Insurance is a contract whereby one undertakes to indemnify another or to pay a specified amount upon determinable contingencies.
The following definitions of kinds of insurance are not mutually exclusive and, if reasonably adaptable thereto, a particular coverage may be included under one or more of such definitions:(a) Life insurance. -- Life insurance is insurance on human lives including endowment benefits, additional benefits in the event of death or dismemberment by accident or accidental means, additional benefits for disability and annuities.(b) Accident and sickness. -- Accident and sickness insurance is insurance against bodily injury, disability or death by accident or accidental means, or the expense thereof, or against disability or expense resulting from sickness and insurance relating thereto. Group credit accident and health insurance may also include loss of income insurance which is insurance against the failure of a debtor to pay his or her monthly obligation due to involuntary loss of employment. For the purposes of this definition, involuntary loss of employment means the debtor loses employment income (salary or wages) as a result of unemployment caused by individual or mass layoff, general strikes, labor disputes, lockout or termination by employer for other than willful or criminal misconduct. Any or all of the above-mentioned perils may be included in an insurance policy, at the discretion of the policyholder.(c) Fire. -- Fire insurance is insurance on real or personal property of every kind and interest therein, against loss or damage from any or all hazard or cause, and against loss consequential upon such loss or damage, other than noncontractual liability for any such loss or damage. Fire insurance shall also include miscellaneous insurance as defined in paragraph (12), subdivision (e) of this section.(d) Marine insurance is insurance:(1) Against any and all kinds of loss or damage to vessels, craft, aircraft, cars, automobiles and vehicles of every kind, as well as all goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious stones, securities, chooses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit or transportation, including war risks, on or under any seas or other waters, on land (above or below ground), or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the same or during any delays, storage, transshipment, or reshipment incident thereto, including marine builders' risks and all personal property floater risks;(2) Against any and all kinds of loss or damage to person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds nor insurance against loss by reason of bodily injury to the person arising out of the ownership, maintenance or use of automobiles);(3) Against any and all kinds of loss or damage to precious stones, jewels, jewelry, gold, silver and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise;(4) Against any and all kinds of loss or damage to bridges, tunnels and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage) unless fire, windstorm, sprinkler leakage, hail, explosion, earthquake, riot or civil commotion or any or all of them are the only hazards to be covered;(5) Against any and all kinds of loss or damage to piers, wharves, docks and ships, excluding the risks of fire, windstorm, sprinkler leakage, hail, explosion, earthquake, riot and civil commotion and each of them;(6) Against any and all kinds of loss or damage to other aids to navigation and transportation, including dry docks and marine railways, dams and appurtenant facilities for control of waterways; and(7) Marine protection and indemnity insurance, which is insurance against, or against legal liability of the insured for, loss, damage or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair or construction of any vessel, craft or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness or death or for loss of or damage to the property of another person.(e) Casualty. -- Casualty insurance includes:(1) Vehicle insurance, which is insurance against loss of or damage to any land vehicle or aircraft or any draft or riding animal or to property while contained therein or thereon or being loaded therein or therefrom, from any hazard or cause, and against any loss, liability or expense resulting from or incident to ownership, maintenance or use of any such vehicle, aircraft or animal; together with insurance against accidental death or accidental injury to individuals, including the named insured, while in, entering, alighting from, adjusting, repairing or cranking, or caused by being struck by any vehicle, aircraft or draft or riding animal, if such insurance is issued as a part of insurance on the vehicle, aircraft or draft or riding animal;(2) Liability insurance, which is insurance against legal liability for the death, injury or disability of any human being, or for damage to property; and provisions for medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to liability insurance;(3) Burglary and theft insurance, which is insurance against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation, or wrongful conversion, disposal or concealment, or from any attempt at any of the foregoing, including supplemental coverages for medical, hospital, surgical and funeral benefits sustained by the named insured or other person as a result of bodily injury during the commission of a burglary, robbery or theft by another; also insurance against loss of or damage to moneys, coins, bullion, securities, notes, drafts, acceptances or any other valuable papers and documents resulting from any cause;(4) Personal property floater insurance, which is insurance upon personal effects against loss or damage from any cause;(5) Glass insurance, which is insurance against loss or damage to glass, including its lettering, ornamentation and fittings;(6) Boiler and machinery insurance, which is insurance against any liability and loss or damage to property or interest resulting from accidents to or explosion of boilers, pipes, pressure containers, machinery or apparatus and to make inspection of and issue certificates of inspection upon boilers, machinery and apparatus of any kind, whether or not insured;(7) Leakage and fire extinguishing equipment insurance, which is insurance against loss or damage to any property or interest caused by the breakage or leakage of sprinklers, hoses, pumps and other fire extinguishing equipment or apparatus, water mains, pipes and containers, or by water entering through leaks or openings in buildings, and insurance against loss or damage to such sprinklers, hoses, pumps and other fire extinguishing equipment or apparatus;(8) Credit insurance, which is insurance against loss or damage resulting from failure of debtors to pay their obligations to the insured. Credit insurance shall include loss of income insurance which is insurance against the failure of a debtor to pay his or her monthly obligation due to involuntary loss of employment. For the purpose of this definition, involuntary loss of employment means the debtor loses employment income (salary or wages) as a result of unemployment caused by individual or mass layoff, general strikes, labor disputes, lockout or termination by employer for other than willful or criminal misconduct; any or all of the above-mentioned perils may be included in an insurance policy, at the discretion of the policyholder;(9) Malpractice insurance, which is insurance against legal liability of the insured and against loss, damage or expense incidental to a claim of such liability, and including medical, hospital, surgical and funeral benefits to injured persons, irrespective of legal liability of the insured arising out of the death, injury or disablement of any person, or arising out of damage to the economic interest of any person, as the result of negligence in rendering expert, fiduciary or professional service;(10) Entertainment insurance, which is insurance indemnifying the producer of any motion picture, television, radio, theatrical, sport, spectacle, entertainment or similar production, event or exhibition against loss from interruption, postponement or cancellation thereof due to death, accidental injury or sickness of performers, participants, directors or other principals;(11) Mine subsidence insurance as provided for in article thirty of this chapter;(12) Miscellaneous insurance, which is insurance against any other kind of loss, damage or liability properly a subject of insurance and not within any other kind of insurance as defined in this chapter, if such insurance is not disapproved by the commissioner as being contrary to law or public policy; and(13) Federal flood insurance, which is insurance provided by the federal insurance administration or by private insurers through the write your own program within the national flood insurance program, instituted by the federal insurance administration pursuant to the provision of 42 U.S.C. 4071, on real or personal property of every kind and interest therein, against loss or damage from flood or mudslide and against loss consequential to such loss or damage, other than noncontractual liability for any loss or damage.(14) Workers' compensation insurance, which is insurance providing all compensation and benefits required by chapter twenty-three of this code.(f) Surety. -- Surety insurance includes:(1) Fidelity insurance, which is insurance guaranteeing the fidelity of persons holding positions of public or private trust;(2) Insurance guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds, undertakings and contracts of surety ship: Provided, That surety insurance does not include the guaranteeing and executing of bonds by professional bondsmen in criminal cases or by individuals not in the business of becoming a surety for compensation upon bonds;(3) Insurance indemnifying banks, bankers, brokers, financial or moneyed corporations or associations against loss, resulting from any cause, of bills of exchange, notes, bonds, securities, evidences of debt, deeds, mortgages, warehouse receipts or other valuable papers, documents, money, precious metals and articles made therefrom, jewelry, watches, necklaces, bracelets, gems, precious and semiprecious stones, including any loss while they are being transported in armored motor vehicles or by messenger, but not including any other risks of transportation or navigation, and also insurance against loss or damage to such an insured's premises or to his furnishings, fixtures, equipment, safes and vaults therein, caused by burglary, robbery, theft, vandalism or malicious mischief, or any attempt to commit such crimes; and(4) Title insurance, which is insurance of owners of property or others having an interest therein, or liens or encumbrances thereon, against loss by encumbrance, defective title, invalidity or adverse claim to title.
Reinsurance is a contract of indemnity against liability by which an insurer procures another insurer to insure it against loss or liability by reason of the original insurance.
An insurance agent is an individual appointed by an insurer to solicit, negotiate, effect or countersign insurance contracts in its behalf.
An insurance solicitor is an individual appointed and authorized by an agent to solicit and receive applications for insurance as a representative of such agent.
A broker is an individual who for compensation in any manner solicits, negotiates or procures insurance or the renewal or continuance thereof on behalf of insureds or prospective insureds.
Reciprocal insurance is insurance resulting from an interexchange among persons known as subscribers of reciprocal agreements of indemnity, the interexchange being effected through an attorney-in-fact common to all such persons, and the group of such subscribers being a reciprocal insurer.
Policy means the contract effecting insurance, or the certificate thereof, by whatever name called, and includes all clauses, riders, endorsements and papers attached thereto and a part thereof.
Premium is the consideration for insurance, by whatever name called.
Stock insurer is an incorporated insurer with capital divided into shares and owned by its shareholders.
Mutual insurer is an incorporated insurer without permanent capital stock and the governing body of which is elected by the policyholders.
Insurer is every person engaged in the business of making contracts of insurance. Insurer includes private carrier as that term is used in chapter twenty-three of this code.
(a) Emergency services are: Those services provided in or by a hospital emergency facility, an ambulance providing related services under the provisions of article four-c, chapter sixteen of this code or the private office of a dentist to evaluate and treat a medical condition manifesting itself by the sudden, and at the time, unexpected onset of symptoms that require immediate medical attention and that failure to provide medical attention would result in serious impairment to bodily function, serious dysfunction to any bodily organ or part, or would place the person's health in jeopardy. (b) From July 1, 1998, the following provisions apply:(1) "Emergency medical services" means those services required to screen for or treat an emergency medical condition until the condition is stabilized, including prehospital care;(2) "Prudent layperson" means a person who is without medical training and who draws on his or her practical experience when making a decision regarding whether an emergency medical condition exists for which emergency treatment should be sought;(3) "Emergency medical condition for the prudent layperson" means one that manifests itself by acute symptoms of sufficient severity, including severe pain, such that the person could reasonably expect the absence of immediate medical attention to result in serious jeopardy to the individual's health, or, with respect to a pregnant woman, the health of the unborn child; serious impairment to bodily functions; or serious dysfunction of any bodily organ or part;(4) "Stabilize" means with respect to an emergency medical condition, to provide medical treatment of the condition necessary to assure, with reasonable medical probability that no medical deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility: Provided, That this provision may not be construed to prohibit, limit or otherwise delay the transportation required for a higher level of care than that possible at the treating facility;(5) "Medical screening examination" means an appropriate examination within the capability of the hospital's emergency department, including ancillary services routinely available to the emergency department, to determine whether or not an emergency medical condition exists; and(6) "Emergency medical condition" means a condition that manifests itself by acute symptoms of sufficient severity including severe pain such that the absence of immediate medical attention could reasonably be expected to result in serious jeopardy to the individual's health or with respect to a pregnant woman the health of the unborn child, serious impairment to bodily functions or serious dysfunction of any bodily part or organ.
Person includes an individual, company, insurer, association, organization, society, reciprocal, partnership, syndicate, business trust, corporation or any other legal entity.
Commissioner means the Insurance Commissioner of West Virginia.
A domestic insurer is an insurer formed under the laws of West Virginia.
A foreign insurer is an insurer formed under the laws of the United States or of another state of the United States.
An alien insurer is an insurer formed under the laws of a country other than the United States.
State means any state, commonwealth, territory, or district of the United States. United States includes the states, territories, districts and commonwealths thereof.
For the purpose of this article, the following definitions shall apply:(a) "Impairment" means a financial situation in which, based upon the financial information which would be required by this chapter for the preparation of the insurer's annual statement, the assets of an insurer are less than the sum of all of its liabilities and required reserves including any minimum capital or surplus or both required of that insurer by this chapter so as to maintain its authority to transact the kinds of business or insurance it is so authorized to transact.(b) "Insolvency" or "insolvent" means a financial situation in which, based upon the financial information which would be required by this chapter for the preparation of the insurer's annual statement, the assets of the insurer are less than the sum of all of its liabilities and required reserves.(c) "Insurer" means any person, firm, corporation, association or aggregation of persons doing an insurance business and which is or has been subject to the insurance supervisory authority of, or to liquidation, rehabilitation, reorganization or conservation by, the commissioner or the equivalent insurance supervisory official of another state. For purposes of this article, all persons, corporations, associations or entities to whom this article applies and which are subject to delinquency proceedings commenced in this state shall be considered "insurers".(d) "Delinquency proceeding" means any proceeding commenced against an insurer pursuant to this article for the purpose of liquidating, rehabilitating, reorganizing or conserving the insurer and any summary proceeding under section thirty-six of this article. "Formal delinquency proceeding" means any liquidation or rehabilitation proceeding.(e) "State" means any state, district or territory of the United States.(f) "Foreign country" means any other jurisdiction not in any state.(g) "Domiciliary state" means the state in which an insurer is incorporated or organized, or in the case of an alien insurer as defined in section eight, article one of this chapter, the state in which such insurer, having become authorized to do business in such state, has at the commencement of delinquency proceedings, the largest amount of its assets held in trust and assets held on deposit for the benefit of its policyholders or policyholders and creditors in the United States or its state of entry.(h) "Ancillary state" means any state other than a domiciliary state.(i) "Reciprocal state" means any state other than this state in which in substance and effect the provisions of the uniform insurers liquidation act, as defined in section twenty-one of this article, are in force, and in which provisions are in force requiring that the Insurance Commissioner or equivalent insurance supervisory official be the receiver of a delinquent insurer, and in which some provision exists for the avoidance of fraudulent conveyances and preferential transfers.(j) "General assets" means all property, real, personal or otherwise, not specifically mortgaged, pledged, deposited or otherwise encumbered for the security or benefit of specified persons or a limited class or classes of persons and as to such specifically encumbered property, the term includes all such property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and assets held on deposit for the security or benefit of all policyholders or all policyholders and creditors in more than a single state shall be considered general assets.(k) "Preferred claim" means any claim with respect to which the terms of this article accord priority of payments from the general assets of the insurer.(l) "Special deposit claim" means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any general assets.(m) "Secured claim" means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise, but not including special deposit claim or claims against general assets. The term also includes claims which more than four months prior to the commencement of delinquency proceedings in the state of the insurer's domicile have become liens upon specific assets by reason of judicial process.(n) "Receiver" means receiver, liquidator, rehabilitator or conservator as the context may require.(o) "Guaranty association" means the West Virginia insurance guaranty association created by article twenty-six of this chapter, the West Virginia life and health insurance guaranty association act created by article twenty-six-a of this chapter and any other similar entity now or hereafter created by the Legislature of this state for the payment of claims of insolvent insurers.(p) "Foreign guaranty association" means any entities now in existence in or hereafter created by the Legislature of any other state that are similar to the entities described in subsection (o) of this section.(q) "Surplus" means the amount by which an insurer's assets exceeds its liabilities and required reserves based upon the financial information which would be required by this chapter for the preparation of the insurer's annual statement.(r) "Affiliate" or a person "affiliated with" a specific person means a person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with the person specified.(s) "Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing that control does not, in fact, exist.(t) "Transfer" means the sale and every other and different mode, direct or indirect, of disposing of or of parting with property or an interest therein, absolutely or conditionally, voluntarily, by or without judicial proceedings. The retention of a security title to property delivered to a debtor is considered a transfer suffered by the debtor.
(a) An order to rehabilitate a domestic insurer or the United States branch of an alien insurer having trusteed assets in this state shall direct the commissioner forthwith to take possession of the assets of the insurer and to conduct the business thereof, and to take such steps toward removal of the causes and conditions which have made rehabilitation necessary as the court may direct.(b) If at any time the commissioner deems that further efforts to rehabilitate the insurer would be useless, he or she may apply to the court for an order of liquidation.(c) The commissioner, or any interested person upon due notice to the commissioner, at any time may apply to the court for an order terminating the rehabilitation proceedings and permitting the insurer to resume possession of its property and the conduct of its business, but no such order shall be granted except when, after a full hearing, the court has determined that the purposes of the proceeding have been fully accomplished.
(a) An order to liquidate the business of a domestic insurer shall direct the commissioner forthwith to take possession of the assets of the insurer, to liquidate its business, to deal with the insurer's property and business in his or her own name as Insurance Commissioner or in the name of the insurer, as the court may direct, and to give notice to all creditors who may have claims against the insurer to present their claims.(b) The commissioner may apply for and secure an order dissolving the corporate existence of a domestic insurer upon his or her application for an order of liquidation of the insurer or at any time after such order has been granted.
An order to liquidate the business of a United States branch of an alien insurer having trusteed assets in this state shall be in the same terms as those prescribed for domestic insurers, save and except only that the assets of the business of such United States branch shall be the only assets included therein.
(a) An order to conserve the assets of a foreign or alien insurer shall require the commissioner forthwith to take possession of the assets of the insurer within this state and to conserve it, subject to the further direction of the court.(b) An order to liquidate the assets in this state of a foreign insurer shall require the commissioner forthwith to take possession of the assets of the insurer within this state and to liquidate it subject to the orders of the court and with due regard to the rights and powers of the domiciliary receiver, as provided in this article.
