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Introduced Version House Bill 4199 History

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Key: Green = existing Code. Red = new code to be enacted

H. B. 4199


(By Delegates Phillips, Gallagher, Collins, Ashley,
Riggs, Mezzatesta and Rowe)

[Introduced January 28, 1994; referred to the

Committee on Banking and Insurance.]




A BILL to amend and reenact section six, article twenty, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to insurance; requiring a rating organization to complete a fire rate classification, including notification and publication, within one hundred eighty days after the initial request for a classification inspection is made; and setting forth the publication and filing requirements for such classifications.

Be it enacted by the Legislature of West Virginia:

That section six, article twenty, 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 33. LICENSING, FEES AND TAXATION OF INSURERS.

§ 33 - 20 - 6. Rating organizations.

(a) A corporation, an unincorporated association, a partnership or an individual, whether located within or outside this state, may make application to the commissioner for license as a rating organization for such kinds of casualty insurance or subdivisions thereof, or for such kinds of fire and marine insurance or subdivision or class of risk or a part or combination thereof as are specified in its application and shall file therewith (1) a copy of its constitution, its articles of agreement or association or its certificates of incorporation, and of its bylaws, rules and regulations governing the conduct of its business, (2) a list of its members and subscribers, (3) the name and address of a resident of this state as attorney-in-fact upon whom notices or orders of the commissioner or process affecting such rating organization may be served and (4) a statement of its qualifications as a rating organization. If the commissioner finds that the applicant is competent, trustworthy and otherwise qualified to act as a rating organization and that its constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business conform to the requirements of law, he shall issue a license specifying the kinds of insurance or subdivisions thereof for which the applicant is authorized to act as a rating organization. Every application shall be granted or denied in whole or in part by the commissioner within sixty days of the date of its filing with him. Licenses issued pursuant to this section shall remain in effect for three years unless sooner suspended or revoked by the commissioner. The fee for the license shall be one hundred dollars, and the fee shall be in lieu of all other fees, licenses or taxes to which a rating organization might otherwise be subject, all fees so collected to be used for the purposes specified in section thirteen, article three of this chapter. Licenses issued pursuant to this section may be suspended or revoked by the commissioner, after notice and hearing, in the event the rating organization ceases to meet the requirements of this article. Every rating organization shall notify the commissioner promptly of every change in (1) its constitution, its articles of agreement or association or its certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business, (2) its list of members and subscribers and (3) the name and address of the resident of this state designated as attorney-in-fact by it upon whom notices or orders of the commissioner or process affecting such rating organization may be served.

(b) Subject to rules and regulations which have been approved by the commissioner as reasonable, each rating organization shall permit any insurer, not a member, to be a subscriber to its rating services for any kind of casualty insurance or subdivision thereof, or for any kind of fire and marine insurance or subdivision or class of risk or a part or combination thereof, or any kind of surety insurance or subdivision thereof, for which it is authorized to act as a rating organization. Notice of proposed changes in such rules and regulations shall be given to subscribers. Each rating organization shall furnish its rating services without discrimination to its members and subscribers. The reasonableness of any rule or regulation in its application to subscribers, or the refusal of any rating organization to admit an insurer as a subscriber, shall, at the request of any subscriber or any such insurer, be reviewed by the commissioner. If, after notice and hearing, the commissioner finds that the rule or regulation is unreasonable in its application to subscribers, he shall order that such rule or regulation shall not be applicable to subscribers. If the rating organization fails to grant or reject an insurer's application for subscribership within thirty days after it was made, the insurer may request a review by the commissioner as if the application had been rejected. If, after notice and hearing, the commissioner finds that the insurer has been refused admittance to the rating organization as a subscriber without justification, he shall order the rating organization to admit the insurer as a subscriber. If he finds that the action of the rating organization was justified, he shall make an order affirming its action.
(c) No rating organization shall adopt any rule the effect of which would be to prohibit or regulate the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers.
(d) Cooperation among rating organizations or among rating organizations and insurers in rate making or in other matters within the scope of this article is hereby authorized, provided the filings resulting from such cooperation are subject to all the provisions of this article which are applicable to filings generally. The commissioner may review such cooperative activities and practices, and if after a hearing he finds that any such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this article, he may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this article, and requiring the discontinuance of such activity or practice.
(e) Any rating organization for casualty, marine or surety insurance may provide for the examination of policies, daily reports, binders, renewal certificates, endorsements or other evidences of insurance, or the cancellation thereof, and may make reasonable rules governing their submission. The rules shall contain a provision that in the event any insurer does not within sixty days furnish satisfactory evidence to the rating organization of the correction of any error or omission previously called to its attention by the rating organization, it shall be the duty of the rating organization to notify the commissioner thereof. All information so submitted for examination shall be confidential. Such services for fire insurance shall be governed by the provisions of section ten, article seventeen of this chapter.
(f) Any rating organization may subscribe for or purchase actuarial, technical or other services, and these services shall be available to all members and subscribers without discrimination.
(g) Any rating organization responsible for establishing fire rate classifications for West Virginia cities, towns, and fire districts shall:
(1) Commence a classification inspection within ninety days after requested to do so in writing by any entity for which the rating organization is responsible. Within ninety days after commencement of the inspection, such inspection shall be completed, the entity inspected shall be notified of any necessary adjustments, a comprehensive written evaluation shall be provided to the entity inspected, and publication of the classification established shall be undertaken; and
(2) File the following with the insurance commissioner:
(A) Within thirty days of its publication:
(i) A copy of a current list of all classifications established in West Virginia. Such list shall be published on a quarterly basis; and
(ii) All changes in established classifications during the previous month. Such list shall be published on a monthly basis.
(B) Within thirty days after being requested by the insurance commissioner pursuant to this paragraph, a copy of guidelines used to establish classifications, stating the minimum qualifications, standards and requirements for each classification (classes one through ten).

NOTE: The purpose of this bill is to require fire rating organizations to perform fire rate classification inspections of towns, cities and fire districts in a timely manner; and to file with the Insurance Commissioner all classifications, changes in classifications, and guidelines used in establishing classifications. The bill would also eliminate language referring to W. Va. Code § 33-17-10, which has been repealed.

BANKING & INSURANCE COMMITTEE TITLE AMENDMENT


"A BILL to amend and reenact section six, article twenty, chapter thirty-three of the code of west Virginia, one thousand nine hundred thirty-one, as amended, relating to insurance rating organizations; requiring certain applications and filings; establishing fees; required notices; rules of the insurance commissioner; subscribers to the rating organization service; prohibited acts; cooperation among rating organizations and insurers; review and examinations; permitting subscription to actuarial, technical or other services; establishing time frames for commencement and completion of classification inspections; requiring notification of adjustments, written evaluations and publications of classifications; and requiring classification lists, changes in established classifications and guidelines to be submitted to the insurance commissioner within a certain time period."
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