COMMITTEE SUBSTITUTE
FOR
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 468
(By Senator Minard)
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[Originating in the Committee on the Judiciary;
reported February 26, 2004.]
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A BILL to amend the code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §33-2-20; to amend
and reenact §33-6A-4 of said code; and to amend said code by
adding thereto two new sections, designated §33-6A-4a and §33-
6A-4b, all relating to insurance generally; additional reasons
for nonrenewal of automobile liability, physical damage and
property insurance; providing that any existing policy or any
policy issued or renewed after the effective date of the bill
may be nonrenewed by an insurer for any reason with proper
notice to the insured; and authorizing the commissioner of
insurance to act regarding withdrawal of insurers from the
state.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §33-2-20; that
§33-6A-4 of the said be amended and reenacted; and that said code
be further amended by adding two new sections, designated §33-6A-4a
and §33-6A-4b, all to read as follows:
ARTICLE 2. INSURANCE COMMISSIONER.
§33-2-20. Authority of commission to allow withdrawal of
insurance carriers from doing business in the
state.
(a) Notwithstanding any provision of the code to the contrary,
the commissioner may consistent with the provisions of this section
authorize an insurer to withdraw from the line of authority of
automobile liability insurance for personal, private passenger
automobiles covered by article six-a of this chapter from doing
business entirely in this state if:
(1) The insurer has submitted and received approval from the
commissioner of a withdrawal plan; and
(2) The insurer demonstrates to the satisfaction of the
commissioner that allowing the insurer to withdraw would be in the
best interest of the insurer, its policyholders and the citizens of
this state.
(b) Any insurer that elects to nonrenew or cancel the
particular type or line of insurance coverage provided for by
section five, article seventeen-a of this chapter shall submit to
the insurance commissioner a withdrawal plan for informational
purposes only prior to cancellation or nonrenewal of all its business in this state
(c) The commissioner shall promulgate rules pursuant to
chapter twenty-nine-a of this code setting forth the criteria for
withdrawal plans.
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 an
(b) 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,
physical or mental condition that prevents the insured from
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;
(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 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: Provided, That an insurer may nonrenew an automobile
liability or physical damage insurance policy if 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 twenty-
four months, each of which occurs on or after the first day of
July, two thousand four and 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 subdivision 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 either
residing in the same household or who customarily operates an
automobile insured under such policy has had a second at-fault
motor vehicle accident within a period of twelve months, whether or
not the insurer renewed the policy without knowledge of all such
accidents: Provided, That an insurer may non-renew an automobile
liability or physical damage insurance policy under this subsection
if the named insured or any other operator either residing in the
same household or who customarily operates an automobile insured
under such policy has had two at-fault motor vehicle accidents
within a period of thirty-six months, each of which occurs after
the first day of July, two thousand four and results in a claim
paid by the insurer for each accident, 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; or
(9) The insurer ceases writing automobile liability or
physical damage insurance policies throughout the state after
submission to and approval by the commissioner of a withdrawal plan
or discontinues operations within the state pursuant to a withdrawal plan approved by the commissioner.
(c) An insurer shall not fail to renew an automobile liability
or physical damage insurance policy when an operator other than the
named insured has violated the provisions of subdivision (4) or
(5), subsection (b) of this section, if the named insured, by
restrictive endorsement, specifically excludes the operator who
violated the provision. An insurer issuing a nonrenewal notice
informing the named insured that the policy will be nonrenewed, the
reason for that an operator has violated the provisions of
subdivision (4) or (5), subsection (b) of this section, shall at
that time inform the named insured of his or her option to
specifically exclude the operator by restrictive endorsement and
shall further inform the named insured that upon obtaining the
restrictive endorsement, the insurer will renew the policy or
rescind the nonrenewal absent the existence of any other basis for
nonrenewal set forth in this section.
(d) A notice provided under subsection (a) of this section
must state the specific reason or reasons for nonrenewal and shall
advise the named insured that Nonrenewal 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. The notice must also advise the insured of possible
eligibility for insurance through the West Virginia assigned risk
plan.
(e) 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 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 shall not be afforded 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.
§33-6A-4a. Alternative method for nonrenewal for automobile
liability and physical damage insurance.
(a) On or after the first day of July, two thousand four, an
insurer may nonrenew an automobile liability or physical damage
insurance policy for any reason other than race, religion,
nationality, ethnic group, age, sex, marital status, or other
reason prohibited by the provisions of this chapter,
notwithstanding the provisions of section four of this article,
upon forty-five days advance notice to the named insured of the insurer's election not to renew the policy.