(a) Whenever under this article a receiver is to be appointed in delinquency proceedings for a domestic or alien insurer, the court shall appoint the Insurance Commissioner as the receiver. The court shall order the commissioner forthwith to take possession of the assets of the insurer and to administer the same under the orders of the court.(b) As domiciliary receiver, the commissioner shall be vested by operation of law with the title to all the property, contracts and rights of action and all of the books and records of the insurer, wherever located, as of the date of entry of the order directing him or her to rehabilitate or liquidate a domestic insurer or to liquidate the United States branch of an alien insurer domiciled in this state and he or she shall have the right to recover the same and reduce the same to possession; except that ancillary receivers in reciprocal states shall have, as to assets located in their respective states, the rights and powers which are prescribed in this section for ancillary receivers appointed in this state as to assets located in this state.(c) The recording of a certified copy of the order directing possession to be taken in the office of the clerk of the county commission of the county where the proceedings are pending and in the office of the clerk of the county commission of any county wherein the insurer has property or other assets, recorded in the same manner as deeds to real property are recorded, shall impart the same notice as would be imparted by a deed, bill of sale or other evidence of title duly recorded or filed.(d) The commissioner as domiciliary receiver shall be responsible for the proper administration of all assets coming into his or her possession or control. The court may at any time require a bond from the commissioner or his or her deputies if considered desirable for the protection of the assets. The cost of the bond shall be paid out of the assets of the insurer as a cost of administration.(e) Upon taking possession of the assets of an insurer, the domiciliary receiver shall, subject to the direction of the court, immediately proceed to conduct the business of the insurer or to take such steps as are authorized by this article for the purpose of rehabilitating, liquidating or conserving the affairs or assets of the insurer.(f) In connection with delinquency proceedings, the commissioner may appoint one or more special deputy commissioners of insurance to act for him or her and may employ such counsel, clerks and assistants as he or she considers necessary. The compensation of the special deputies, counsel, clerks or assistants and all expenses of taking possession of the insurer and of conducting the proceedings shall be fixed by the receiver, subject to the approval of the court and shall be paid out of the funds or assets of the insurer. In the event the property of such person does not contain cash or liquid assets sufficient to defray the cost of the service required to be performed under the terms of this article, the commissioner may pay the cost of the services first out of the commissioner's closed estate fund account. If the moneys in the closed estate fund account are insufficient to fully defray the cost of the services required under the terms of this article, the commissioner may pay the costs out of the commissioner's "operating  additional fees" account. Any amount so paid from either account shall be considered to be expenses of administration and shall be repaid to the appropriate account out of the first available moneys in the estate.(g) Within the limits of duties imposed upon them, special deputies shall possess all the powers given to and, in the exercise of those powers, shall be subject to all of the duties imposed upon the receiver with respect to such proceedings. All transactions involving estate accounts shall be reconciled quarterly by a special deputy commissioner appointed pursuant to subsection (f) of this section and reported to the commissioner. An annual audit of any special deputy commissioner appointed under this section may be conducted, at the discretion of the commissioner, by an independent, outside certified public accountant. The cost of this audit shall be allocated among the estates of the companies in conservation, rehabilitation or liquidation on a basis of allocation established by the commissioner.
(a) Whenever under this article an ancillary receiver is to be appointed in delinquency proceedings for an insurer not domiciled in this state, the court shall appoint the Insurance Commissioner as ancillary receiver. The commissioner shall file a petition requesting the appointment on the grounds set forth in section nine of this article if he finds that there are sufficient assets of the insurer located in this state to justify the appointment of an ancillary receiver, or if ten or more persons resident in this state having claims against such insurer file a petition with the commissioner requesting the appointment of such ancillary receiver.(b) The domiciliary receiver for the purpose of liquidating an insurer domiciled in a reciprocal state shall be vested by operation of law with the title to all of the property, contracts, and rights of action and all of the books and records of the insurer located in this state, and he shall have the immediate right to recover balances due from local agents and to obtain possession of any books and records of the insurer found in this state. He shall also be entitled to recover the other assets of the insurer located in this state, except that upon the appointment of an ancillary receiver in this state, the ancillary receiver shall during the ancillary receivership proceedings have the sole right to recover such other assets. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims which are proved and allowed in the ancillary proceedings in this state, and shall pay the necessary expenses of the proceedings. All remaining assets he shall promptly transfer to the domiciliary receiver. Subject to the foregoing provisions, the ancillary receiver and his deputies shall have the same powers and be subject to the same duties with respect to the administration of such assets as a receiver of an insurer domiciled in this state.(c) The domiciliary receiver of an insurer domiciled in a reciprocal state may sue in this state to recover any assets of such insurer to which he may be entitled under the laws of this state.
(a) In a delinquency proceeding begun in this state against a domestic insurer, claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceedings.(b) Controverted claims belonging to claimants residing in reciprocal states may either be proved in this state, or if ancillary proceedings have been commenced in such reciprocal states, may be proved in those proceedings. In the event a claimant elects to prove his claim in ancillary proceedings, if notice of the claim and opportunity to appear and be heard is afforded the domiciliary receiver of this state as provided in section seventeen of this article with respect to ancillary proceedings in this state, the final allowance of such claim by the courts in the ancillary state shall be accepted in this state as conclusive as to its amount and shall also be accepted as conclusive as to its priority, if any, against special deposits or other security located within the ancillary state.
(a) In a delinquency proceeding in a reciprocal state against an insurer domiciled in that state, claimants against such insurer who reside within this state may file claims either with the ancillary receiver, if any, appointed in this state, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceedings.(b) Controverted claims belonging to claimants residing in this state may either be proved in the domiciliary state as provided by the law of that state, or if ancillary proceedings have been commenced in this state, be proved in those proceedings. In the event that any such claimant elects to prove his claim in this state, he shall file his claim with the ancillary receiver and shall give notice in writing to the receiver in the domiciliary state, either by registered mail or by personal service at least forty days prior to the date set for hearing. The notice shall contain a concise statement of the amount of the claim, the facts on which the claim is based, and the priorities asserted, if any. If the domiciliary receiver within thirty days after the giving of such notice shall give notice in writing to the ancillary receiver and to the claimant, either by registered mail or by personal service, of his intention to contest such claim, he shall be entitled to appear or to be represented in any proceeding in this state involving adjudication of the claim. The final allowance of the claim by the courts of this state shall be accepted as conclusive as to its amount and shall also be accepted as conclusive as to its priority, if any, against special deposits or other security located within this state.
(a) All claims against an insurer against which delinquency proceedings have begun shall set forth all of the following that are applicable:(1) In reasonable detail, the amount of the claim, or the basis upon which the amount can be ascertained;(2) The facts upon which the claim is based, including any consideration given for it;(3) The priorities asserted, if any;(4) The identity and amount of any security on the claim;(5) The payments made on the debt, if any; and(6) A statement that the sum claimed is justly owing and whether there is a right of setoff, counterclaim or defense to the claim.(b) All claims shall be verified by the affidavit of the claimant, or someone authorized to act on his or her behalf and having knowledge of the facts and shall be supported by any documents as may be material thereto.(c) All claims filed in this state shall be filed with the receiver, whether domiciliary or ancillary, in this state on or before the last date for filing as specified in this article.(d) When a claim is denied, in whole or in part, by the liquidator, written notice of the determination shall be given to the claimant or his or her attorney by first class mail at the address shown in the proof of claim. Within sixty days from the mailing of the notice, the claimant may file his or her objections with the liquidator. If no such filing is made, the claimant may not further object to the determination.(e) Whenever objections are filed with the liquidator and the liquidator does not alter his or her denial of the claim as a result of the objections, the liquidator shall ask the court for a hearing as soon as practicable and give notice of the hearing by first class mail to the claimant or his or her attorney and to any other persons directly affected, not less than ten nor more than thirty days before the date of the hearing. The matter may be heard by the court or by a court-appointed referee who shall submit findings of fact along with his or her recommendation. Upon receipt of the report, the court shall fix a time for hearing the claim and shall direct that the claimant or the receiver, as the court shall specify, shall give such notice as the court shall determine to any persons as shall appear to the court to be interested therein. All such notices shall specify the time and place of the hearing and shall concisely state the amount and nature of the claim, the priorities asserted, if any, and the recommendation of the receiver with reference thereto.(f) At the hearing, all persons interested shall be entitled to appear and the court shall enter an order allowing, allowing in part, or disallowing the claim. Any such order shall be considered an appealable order.
(a) In a delinquency proceeding against an insurer domiciled in this state, claims owing to residents of ancillary states shall be preferred claims if like claims are preferred under the laws of this state. All such claims owing to residents or nonresidents shall be given equal priority of payment from general assets regardless of where such assets are located.(b) In a delinquency proceeding against an insurer domiciled in a reciprocal state, claims owing to residents of this state shall be preferred if like claims are preferred by the laws of that state.(c) The owners of special deposit claims against an insurer for which a receiver is appointed in this or any other state shall be given priority against their several special deposits in accordance with the provisions of the statutes governing the creation and maintenance of such deposits. If there is a deficiency in any such deposit so that the claims secured thereby are not fully discharged therefrom, the claimants may share in the general assets, but such sharing shall be deferred until general creditors, and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit.(d) The owner of a secured claim against an insurer for which a receiver has been appointed in this or any other state may surrender his security and file his claim as a general creditor, or the claim may be discharged by resort to the security, in which case the deficiency, if any, shall be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors. If the amount of the deficiency has been adjudicated in ancillary proceedings as provided in this article or if it has been adjudicated by a court of competent jurisdiction in proceedings in which the domiciliary receiver has had notice and opportunity to be heard, such amounts shall be conclusive; otherwise the amount shall be determined in the delinquency proceeding in the domiciliary state.
The priority of distribution of claims from the insurer's estate shall be in accordance with the order in which each class of claims is herein set forth. Every claim in each class shall be paid in full or adequate funds retained for such payment before the members of the next class receive any payment. No subclasses may be established within any class. No claim by a shareholder, policyholder or other creditor may be permitted to circumvent the priority classes through the use of equitable remedies. The order of distribution shall be:(a) Class I. The costs and expenses of administration, including, but not limited to, the following:(1) The actual and necessary costs of preserving or recovering the assets of the insurer;(2) Compensation for all authorized services rendered in the liquidation;(3) Any necessary filing fees;(4) The fees and mileage payable to witnesses;(5) Reasonable attorney's fees and fees for other professional services rendered in the proceeding; and(6) All expenses incurred by the department of insurance arising out of the enforcement of chapter thirty-three and its rules.(b) Class II. All claims for refund of unearned premiums under nonassessable policies and all claims of policyholders including claims of the federal or any state or local government as policyholders for losses incurred; third party claims of an insolvent insurer; and all reasonable claims of the West Virginia insurance guaranty associations and associations or entities performing a similar function in other states.(c) Class III. Claims of the federal government other than as an insured policyholder.(d) Class IV. Debts due to employees for compensation, which may not exceed two months of monetary compensation and must represent payment for services performed within six months before the filing of the petition for liquidation, or, if rehabilitation preceded liquidation, within one year before the filing of the petition for rehabilitation. Principal officers and directors shall not be entitled to the benefit of this priority except as otherwise approved by the liquidator and the court. This priority shall be in lieu of any other similar priority which may be authorized by law as to wages or compensation of employees.(e) Class V. Claims of general creditors including claims of ceding and assuming companies in their capacity as such.(f) Class VI. Claims of any state or local government. Claims, including those of any governmental body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of such claims shall be postponed to the class of claims under subsection (h) of this section.(g) Class VII. Claims filed late or any other claims other than claims under subsection (h) of this section.(h) Class VIII. Surplus or contribution notes, or similar obligations and premium refunds on assessable policies. Payments to members of domestic mutual corporations shall be limited in accordance with law.(i) Class IX. The claims of shareholders or other owners.
(a) The circuit courts of this state or the judges thereof in vacation are vested with exclusive original jurisdiction of delinquency proceedings under this article, and are authorized to make all necessary and proper orders to carry out the purposes of this article.(b) The venue of delinquency proceedings against a domestic insurer shall be in the circuit court of the county of the insurer's principal place of business. The venue of such proceedings against foreign insurers, alien insurers or domestic insurers in which their principal place of business is outside of the State of West Virginia shall be in the circuit court of Kanawha County.(c) With the exception of administrative supervision pursuant to article thirty-four of this chapter, delinquency proceedings pursuant to this article shall constitute the sole and exclusive method of liquidating, rehabilitating, reorganizing or conserving an insurer and no court shall entertain a petition for the commencement of such proceedings unless the same has been filed in the name of the state on the relation of the Insurance Commissioner.(d) An appeal shall lie to the West Virginia Supreme Court of Appeals from an order granting or refusing rehabilitation, liquidation or conservation and from every other order in delinquency proceedings having the character of a final order as to the particular portion of the proceedings embraced therein. Appeals from orders granting or refusing rehabilitation, liquidation or conservation shall be prosecuted pursuant to section four-d of this article.(e) At any time after an order is made under section ten or eleven of this article, the commissioner may remove the principal office of the insurer proceeded against to Kanawha County. In the event of such removal, the court wherein the proceeding was originally commenced shall, upon the application of the commissioner, direct its clerk to transmit all the pleadings, motions and other papers filed therein with such clerk to the clerk of the circuit court of Kanawha County. The proceeding shall thereafter be subject to the jurisdiction of the Kanawha County circuit court and conducted in the same manner as though it had been commenced in the Kanawha County circuit court.
During the pendency of delinquency proceedings in this or any reciprocal state, no action or proceeding in the nature of an attachment, garnishment or execution shall be commenced or maintained in the courts of this state against the delinquent insurer or its assets. Any lien obtained by any such action or proceeding within four months prior to the commencement of any such delinquency proceeding or at any time thereafter shall be void as against any rights arising in such delinquency proceeding.
(a) Paragraphs (b) to (m), inclusive, of section one of this article, together with sections four, and fourteen to twenty, inclusive, of this article constitute and may be referred to as the Uniform Insurers Liquidation Act.(b) The Uniform Insurers Liquidation Act shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states that enact it. To the extent that its provisions when applicable conflict with other provisions of this article the provisions of such act shall control.
The moneys collected by the commissioner in a proceeding under this article shall be from time to time deposited in one or more state or national banks, savings banks, or trust companies, and in the case of the insolvency or voluntary or involuntary liquidation of any such depository which is an institution organized and supervised under the laws of this state, such deposits shall be entitled to priority of payment on an equality with any other priority given by the banking laws of this state. The commissioner may in his discretion deposit such moneys or any part thereof in a national bank or trust company as a trust fund.
The commissioner shall not be required to pay any fee to any public officer in this state for filing, recording, issuing a transcript or certificate or authenticating any paper or instrument pertaining to the exercise by the commissioner of any of the powers or duties conferred upon him under this article, whether or not such paper or instrument be executed by the commissioner or his deputies, employees or attorneys of record and whether or not it is connected with the commencement of any action or proceeding by or against the commissioner, or with the subsequent conduct of such action or proceeding.
For the purpose of facilitating the rehabilitation, liquidation, conservation or dissolution of an insurer pursuant to this article, the commissioner may, subject to the approval of the court, borrow money and execute, acknowledge and deliver notes or other evidences of indebtedness therefor and secure the repayment of the same by the mortgage, pledge, assignment, transfer in trust, or hypothecation of any or all of the property, whether real, personal or mixed, of such insurer, and the commissioner, subject to the approval of the court, shall have power to take any and all other action necessary and proper to consummate any such loan and to provide for the repayment thereof. The commissioner shall be under no obligation personally or in his official capacity to repay any loan made pursuant to this section.
The rights and liabilities of the insurer and of its creditors, policyholders, stockholders, members, subscribers, and all other persons interested in its estate shall, unless otherwise directed by the court, be fixed as of the date on which the order directing the liquidation of the insurer is entered in the office of the clerk of the court which made the order, subject to the provisions of this article with respect to the rights of claimants holding contingent claims.
