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Introduced Version House Bill 2942 History

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

WEST virginia Legislature

2017 regular session

Introduced

House Bill 2942

By Delegate Westfall and Frich

[Introduced March 13, 2017; Referred
to the Committee on Banking and Insurance then the Judiciary.]

A BILL to amend and reenact §33-17A-4 of the Code of West Virginia, 1931, as amended, relating to prohibiting insurers from cancelling or failing to renew insurance policies do to the mere filing of a claim that was later denied or making an inquiry about whether a loss was potentially covered by a policy; and permitting insurers to cancel or not renew policies for filing numerous frivolous or unfounded claims.

Be it enacted by the Legislature of West Virginia:


That §33-17A-4 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:

ARTICLE 17A. PROPERTY INSURANCE DECLINATION, TERMINATION AND DISCLOSURE.


§33-17A-4. Notification and reasons for a transfer, declination or termination; prohibitions.

(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 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: Provided, however, That notwithstanding any other provision of this article, no property insurance coverage policy in force for at least four years, may be denied renewal or canceled solely as a result of:

(1) A single first party property damage claim within the previous thirty-six months and that arose from wind, hail, lightning, wildfire, snow or ice, unless the insurer has evidence that the insured unreasonably failed to maintain the property and that failure to maintain the property contributed to the loss, or

(2) Two first party property damage claims within the previous twelve months, both of which arose from claims solely due to an event for which a state of emergency is declared for the county in which the insured property is located, unless the insurer has evidence that the insured unreasonably failed to maintain the property and that failure to maintain the property contributed to the loss. "State of emergency" means the situation existing after the occurrence of a disaster in which a state of emergency has been declared by the Governor or by the Legislature pursuant to the provisions of section six, article five, chapter fifteen of this code or in which a major disaster declaration or emergency declaration has been issued by the President of the United States pursuant to the provisions of 42 U. S. C. §5122.

(d) Notwithstanding any other provisions in this article, no property insurance coverage policy subject to this article may be canceled or denied renewal as a result of filing a claim that was later denied.

(e) Notwithstanding any other provisions in this article, an insurer may not cancel or fail to renew a property insurance coverage policy solely because the insured has inquired about coverage or requested a coverage determination about a potentially covered loss or event.

(f) Notwithstanding the provisions of subsections (d) and (e) of this section, an insurer may cancel or decline to renew a policy if the policy holder has filed numerous frivolous or unfounded claims.

 

NOTE: The purpose of this bill is to prohibit insurers from cancelling insurance policies doe to the mere filing of a claim that was later denied or to the policy holders inquiry about whether a loss is covered under the policy.  The bill permits the cancellation of policies for numerous frivolous or unfounded claims.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.

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