H. B. 2441
(By Delegates Phillips, L. White, Beane and Douglas)
[Introduced March 2, 1993; referred to the
Committee on Banking and Insurance.]
A BILL to amend and reenact section twenty, article three,
chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
the Unauthorized Insurers Act; excluding the state board of
risk and insurance management and attorneys at law acting
within an attorney-client relationship from the definition
of "insurer" for purposes of that act; and making technical
corrections.
Be it enacted by the Legislature of West Virginia:
That section twenty, article three, 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 3. LICENSING, FEES AND TAXATION OF INSURERS.
§33-3-20. Unlawful transaction of business; exceptions.
(a)
As used in this section For purposes of sections
eighteen through thirty-two, inclusive, of this article, unless
otherwise indicated, "insurer" includes:
(1) All corporations, associations, trusts, partnerships,
natural persons and other legal entities engaged as principals in
the business of insurance, including a fraternal benefit society,
a nonprofit corporation offering dental, hospital and medical
services, a health maintenance organization and an organization
for dental care; and
(2) Interinsurance exchanges and mutual benefit societies.
(b) For purposes of sections eighteen through thirty-two,
inclusive, of this article, "insurer" excludes:
(1) The state board of risk and insurance management
established pursuant to article twelve, chapter twenty-nine of
this code; and
(2) Any attorney at law who adjusts claims or losses while
acting in an attorney-client relationship.
(b) (c) It is unlawful for any insurer to transact an
insurance business in this state as set forth in subsection
(c)
(d) of this section, without a license from the commissioner.
This section does not apply to:
(1) Any transaction for which a license is not required
pursuant to section one of this article including, but not
limited to, the lawful transaction of surplus lines insurance and
reinsurance by insurers;
(2) Attorneys at law acting in the ordinary relation of
attorney and client in the adjustment of claims or losses; and
(3) (2) Transactions in this state relative to a policy
issued or to be issued outside this state involving insurance oncargo vessels, their craft or hulls, their cargoes, marine
builder's risk, commercial marine protection and indemnity or
other risk, including strikes and war risks commonly insured
under ocean marine forms of policy;
and
(3) Transactions in this state involving group life
insurance, group accident and sickness insurance or group
annuities providing coverage under policies that are recognized
under articles fourteen and sixteen, respectively, of this
chapter where
(1) (i) the master policy of such groups was
lawfully issued and delivered in and pursuant to the laws of a
state in which the insurer was authorized to do an insurance
business, to a group organized for purposes other than the
procurement of insurance, and where the policyholder is domiciled
or otherwise has a bona fide situs, and
(2) (ii) except for group
annuities, the insurer complies with section thirty-five, article
six of this chapter.
The commissioner may require the insurer which has issued
such master policy to submit such information as the commissioner
requires in order to determine if probable cause exists to
convene a hearing to determine whether the total charges for the
insurance to the persons insured are reasonable in relation to
the benefits provided under such policy.
(c) (d) Any of the following acts in this state effected by
mail or otherwise by or on behalf of an unauthorized insurer
constitutes the transaction of an insurance business in this
state:
(1) The making of or proposing to make, as an insurer, an
insurance contract;
(2) The making of or proposing to make, as guarantor or
surety, any contract of
guaranty guarantyship or suretyship as a
vocation and not merely incidental to any other legitimate
business or activity of the guarantor or surety;
(3) The taking or receiving of any application for
insurance;
(4) The receiving or collection of any premium, commission,
membership fees, assessments, dues or other consideration for any
insurance or any part thereof;
(5) The issuance or delivery of contracts of insurance to
residents of this state or to persons authorized to do business
in this state;
(6) The acting, directly or indirectly, as an agent for or
otherwise representing or aiding on behalf of another any person
or insurer in the solicitation, negotiation, procurement or
effectuation of insurance or renewals thereof or in the
dissemination of information as to coverage or rates, forwarding
of applications, delivery of policies or contracts, inspection of
risks, fixing of rates, investigating or adjusting of claims or
losses, transacting of matters after effectuation of the contract
and arising out of it, or in any other manner representing or
assisting a person or insurer in the transaction of insurance
with respect to subjects of insurance that are resident, located
or to be performed in this state. The provisions of thisparagraph do not prohibit full-time salaried employees of a
corporate insured from acting in the capacity of an insurance
manager or buyer in placing insurance on behalf of such an
insured;
(7) The transacting of any kind of insurance business
specifically recognized as transacting an insurance business or
transacting insurance within the meaning of provisions of this
chapter;
(8) The transacting of or proposing to transact any
insurance business in substance equivalent to any of the
activities described in this subsection, in a manner designed to
evade the provisions of this chapter.
(d) (e) The venue of an act committed by mail is at the
point where the matter transmitted by mail is delivered and takes
effect, or in any action filed on behalf of the commissioner is
at such point as above described or, at the election of the
commissioner, in the circuit court of Kanawha County.
(e) (f) The failure of an insurer transacting insurance
business in this state to obtain a license does not impair the
validity of any act or contract of the insurer and does not
prevent the insurer from defending any action at law or suit in
equity in any court of this state:
Provided, That no insurer
transacting insurance business in this state without a license
may maintain an action in any court of this state to enforce any
right, claim or demand arising out of the transaction of such
business until the insurer has obtained a license. In the eventof a failure by an unauthorized insurer to pay any claim or loss
within the provisions of an insurance contract, any person who
assisted or in any manner aided directly or indirectly in the
procurement of the insurance contract is liable to the insured
for the full amount of the claim or loss in the manner provided
by the provisions of the insurance contract.
NOTE: The purpose of this bill is to amend the state
Unauthorized Insurers Act (West Virginia Code §§33-3-18 through
33-3-32, inclusive) to exclude the West Virginia Board of Risk
and Insurance Management from the definition of "insurer" for
purposes of that act.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
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