(a) A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt, made or suffered by the insurer within one year before the filing of a successful petition for liquidation under this article, the effect of which transfer may be to enable the creditor to obtain a greater percentage of this debt than another creditor of the same class would have otherwise received. If a liquidation order is entered while the insurer is already subject to a rehabilitation order, then the transfers are preferences if made or suffered within one year before the filing of the successful petition for rehabilitation, or within two years before the filing of the successful petition for liquidation, whichever time is shorter.(b) Any preference may be avoided by the liquidator if the insurer was insolvent at the time of the transfer; and(1) The transfer was made within four months before the filing of the petition; or(2) The creditor receiving it or to be benefitted thereby or his or her agent acting with reference thereto had, at the time when the transfer was made, reasonable cause to believe that the insurer was insolvent or was about to become insolvent; or(3) The creditor receiving it was an officer, or any employee or attorney or other person who was in fact in a position of comparable influence in the insurer to an officer whether or not he or she held such position, or any shareholder holding directly or indirectly more than five percent of any class of any equity security issued by the insurer, or any other person, firm, corporation, association or aggregation of persons with whom the insurer did not deal at arm's length.(c) (1) Notwithstanding subsections (a) and (b) of this section or any other provision of this chapter, the receiver for an insurer-member subject to a delinquency proceeding may not void a transfer made to a federal home loan bank in the ordinary course of business within four months of the commencement of the delinquency proceedings or which received prior approval of the receiver: Provided, That a transfer may be voided under this section if the transfer was made with actual intent to hinder, delay or defraud the insurer-member, a receiver appointed for the insurer-member or existing or future creditors.(2) Following the appointment of a receiver for an insurer-member and upon request of the receiver, the federal home loan bank shall, within ten days of the request, provide a process and establish timing for:(A) The release of collateral that exceeds the lending value, as determined in accordance with the advance agreement with the federal home loan bank, required to support secured obligations remaining after any repayment of advances;(B) The release of any collateral remaining in the federal home loan bank's possession following repayment of all outstanding secured obligations in full;(C) The payment of fees and the operation of deposits and other accounts with the federal home loan bank; and(D) The possible redemption or repurchase of federal home loan bank stock or excess stock of any class that an insurer-member is required to own.(3) Upon the request of the receiver for an insurer-member, the federal home loan bank shall provide any available options for the insurer-member to renew or restructure an advance to defer associated prepayment fees, to the extent that market conditions, the terms of the advance outstanding to the insurer-member, the applicable policies of the federal home loan bank and compliance with the Federal Home Loan Bank Act and corresponding regulations permit.(4) Nothing in this subsection affects the receiver's rights pursuant to 12 C.F.R.  1266.4 regarding advances to an insurer-member in delinquency proceedings.(d) Where the preference is voidable, the liquidator may recover the property or, if it has been converted, its value from any person who has received or converted the property; except where a bona fide purchaser or lienor has given less than fair equivalent value, the purchaser or lienor shall have a lien upon the property to the extent of the consideration actually given. Where a preference by way of lien or security title is voidable, the court may on due notice order the lien or title to be preserved for the benefit of the estate, in which event the lien or title shall pass to the liquidator.(e) A transfer under this section is considered to have been made as follows:(1) A transfer of property other than real property is made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee.(2) A transfer of real property is made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee.(3) A transfer which creates an equitable lien is not perfected if there are available means by which a legal lien could be created.(4) A transfer not perfected prior to the filing of a petition for liquidation is made immediately before the filing of the successful petition.(5) The provisions of this subsection apply whether or not there are or were creditors who might have obtained liens or persons who might have become bona fide purchasers.(f) (1) A lien obtainable by legal or equitable proceedings upon a simple contract is one arising in the ordinary course of the proceedings upon the entry or docketing of a judgment or decree, or upon attachment, garnishment, execution or like process, whether before, upon or after judgment or decree and whether before or upon levy. It does not include liens which under applicable law are given a special priority over other liens which are prior in time.(2) A lien obtainable by legal or equitable proceedings becomes superior to the rights of a transferee, or a purchaser obtains rights superior to the rights of a transferee within the meaning of subsection (e) of this section, if the consequences follow only from the lien or purchase itself, or from the lien or purchase followed by any step wholly within the control of the respective lienholder or purchaser, with or without the aid of ministerial action by public officials. A lien does not, however, become superior and the purchase does not create superior rights for the purpose of subsection (e) of this section through any acts subsequent to the obtaining of the lien or subsequent to the purchase which require the agreement or concurrence of any third party or which require any further judicial action or ruling.(g) A transfer of property for or on account of a new and contemporaneous consideration which is considered under subsection (e) of this section to be made or suffered after the transfer because of delay in perfecting it does not thereby become a transfer for or on account of an antecedent debt if any acts required by the applicable law to be performed in order to perfect the transfer as against liens or bona fide purchasers' rights are performed within twenty-one days or any period expressly allowed by the law, whichever is less. A transfer to secure a future loan, if the loan is actually made, or a transfer which becomes security for a future loan, has the same effect as a transfer for or on account of a new and contemporaneous consideration.(h) If any lien that is voidable under subsection (b) of this section has been dissolved by the furnishing of a bond or other obligation, the surety on which has been indemnified directly or indirectly by the transfer of or the creation of a lien upon any property of an insurer before the filing of a petition under this article which results in a liquidation order, the indemnifying transfer or lien is also considered voidable.(i) The property affected by any lien considered voidable under subsections (a), (b) and (h) of this section shall be discharged from the lien and that property and any of the indemnifying property transferred to or for the benefit of a surety shall pass to the liquidator, except that the court may on due notice order the lien to be preserved for the benefit of the estate and the court may direct that the conveyance be executed as may be proper or adequate to evidence the title of the liquidator.(j) The circuit court has summary jurisdiction of any proceeding by the liquidator to hear and determine the rights of any parties under this section. Reasonable notice of any hearing in the proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obligation. Where an order is entered for the recovery of indemnifying property in kind or for the avoidance of an indemnifying lien the court, upon application of any party in interest, shall in the same proceeding ascertain the value of the property or lien and if the value is less than the amount for which the property is indemnity or than the amount of the lien, the transferee or lienholder may elect to retain the property or lien upon payment of its value, as ascertained by the court, to the liquidator within reasonable times the court fixes.(k) The liability of the surety under a releasing bond or other like obligation is discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nullified and avoided by the liquidator or where the property is retained under subsection (j) of this section to the extent of the amount paid to the liquidator.(l) If a creditor has been preferred, and afterward in good faith gives the insurer further credit without security of any kind, for property which becomes a part of the insurer's estate, the amount of the new credit remaining unpaid at the time of the petition may be set off against the preference which would otherwise be recoverable from him or her.(m) If an insurer, directly or indirectly, within four months before the filing of a successful petition for liquidation under this article, or at any time in contemplation of a proceeding to liquidate it, pays money or transfers property to an attorney-at-law for services rendered or to be rendered, the transactions may be examined by the court on its own motion or shall be examined by the court on petition of the liquidator and may be held valid only to the extent of a reasonable amount to be determined by the court and the excess may be recovered by the liquidator for the benefits of the estate provided that where the attorney is in a position of influence in the insurer or an affiliate thereof payment of any money or the transfer of any property to the attorney-at-law for services rendered or to be rendered shall be governed by the provision of subdivision (3), subsection (b) of this section.(n) (1) Every officer, manager, employee, shareholder, member, subscriber, attorney or any other person acting on behalf of the insurer who knowingly participates in giving any preference when he or she has reasonable cause to believe the insurer is or is about to become insolvent at the time of the preference is personally liable to the liquidator for the amount of the preference. It is permissible to infer that there is a reasonable cause to so believe if the transfer was made within four months before the date of filing of this successful petition for liquidation.(2) Every person receiving any property from the insurer or the benefit thereof as a preference voidable under subsections (a) and (b) of this section is personally liable therefor and is bound to account to the liquidator.(3) Nothing in this subsection prejudices any other claim by the liquidator against any person.
(a) Every transfer made or suffered and every obligation incurred by an insurer within one year prior to the filing of a successful petition for rehabilitation or liquidation under this article is fraudulent as to then existing and future creditors if made or incurred without fair consideration, or with actual intent to hinder, delay or defraud either existing or future creditors. A transfer made or an obligation incurred by an insurer ordered to be rehabilitated or liquidated under this article, which is fraudulent under this section, may be avoided by the receiver, except as to a person who in good faith is a purchaser, lienor or obligee for a present fair equivalent value and except that any purchaser, lienor or obligee, who in good faith has given a consideration less than fair for such transfer, lien or obligation, may retain the property, lien or obligation as security for repayment. The court may, on due notice, order any such transfer or obligation to be preserved for the benefit of the estate and in that event, the receiver shall succeed to and may enforce the rights of the purchaser, lienor or obligee.(b) A transfer under this section will be considered to have been made as follows:(1) A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee under subsection (e), section twenty-six of this article.(2) A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee.(3) A transfer which creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created.(4) Any transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition.(5) The provisions of this subsection apply whether or not there are or were creditors who might have obtained any liens or persons who might have become bona fide purchasers.(c) Any transaction of the insurer with a reinsurer shall be deemed fraudulent and may be avoided by the receiver under subsection (a) of this section if:(1) The transaction consists of the termination, adjustment or settlement of a reinsurance contract in which the reinsurer is released from any part of its duty to pay the originally specified share of losses that had occurred prior to the time of the transactions, unless the reinsurer gives a present fair equivalent value for the release; and(2) Any part of the transaction took place within one year prior to the date of filing of the petition through which the receivership was commenced.(d) Every person receiving any property from the insurer or any benefit thereof which is a fraudulent transfer under subsection (a) of this section shall be personally liable therefore and shall be bound to account to the liquidator.
(a) If an order instituting a delinquency proceeding against an insurer authorized to do business in this state is entered under this article, the receiver appointed under the order has a right to recover on behalf of the insurer from any affiliate that controlled the insurer the amount of distributions, other than stock dividends paid by the insurer on its capital stock, made at any time during the five years preceding the petition for liquidation, rehabilitation or conservation. This recovery is subject to the limitations of subsections (b) through (g), inclusive, of this section.(b) No dividend is recoverable if the recipient shows that, when paid, the distribution was lawful and reasonable and that the insurer did not know and could not reasonably have known that the distribution might adversely affect its solvency.(c) The maximum amount recoverable under this section is the amount needed, in excess of all other available assets, to pay all claims under the receivership, reduced for each recipient by any amount the recipient has already paid to receivers under similar laws of other states.(d) Any person who was an affiliate that controlled the insurer at the time the distributions were paid is liable up to the amount of distributions received. Any person who was an affiliate that controlled the insurer at the time the distributions were declared is liable up to the amount of distributions the person would have received if the distributions had been paid immediately. If two or more persons are liable regarding the same distributions, they are jointly and severally liable.(e) If any person liable under subsection (d) of this section is insolvent, all affiliates that controlled that person at the time the dividend was declared or paid are jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate.(f) This section does not reduce the personal liability of a director under existing law.(g) An action or proceeding under this section may not be commenced after the earlier of:(1) Two years after the appointment of a liquidator pursuant to this article; or(2) The date the rehabilitation or liquidation is terminated.
(a) After a petition for rehabilitation or liquidation has been filed, a transfer of any of the real property of the insurer made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefore, for which amount the transferee shall have a lien on the property so transferred. The commencement of a proceeding in rehabilitation or liquidation shall be constructive notice upon the recording of a copy of the petition for or order of rehabilitation or liquidation with the clerk of the county commission of the county where any real property in question is located. The exercise by a court of the United States or any state or jurisdiction to authorize or effect a judicial sale of real property of the insurer within any county in any state shall not be impaired by the pendency of such a proceeding unless the copy is recorded in the county prior to the consummation of the judicial sale.(b) After a petition for rehabilitation or liquidation has been filed and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted:(1) A transfer of any of the property of the insurer, other than real property, made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value; or, if made for less than a present fair equivalent value, then to the extent of the present consideration actually paid therefore, for which amount the transferee shall have a lien on the property so transferred;(2) A person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property, or any part thereof, to the insurer or upon his or her order, with the same effect as if the petition were not pending;(3) A person having actual knowledge of the pending rehabilitation or liquidation shall be considered not to act in good faith;(4) A person asserting the validity of a transfer under this section shall have the burden of proof. Except as elsewhere provided in this section, no transfer by or on behalf of the insurer after the date of the petition for liquidation by any person other than the liquidator shall be valid against the liquidator.(c) Every person receiving any property from the insurer or any benefit thereof which is a fraudulent transfer under this section shall be personally liable therefore and shall be bound to account to the liquidator.(d) Nothing in this article shall impair the negotiability of currency or negotiable instruments.
(a) No claim of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment or encumbrance voidable under this article shall be allowed unless the creditor surrenders the preference, lien, conveyance, transfer, assignment or encumbrance. If the avoidance is effected by a proceeding in which a final judgment has been entered, the claim will not be allowed unless the money is paid or the property is delivered to the liquidator within thirty days from the date of entry of the final judgment, except that the court having jurisdiction over the liquidation may allow further time if there is an appeal or other continuation of the proceeding.(b) A claim allowable under subsection (a) of this section by reason of the avoidance, whether voluntary or involuntary, of a preference, lien, conveyance, transfer, assignment or encumbrance, may be filed as a late filing if filed within thirty days from the date of the avoidance, or within the further time allowed by the court under subsection (a) of this section. A claimant having a late filed claim under this section may be permitted by the liquidator to share in distribution as though the claim were not late, to the extent that the payment will not interfere with the orderly administration of the liquidation.
(a) In all cases of mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this article, the credits and debts shall be set off and the balance only shall be allowed or paid, except as provided in subsection (b), below.(b) No setoff may be allowed in favor of any such person where:(1) The obligation of the insurer to the person would not at the date of the entry of any liquidation order or otherwise, as provided in section twenty-five of this article, entitle him or her to share as a claimant in the assets of the insurer;(2) The obligation of the insurer to the person was purchased by or transferred to the person with a view of its being used as a setoff;(3) The obligation of the person is to pay an assessment levied against the members of a mutual insurer, or against the subscribers of a reciprocal insurer, or is to pay a balance upon the subscription to the capital stock of a stock insurer;(4) The obligation of the insurer is owed to an affiliate of such person, or any other entity or association other than the person;(5) The obligation of the person is owed to an affiliate of the insurer, or any other entity or association other than the insurer; or(6) The obligations between the person and the insurer arise from transactions by which the person or the insurer assumed risk and obligations from the other party and ceded back substantially the same risks and obligations except the receiver may permit setoffs if in his or her discretion, a setoff is appropriate because of specific circumstances.(c) Notwithstanding the provisions of subsection (b) of this section, a setoff of sums due on obligations in the nature of those set forth in subdivision (6), subsection (b) of this section shall be allowed for those sums accruing from business written where the contracts were entered into, renewed or extended with the approval of the commissioner of insurance of the state of domicile of the now insolvent insurer, when in the judgment of such commissioner it was necessary to provide reinsurance in order to prevent or mitigate a threatened impairment or insolvency of a domiciliary insurer in connection with the exercise of the commissioner's regulatory responsibilities.(d) The provisions of this section shall supersede any agreements or contractual provisions which might be construed to enlarge the setoff rights of any person under any contract with the insurer.
(a) No contingent claim may share in a distribution of the assets of an insurer which has been adjudicated to be insolvent by an order made pursuant to this article, except that such claim shall be considered, if properly presented, and may be allowed to share where:(1) It does not prejudice the orderly administration of the liquidation; or(2) There is a surplus and the liquidation is thereafter conducted upon the basis that the insurer is solvent.(b) Where an insurer has been so adjudicated to be insolvent any person who has a cause of action against an insured of the insurer under a policy issued by the insurer shall have the right to file a claim in the liquidation proceeding, regardless of the fact that the claim may be contingent and the claim may be allowed:(1) If it may be reasonably inferred from the proof presented upon the claim that such person would be able to obtain a judgment upon the cause of action against the insured; and(2) If such person furnishes suitable proof, unless the court for good cause shown otherwise directs, that no further valid claim against the insurer arising out of his or her cause of action other than those already presented can be made; and(3) If the total liability of the insurer to all claimants arising out of the same act of its insured is no greater than its maximum liability would be were it not in liquidation.(c)(1) No judgment against such an insured taken after the date of entry of the liquidation order may be considered in the liquidation proceedings as evidence of liability, or of the amount of damages, and no judgment against an insured taken by default or by collusion prior to the entry of the liquidation order may be considered as conclusive evidence in the liquidation proceedings, either of the liability of the insured to the person upon the cause of action or of the amount of damages to which the person is therein entitled.(2) A claim by a third party founded upon a policy may be allowed without requiring the claim to be reduced to judgment, provided it can be reasonably inferred from the proof presented that the claimant would be able to obtain a judgment upon his or her cause of action against the insured and that the judgment would represent a liability of the insurer in liquidation under the policy upon which the claim is founded.(d) No claim of any secured claimant may be allowed at a sum greater than the difference between the value of the claim without security and the value of the security itself as of the date of the entry of the order of liquidation or such other date set by the court for determining rights and liabilities as provided in section twenty-five of this article unless the claimant surrenders his or her security to the commissioner, in which event the claim shall be allowed in the full amount for which it is valued.(e) Whenever a creditor, whose claim against an insurer is secured, in whole or in part, by the undertaking of another person, fails to prove and file that claim, the other person may do so in the creditor's name and shall be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor's name, to the extent that he or she discharges the undertaking. In the absence of an agreement with the creditor to the contrary, the other person shall not be entitled to any distribution, however, until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer's estate to the creditor equals the amount of the entire claim of the creditor. Any excess received by the creditor shall be held by him or her in trust for such other person. The term "other person", as used in this section, is not intended to apply to a guaranty association or foreign guaranty association.(f) Unless such claim is filed in the manner and within the time provided in sections eighteen and thirty of this article, it shall not be entitled to filing or allowance and no action may be maintained thereon. In the liquidation, pursuant to the provisions of this article, of any domestic insurer which has issued policies insuring the lives of persons, the commissioner shall, within thirty days after the last day set for the filing of claims, make a list of the persons who have not filed proofs of claim with him or her and to whom, according to the books of the insurer, there are amounts owing under such policies and he or she shall set opposite the name of each person the amount so owing to the person. Each person whose name appears upon the list shall be considered to have duly filed, prior to the last day set for the filing of claims, a claim for the amount set opposite his or her name on the list.(g)(1) Claims founded upon unliquidated or undetermined demands must be filed within the time limit provided in this article for the filing of claims, but claims founded upon such demands shall not share in any distribution to creditors of a person proceeded against under section nineteen-a of this article until the claims have been definitely determined, proved and allowed. Thereafter, the claims shall share ratably with other claims of the same class in all subsequent distributions.(2) An unliquidated or undetermined claim or demand within the meaning of this article shall be considered to be any claim or demand upon which a right of action has accrued at the date of the order of liquidation and upon which the liability has not been determined or the amount thereof liquidated.(h) The commissioner may require, as a condition of payment of the final liquidation dividend to a lender, or his or her assignee, who has filed a claim for an unearned premium as an assignee of the insured for valuable consideration:(1) That such assignee of the insured shall assign to the liquidator all his or her right, title and interest in any unsatisfied debt of the insured to the assignee, pertaining to policies of the insolvent insurer, remaining unpaid after crediting the final liquidation dividend, if the amount of the unsatisfied debt is less than $100.01; and(2) That all of the documents giving rise to the debt be delivered to him or her.(i) The commissioner may determine whether or not it will be feasible to attempt to collect any assigned debt. If the commissioner determines not to pursue collection of any such debt, he or she shall file a declaration to that effect with the liquidation court and be relieved of any further responsibility in respect to the debt.(j) As used in this section, "insured" means a natural person who purchased insurance or coverage from the insolvent insurer for personal, family, or household purposes.
