Enrolled Version - Final Version
House Bill 4740 History
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Key: Green = existing Code. Red = new code to be enacted
HB ORIG 1 LINE
H. B. 4740
(By Delegates Michael, Doyle, Campbell, Leach,
Boggs, Stalnaker and Warner)
[Passed March 13, 2004; in effect ninety days from passage.]
AN ACT to amend the code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §29-12D-1, §29-12D-2
and §29-12D-3, all relating to the establishment, initial
funding and operation of a patient injury compensation fund;
creating a patient injury compensation fund; providing initial
funding; providing the fund is not an insurer or insurance
company under the code; providing for administration by the
board of risk and insurance management; specifying certain
powers and authority of the board; protecting the assets of
the fund; requiring an annual audit of the fund by an
independent actuary; providing immunity for the state and its
agents for the debts, liabilities or obligations of the fund;
providing for payments from the fund to qualified claimants;
providing limits on the amount on payment in respect of any
occurrence; authorizing payments from the fund either in lump
sums or periodic payments; establishing procedures; providing
for proration of payments under certain circumstances; authorizing the payment of reasonable attorney fees; and
providing for appeals.
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 article, designated §29-12D-1, §29-12D-2
and §29-12D-3, all to read as follows:
ARTICLE 12D. WEST VIRGINIA PATIENT INJURY COMPENSATION FUND.
§29-12D-1. Creation of patient injury compensation fund; purpose;
initial funding of patient injury compensation fund.
(a) There is created the West Virginia patient injury
compensation fund, for the purpose of providing fair and reasonable
compensation to claimants in medical malpractice actions for any
portion of economic damages awarded that is uncollectible as a
result of limitations on economic damage awards for trauma care, or
as a result of the operation of the joint and several liability
principles and standards, set forth in article seven-b, chapter
fifty-five of this code. The fund shall consist of all
contributions, revenues and moneys which may be paid into the fund
from time to time by the state of West Virginia or from any other
source whatsoever, together with any and all interest, earnings,
dividends, distributions, moneys or revenues of any nature
whatsoever accruing to the fund.
(b) Initial funding for the fund shall be provided as follows:
During fiscal year two thousand five, two million two hundred
thousand dollars of the revenues that would otherwise be transferred to the tobacco account established in subsection (b),
section two, article eleven-a, chapter four of this code pursuant
to the provisions of section fourteen, article three, chapter
thirty-three of this code shall be transferred to the fund; during
fiscal year two thousand six, two million two hundred thousand
dollars of the revenues that would otherwise be transferred to the
tobacco account established in subsection (b), section two, article
eleven-a, chapter four of this code pursuant to the provisions of
section fourteen, article three, chapter thirty-three of this code,
shall be transferred to the fund; and during fiscal year two
thousand seven, two million two hundred thousand dollars of the
revenues that would otherwise be transferred to the tobacco account
established in subsection (b), section two, article eleven-a,
chapter four of this code pursuant to the provisions of section
fourteen, article three, chapter thirty-three of this code shall be
transferred to the fund. Beginning fiscal year two thousand eight,
if and to the extent additional funding for the fund is required
from time to time to maintain the actuarial soundness of the fund,
the additional funding may be provided by further act of the
Legislature, either from the revenue stream identified in this
subsection or otherwise. Payments to the tobacco fund shall be
extended until the tobacco fund is repaid in full.
(c) The fund is not and shall not be considered a defendant in
any civil action arising under article seven-b, chapter fifty-five
of this code.
(d) The fund is not and shall not be considered an insurance company or insurer for any purpose under this code.
§29-12D-2. Administration of fund; investment of fund assets;
annual actuarial review and audit; fund assets and
liabilities not assets and liabilities of the state.
