H. B. 4740
(By Delegates Michael, Doyle, Campbell, Leach,
Boggs, Stalnaker and Warner)
(Originating in the Committee on Finance)
[February 27, 2004]
A BILL 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 for the fund; specifying that the fund shall not be
considered a defendant for certain actions and shall not be
considered an insurer or insurance company under the code;
providing that the fund shall be administered by the board of
risk and insurance management; specifying certain powers and
authority of the board in respect of the fund; providing that
the assets of the fund shall be held in trust for their
intended purposes, and managed and invested by the investment
management board; requiring an annual audit of the fund by an
independent actuary; providing that in no circumstance shall
the state, the board, the investment board or any person or
persons acting on their behalf be liable 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 in the form of
periodic payments; authorizing the board to make payments from
the fund in connection with the settlement of claims;
establishing procedures for the payment of claims and
settlement amounts; providing for proration of payments in a
given fiscal year, in the event there are insufficient assets
in the fund to make full payment of a claim or claims in such
fiscal year; and authorizing the payment of reasonable
attorney fees out of the fund as determined by the board of
risk and insurance management.
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 hereby 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 thereunto.
(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 at 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 at 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 at 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,
such 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 such other powers and authority
elsewhere expressly or impliedly conferred on the board of risk and
insurance management, the board shall have the authority to:
(1) Receive, collect and deposit all revenues and moneys due
the fund;
(2) Employ, or in accordance with the provisions of law
applicable to contracting 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 to 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 such clerical personnel as may be necessary or
appropriate 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 and standards as it may deem
necessary or advisable to implement the authority and discharge the
responsibilities conferred and imposed on the board by this
article.
(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
board.
(b) 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.
(c) The board shall cause an audit of the fund to be conducted
on an annual basis by a qualified, independent auditor.
(d) The state of West Virginia is not and shall not be liable
for any liabilities of the fund whatsoever. No claims or expenses
against the fund shall be deemed to constitute a debt of the state
of West Virginia or a charge against the general revenue fund of
the state of West Virginia. There shall be no liability on the
part of, and no cause of action of any nature shall arise against,
the board of risk and insurance management, the fund, or the
investment management board, or any of its or their respective
agents, employees, professional advisers or consultants, members of
the board, trustees, officers, directors, or representatives in
respect of any action taken or not taken by them in the performance
of their respective powers and duties pursuant to this article.
§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 otherwise 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. 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. 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 such procedures as the
board in its discretion may prescribe from time to time.
(b) 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
such applicant in respect of the economic damages which have been
awarded but are uncollectible after the exhaustion of all
reasonable means of recovery, provided that in no event shall the
amount paid by the board in respect of 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.
(c) The board, in its discretion, may make payments to a
qualified claimant in a lump sum amount or in the form of periodic
payments.
(d) 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 such procedures and
policies as the board may establish regarding same; provided that
in all such cases the board shall have determined that the payment
of moneys out of the fund to a qualified applicant in connection
with the settlement of any such claim is in the best interests of
the fund. In the event the claimant and the board agree upon an
amount in respect of any such settlement, 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 such petition for hearing as soon as
the court's calendar permits, and notice of the time, date and
place of hearing shall be given to the claimant and to the board.
(3) At such hearing the court shall approve the proposed
settlement if the court finds it to be valid, just and equitable.
(e) 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
shall be prorated in such fiscal year according to such procedures
as the board may adopt from time to time. Any amounts due and
unpaid to qualified claimants shall be paid in subsequent fiscal
years from available funds, but only to the extent of funds
available in any fiscal year all according to such procedures as
the board may establish from time to time. In no event shall the
state of West Virginia be or become liable for any liabilities of
the fund whatsoever.
(f) 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.
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