(a) The commissioner may file in the appropriate circuit court of this state, as provided in section two of this article, a petition alleging, with respect to a domestic insurer:(1) That there exist any grounds that would justify a court order for a formal delinquency proceeding against an insurer under this act;(2) That the interests of policyholders, creditors or the public will be endangered by delay; and(3) The contents of an order considered necessary by the commissioner.(b) Upon a filing under subsection (a) of this section, the court may issue forthwith, ex parte and without a hearing, the requested order which shall direct the commissioner to take possession and control of all or a part of the assets, books, accounts, documents and other records of an insurer and of the premises occupied by it for transaction of its business; and until further order of the court enjoin the insurer and its officers, managers, agents and employees from disposition of its property and from the transaction of its business except with the written consent of the commissioner.(c) The court shall specify in the order what its duration shall be, which shall be the time as the court considers necessary for the commissioner to ascertain the condition of the insurer. On motion of either party or on its own motion, the court may, from time to time, hold hearings as it considers desirable after notice that it considers appropriate and may extend, shorten or modify the terms of the seizure order. The court shall vacate the seizure order if the commissioner fails to commence a formal delinquency proceeding under this article after having had a reasonable opportunity to do so. An order of the court pursuant to a formal proceeding under this article shall ipso facto vacate the seizure order.(d) Entry of a seizure order under this section will not constitute an anticipatory breach of any contract of the insurer.(e) An insurer subject to an ex parte order under this section may petition the court at any time after the issuance of the order for a hearing and review of the order. The court shall hold the hearing and review not more than fifteen days after the request. Subject to the approval of the court, a hearing under this subsection may be held privately in chambers if the insurer proceeded against so requests.(f) If, at any time after the issuance of such an order, it appears to the court that any person whose interest is or will be substantially affected by the order did not appear at the hearing and has not been served, the court may order that notice be given. An order that notice be given will not stay the effect of any order previously issued by the court.
(a) If upon the granting of an order of liquidation under this article or at any time thereafter during the liquidation proceeding, the insurer shall not be clearly solvent, the court shall, after notice and hearing as provided in this article, make an order declaring the insurer to be insolvent. Thereupon regardless of any prior notice which may have been given to creditors, the commissioner shall notify all persons who may have claims against the insurer and who have not filed proper proofs thereof to present the same to him or her, at a place specified in the notice, within four months from the date of entry of the order, or if the commissioner shall certify that it is necessary, within such longer time as the court shall prescribe. The last day for filing of proofs of claims shall be specified in the notice and notice shall be given in a manner to be determined by the court.(b) Proofs of claim may be filed subsequent to the date specified, but no such claim may share in the distribution of the assets until all allowed claims, proofs of which have been filed before said date, have been paid in full with interest, except as provided in section twenty-six-d of this article.
Within three years from the date an order of rehabilitation or liquidation of a domestic mutual insurer or a domestic reciprocal insurer was entered in the office of the clerk of the court by which such order was made, the commissioner may make a report to the court setting forth:(a) The reasonable value of the assets of the insurer,(b) The insurer's probable liabilities, and(c) The probable necessary assessment, if any, to pay all claims and expenses in full, including expenses of administration.
(a) Upon the basis of the report provided for in section thirty-one of this article, including any amendments thereof, the court, ex parte, may levy one or more assessments against all members of such insurer who, as shown by the records of the insurer, were members (if a mutual insurer) or subscribers (if a reciprocal insurer) at any time within one year prior to the date of issuance of the order to show cause under section three of this article.(b) Such assessment or assessments shall cover the excess of the probable liabilities over the reasonable value of the assets, together with estimated cost of collection and percent of uncollectibility thereof. The total of all assessments against any member or subscriber with respect to any policy, whether levied pursuant to this article or pursuant to any other provision of this chapter, shall be for no greater amount than that specified in the policy or policies of the member or subscriber and as limited under this chapter, except that if the court finds that the policy was issued at a rate of premium below the minimum rate lawfully permitted for the risk insured, the court may determine the upper limit of such assessment upon the basis of such minimum rate.(c) No assessment shall be levied against any member or subscriber with respect to any nonassessable policy issued in accordance with this chapter.
After levy of assessment as provided in section thirty-two of this article, upon the filing of a further detailed report by the commissioner the court shall issue an order directing each member (if a mutual insurer) or each subscriber (if a reciprocal insurer), if he shall not pay the amount assessed against him to the commissioner on or before a day to be specified in the order, to show cause why he should not be held liable to pay such assessment, together with costs as provided in section thirty- five of this article, and to show cause why the commissioner should not have judgment therefor.
The commissioner shall cause a notice of such assessment order, setting forth a brief summary of the contents of such order, to be (a) published in such manner as shall be directed by the court, and (b) enclosed in a sealed envelope, addressed and mailed postage prepaid, to each member or subscriber liable thereunder at his last-known address as it appears on the records of the insurer, at least twenty days before the return day of the order to show cause provided for in section thirty-three of this article.
(a) Upon the return day of the order to show cause provided for in section thirty-three of this article, if the member or subscriber does not appear and serve duly verified objections upon the commissioner, the court shall make an order adjudging that such member or subscriber is liable for the amount of the assessment against him together with costs, and that the commissioner may have judgment against the member or subscriber therefor.(b) If, on such return day, the member or subscriber shall appear and serve duly verified objections upon the commissioner, there shall be a full hearing before the court which, after such hearing, shall make such order as the facts shall warrant.(c) Any such order shall have the same force and effect, shall be entered and docketed and may be appealed from, as if it were a judgment in an original action brought in the court in which the proceeding is pending.
(a) Within one hundred twenty days of a final determination of insolvency of an insurance company by the circuit court, the commissioner shall make application to the court for approval of a proposal to disburse assets out of the company's marshaled assets, from time to time as such assets become available, to the appropriate guaranty association having obligations because of the insolvency. "Appropriate guaranty association" means guaranty association and foreign guaranty association as those terms are defined in section one of this article. If the commissioner determines that there are insufficient assets to disburse, the application required by this section shall be satisfied by a filing by the commissioner stating the reasons for this determination.(b) The proposal shall at least include provisions for:(1) Reserving amounts for the payment of expenses of administration and of claims falling within the priorities established in section nineteen-a of this article but only with respect to such priorities higher than that of the associations;(2) Disbursement of the assets marshaled to date and subsequent disbursement of assets as they become available;(3) Equitable allocation of disbursements to each of the associations entitled thereto;(4) The securing by the commissioner from each of the associations entitled to disbursements pursuant to this section of an agreement to return to the commissioner such assets, together with income earned on assets previously disbursed, as may be required to pay claims of secured creditors and claims falling within the priorities established in section nineteen-a of this article but only with respect to such priorities higher than that of the associations. No bond shall be required of any such association; and(5) A full report to be made by the association to the commissioner accounting for all assets so disbursed to the association, all disbursements made therefrom, any interest earned by the association on such assets and any other matter as the court may direct.(c) The commissioner's proposal shall provide for disbursements to the association in amounts estimated at least equal to the claim payments made or to be made thereby for which the association could assert a claim against the commissioner, and shall further provide that if the assets available for disbursement from time to time do not equal or exceed the amount of the claim payments made or to be made by the association, then disbursements shall be in the amount of available assets.(d) Notice of the commissioner's application shall be given to the associations in and to the commissioners of insurance of each of the states. Any such notice shall be considered to have been given when deposited in the United States mail, first class postage prepaid, at least thirty days prior to submission of the application to the court. Action on the application may be taken by the court provided the notice required in this subsection has been given and provided that the commissioner's proposal complies with subdivisions (1) and (2), subsection (b) of this section.
Under the direction of court, the liquidator shall pay distributions in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and the creditor and approved by the court.
(a) All unclaimed funds subject to distribution remaining in the liquidator's hands when he or she is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member or other person who is unknown or cannot be found, shall be deposited with the state Treasurer and shall be paid without interest to the person entitled thereto or his or her legal representative upon proof satisfactory to the state Treasurer of his or her right thereto. Any amount on deposit not claimed within six years from the discharge of the liquidator shall be considered to have been abandoned and shall be escheated to the State of West Virginia without formal escheat proceedings and be deposited with the General Fund.(b) When all assets justifying the expense of collection and distribution have been marshaled and distributed under this article, the liquidator shall petition the circuit court to terminate the liquidation proceeding and to close the estate and for other relief as may be appropriate. Subject to approval of the circuit court, after the completion of all post-closure activities for which moneys were reserved, the liquidator is authorized to deposit any remaining assets reserved for administrative expenses incurred in the closing of the estate that may not be practicably or economically distributed to claimants into a segregated account to be known as the closed estate fund account. The commissioner may thereafter use moneys held in the account to fund the administrative expenses of proceedings against insurers subject to this article that lack sufficient assets to fund administration.
(a) No claim of any nature whatsoever that is directly related to the receivership of an insurer shall arise against and no liability shall be imposed upon, the Insurance Commissioner, special deputy commissioner, or any person or entity acting as a receiver of an insurer, including surety, in rehabilitation, liquidation or conservation as a result of a court order issued on or after the effective date of this article for any statement made or actions taken or not taken in the good faith exercise of their powers under law. However, this immunity shall not extend to acts or omissions which are malicious or grossly negligent. This qualified immunity extends to agents and employees of the receiver.(b) In any civil proceeding filed against a special deputy commissioner appointed pursuant to this article, the special deputy commissioner shall be entitled to be represented by the Attorney General.
(a) Upon application by the commissioner for an order under this article:(1) The court may without notice issue an injunction restraining the insurer, its officers, directors, stockholders, members, subscribers, agents and all other persons from the transaction of its business or the waste or disposition of its property until further order of the court.(2) The court may at any time during a proceeding under this article issue other injunctions or orders as may be considered necessary to prevent interference with the commissioner or the proceeding, or waste of the assets of the insurer, or the commencement or prosecution of any actions, or the obtaining of preferences, judgments, attachments or other liens, or the making of any levy against the insurer or against its assets or any part thereof.(3) The court may order any managing general agent or attorney-in-fact to release to the commissioner any books, records, accounts, documents or other writings relating to the business of such person: Provided, That any of the same or the property of an agent or attorney shall be returned when no longer necessary to the commissioner or at any time the court after notice and hearing shall so direct.(b) Any person having possession of and refusing to deliver any of the books, records or assets of an insurer against whom a seizure order has been issued by the court is guilty of a misdemeanor and, shall be punished by a fine not exceeding $1,000 or confined in jail not more than one year, or both fined and confined.(c) Whenever the commissioner makes any seizure as provided in section three of this article, it is the duty of the sheriff of any county of this state, and of the police department of any municipality therein, to furnish the commissioner, upon demand, with deputies, patrolmen or officers necessary to assist the commissioner in making and enforcing the seizure.(d) Notwithstanding any other provision of law, no bond is required of the commissioner as a prerequisite for the issuance of any injunction or restraining order pursuant to this section.(e) Notwithstanding subsections (a) through (d) of this section or any other provision of this chapter, the commencement of a delinquency proceeding with respect to an insurer-member does not operate as a stay, injunction or prohibition of the exercise by a federal home loan bank of its rights regarding collateral pledged by the insurer-member.
From and after July 1, 2004, any delinquency proceeding commenced against an insurer for the purpose of liquidating, rehabilitating, reorganizing or conserving the insurer shall be undertaken pursuant to this article. Any delinquency proceeding pending against an insurer under this article on June 30, 2004, will be administered and concluded under the law in effect at the time the delinquency proceeding was commenced.
The amount recoverable by the liquidator from reinsurers may not be reduced as a result of delinquency proceedings unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance shall be payable under a contract reinsured by the assuming insurer on the basis of reported claims allowed by the liquidation court, without diminution because of the insolvency of the ceding insurer. The payments shall be made directly to the ceding insurer or to its domiciliary liquidator except: (1) Where the contract or other written agreement specifically provides another payee of the reinsurance in the event of the insolvency of the ceding insurer; or (2) where the assuming insurer, with the consent of the direct insured, has assumed the policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under the policies and in substitution for the obligations of the ceding insurer to the payees.
(a) Any formal delinquency proceeding against a person shall be commenced by filing a petition in the name of the commissioner.(b) The petition shall state the grounds upon which the proceeding is based and the relief requested, and may include a prayer for restraining orders and injunctive relief as described in section four of this article.(c) Any petition that prays for a temporary restraining order must be verified by the commissioner or the commissioner's designee, but need not plead or prove irreparable harm or inadequate remedy by law. The commissioner shall provide only such notice as the court may require.(d) If any temporary restraining order is prayed for:(1) The court may issue an initial order containing the relief requested;(2) The order shall state the time and date of its issuance;(3) The court shall set a time and date for the return of summons, not more than ten days from the time and date of the issuance of the initial order, at which time the person proceeded against may appear before the court for a summary hearing;(4) The order shall not continue in effect beyond the time and date set for the return of summons, unless the court shall expressly enter one or more orders extending the restraining order; and(5) The verified petition shall be filed with the clerk of the circuit court and maintained as confidential, except for good cause shown, until service of the petition and summons is effected.(e) If no temporary restraining order is requested, the court shall cause a summons to be issued. The summons shall specify a return date not more than thirty days after issuance and that an answer to the petition must be filed at or before the return date.(f) Service of process required pursuant to this article shall be upon the person named in the petition in accordance with the West Virginia rules of civil procedure.
(a) The court shall hold a summary hearing at the time and date for the return of summons.(b) If a person is not served with the petition and summons and fails to appear for the summary hearing, the court shall:(1) Continue the summary hearing not more than ten days;(2) Require the commissioner to make additional or alternative attempts at service of the petition and summons upon the person; and(3) Extend any restraining order.(c) Upon a showing of good faith efforts to effect service upon a person who has failed to appear for a continued summary hearing, the court shall order notice of the petition to be published. The order and notice shall specify a return date not less than ten nor more than twenty days after the publication and that the restraining order has been extended to the continued hearing date.(d) If a person fails to appear for a summary hearing after service of the summons, the court shall enter judgment in favor of the commissioner against that person.(e) A person who appears for the summary hearing shall file its answer at the hearing and the court shall:(1) Determine whether to extend any temporary restraining orders pending final judgment; and(2) Set the case for trial on a date not more than ten days from the summary hearing.(f) The court shall grant no continuance for filing an answer.
(a) The court shall hear the case at the time and date set forth for trial without a jury and without unnecessary delays. To the extent not inconsistent with other laws or applicable rules, the court shall give priority to the matter over all other matters. To the extent otherwise authorized by law or applicable rules, the court may assign the matter to other judges if necessary to comply with the need for expedited proceedings under this article.(b) Continuances for trial shall be granted only in extreme circumstances.(c) The court shall receive as self-authenticated any of the following when offered by the commissioner:(1) Certified copies of the financial statements made by the person; and(2) Certified copies of examination reports of the person made by or on behalf of the commissioner.(d) The facts contained in any such examination report shall be presumed to be true as of the date of the hearing if the examination was made as of a date not more than two hundred seventy days before the petition was filed. This presumption shall be rebuttable and shall shift the burden of production and persuasion.(e) Discovery shall be limited to grounds alleged in the petition, and shall be concluded on an expedited basis.
(a) The court shall enter judgment within fifteen days or as soon as practicable after the conclusion of the evidence.(b) The judgment shall be final when entered. Any appeal shall be prosecuted on an expedited basis and must be filed within five days of entry. No request for reconsideration, review or appeal and no posting of a bond shall dissolve or stay the judgment.
(a) In all proceedings and judicial reviews under section four of this article, all records of the insurer, other documents and all insurance department files and court records and papers, so far as they pertain to or are a part of the record of the proceedings, shall be and remain confidential and all papers filed with the clerk of the circuit court shall be held by the clerk in a confidential file, except as is necessary to obtain compliance with any order entered in connection with the proceedings, unless and until:(1) The circuit court, after hearing argument in chambers, shall order otherwise;(2) The insurer requests that the matter be made public; or(3) The commissioner applies for an order under section ten or eleven of this article.(b) The commissioner may share documents, materials or other information in his or her possession or control pertaining to an insurer that is the subject of a proceeding under this article with other state insurance departments, the national association of Insurance Commissioners, and federal banking agencies in accordance with section nineteen, article two of this chapter. No waiver of any applicable privilege or claim of confidentiality shall occur as a result of disclosure by the commissioner under this section or as a result of sharing documents, materials or other information pursuant to this subsection.
