not be unfairly discriminatory between risks involving essentially the same hazards and expense elements. The rates may
be fixed in an amount sufficient to furnish a reasonable margin for
profit after provisions to account for: (i) Probable losses as
indicated by experience within and without this state; (ii)exposure
to loss under policies; (iii) allocations to reserves; (iv) costs
participating insurance; (v) operating costs; and (vi) other items
of expense fairly attributable to the operation of a title
insurance business.
(2) Policies may be grouped into classes for the establishment
of rates. A title insurance policy that is unusually hazardous to
the title insurance company because of an alleged defect or
irregularity in the title insured or because of uncertainty
regarding the proper interpretation or application of the law
involved may be classified separately according to the facts of
each case.
(3) Title insurance risk rates may not include charges for
abstracting, record searching, certificates regarding the record
title, escrow services, closing services and other related services
that may be offered or furnished or the cost and expenses of
examinations of titles.
(e) (f) Except to the extent necessary to meet the provisions
of subdivisions (b) and (c) of this section, uniformity among
insurers in any matters within the scope of this section is neither
required nor prohibited.
(f) (g) Rates made in accordance with this section may be used subject to the provisions of this article.