(b) The total number of nonrenewal notices issued by the
insurer pursuant to this section may not exceed one and one-half
percent of the total number of such policies of the insurer in
force at the end of the previous calendar year in this state:
Provided, That the total number of nonrenewal notices issued to
insureds within any given county in this state may not exceed one
and one-half percent of the total number of such policies of the
insurer in force in that county at the end of the previous calendar
year: Provided, however, That an insurer may nonrenew one policy
in any county if the applicable percentage limitation results in
less than one policy.
(c) Notwithstanding the provisions of subsection (b) of this
section, on or after the first day of July, two thousand seven, the
total number of nonrenewal notices issued by the insurer pursuant
to this section may not exceed one percent of the total number of
such policies of the insurer in force at the end of the previous
calendar year in this state: Provided, That the total number of
nonrenewal notices issued to insureds within any given county in
this state may not exceed one percent of the total number of such
policies of the insurer in force in that county at the end of the
previous calendar year: Provided, however, That an insurer may
nonrenew one policy in any county if the applicable percentage
limitation results in less than one policy.
(d) A notice issued pursuant to this section shall state the
specific reason or reasons for refusal to renew and shall advise the named insured that nonrenewal of such policy for any reason is
subject to a hearing and review as provided for in section five of
this article: Provided, That the hearing must relate to whether
the nonrenewal notice was issued for a discriminatory reason, was
based upon inadequate notice, or causes the insurer to exceed the
percentage limitation on nonrenewal notices set forth in this
section. Cost of the hearing shall be assessed against the losing
party but shall not exceed seventy-five dollars. The notice must
also advise the insured of possible eligibility for insurance
through the West Virginia assigned risk plan.
(e) Each insurer licensed to write automobile liability and
physical damage insurance policies in this state shall file with
the commissioner a copy of its underwriting standards, including
any amendments or supplements. The commissioner shall review and
examine the underwriting standards to ensure compliance with this
chapter. The underwriting standards filed with the commissioner
shall be considered confidential information and shall be exempt
from disclosure pursuant to chapter twenty-nine-b of this code.
The commissioner may promulgate rules pursuant to chapter twenty-
nine-a of this code to implement the provisions of this section.
(f) Each insurer that has elected to issue nonrenewal notices
pursuant to the percentage limitations provided in subsection (b)
or (c) of this section shall report to the commissioner on or
before the thirty-first day of March of each year the total number
of nonrenewal notices issued in this state and in each county of
this state for the preceding calendar year.
§33-6A-4b. Manner of making election relating to nonrenewals.
(a) Each insurer licensed to write automobile liability or
physical damage insurance policies in this state as of the first
day of July, two thousand four, shall make an election to issue all
nonrenewal notices either pursuant to section four or section four-
a of this article. Each insurer shall notify the commissioner of
its election no later than the first day of July, two thousand
four, and shall remain bound by the election for a period of five
years. For each subsequent five-year period each insurer shall
notify the commissioner of its election to issue all nonrenewal
notices either pursuant to section four or section four-a of this
article.
(b) An insurer that is not licensed to write automobile
liability or physical damage insurance policies in this state as of
the first day of July, two thousand four, but becomes licensed to
write such policies after that date shall, no later than two years
after the date the insurer becomes licensed to write such policies,
make an election to issue all nonrenewal notices either pursuant to
section four or section four-a of this article, and shall notify
the commissioner of its election. If the insurer elects to issue
all nonrenewal notices pursuant to section four-a of this article,
the total number of nonrenewal notices issued by the insurer for
the subsequent three-year period may not exceed the percentage
limitation set forth in subsection (b), section four-a of this
article. At the end of the three-year period, the total number of
nonrenewal notices issued by the insurer with regard to such policies may not exceed the percentage limitation set forth in
subsection (c), section four-a of this article. An insurer first
becoming licensed to issue automobile liability and physical damage
insurance policies in this state after the first day of July, two
thousand four, shall be bound by its election for a period of five
years, and for each subsequent five-year period shall notify the
commissioner of its election to issue all nonrenewal notices either
pursuant to section four or section four-a of this article.
(c) Notwithstanding any provision of this article to the
contrary, a named insured by restrictive endorsement may
specifically exclude from automobile liability or physical damage
insurance policy an operator who has violated the provisions of
subdivision (4) or (5), subsection (b), section four of this
article.
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(NOTE: The purpose of this bill is to amend the reasons for
nonrenewal of automobile liability and physical damage insurance
and property insurance. The bill further provides an alternative
method of issuing nonrenewal that is based upon a percentage
limitation within the state and counties rather than the specific
enumerated reasons for nonrenewal, and requires insurers to elect
the method of nonrenewal by a date certain.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§33-2-20, §33-6A-4a and §33-6A-4b are new; therefore, strike-
throughs and underscoring have been omitted.)
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