The commissioner may apply to the court for an order appointing him or her as receiver of and directing him or her to rehabilitate a domestic insurer or of the United States branch of an alien insurer having trusteed assets in this state, upon one or more of the following grounds. That the insurer:(a) Is impaired or insolvent.(b) Has refused to submit to reasonable examination by the commissioner its property, books, records, accounts or affairs or those of any subsidiary or related company within the control of the insurer, or those of any person having executive authority in the insurer as far as they pertain to the insurer.(c) Has failed to comply with an order of the commissioner to make good an impairment of capital or surplus or both.(d) Has transferred or attempted to transfer substantially its entire property or business, or has entered into any transaction the effect of which is to merge substantially its entire property or business in that of any other insurer or other legal entity without having first obtained the written approval of the commissioner.(e) Has willfully violated its charter, articles of incorporation, or bylaws, or any law of this state or any valid order of the commissioner.(f) Has an officer, director or manager who has refused to be examined under oath concerning its affairs, for which purpose the commissioner is hereby authorized to conduct and to enforce by all appropriate and available means any such examination under oath in any other state or territory of the United States, in which any such officer, director or manager may then presently be, to the full extent permitted by the laws of such other state or territory, this special authorization considered.(g) Has been the subject of an application for the appointment of a receiver, trustee, custodian or sequestrator of the insurer or its property otherwise than pursuant to the provisions of this chapter, but only if such appointment has been made or is imminent and its effect is or would be to oust the courts of this state of jurisdiction hereunder.(h) Has consented to such an order through a majority of its directors, stockholders, members or subscribers.(i) Has failed to pay a final judgment rendered against it in this state upon any insurance contract issued or assumed by it, within thirty days after the judgment became final or within thirty days after the time for taking an appeal has expired or within thirty days after dismissal of an appeal before final determination, whichever date is the later.(j) Has been deemed in hazardous financial condition pursuant to the provisions of article thirty-four-a of this chapter.
The commissioner may apply to the court for an order appointing him as receiver (if his appointment as receiver shall not be then in effect) and directing him to liquidate the business of a domestic insurer or of the United States branch of an alien insurer having trusteed assets in this state, regardless of whether or not there has been a prior order directing him to rehabilitate such insurer, upon any of the grounds specified in section five of this article, or if such insurer:(a) Has ceased transacting business for a period of one year, or(b) Is an insolvent insurer and has commenced voluntary liquidation or dissolution, or attempts to commence or prosecute any action or proceeding to liquidate its business or affairs, or to dissolve its corporate charter, or to procure the appointment of a receiver, trustee, custodian, or sequestrator under any law except this chapter.
The commissioner may apply to the court for an order appointing him as receiver or ancillary receiver, and directing him to conserve the assets within this state, of a foreign insurer upon any of the following grounds:(a) Upon any of the grounds specified in sections five or six of this article; or(b) Upon the ground that its property has been sequestrated in its domiciliary state or in any other state.
The commissioner may apply to the court for an order appointing him as receiver or ancillary receiver, and directing him to conserve the assets within this state, of any alien insurer upon any of the following grounds:(a) Upon any of the grounds specified in sections five or six of this article,(b) Upon the ground that the insurer has failed to comply, within the time designated by the commissioner, with an order made by him to make good an impairment of its trusteed funds, or(c) Upon the ground that the property of the insurer has been sequestrated in a country other than the United States.
The commissioner may apply to the court for an order appointing him as ancillary receiver of and directing him to liquidate the business of a foreign insurer having assets, business, or claims in this state upon the appointment in the domiciliary state of such insurer of a receiver, liquidator, conservator, rehabilitator or other officer by whatever name called for the purpose of liquidating the business of such insurer.
The purpose of this article is to regulate trade practices in the business of insurance in accordance with the intent of Congress as expressed in the act of Congress of March 9, 1945 (Public Law fifteen, seventy-ninth Congress), by defining, or providing for the determination of, all such practices in this state which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.
In the event any provision of this article, or the application of such provision to any person or circumstance, shall be held unconstitutional or otherwise invalid by any court of competent jurisdiction, the remainder of this article or the application of the provisions to other persons or circumstances shall not be affected thereby.
As used in this article:(a) "Person" includes any individual, company, insurer, association, organization, society, reciprocal, business trust, corporation, or any other legal entity, including agents and brokers. "Person" also includes hospital service corporations, medical service corporations and dental service corporations as defined in article twenty-four of this chapter, and health care corporations as defined in article twenty-five of this chapter. For purposes of this article hospital service corporations, medical service corporations, dental service corporations, and health care corporations shall be deemed to be in the business of insurance.(b) "Commissioner" means the Insurance Commissioner of West Virginia.(c) "Insurance policy" or "insurance contract" means the contract effecting insurance, or the certificate thereof, by whatever name called, and includes all clauses, riders, endorsements and papers attached thereto and a part thereof.
No person shall engage in this state in any trade practice which is defined in this article as, or determined pursuant to section seven of this article to be, an unfair method of competition or an unfair or deceptive act or practice in the business of insurance.
The following are defined as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance:(1) Misrepresentation and false advertising of insurance policies. -- No person shall make, issue, circulate, or cause to be made, issued or circulated, any estimate, circular, statement, sales presentation, omission or comparison which:(a) Misrepresents the benefits, advantages, conditions or terms of any insurance policy; or(b) Misrepresents the dividends or share of the surplus to be received on any insurance policy; or(c) Makes any false or misleading statements as to the dividends or share of surplus previously paid on any insurance policy; or(d) Is misleading or is a misrepresentation as to the financial condition of any person, or as to the legal reserve system upon which any life insurer operates; or(e) Uses any name or title of any insurance policy or class of insurance policies misrepresenting the true nature thereof; or(f) Is a misrepresentation for the purpose of inducing or tending to induce the lapse, forfeiture, exchange, conversion or surrender of any insurance policy; or(g) Is a misrepresentation for the purpose of effecting a pledge or assignment of or effecting a loan against any insurance policy; or(h) Misrepresents any insurance policy as being shares of stock.(2) False information and advertising generally. -- No person shall make, publish, disseminate, circulate or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster or over any radio or television station, or in any other way, an advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of his or her insurance business, which is untrue, deceptive or misleading.(3) Defamation. -- No person shall make, publish, disseminate or circulate, directly or indirectly, or aid, abet or encourage the making, publishing, disseminating or circulating of any oral or written statement or any pamphlet, circular, article or literature which is false, or maliciously critical of or derogatory to the financial condition of any person and which is calculated to injure the person.(4) Boycott, coercion and intimidation. -- No person shall enter into any agreement to commit, or by any concerted action commit, any act of boycott, coercion or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance.(5) False statements and entries. -- (a) No person shall knowingly file with any supervisory or other public official, or knowingly make, publish, disseminate, circulate or deliver to any person, or place before the public, or knowingly cause directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement of fact as to the financial condition of a person.(b) No person shall knowingly make any false entry of a material fact in any book, report or statement of any person or knowingly omit to make a true entry of any material fact pertaining to the business of any person in any book, report or statement of such person.(6) Stock operations and advisory board contracts. -- No person shall issue or deliver or permit agents, officers or employees to issue or deliver, agency company stock or other capital stock, or benefit certificates or shares in any common-law corporation, or securities or any special or advisory board contracts or other contracts of any kind promising returns and profits as an inducement to insurance.(7) Unfair discrimination. -- (a) No person shall make or permit any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any contract of life insurance or of life annuity or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contract.(b) No person shall make or permit any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium policy fees, or rates charged for any policy or contract of accident and sickness insurance or in the benefits payable thereunder, or in any of the terms or conditions of the contract, or in any other manner whatever.(c) As to kinds of insurance other than life and accident and sickness, no person shall make or permit any unfair discrimination in favor of particular persons, or between insureds or subjects of insurance having substantially like insuring, risk and exposure factors or expense elements, in the terms or conditions of any insurance contract, or in the rate or amount of premium charge therefor. This paragraph shall not apply as to any premium or premium rate in effect pursuant to article twenty of this chapter.(8) Rebates. -- (a) Except as otherwise expressly provided by law, no person shall knowingly permit or offer to make or make any contract of life insurance, life annuity, or accident and sickness insurance, or agreement as to any contract other than as plainly expressed in the insurance contract issued thereon, or pay or allow or give or offer to pay, allow or give, directly or indirectly, as inducement to any insurance or annuity, any rebate of premiums payable on the contract, or any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatever not specified in the contract; or give or sell, or purchase or offer to give, sell or purchase as inducement to any insurance contract or annuity or in connection therewith, any stocks, bonds or other securities of any insurance company or other corporation, association or partnership, or any dividends or profits accrued thereon, or anything of value whatsoever not specified in the contract.(b) Nothing in subdivision (7) or paragraph (a) of subdivision (8) of this section shall be construed as including within the definition of unfair discrimination or rebates any of the following practices:(i) In the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums, in whole or in part, out of surplus accumulated from nonparticipating insurance: Provided, That any such bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interests of the insurer and its policyholders;(ii) In the case of life insurance policies issued on the industrial debit plan, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer in an amount which fairly represents the saving in collection expenses;(iii) Readjustment of the rate of premium for a group insurance policy based on the loss or expense thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for such policy year;(iv) Issuing life or accident and sickness policies on a salary savings or payroll deduction plan at a reduced rate commensurate with the savings made by the use of the plan.(c) With respect to insurance other than life, accident and sickness, ocean marine or marine protection and indemnity insurance, no person shall knowingly charge, demand or receive a premium for the insurance except in accordance with an applicable filing on file with the commissioner. No person shall pay, allow or give, directly or indirectly, either as an inducement to insurance or after insurance has been effected, any rebate, discount, abatement, credit or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified in the policy of insurance, except to the extent provided for in an applicable filing. No insured named in a policy of insurance, nor any relative, representative or employee of the insured shall knowingly receive or accept directly or indirectly, any rebate, discount, abatement, credit or reduction of premium, or any special favor or advantage or valuable consideration or inducement. Nothing in this section shall be construed as prohibiting the payment of commissions or other compensation to duly licensed agents and brokers, nor as prohibiting any insurer from allowing or returning to its participating policyholders, members or subscribers, dividends, savings or unabsorbed premium deposits. As used in this section the word "insurance" includes suretyship and the word "policy" includes bond.(9) Unfair claim settlement practices. -- No person shall commit or perform with such frequency as to indicate a general business practice any of the following:(a) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;(b) Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;(c) Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;(d) Refusing to pay claims without conducting a reasonable investigation based upon all available information;(e) Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;(f) Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;(g) Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by the insureds, when the insureds have made claims for amounts reasonably similar to the amounts ultimately recovered;(h) Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application;(i) Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of, the insured;(j) Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made;(k) Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;(l) Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;(m) Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage;(n) Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement;(o) Failing to notify the first party claimant and the provider(s) of services covered under accident and sickness insurance and hospital and medical service corporation insurance policies whether the claim has been accepted or denied and if denied, the reasons therefor, within fifteen calendar days from the filing of the proof of loss: Provided, That should benefits due the claimant be assigned, notice to the claimant shall not be required: Provided, however, That should the benefits be payable directly to the claimant, notice to the health care provider shall not be required. If the insurer needs more time to investigate the claim, it shall so notify the first party claimant in writing within fifteen calendar days from the date of the initial notification and every thirty calendar days, thereafter; but in no instance shall a claim remain unsettled and unpaid for more than ninety calendar days from the first party claimant's filing of the proof of loss unless, as determined by the Insurance Commissioner: (1) There is a legitimate dispute as to coverage, liability or damages; or (2) the claimant has fraudulently caused or contributed to the loss. In the event that the insurer fails to pay the claim in full within ninety calendar days from the claimant's filing of the proof of loss, except for exemptions provided above, there shall be assessed against the insurer and paid to the insured a penalty which will be in addition to the amount of the claim and assessed as interest on the claim at the then current prime rate plus one percent. Any penalty paid by an insurer pursuant to this section shall not be a consideration in any rate filing made by the insurer.(10) Failure to maintain complaint handling procedures. -- No insurer shall fail to maintain a complete record of all the complaints which it has received since the date of its last examination under section nine, article two of this chapter. This record shall indicate the total number of complaints, their classification by line of insurance, the nature of each complaint, the disposition of these complaints, and the time it took to process each complaint. For purposes of this subsection, "complaint" shall mean any written communication primarily expressing a grievance.(11) Misrepresentation in insurance applications. -- No person shall make false or fraudulent statements or representations on or relative to an application for an insurance policy, for the purpose of obtaining a fee, commission, money or other benefit from any insurer, agent, broker or individual.(12) Failure to maintain privacy of consumer financial and health information. -- Any licensee who violates any provision of the commissioner's rule relating to the privacy of consumer financial and health information shall be deemed to have violated the provisions of this article: Provided, That any licensee who complies with the provisions of this subsection, a commissioner's rule, or a court order shall not be deemed to be in violation of any other provisions of sections three and four of this article by their compliance with this subsection, the rule or court order. For purposes of this subsection, "licensee" means all licensed insurers, producers and other persons licensed or required to be licensed, or authorized or required to be authorized, or registered or required to be registered pursuant to this chapter.
(a) A third-party claimant may not bring a private cause of action or any other action against any person for an unfair claims settlement practice. A third-party claimant's sole remedy against a person for an unfair claims settlement practice or the bad faith settlement of a claim is the filing of an administrative complaint with the Commissioner in accordance with subsection (b) of this section. A third-party claimant may not include allegations of unfair claims settlement practices in any underlying litigation against an insured.(b) A third-party claimant may file an administrative complaint against a person for an alleged unfair claims settlement practice with the Commissioner. The administrative complaint shall be filed as soon as practicable but in no event later than one year following the actual or implied discovery of the alleged unfair claims settlement practice.(1) The administrative complaint shall be on a form provided by the Commissioner and shall state with specificity the following information and such other information as the Commissioner may require:(A) The statutory provision, if known, which the person allegedly violated;(B) The facts and circumstances giving rise to the violation;(C) The name of any individual or other entity involved in the violation; and(D) Reference to specific policy language that is relevant to the violation, if known.(2) If the administrative complaint is deficient, the Commissioner shall contact the third-party claimant within fifteen days of receipt of the complaint to obtain the necessary information.(3) Upon receipt of a sufficiently complete administrative complaint, the Commissioner must provide the person against whom the administrative complaint is filed written notice of the alleged violation.(4) If the person against whom the administrative complaint was filed substantially corrects the circumstances that gave rise to the violation or offers to resolve the complaint in a manner found reasonable by the Commissioner within sixty days after receiving the notice from the Commissioner pursuant to subdivision (3) of this subsection, the Commissioner shall close the complaint and no further action shall lie on the matter, either by the Commissioner or by the third party.(5) The person that is the recipient of a notice from the Commissioner pursuant to subdivision (3) of this subsection shall report to the Commissioner on the disposition of the alleged violation within fifteen days of the disposition but no later than sixty days from receipt of notice of the complaint from the Commissioner.(c) If the third-party claim is not resolved within the sixty-day period described in subdivision (4), subsection (b) of this section through either the person's substantial correction of the circumstances giving rise to the alleged violation or an offer from the person to resolve the administrative complaint that is found to be reasonable by the Commissioner, the Commissioner shall conduct any investigation he or she considers necessary to determine whether the allegations contained in the administrative complaint are meritorious.(d) Following the time period and investigation provided in subsection (c) of this section, if the Commissioner finds that merit exists for a complaint and the complaint has not been resolved, the Commissioner shall forward a complete copy of the complaint to the Office of Consumer Advocacy and, if at his or her discretion, may order further investigation and hearing to determine if the person has committed an unfair claims settlement practice with such frequency as to constitute a general business practice. Notice of any hearing shall be provided to all parties. The Commissioner shall assign a time and place for a hearing and shall notify the parties of the hearing by written notice at least ten days in advance thereof. The hearing shall be held within ninety days from the date of filing the complaint unless the complaint has been successfully resolved pursuant to subdivision (4), subsection (b) of this section or continued by agreement of all parties or by the Commissioner for good cause. The Commissioner shall cause hearings to be conducted in the geographical region of the state where the complainant resides. The Commissioner may promulgate rules pursuant to article three, chapter twenty-nine-a of this code necessary, pursuant to the authority of this chapter, to establish procedures to conduct hearings pursuant to this section and chapter.(e) If the Commissioner finds that the person has committed the unfair claim settlement practice with such frequency as to constitute a general business practice, the Commissioner may proceed to take administrative action he or she considers appropriate in accordance with section six of this article or as otherwise provided in this chapter. If the Commissioner finds that the person engaged in any method of competition, act or practice that involves an intentional violation of subdivision (9), section four of this article, and even though it has not been established that the person engaged in a general business practice, the Commissioner may proceed to take administrative action he or she considers appropriate in accordance with subsection (b), section six of this article. The person is entitled to notice and hearing in connection with the administrative proceeding.(f) A finding by the Commissioner that the actions of a person constitute a general business practice may only be based on the existence of substantially similar violations in a number of separate claims or causes of action.(g) A good faith disagreement over the value of an action or claim or the liability of any party to any action or claim is not an unfair claims settlement practice.(h) The Commissioner, pursuant to article three, chapter twenty-nine-a of this code, may promulgate by emergency rule standards for subsection (9), section four of this article.(i) Nothing in this section in any way limits the rights of the Commissioner to investigate and take action against a person which the Commissioner has reason to believe has committed an unfair claims settlement practice or has consistently resolved administrative complaints by third-party claimants within the sixty-day period set forth in subdivision (4), subsection (b) of this section.(j) Definitions:(1) "Third-party claimant" means any individual, corporation, association, partnership or any other legal entity asserting a claim against any individual, corporation, association, partnership or other legal entity insured under an insurance policy or insurance contract for the claim in question.(2) "Unfair claims settlement practice" means a violation of subsection (9), section four of this article.(3) "Underlying litigation" means a third-party claimant's lawsuit involving a claim against an insured.(4) "Underlying claim" means the claim by a third-party claimant against an insured.
(a) There is hereby created a special account in the state Treasury designated the Unfair Claims Settlement Practice Trust Fund, which shall be an interest-bearing account and may be invested in the manner permitted by section nine, article six, chapter twelve of this code, with the interest income or other refund earned thereon a proper credit to the fund. Funds paid into the account may also be derived from the following sources:(1) Payments received pursuant to section nine, article two of this chapter; and(2) Any appropriations by the Legislature which may be made for this purpose.(b) The moneys from the principal in the fund shall be expended by the Commissioner to compensate claimants as provided in sections four-a and six of this article.
