COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 468
(By Senator Minard)
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[Originating in the Committee on Banking and Insurance;
reported February 17, 2004.]
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A BILL to amend and reenact §33-6A-4 of the code of West Virginia,
1931, as amended; and to amend and reenact
§33-17A-4
and
§33-17A-5
of said code, all relating to insurance generally;
additional reasons for nonrenewal of automobile liability,
physical damage and property insurance; and providing that any
policy issued after the effective date of the bill may be
nonrenewed by an insurer for any reason with proper notice to
the insured.
Be it enacted by the Legislature of West Virginia:
That §33-6A-4 of the code of West Virginia, 1931, as amended,
be amended and reenacted; and that
§33-17A-4
and
§33-17A-5
of said
code be amended and reenacted, all to read as follows:
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 insurer's election not to renew
such 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 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, That
(b) Subject to the provisions of subsection (c) of this
section, 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, a
physical or mental condition that may prevent the insured from
safely operating a motor vehicle, and such individual cannot
produce a certificate from a physician testifying to his or her
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; or
(6) (F) Making false statements in an application for a motor
vehicle operator's license;
(7) (6) 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 two or more moving traffic
violations committed within a period of twelve twenty-four 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) (7) The named insured or any other operator has had a
second at-fault motor vehicle accident within a period of twelve
thirty-six months, whether or not the insurer renewed the policy
without knowledge of all such accidents. 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 of the second accident.
(8) The insurer ceases writing automobile liability or
physical damage insurance policies throughout the state or
discontinues operations within the state: Provided, That the
insurer:
(A) Has submitted and received approval from the commissioner
of a withdrawal plan relating to automobile liability or physical
damage insurance policies or the insurer's certificate of
authority, if applicable; and
(B) Demonstrates to the satisfaction of the commissioner that
allowing the insurer to nonrenew all outstanding automobile
liability or physical damage insurance policies would be in the
best interest of the insurer, its policyholders and the citizens of
this state.
The commissioner shall promulgate rules pursuant to chapter twenty-
nine-a of this code setting forth the criteria for withdrawal plans
relating to automobile liability or physical damage policies.
(9) Nonrenewal of such 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.
(c) (1) The provisions of subsection (b) of this section shall
apply to members of the household in connection with any policy of
insurance issued on or before the first day of July, two thousand
four so long as the named insured and members of the household
continue to obtain insurance from the same insurer or its
affiliates even if coverage is provided through multiple policies.
In the event of divorce or death of the named insured, the policy
issued to the spouse of the named insured shall continue to be
subject to subsection (b) of this section so long as the policy is
issued by the same insurer or one of its affiliates.
(2) Subject to subdivision (1) of this subsection, the
provisions of subsection (b) of this section do not apply to any
policy of insurance issued after the first day of July, two
thousand four.
(3) No insurer may issue an automobile liability or physical
damage insurance policy that replaces such a policy issued prior to
the first day of July, two thousand four without first having
advised the named insured and received a written acknowledgment
that the replacement policy will not be subject to the limitations
against nonrenewal contained in this section. Written
acknowledgment of the named insured shall be made pursuant to a
form to be prepared by the commissioner. The form shall
specifically inform the named insured that the replacement policy
will not be subject to the limitations against nonrenewal contained
in this section. The contents of the form described herein which
has been signed by the named insured shall create a presumption
that such named insured exercised a knowing and intelligent
election of replacement coverage without the protections afforded
under his or her existing policy. No insurer or agent thereof
shall be liable for alleged damages resulting from the loss of any
protections afforded the insured by this section.
(d) Notwithstanding the provisions of subsection (a) of this
section, the insurer shall renew reinstate 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 subsection (b) through (f), inclusive of this section
exist; and
(2) The insured makes an application for renewal reinstatement
within ninety forty-five days of the original expiration date of
the policy. If a policy is renewed reinstated as provided for in
this paragraph, then the coverage afforded shall not be retroactive
to the original expiration date of the policy: but Provided, That
such policy shall begin be effective on the reinstatement date at
the current premium levels offered by the company and not within
the protections of this section relating to renewal of an
outstanding automobile liability or physical damage insurance
policy that has been in existence for at least two consecutive
years.
ARTICLE 17A. PROPERTY INSURANCE DECLINATION, TERMINATION AND
DISCLOSURE.
§33-17A-4. Notification and reasons for a transfer, declination or
termination.
(a) Upon declining to insure any real or personal property,
subject to this article, the insurer making a declination shall
provide the insurance applicant with a written explanation of the
specific reason or reasons for the declination at the time of the
declination. The provision of such insurance application form by
an insurer shall create no right to coverage on the behalf of the
insured to which the insured is not otherwise entitled.
(b) A notice of cancellation of property insurance coverage by an insurer shall be in writing, shall be delivered to the named
insured or sent by first class mail to the named insured at the
last known address of the named insured, shall state the effective
date of the cancellation and shall be accompanied by a written
explanation of the specific reason or reasons for the cancellation.
(c) At least thirty days before the end of a policy period, as
described in subsection (c), section three of this article, an
insurer shall deliver or send by first class mail to the named
insured at the last known address of the named insured, notice of
its intention regarding the renewal of the property insurance
policy. Notice of an intention not to renew a property insurance
policy shall be accompanied by an explanation of the specific
reasons for the nonrenewal: Provided, That no insurer shall fail
to renew an outstanding property insurance policy which has, as of
the first day of July, two thousand four, been in existence for
four years or longer except for the reasons as set forth in section
five of this article; or for other valid underwriting reasons which
involve a substantial increase in the risk. Notwithstanding any
provision of this section to the contrary, any property insurance
policy issued on or after the first day of July, two thousand four,
may be nonrenewed by the insurer for any reason upon thirty days
notice to the named insured as provided in this section.
§33-17A-5. Permissible cancellations.
After coverage has been in effect for more than sixty days or
after the effective date of a renewal policy, a notice of
cancellation may not be issued unless it is based on at least one of the following reasons:
(a) Nonpayment of premium;
(b) Conviction of the insured of any crime having as one of
its necessary elements an act increasing any hazard insured
against;
(c) Discovery of fraud or material misrepresentation made by
or with the knowledge of the named insured in obtaining the policy,
continuing the policy or in presenting a claim under the policy;
(d) Discovery of willful or reckless acts or omissions on the
part of the named insured which increase any hazard insured
against;
(e) The occurrence of a change in the risk which substantially
increases any hazard insured against after insurance coverage has
been issued or renewed;
(f) A violation of any local fire, health, safety, building or
construction regulation or ordinance with respect to any insured
property or the occupancy thereof which substantially increases any
hazard insured against;
(g) A determination by the commissioner that the continuation
of the policy would place the insurer in violation of the insurance
laws of this state;
(h) Real property taxes owing on the insured property have
been delinquent for two or more years and continue delinquent at
the time notice of cancellation is issued;
(i) The insurer which issues said policy of insurance ceases
writing the particular type or line of insurance coverage contained in said policy property insurance policies throughout the state or
should such the insurer discontinue discontinues operations within
the state, if the insurer has filed a withdrawal plan relating to
property insurance policies or the insurer's certificate of
authority, if applicable, for the commissioner's review; or
(j) Substantial breach of the provisions of the policy.
__________
NOTE: The purpose of this bill is to add additional reasons
for nonrenewal of automobile liability and physical damage
insurance and property insurance. The bill provides that any
policy issued after the effective date of the bill may be
nonrenewed by an insurer for any reason with proper notice to the
insured.
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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