(a) The patient injury compensation fund shall be implemented,
administered and operated by the board of risk and insurance
management. In addition to any other powers and authority
expressly or impliedly conferred on the board of risk and insurance
management in this code, the board may:
(1) Receive, collect and deposit all revenues and moneys due
(2) Employ, or in accordance with the provisions of law
applicable contract for personal, professional or consulting
services, retain the services of a qualified competent actuary to
perform the annual actuarial study of the fund required by this
section and advise the board on all aspects of the fund's
administration, operation and defense which require application of
the actuarial science;
(3) Contract for any services necessary or advisable to
implement the authority and discharge the responsibilities
conferred and imposed on the board by this article;
(4) Employ, or contract with, legal counsel of the board's
choosing to advise and represent the board and represent the fund
in respect of any and all matters relating to the operation of the
fund and payments out of the fund;
(5) Employ necessary or appropriate clerical personnel to
carry out the responsibilities of the board under this part; and
(6) Promulgate rules, in accordance with article three,
chapter twenty-nine-a of this code as it considers necessary or
advisable to implement the authority of and discharge the
responsibilities conferred and imposed on the board by this
(b) The assets of the fund, and any and all income, dividends,
distributions or other income or moneys earned by or accruing to
the benefit of the fund, shall be held in trust for the purposes
contemplated by this article, and shall not be spent for any other
purpose: Provided, That the assets of the fund may be used to pay
for all reasonable costs and expenses of any nature whatsoever
associated with the ongoing administration and operation of the
fund. All assets of the fund from time to time shall be deposited
with, held and invested by, and accounted for separately by the
investment management board. All moneys and assets of the fund
shall be invested and reinvested by the investment management board
in the same manner as provided by law for the investment of other
trust fund assets held and invested by the investment management
(c) The board shall cause an annual review of the assets and
liabilities of the fund to be conducted on an annual basis by a
qualified, independent actuary.
(d) The board shall cause an audit of the fund to be conducted
on an annual basis by a qualified, independent auditor.
(e) The state of West Virginia is not liable for any
liabilities of the fund. Claims or expenses against the fund are
not a debt of the state of West Virginia or a charge against the
general revenue fund of the state of West Virginia.
§29-12D-3. Payments from the patient injury compensation fund.
(a) Other than payments in connection with the ongoing
operation and administration of the fund, no payments may be made
from the fund other than in satisfaction of claims for economic
damages to qualified claimants who would have collected economic
damages but for the operation of the limits on economic damages set
forth in article seven-b, chapter fifty-five of this code.
(b) For purposes of this article, a qualified claimant must be
both a "patient" and a "plaintiff" as those terms are defined in
article seven-b, chapter fifty-five of this code.
(c) Any qualified claimant seeking payment from the fund must
establish to the satisfaction of the board that he or she has
exhausted all reasonable means to recover from all applicable
liability insurance an award of economic damages, following
procedures prescribed by the board by legislative rule.
(d) Upon a determination by the board that a qualified
claimant to the fund for compensation has exhausted all reasonable
means to recover from all applicable liability insurance an award
of economic damages arising under article seven-b, chapter fifty-
five of this code, the board shall make a payment or payments to
the claimant for economic damages. The economic damages must have
been awarded but be uncollectible after the exhaustion of all reasonable means of recovery of applicable insurance proceeds. In
no event shall the amount paid by the board in respect to any one
occurrence exceed one million dollars or the maximum amount of
money that could have been collected from all applicable insurance
prior to the creation of the patient injury compensation fund under
this article, regardless of the number of plaintiffs or the number
of defendants or, in the case of wrongful death, regardless of the
number of distributees.
(e) The board, in its discretion, may make payments to a
qualified claimant in a lump sum amount or in the form of periodic
payments. Periodic payments are to be based upon the present value
of the total amount to be paid by the fund to the claimant by using
federally approved qualified assignments.
(f) In its discretion, the board may make a payment or
payments out of the fund to a qualified claimant in connection with
the settlement of claims arising under article seven-b, chapter
fifty-five of this code, all according to rules promulgated by the
board. The board shall prior to making payment determine that
payment from the fund to a qualified claimant is in the best
interests of the fund. When the claimant and the board agree upon
a settlement amount, the following procedure shall be followed:
(1) A petition shall be filed by the claimant with the court
in which the action is pending, or if none is pending, in a court
of appropriate jurisdiction, for approval of the agreement between
the claimant and the board.
(2) The court shall set the petition for hearing as soon as the court's calendar permits. Notice of the time, date and place
of hearing shall be given to the claimant and to the board.
(3) At the hearing the court shall approve the proposed
settlement if the court finds it to be valid, just and equitable.
(g) If and to the extent that any payment to one or more
qualified claimants under this section would deplete the fund
during any fiscal year, payments to and among qualified claimant's
shall be prorated during the fiscal year according to the rules
promulgated by the board. Any amounts due and unpaid to qualified
claimants shall be paid in subsequent fiscal years from available
funds, but only to the extent funds are available in any fiscal
year, according to the board's rules.
(h) Payments out of the fund may be used to pay reasonable
attorney fees of attorneys representing qualified claimants
receiving compensation in respect of economic damages as
established by the board of risk and insurance management.
(i) The claimant may appeal a final decision made by the board
pursuant to the provisions of article five, chapter twenty-nine-a
of this code.