(a) No person may:(1) Require, as a condition precedent to the lending of money or extension of credit, or any renewal thereof, that the person to whom such money or credit is extended or whose obligation the creditor is to acquire or finance, negotiate any policy or contract of insurance through a particular insurer or group of insurers or agent or broker or group of agents or brokers;(2) Unreasonably disapprove the insurance policy provided by a borrower for the protection of the property securing the credit or lien;(3) Require directly or indirectly that any borrower, mortgagor, purchaser, insurer, broker, or agent pay a separate charge, in connection with the handling of any insurance policy required as security for a loan on real estate, or pay a separate charge to substitute the insurance policy of one insurer for that of another; or(4) Use or disclose information resulting from a requirement that a borrower, mortgagor or purchaser furnish insurance of any kind on real property being conveyed or used as collateral security to a loan, when such information is to the advantage of the mortgagee, vendor, or lender, or is to the detriment of the borrower, mortgagor, purchaser, insurer, or the agent or broker complying with such a requirement.(b) (1) Subdivision (3), subsection (a) does not include the interest which may be charged on premium loans or premium advancements in accordance with the security instrument.(2) For purposes of subdivision (2), subsection (a) such disapproval shall be deemed unreasonable if it is not based solely on reasonable standards uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an insurer. Such standards shall not discriminate against any particular type of insurer, nor shall such standards call for the disapproval of an insurance policy because such policy contains coverage in addition to that required.(3) The commissioner may investigate the affairs of any person to whom this subsection applies to determine whether such person has violated this subsection. If a violation of the subsection is found, the person in violation shall be subject to the same procedures and penalties as are applicable to other provisions of this article.(4) For purposes of this section, "person" includes any individual, corporation, association, partnership, or other legal entity.
(a) As used in this section:(1) "Replacement" means any transaction in which new life insurance is to be purchased and by reason of such transaction existing life insurance has been or is to be:(A) Lapsed, forfeited, surrendered or otherwise terminated;(B) Converted to reduced paid-up insurance, continued as extended term insurance or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;(C) Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid;(D) Reissued with any reduction in cash value; or(E) Pledged as collateral or subjected to borrowing, whether in a single loan or under a schedule of borrowing over a period of time for amounts in the aggregate exceeding twenty-five percent (25%) of the loan value set forth in the policy;(2) "Existing insurer" means the insurance company whose existing life insurance policy is or will be terminated or otherwise affected in a replacement transaction;(3) "Replacing insurer" means the insurance company, including the same insurer or an insurer in the same group of affiliated insurers, that issues new life insurance in a replacement transaction; and(4) "Existing life insurance" means any life insurance in force including life insurance under a binding or conditional receipt or a life insurance policy that is within an unconditional refund period, but excluding life insurance obtained through the exercise of a dividend option.(b) No replacing insurer shall issue any life insurance in a replacement transaction to replace existing life insurance unless the replacing insurer shall agree in writing with the insured that:(1) The new life insurance issued by the replacing insurer will not be contestable by it in the event of such insured's death to any greater extent than the existing life insurance would have been contestable by the existing insurer had such replacement not taken place provided, however, that this paragraph shall not apply to that amount of insurance written and issued which exceeds the amount of the existing life insurance; and(2) The new life insurance issued by the replacing insurer may be voluntarily surrendered by the insured at any time within thirty (30) days after its delivery to the insured in exchange for a full refund of premiums paid by the replacing insurer to the insured.(c) Unless otherwise specifically included, subsection (b) of this section shall not apply to:(1) Annuities;(2) Individual credit life insurance;(3) Group life insurance, group credit life insurance and life insurance policies issued in connection with a pension, profit-sharing or other benefit plan qualifying for tax deductibility of premiums, provided, however, that as to any plan described in this subsection, full and complete disclosure of all material facts shall be given to the administrator of any plan to be replaced;(4) Variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account;(5) An application to the existing insurer that issued the existing life insurance and a contractual policy change or conversion privilege or a privilege of policy change granted by the insurer is being exercised;(6) Existing life insurance that is a nonconvertible term life insurance policy which will expire in five (5) years or less and cannot be renewed; or(7) Proposed life insurance that is to replace life insurance under a binding or conditional receipt issued by the same company.(d) For purposes of inducing or attempting to induce a policyholder to lapse, forfeit, borrow against, surrender, retain, exchange, modify, convert, or otherwise alter or dispose of any insurance policy or coverage, no person shall:(1) Prepare, make or issue, or cause to be prepared, made or issued, any written or oral misrepresentation of a material fact regarding the terms, conditions or benefits of either existing insurance coverage or proposed replacement insurance coverage; or(2) Omit information concerning a material fact regarding the terms, conditions or benefits of either existing insurance coverage or proposed replacement insurance coverage.(e) The provisions of this section shall have no further force and effect as of the effective date of the emergency rule authorized by the provisions of section forty-eight, article thirteen of this chapter.
If, after notice and hearing, the Commissioner determines that any person has engaged in or is engaging in any method of competition, act or practice in violation of the provisions of this article or any rules or regulations promulgated by the Commissioner thereunder, the Commissioner shall issue an order directing the person to cease and desist from engaging in the method of competition, act or practice and, in addition thereto, the Commissioner may at his or her discretion order any one or more of the following:(a) Require the payment to the State of West Virginia of a penalty in a sum not exceeding $1,000 for each and every act or violation, but not to exceed an aggregate penalty of $10,000, unless the person knew or reasonably should have known he or she was in violation of this article, in which case the penalty shall not exceed $5,000 for each and every act or violation, but not to exceed an aggregate penalty of $100,000 in any six-month period.(b) In the event the act involves an intentional violation of subdivision (9), section four of this article, and even though it has not been established that the person engaged in a general business practice, require the payment to the State of West Virginia of a penalty in a sum not to exceed $10,000.(c) Require the payment to the State of West Virginia of a penalty in a sum not exceeding $250,000 if the Commissioner finds that the insurer committed or performed unfair claims settlement practices with such frequency as to indicate a general business practice.(d) Revoke or suspend the license of any person if he or she knew, or reasonably should have known, that he or she was in violation of this article.(e)(1) Provide restitution from the Unfair Claims Settlement Practice Trust Fund to a claimant who has suffered damages as a result of a general business practice or from an egregious act by a person whether or not the act constituted a pattern corresponding to an unfair claim settlement practice committed with such frequency as to constitute a general business practice.(2) Restitution provided herein may include: (A) Actual economic damages; and (B) noneconomic damages not to exceed $10,000. Restitution may not be given for attorney fees and punitive damages.(f) It is expressly understood and intended that the provisions of paragraph (1), subdivision (e) of this section do not create a private cause of action against the person that has committed an unfair claims settlement practice. In the event that any provision of said paragraph is found to be unconstitutional or is deemed by any court of competent jurisdiction to create a private cause of action, then subdivision (e) shall be void.(g) Any person aggrieved by an order of the Commissioner under this article may seek judicial review of the order as provided in section fourteen, article two of this chapter.(h) No order of the Commissioner pursuant to this article or order of any court to enforce it, or holding of a hearing, shall in any manner relieve or absolve any person affected by the order or hearing from any other liability, penalty or forfeiture under law.(i) The provisions of section four-a of this article and subdivision (e) of this section do not apply to medical professional liability insurance claims pursuant to article seven-b, chapter fifty-five of this code and Workers Compensation insurance policies governed by article two-c, chapter twenty-three of this code.
If, after notice and hearing, the commissioner determines that any person transacting insurance is engaging in this state in any method of competition or act or practice in the transaction of such insurance which is not defined in this article, and that such method of competition is unfair or such act or practice is unfair or deceptive, the commissioner shall issue an order directing such person to cease and desist from engaging in such method of competition, act or practice.
If, after notice and hearing, the commissioner determines that any person has violated a cease and desist order issued by the commissioner and which such order is still in effect, the commissioner may at his discretion order any one or more of the following:(a) Require the payment to the State of West Virginia of a penalty in a sum not exceeding $10,000 for each and every act or violation.(b) Revoke or suspend the license of such person.
The powers vested in the commissioner by this article, shall be additional to any other powers to enforce any penalties, fines or forfeitures authorized by law with respect to the methods, acts and practices hereby declared to be unfair or deceptive.
This article may be cited as the "Insurance Sales Consumer Protection Act".
(a) No individual who is an employee or agent of a financial institution, or of a subsidiary or affiliate thereof, may, directly or indirectly, make an insurance-related referral to or solicit the purchase of any insurance from a customer knowing that such customer has applied for a loan or extension of credit from that financial institution before such time as the customer has received a written commitment with respect to such loan or extension of credit, or, in the event that no written commitment has or will be issued in connection with the loan or extension of credit, before such time as the customer receives notification of approval of the loan or extension of credit by the financial institution and the financial institution creates a written record of the loan or extension of credit approval.(b) This provision shall not prohibit any individual subject to subsection (a) above from:(1) Informing a customer that insurance is required in connection with a loan; or(2) Contacting persons in the course of direct or mass mailing to a group of persons in a manner that bears no relation to the person's loan application or credit decision.
(a) If insurance is required as a condition of obtaining a loan, the credit and insurance transactions shall be completed independently and through separate documents.(b) A loan for premiums on required insurance shall not be included in the primary credit without the written consent of the customer.(c) No title insurance shall be issued until the title insurance company has obtained a title opinion of an attorney licensed to practice law in West Virginia, which attorney is not an employee, agent, or owner of the insured bank or its affiliates. Said attorney shall have conducted or cause to have conducted under the attorney's direct supervision a reasonable examination of the title. In no event shall the authority of a state-chartered bank to sell title insurance exceed the authority of a nationally chartered bank to do so.
(a) No financial institution may, in connection with a loan or extension of credit that requires a borrower to obtain insurance, reject an insurance policy because such policy has been issued or underwritten by any person who is not affiliated with such financial institution.(b) No financial institution may impose any requirement on any insurance agent or broker who is not affiliated with the financial institution that is not imposed on any insurance agent or broker who is affiliated with such financial institution.(c) No financial institution may, unless otherwise authorized by any applicable federal or state law, require any debtor, insurer, broker, or agent to pay a separate charge in connection with the handling of insurance that is required under a contract, if such insurance is sold by an agent or broker not affiliated with the financial institution.(d) No financial institution may offer, as a package of products any products which are not insurance products in connection with insurance products, on a discounted basis, when compared with the pricing of each of the products when offered separately: Provided, That this prohibition does not apply to: (1) Annuity products; (2) The packaging of noninsurance products on a discounted basis; or(3) The packaging of insurance products on a discounted basis to the extent permitted by the anti-rebating statute contained in section four, article eleven of this chapter.(e) All of the prohibitions contained in this section shall be subject to other applicable laws, rules and regulations relating to the pricing of insurance products and the products of financial institutions.
(a) When a financial institution requires a borrower to provide insurance information in connection with the making of a loan or extension of credit, neither such financial institution nor an insurance agent or broker affiliated with such financial institution may later use the information so obtained to solicit or offer insurance to such borrower, unless the consent required in subsection (b) below is first obtained.(b) A borrower may consent to the financial institution's disclosure of insurance information to an agent or broker affiliated with the financial institution, but any such consent must be in writing and be given at a time subsequent, which shall be no less than two days, to the time of the application for, approval of and making of the loan or extension of credit.(c) Consent under subsection (b) of this section shall be obtained in a separate document, distinct from any other transaction, and shall not be required as a condition for performance of other services for the customer.
The place of solicitation or sale of insurance by any financial institution or on the premises of any financial institution shall be clearly and conspicuously signed so as to be readily distinguishable by the public as separate and distinct from the financial institution's lending and deposit-taking activities. In the event that a person which would otherwise be subject to the requirements set forth in this provision does not have the physical space to so comply, the commissioner may grant a waiver of the requirements of this section upon a written request by such person demonstrating that, due to its small physical facilities, compliance is not possible, and including identification of other steps which will be taken to minimize customer confusion.
(a) Books and records relating to the insurance transactions of any person licensed to sell insurance, including all files relating to and reflecting customer complaints, shall be kept separate and apart from all records relating to other business transactions of such person, and shall be made available to the commissioner for inspection upon reasonable notice. (b) Unless applicable provisions of chapter thirty-three of this code or rules promulgated thereunder expressly require that an original of any insurance record be maintained, any insurance records may be stored in any photographic, photostatic, microphotographic or similar miniature photographic process or by nonerasable optical image disks such as compact disks or by other similar retention technology and such copies, in positive or negative form, may be substituted for the originals thereof. Thereafter, such copy or reproduction in the form of a positive print thereof, shall be deemed for all purposes to be an original counterpart of and shall have the same force and effect as the original thereof and shall be admissible in evidence in all courts and administrative agencies in this state, to the same extent, and for the same purposes as the original thereof, and the original may be destroyed or otherwise disposed of; but every such person shall retain either the originals or such copies or reproductions for as long as required under applicable records retention requirements. (c) All circumstances surrounding the making or issuance of such documents, books, records, correspondence and other instruments, papers or writings, or the photographic, photostatic or microphotographic copies or optical disks or other permissible reproductions thereof, when the same are offered in evidence, may be shown to affect the weight but not the admissibility thereof. (d) Any device used to copy or reproduce such documents and records shall be one which correctly and accurately reproduces the original thereof in all details and any disk or film used therein shall be of durable material.
If any provision of this article is for any reason held to be invalid, the remainder of the article shall not be affected thereby.
The purpose of this article is to regulate the business of insurance in West Virginia when engaged in by financial institutions and to protect the interests of consumers.
For the purposes of this article:(a) "Affiliate" means a person that directly or indirectly or through one or more intermediaries, controls or is controlled by another or is under common control with another.(b) "Commissioner" means the Insurance Commissioner of West Virginia.(c) "Financial institution":(1) Means any bank, savings bank, savings and loan association, trust company, credit union or any other depository institution, which: (i) Accepts federally insured deposits, including, but not limited to, those as defined by the Federal Deposit Insurance Act, as amended, 12 U.S.C. 1813(c)(1); and (ii) makes loans to residents of this state;(2) Means any employee or agent of a financial institution; and(3) Means any nondepository affiliate or subsidiary of a financial institution but only in the instances when the nondepository affiliate or subsidiary is soliciting the sale or purchase of insurance recommended or sponsored by, on the premises of, or in connection with a product offering of, the financial institution.(4) Does not include a credit card bank, as defined in the Bank Holding Company Act of 1956, as amended, 12 U.S.C. 1841(c)(2)(F), an industrial loan company as defined in 12 U.S.C. 1841(c)(2)(H), a specialized savings association serving certain military personnel as defined in 12 U.S.C. 1467a(m)(3)(F), a bank whose ownership is grandfathered under the Competitive Equality Banking Act of 1987 as codified at 12 U.S.C. 1843(f)(1), or an insurance company.(d) "Insurance" means all products defined or regulated as insurance by the State of West Virginia, except:(1) Credit life, health and accident, accident, loss of income, or property insurance as described in subsection (b) of section one hundred nine, article three, chapter forty-six-a of the Code of West Virginia;(2) Insurance placed by a financial institution in connection with collateral pledged as security for a loan when the debtor breaches the contractual obligation to provide that insurance; and(3) Private mortgage insurance.(e) "Insurance company" means a company that possesses a certificate under this chapter to transact insurance business in West Virginia.(f) "Insurance information" means copies of insurance policies, or the information contained thereon, binders, rates and expiration dates contained within the information supplied in connection with the loan, which are not otherwise available to the financial institution's affiliated broker or agent.(g) "Person" means any natural person, partnership, corporation, association, business trust, or other form of business enterprise, as the case demands.
The commissioner shall promulgate rules in accordance with chapter twenty-nine-a of this code to effectuate the provisions of this article.
Solicitation for the purchase or sale of any insurance product by any person, including an employee or agent of a financial institution, shall be conducted only by individuals who have complied with all applicable state insurance licensing and appointment laws and regulations and who have been issued an agent or broker's license pursuant to chapter thirty-three of this code.
(a) Solicitation for the purchase or sale of insurance by a financial institution shall be conducted only by individuals whose responsibilities do not include loan transactions or other transactions involving the extension of credit: Provided, That for a financial institution location having three or less individuals with lending authority, solicitation for the sale of insurance may be conducted by an individual with responsibilities for loan transactions or other transactions involving the extension of credit, as long as the individual primarily responsible for making the specific loan or extension of credit is not the same individual engaged in the solicitation of the purchase or sale of insurance for that same transaction. (b) In the event that in any small office, the same individual is the licensed agent or broker and the sole individual with lending authority, the commissioner may grant a waiver of the requirements of this section upon a written request. Such request shall include documentation that, due to the small office staff, compliance is not possible, and include identification of other steps which will be taken to minimize the customer confusion prohibited by this article.
A person who is not licensed to sell insurance may refer a customer who seeks to purchase, or seeks an opinion or advice on, any insurance product to a person, or provide the phone number of a person, who sells or provides opinions or advice on such product, only if the person making the referral receives no fee or only a nominal fee for such referral and such fee is not based on the customer's application for or purchase of insurance.
(a) No person shall require or imply that the purchase of an insurance product from a financial institution by a customer or prospective customer of the institution is required as a condition of the lending of money or extension of credit.(b) No financial institution may offer an insurance product in combination with its other products, unless all the products are available separately from the financial institution.
(a) A financial institution soliciting the purchase of or selling insurance, and any person soliciting the purchase of or selling insurance on the premises of, in connection with a product offering of, or using a name identifiable with, a financial institution, shall prominently disclose to customers, in writing, in clear and concise language, including in any advertisement or promotional material, and orally during any customer contact, that insurance offered, recommended, sponsored, or sold:(1) Is not a deposit;(2) Is not insured by the federal deposit insurance corporation or, where applicable, the National Credit Union Share Insurance Fund;(3) Is not guaranteed by any insured depository institution; and(4) Where appropriate, involves investment risk, including potential loss of principal.(b) Any financial institution engaged in the making of loans or other extensions of credit and the sale of insurance shall prominently disclose to customers in writing, in clear and concise language, that the insurance product may be purchased from an agent or broker of the customer's choice, and the customer's choice of another insurance provider will not affect the customer's credit relationship with the person. For purposes of this subsection, loans and extensions of credit shall not include financing in connection with the insurance product offered or sold.(c) Any person required under subsections (a) or (b) of this section to make disclosures to a customer shall obtain a written acknowledgment of receipt by the customer of such disclosures, including the date of receipt and the customer's name, address, and account number, prior to or at the time of any application for insurance sold by the person. Such acknowledgment shall be in a separate document.(d) The commissioner may grant a waiver of the requirements of this section to any person required to give the disclosures required by this section solely because that person has a name identifiable with a financial institution upon a written request by such person demonstrating that his her or its customers would not reasonably benefit from, or might in fact be confused by, these required disclosures.
This article governs the qualifications and procedures for the licensing of insurance producers. It simplifies and organizes some statutory language to improve efficiency, permits the use of new technology and reduces costs associated with issuing and renewing insurance licenses.This article does not apply to excess line and surplus line agents and brokers licensed pursuant to article twelve-c of this chapter except as provided in sections six, twelve, twenty-four and thirty-three of this article.
The fee for an individual insurance producer's license shall be $25, the fee for a solicitor's license shall be $25 and the fee for an insurance agency producer license shall be $200. The commissioner shall receive the following fees from individual insurance producers, solicitors and insurance agency producers: For letters of certification, $5; for letters of clearance, $10; and for duplicate license, $5. All fees and moneys so collected shall be used for the purposes set forth in section thirteen, article three of this chapter.
No contract of insurance covering a subject of insurance, resident, located or to be performed in this state, shall be executed, issued or delivered by any insurer unless the contract or, in the case of an interstate risk, a countersignature endorsement carrying full information as to the West Virginia risk, is signed or countersigned in writing by a licensed resident agent of the insurer, except that excess line insurance shall be countersigned by a duly licensed excess line broker. This section does not apply to: Reinsurance; credit insurance; any contract of insurance covering the rolling stock of any railroad or covering any vessel, aircraft or motor carrier used in interstate or foreign commerce or covering any liability or other risks incident to the ownership, maintenance or operation thereof; any contract of insurance covering any property in interstate or foreign commerce, or any liability or risks incident thereto. Countersignature of a duly licensed resident agent of the company originating a contract of insurance participated in by other companies as cosureties or coindemnitors shall satisfy all countersignature requirements in respect to such contract of insurance: Provided, That the countersignature requirements of this section shall no longer be required for any contract of insurance executed, issued or delivered on or after December 31, 2004.
(a) Unless denied licensure pursuant to section twenty-four, a nonresident person shall receive a nonresident producer license if:(1) The person is currently licensed as a resident and in good standing in his or her home state;(2) The person has submitted the proper request for licensure and has paid the fees required by section thirteen, article three of this chapter;(3) The nonresident person holds a similar license that is awarded on the same basis in the nonresident's home state and for the same line or lines of authority applied for in this state;(4) The person has submitted or transmitted to the Insurance Commissioner the application for licensure that the person submitted to his or her home state, or in lieu of the same, a completed uniform application; and(5) The person's home state awards nonresident producer licenses to residents of this state on the same basis.(b) An insurance agency may qualify as a nonresident if the agency has its principal office located in another state.(c) The Insurance Commissioner may verify the producer's licensing status through the producer database maintained by the national association of Insurance Commissioners, its affiliates or subsidiaries.(d) A nonresident producer who moves from one state to another state or a resident producer who moves from this state to another state shall file a change of address and provide certification from the new resident state within thirty days of the change of legal residence. No fee or license application is required.(e) If the insurance department of the nonresident insurance producer's resident state suspends, terminates, or revokes the producer's insurance license in that state, the nonresident insurance producer shall notify the commissioner and shall return the West Virginia nonresident license.(f) Notwithstanding any other provision of this article, an individual licensed as a surplus lines producer in his or her home state shall receive a nonresident surplus lines producer license pursuant to subsection (a) of this section. Except as to subsection (a), nothing in this section otherwise amends or supercedes any provision of sections one through fourteen, article twelve-c of this chapter.(g) Notwithstanding any other provision of this article, an individual licensed as a limited line credit insurance or other type of limited lines producer in his or her home state shall receive a nonresident limited lines producer license, pursuant to subsection (a) of this section, granting the same scope of authority as granted under the license issued by the producer's home state. For the purposes of subsection (e), section twelve of this article, limited line insurance is any authority granted by the home state which restricts the authority of the license to less than the total authority prescribed in the associated major lines pursuant to subdivisions (1) through (6), subsection (a), section nine of this article.
An agent who has his or her residence in an urban community composed of two immediately contiguous municipal corporations not separated by a river or other stream, one of which is located in this state and the other located in another state, shall be considered a resident of this state for the purposes of this article if his or her residence is in any part of such urban community and the state wherein the other municipal corporation is located has established by law or regulation like requirements as to residence of agents in such urban community.
(a) An individual who applies for an insurance producer license in this state who was previously licensed for the same lines of authority in another state may not be required to complete any prelicensing education or examination. This exemption is only available if the individual is currently licensed in that state or if the application is received within ninety days of the cancellation of the applicant's previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state's producer database records, maintained by the national association of Insurance Commissioners, its affiliates or subsidiaries, indicate that the producer is or was licensed in good standing for the line of authority requested.(b) An individual licensed as an insurance producer in another state who moves to this state shall make application within ninety days of establishing legal residence to become a resident licensee pursuant to section five of this article. No prelicensing education or examination shall be required of that individual to obtain any line of authority previously held in the prior state except where the Insurance Commissioner determines otherwise by regulation.
An insurance producer doing business under any name other than the producer's legal name is required to notify the Insurance Commissioner prior to using the assumed name.
(a) The Insurance Commissioner may issue an individual a temporary insurance producer license for a period not to exceed one hundred eighty days without requiring an examination if the Insurance Commissioner considers that the temporary license is necessary for the servicing of an insurance business in the following cases:(1) To the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled to allow adequate time for the sale of the insurance business owned by the producer or for the recovery or return of the producer to the business or to provide for the training and licensing of new personnel to operate the producer's business;(2) To the designee of a licensed insurance producer entering active service in the Armed Forces of the United States of America; or(3) In any other circumstance where the Insurance Commissioner considers that the public interest will best be served by the issuance of this license.(b) The Insurance Commissioner may by order limit the authority of any temporary licensee in any way considered necessary to protect insureds and the public. The Insurance Commissioner may require the temporary licensee to have a suitable sponsor who is a licensed producer or insurer and who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public. The Insurance Commissioner may by order revoke a temporary license if the interest of insureds or the public are endangered. A temporary license may not continue after the owner or the personal representative disposes of the business.
(a) The commissioner may, in his or her discretion, fix the dates of expiration of respective licenses for individual insurance producers and solicitors in any manner as is considered by him or her to be advisable for an efficient distribution of the work load of his or her office. If the expiration date so fixed would upon first occurrence shorten the period for which license fee has theretofore been paid, no refund of unearned fee shall be made; and if the expiration date so fixed would upon first occurrence lengthen the period for which license fee had theretofore been paid, the commissioner shall charge no additional fee for the lengthened period. If another date is not so fixed by the commissioner, each license shall, unless continued as herein above provided, expire at midnight on the thirty-first day of May next following the date of issuance. The commissioner shall renew annually on the date as provided for in this section the license of the licensee who qualifies and makes application therefor, and has paid the fees set forth in section thirteen, article three of this chapter; and section ten of this article.(b) All producer licenses of insurance agencies shall expire at midnight on June 30 following the date of issuance. The commissioner shall renew annually the license of all licensees who qualify and make application therefor and have paid the fees set forth in section ten of this article.
(a) An individual insurance producer may not act as an agent of an insurer unless the individual insurance producer becomes an appointed agent of that insurer. An individual insurance producer who is not acting as an agent of an insurer is not required to become appointed.(b) To appoint an individual insurance producer as its agent, the appointing insurer shall file, in a format approved by the Insurance Commissioner, a notice of appointment within fifteen days from the date the agency contract is executed or the first insurance application is submitted. An insurer may also elect to appoint an individual insurance producer to all or some insurers within the insurer's holding company system or group by the filing of a single appointment request.(c) Upon receipt of the notice of appointment, the Insurance Commissioner shall verify within a reasonable time not to exceed thirty days that the individual insurance producer is eligible for appointment. If the individual insurance producer is determined to be ineligible for appointment, the Insurance Commissioner shall notify the insurer within five days of its determination. (d) An insurer shall pay a nonrefundable appointment processing fee, in the amount and method of payment set forth in section thirteen, article three of this chapter, for each appointment notification submitted by the insurer to the commissioner.(e) An insurer shall remit, in a manner prescribed by the Insurance Commissioner, a renewal appointment fee in the amount set forth in section thirteen, article three of this chapter no later than midnight the thirty-first day of May annually.(f) Each insurer shall maintain a current list of individual insurance producers appointed to accept applications on behalf of the insurer. Each insurer shall make a list available to the commissioner upon reasonable request for purposes of conducting investigations and enforcing the provisions of this chapter.(g) Insurance agencies licensed as producers are not subject to the provisions of this section.
A solicitor shall solicit and receive applications for insurance only for the duly licensed agent who appointed such solicitor, and shall report all business through the agent. The expiration, cancellation, suspension or revocation of the license of the appointing agent shall automatically expire, cancel, suspend or revoke the solicitor's license in like manner, and the appointing agent may cancel a solicitor's license at any time by written request to the commissioner. No agent may apply for licenses for more than two solicitors. No solicitors shall be permitted for life insurance agents.
For the purpose of this article:(a) "Business entity" means a corporation, association, partnership, limited liability company, or other legal entity.(b) "Home state" means the District of Columbia and any state or territory of the United States in which an insurance producer maintains his or her principal place of residence or principal place of business and is licensed to act as an insurance producer. (c) "Individual" means any private or natural person as distinguished from a partnership, corporation, limited liability company or other legal entity.(d) "Insurance" means any of the lines of authority in section ten, article one of this chapter.(e) "Insurance agency" means an individual, corporation, partnership, association, limited liability company, or other legal entity except for an employee of the individual, corporation, partnership, association, limited liability company, or other legal entity, and other than an insurer or an adjuster as defined by section twelve-b, article one of this chapter, which employs individuals licensed to engage in activity or whose members engage in any activity be performed only by a licensed individual insurance producer or solicitor. It shall not include sole proprietor or partnerships in which there is only one licensed insurance producer.(f) "Insurance producer" means a person required to be licensed under the laws of this state to sell, solicit or negotiate insurance. Wherever the word "agent" appears in this chapter, it shall mean an individual insurance producer.(g) "Insurer" means every person engaged in the business of making contracts of insurance under section two, article one of this chapter.(h) "License" means a document issued by this state's Insurance Commissioner authorizing a person to act as an insurance producer for the lines of authority specified in the document. The license itself does not create any authority, actual, apparent or inherent, in the holder to represent or commit an insurance carrier.(i) "Limited line credit insurance" includes credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection (gap) insurance and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation that the Insurance Commissioner determines should be designated a form of limited line credit insurance. (j) "Limited line credit insurance producer" means an individual who sells, solicits or negotiates one or more forms of limited line credit insurance coverage to individuals through a master, corporate, group or individual policy.(k) "Limited lines insurance" means those lines of insurance defined in section thirty-two of this article or any other line of insurance that the Insurance Commissioner considers necessary to recognize for the purposes of complying with subsection (g), section twelve of this article.(l) "Limited lines producer" means an individual authorized by the Insurance Commissioner to sell, solicit or negotiate limited lines insurance.(m) "Negotiate" means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract: Provided, That the individual engaged in that act either sells insurance or obtains insurance from insurers for purchasers. (n) "Person" means an individual or a business entity.(o) "Sell" means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.(p) "Solicit" means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.(q) "Terminate" means the cancellation of the relationship between an insurance producer and the insurer or the termination of a producer's authority to transact insurance.(r) "Uniform application" means the current version of the NAIC uniform application for resident and nonresident producer licensing.(s) "Uniform business entity application" means the current version of the NAIC uniform business entity application for resident and nonresident insurance agencies.
Any agent who participates directly or indirectly in effecting any insurance contract, except authorized reinsurance, upon any subject of insurance resident, located or to be performed in this state, where the insurer is not licensed to transact insurance in this state, shall be personally liable upon the contract as though such agent were the insurer thereof. This section shall not apply to excess line insurance procured in the manner provided in article twelve-c of this chapter, nor to ocean marine insurance or marine protection and indemnity insurance.
No agent, or excess line broker shall knowingly place any coverage in an insolvent insurer.
Any person who shall solicit within this state an application for insurance shall, in any controversy between the insured or his or her beneficiary and the insurer issuing any policy upon such application, be regarded as the agent of the insurer and not the agent of the insured.
(a) The entire commission payable by any insurer licensed to transact insurance in this state on any insurance policy shall be paid directly to the licensed individual insurance producer who countersigns the policy. The countersigning individual insurance producer may not pay any part of the commission to any person other than a licensed individual insurance producer: Provided, That the portion of such commission retained by the countersigning individual insurance producer may not be less than ten percent of the gross policy premium or fifty percent of the commission payable by the insurer as provided herein, whichever is the lesser amount. The term "commission" as used herein shall include engineering fees, service fees or any other compensation incident to the issuance of a policy payable by or to any insurer or individual insurance producer: Provided, however, That the provisions and requirements of this subsection shall no longer be required for any insurance contract executed, issued or delivered after December 31, 2004.(b) It shall be unlawful for any insurer or individual insurance producer to pay, and any person to accept, directly or indirectly, any commission except as provided in this section: Provided, That any licensed individual insurance producer may pay his or her commissions, or direct that his or her commissions be paid, to a business entity licensed as an insurance producer if:(1) The business entity is engaged, through its licensed individual insurance producers, in conducting an insurance agency business with respect to the general public;(2) If a partnership licensed as an insurance agency producer, each partner satisfies the commissioner that he or she meets the licensing qualifications as set forth in section six of this article;(3) If a corporation licensed as an insurance agency producer, each officer, employee or any one or more stockholders owning, directly or indirectly, the controlling interest in the corporation satisfies the commissioner that he or she meets the licensing qualifications as set forth in section six of this article. The requirements set forth in this subdivision do not apply to clerical employees or other employees not directly engaged in the selling or servicing of insurance;(4) If a limited liability company licensed as an insurance agency producer, each officer, employee or any one or more members owning, directly or indirectly, the controlling interest in a limited liability company satisfies the commissioner that he or she meets the licensing qualifications as set forth in section six of this article. The requirements set forth in this subdivision do not apply to clerical employees or other employees not directly engaged in the selling or servicing of insurance; and(5) If any other business entity licensed as an insurance agency producer, approval is granted by the commissioner.(c) Subsections (a) and (b) of this section do not apply to reinsurance nor to limited line credit insurance, limited lines insurance, any contract of insurance covering the rolling stock of any railroad or covering any vessel, aircraft or motor carrier used in interstate or foreign commerce, any liability or other risks incident to the ownership, maintenance or operation thereof, any contract of insurance covering any property in interstate or foreign commerce or any liability or risks incident thereto.(d) An insurance company or insurance producer may not pay a commission, service fee, brokerage or other valuable consideration to a person for selling, soliciting or negotiating insurance in this state if that person is required to be licensed under this article and is not so licensed.(e) A person may not accept a commission, service fee, brokerage or other valuable consideration for selling, soliciting or negotiating insurance in this state if that person is required to be licensed under this article and is not so licensed. (f) Renewal or other deferred commissions may be paid to a person for selling, soliciting or negotiating insurance in this state if the person was required to be licensed under this article at the time of the sale, solicitation or negotiation and was so licensed at that time.
(a) The commissioner may examine and investigate the business affairs and conduct of every person applying for or holding an insurance producer license, solicitor's license or excess line broker's license to determine whether such person has been or is engaged in any violation of the insurance laws or rules of this state or has engaged in unfair or deceptive acts or practices in any state.(b) The Insurance Commissioner may place on probation, suspend, revoke or refuse to issue or renew an insurance producer's license, solicitor's license or excess line broker's license, or may levy a civil penalty or any combination of actions, for any one or more of the following causes:(1) Providing incorrect, misleading, incomplete or materially untrue information in the license application;(2) Violating any insurance laws, or violating any regulation, subpoena or order of the Insurance Commissioner or of another state's Insurance Commissioner;(3) Obtaining or attempting to obtain a license through misrepresentation or fraud;(4) Improperly withholding, misappropriating or converting any moneys or properties received in the course of doing insurance business;(5) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;(6) Having been convicted of or pleaded nolo contendere to any felony;(7) Been convicted of or pleaded nolo contendere to a misdemeanor in connection with his or her activities as an agent, solicitor, or excess line broker;(8) Having admitted or been found to have committed any insurance unfair trade practice or fraud;(9) Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere;(10) Having an insurance producer license, solicitor license, excess line broker license or its equivalent, denied, suspended or revoked in any other state, province, district or territory;(11) Forging another's name to an application for insurance or to any document related to an insurance transaction or fraudulently procured a forged signature to an insurance application or any other document, knowing the signature to be forged;(12) Improperly using notes or any other reference material to complete an examination for an insurance producer license; (13) Knowingly accepting insurance business from an individual who is not licensed;(14) Failing to comply with an administrative or court order imposing a child support obligation;(15) Having a statutory lien recorded for failing to pay state income tax or comply with any administrative or court order directing payment of state income tax; or(16) Obtained the license for the purpose of writing controlled business, as described in subdivision (7), subsection (a), section six of this article;(c) In the event that the action by the Insurance Commissioner is to nonrenew or to deny an application for a license, the Insurance Commissioner shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reason for the denial or nonrenewal of the applicant's or licensee's license. The applicant or licensee may make written demand upon the Insurance Commissioner within ten days for a hearing before the Insurance Commissioner to determine the reasonableness of the Insurance Commissioner's action. The hearing shall be held within forty-five days and shall be held pursuant to section thirteen, article two of this chapter.(d) The producer's license of a business entity may be placed on probation, suspended, revoked, refused or have civil penalty or any combination of actions, if the Insurance Commissioner finds, after hearing, that an individual licensee's violation was known or should have been known by one or more of the partners, officers or managers acting on behalf of the partnership, corporation, limited liability company or other business entity and the violation was neither reported to the Insurance Commissioner nor corrective action taken.(e) In addition to or in lieu of any applicable denial, probation, suspension or revocation of a license, a person may, after hearing, be subject to a civil penalty in a sum not to exceed $5,000. Upon the failure of the licensee to pay such penalty by delivery of the sum to the commissioner within thirty days of notice thereof, the commissioner shall revoke or suspend such license.(f) The Insurance Commissioner shall retain the authority to enforce the provisions of and impose any penalty or remedy authorized by this article against any person even if the person's license or registration has been surrendered or has lapsed by operation of law.
(a) Termination for cause. - An insurer or authorized representative of the insurer that terminates the appointment, employment, contract or other insurance business relationship with a producer shall notify the Insurance Commissioner within thirty days following the effective date of the termination, using a format prescribed by the Insurance Commissioner, if the reason for termination is one of the reasons set forth in section twenty-four of this article or the insurer has knowledge the producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities in section twenty-four of this article. Upon the written request of the Insurance Commissioner, the insurer shall provide additional information, documents, records or other data pertaining to the termination or activity of the producer.(b) Termination without cause. - An insurer or authorized representative of the insurer that terminates the appointment, employment, or contract with a producer for any reason not set forth in section twenty-four of this article, shall notify the Insurance Commissioner within thirty days following the effective date of the termination, using a format prescribed by the Insurance Commissioner. Upon written request of the Insurance Commissioner, the insurer shall provide additional information, documents, records or other data pertaining to the termination.(c) Ongoing notification requirement. -- The insurer or the authorized representative of the insurer shall promptly notify the Insurance Commissioner in a format acceptable to the Insurance Commissioner if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the Insurance Commissioner in accordance with subsection (a) of this section had the insurer then known of its existence.(d) Copy of notification to be provided to producer. --(1) At the time of making the notification required by subsections (a), (b) and (c) of this section, the insurer shall simultaneously mail a copy of the notification to the producer at his or her last known address. If the producer is terminated for cause for any of the reasons listed in section twenty-four of this article, the insurer shall provide a copy of the notification to the producer at his or her last known address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier.(2) Within thirty days after the producer has received the original or additional notification, the producer may file written comments concerning the substance of the notification with the Insurance Commissioner. The producer shall, by the same means, simultaneously send a copy of the comments to the reporting insurer, and the comments shall become a part of the Insurance Commissioner's file and accompany every copy of a report distributed or disclosed for any reason about the producer as permitted under subsection (f) of this section.(e) Immunities. --(1) In the absence of actual malice, an insurer, the authorized representative of the insurer, a producer, the Insurance Commissioner, or an organization of which the Insurance Commissioner is a member and that compiles the information and makes it available to other Insurance Commissioners or regulatory or law-enforcement agencies may not be subject to civil liability, and a civil cause of action of any nature shall not arise against these entities or their respective agents or employees, as a result of any statement or information required by or provided pursuant to this section or any information relating to any statement that may be requested in writing by the Insurance Commissioner, from an insurer or producer; or a statement by a terminating insurer or producer to an insurer or producer limited solely and exclusively to whether a termination for cause under subsection (a) of this section was reported to the Insurance Commissioner, provided that the propriety of any termination for cause under subsection (a) is certified in writing by an officer or authorized representative of the insurer or producer terminating the relationship.(2) In any action brought against a person that may have immunity under subdivision (1), subsection (e) of this section for making any statement required by this section or providing any information relating to any statement that may be requested by the Insurance Commissioner, the party bringing the action shall plead specifically in any allegation that subdivision (1), subsection (e) does not apply because the person making the statement or providing the information did so with actual malice.(3) Subdivision (1), subsection (e) or subdivision (2), subsection (e) shall not abrogate or modify any existing statutory or common law privileges or immunities.(f) Confidentiality. -(1) Any documents, materials or other information in the control or possession of the department of insurance that is furnished by an insurer, producer or an employee or agent thereof acting on behalf of the insurer or producer, or obtained by the Insurance Commissioner in an investigation pursuant to this section shall be confidential by law and privileged, may not be subject to chapter twenty-nine-b of this code, may not be subject to subpoena, and may not be subject to discovery or admissible in evidence in any private civil action. However, the Insurance Commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the Insurance Commissioner's duties.(2) Neither the Insurance Commissioner nor any person who received documents, materials or other information while acting under the authority of the Insurance Commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subdivision (1) of subsection (f).(3) In order to assist in the performance of the Insurance Commissioner's duties under this article, the Insurance Commissioner: (A) May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subdivision (1) of this subsection, with other state, federal, and international regulatory agencies, with the national association of Insurance Commissioners, its affiliates or subsidiaries, and with state, federal, and international law-enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information;(B) May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the national association of Insurance Commissioners, its affiliates or subsidiaries and from regulatory and law-enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and(C) May enter into agreements governing sharing and use of information consistent with this subsection.(4) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subdivision (3) of this subsection.(5) Nothing in this article shall prohibit the Insurance Commissioner from releasing final, adjudicated actions including for cause terminations that are open to public inspection pursuant to chapter twenty-nine-b of this code to a database or other clearinghouse service maintained by the national association of Insurance Commissioners, its affiliates or subsidiaries of the national association of Insurance Commissioners.(g) Penalties for failing to report. - An insurer, the authorized representative of the insurer, or producer that fails to report as required under the provisions of this section or that is found to have reported with actual malice by a court of competent jurisdiction may, after notice and hearing, have its license or certificate of authority suspended or revoked and may be fined in accordance with subsection (e), section twenty-four of this article.
An insurer participating in a plan for assignment of personal injury liability insurance or property damage liability insurance on owner's automobiles or operators, which plan has been approved by the commissioner, may pay a commission to a qualified individual insurance producer who is licensed to act as individual insurance producer for any insurer participating in the plan when the individual insurance producer is designated by the insured as the individual insurance producer of record under an automobile assigned risk plan pursuant to which a policy is issued under the plan and section eleven of this article is not applicable thereto.
Individual nonresidents of West Virginia, employed on salary by an insurer, who enter the state to assist and advise resident individual insurance producers in the solicitation, negotiation, making or procuring of contracts of insurance on risks resident, located or to be performed in West Virginia shall obtain a service representative permit. The commissioner may, upon receipt of a properly prepared application, issue the permit without requiring a written examination therefor. On or after July 1, 2004, no service representative license will be issued which is not a renewal of an existing license. The fee for a service representative permit shall be $25 and the permit shall expire at midnight on the thirty-first day of March next following the date of issuance. Issuance of a service representative permit may not entitle the holder to countersign policies. The representative may not in any manner sell, solicit, negotiate, make or procure insurance in this state except when in the actual company of the licensed resident individual producer whom he or she has been assigned to assist. All fees collected under this section shall be used for the purposes set forth in section thirteen, article three of this chapter.
(a) When conducting any hearing authorized by section thirteen, article two of this chapter which concerns any insurance producer, solicitor, or service representative, the commissioner shall give notice of the hearing and the matters to be determined therein to the insurance producer, solicitor or service representative by certified mail, return receipt requested, sent to the last address filed by the person or entity pursuant to subsection (e), section nine of this article.(b) If an insurance producer, solicitor or service representative fails to appear at the hearing, the hearing may proceed, at which time the commissioner shall establish that notice was sent to the person pursuant to this section prior to the entry of any orders adverse to the interests of the insurance producer, solicitor or service representative based upon the allegations against a person which were set forth in the notice of hearing. Certified copies of all orders entered by the commissioner shall be sent to the person affected therein by certified mail, return receipt requested, at the last address filed by such person with the division.(c) An insurance producer, solicitor or service representative who fails to appear at a hearing of which notice has been provided pursuant to this section, and who has had an adverse order entered by the commissioner against them as a result of their failure to so appear may, within thirty calendar days of the entry of an adverse order, file with the commissioner a written verified appeal with any relevant documents attached thereto, which demonstrates good and reasonable cause for the person's failure to appear, and may request reconsideration of the matter and a new hearing. The commissioner in his or her discretion, and upon a finding that the insurance producer, solicitor or service representative has shown good and reasonable cause for his or her failure to appear, shall issue an order that the previous order be rescinded, that the matter be reconsidered, and that a new hearing be set.(d) Orders entered pursuant to this section are subject to the judicial review provisions of section fourteen, article two of this chapter.
(a) A person may not sell, solicit or negotiate insurance covering subjects of insurance resident, located or to be performed in this state for any class or classes of insurance unless the person is licensed for that line of authority in accordance with this article.(b) No person shall in West Virginia act as or hold himself or herself out to be an individual insurance producer or insurance agency or solicitor unless then licensed therefor pursuant to this article. (c) No individual insurance producer, insurance agency or solicitor or any representative or employee thereof shall solicit or take application for, negotiate, procure or place for others any kind of insurance or receive or share, directly or indirectly, any commission or other valuable consideration arising from the sale, solicitation or negotiation of any insurance contract for which that person is not then licensed.(d) No insurer shall accept any business from or pay any commission to any individual insurance producer who does not then hold an appointment as an individual insurance producer for such insurer pursuant to this article.
No insurance company may cancel, refuse to renew or otherwise terminate a written contractual relationship with any individual insurance producer who has been employed or appointed pursuant to that written contract by an insurance company as a result of any analysis of a loss ratio resulting from claims paid under the provisions of an endorsement for uninsured and underinsured motor vehicle coverage issued pursuant to the provisions of section thirty-one, article six of this chapter, nor may any provision of that contract, including the provisions for compensation therein, operate to deter or discourage the individual insurance producer from selling and writing endorsements for optional uninsured or underinsured motor vehicle coverage.
(a) In the event of a termination of a contractual relationship between a duly licensed individual insurance producer and an automobile insurer of private passenger automobiles who is withdrawing from writing private passenger automobile insurance within the state, the insurer shall pay the individual insurance producer a commission, equal to the commission the individual insurance producer would have otherwise been entitled to under his or her contract with the insurer, for a period of two years from the date of termination of the contractual relationship for those renewal policies that cannot otherwise be canceled or nonrenewed pursuant to law, which policies the individual insurance producer continues to service. The insurer must continue the appointment of the individual insurance producer for the duration of time the individual insurance producer continues to service the business: Provided, That this requirement shall not obligate the withdrawing insurer to accept any new private passenger automobile insurance within the state.(b) Subsection (a) of this section does not apply to an individual insurance producer who is an employee of the insurer or an individual insurance producer as defined by article twelve-a of this chapter or an individual insurance producer who by contractual agreement either represents only one insurer or group of affiliated insurers or who is required by contract to submit risks to a specified insurer or group of affiliated insurers prior to submitting them to others.
(a) Purpose. -- This section authorizes the Insurance Commissioner to issue limited licenses for the sale of automobile rental coverage.(b) Definitions. -- The following words when used in this section shall have the following meanings:(1) "Authorized insurer" means an insurer that is licensed by the commissioner to transact insurance in West Virginia.(2) "Automobile rental coverage" or "rental coverage" is insurance offered incidental to the rental of a vehicle as described in this section.(3) "Limited license" means the authorization by the commissioner for a person to sell rental coverage as an individual insurance producer of an authorized insurer pursuant to the provisions of this section without the necessity of individual insurance producer prelicensing education, examination or continuing education.(4) "Limited licensee" is an individual resident of this state or nonresident of this state who obtains a limited license.(5) "Rental agreement" means any written agreement setting forth the terms and conditions governing the use of a vehicle provided by the rental company for rental or lease.(6) "Rental company" means any person or entity in the business of providing private motor vehicles to the public under a rental agreement for a period not to exceed ninety days.(7) "Renter" means any person obtaining the use of a vehicle from a rental company under the terms of a rental agreement for a period not to exceed ninety days.(8) "Vehicle" or "rental vehicle" means a motor vehicle of the private passenger type including passenger vans, minivans and sport utility vehicles and of the cargo type, including cargo vans, pick-up trucks and trucks with a gross vehicle weight of twenty-six thousand pounds or less and which do not require the operator to possess a commercial driver's license.(9) "Rental period" means the term of the rental agreement.(c) The commissioner may issue a limited license for the sale of automobile rental coverage to an employee of a rental company, who has satisfied the requirements of this section.(d) As a prerequisite for issuance of a limited license under this section, there shall be filed with the commissioner a written application for a limited license, signed by the applicant, in a form or forms and supplements thereto and containing any information as the commissioner may prescribe. The limited licensee shall pay to the Insurance Commissioner an annual fee of $25.(e) The limited licensee shall be appointed by the licensed insurer or insurers for the sale of automobile rental coverage. The employer of the limited licensee shall maintain at each insurance sales location a list of the names and addresses of employees which are selling insurance at the location.(f) In the event that any provision of this section or applicable provisions of the insurance code is violated by a limited licensee or other employees operating under his or her direction, the commissioner may:(1) After notice and a hearing, revoke or suspend a limited license issued under this section in accordance with the provisions of section thirteen, article two of this chapter; or(2) After notice and hearing, impose any other penalties, including suspending the transaction of insurance at specific locations where applicable violations of the insurance code have occurred, as the commissioner considers to be necessary or convenient to carry out the purposes of this section.(g) Any limited license issued under this section shall also authorize any other employee working for the same employer and at the same location as the limited licensee to act individually, on behalf and under the supervision of the limited licensee with respect to the kinds of coverage authorized in this section. In order to sell insurance products under this section at least one employee who has obtained a limited license must be present at each location where insurance is sold. All other employees working at that location may offer or sell insurance consistent with this section without obtaining a limited license. However, the limited licensee shall directly supervise and be responsible for the actions of all other employees at that location related to the offer or sale of insurance as authorized by this section. No limited licensee under this section may advertise, represent or otherwise hold himself or herself or any other employees out as licensed insurers or individual insurance producers.(h) No automobile rental coverage insurance may be issued by a limited licensee pursuant to this section unless:(1) The rental period of the rental agreement does not exceed ninety consecutive days; and(2) At every rental location where rental agreements are executed, brochures or other written material are readily available to the prospective renter that:(A) Summarize, clearly and correctly, the material terms of coverage offered to renters, including the identity of the insurer;(B) Disclose that the coverage offered by the rental company may provide a duplication of coverage provided by a renter's personal automobile insurance policy, homeowner's insurance policy, personal liability insurance policy or other source of coverage;(C) State that the purchase by the renter of the kinds of coverage specified in this section is not required in order to rent a vehicle; and(D) Describe the process for filing a claim in the event the renter elects to purchase coverage.(3) Any evidence of coverage on the face of the rental agreement is disclosed to every renter who elects to purchase the coverage.(4) The limited licensee to sell automobile rental coverage may offer or sell insurance only in connection with and incidental to the rental of vehicles, whether at the rental office or by preselection of coverage in a master, corporate, group rental or individual agreements in any of the following general categories:(A) Personal accident insurance covering the risks of travel, including, but not limited to, accident and health insurance that provides coverage, as applicable, to renters and other rental vehicle occupants for accidental death or dismemberment and reimbursement for medical expenses resulting from an accident that occurs during the rental period;(B) Liability insurance (which may include uninsured and underinsured motorist coverage whether offered separately or in combination with other liability insurance) that provides coverage, as applicable, to renters and other authorized drivers of rental vehicles for liability arising from the operation of the rental vehicle;(C) Personal effects insurance that provides coverage, applicable to renters and other vehicle occupants of the loss of, or damage to, personal effects that occurs during the rental period;(D) Roadside assistance and emergency sickness protection programs; and(E) Any other travel or auto-related coverage that a rental company offers in connection with and incidental to the rental of vehicles.(i) Each rental company for which an employee has received a limited license pursuant to this section shall conduct a training program in which its employees being trained shall receive basic instruction about the kinds of coverage specified in this section and offered for purchase by prospective renters of rental vehicles: Provided, That limited licensees and employees working hereunder are not subject to the agent prelicensing education, examination or continuing education requirements of this article.(j) Notwithstanding any other provision of this section or any rule adopted by the commissioner, neither the rental company, the limited licensee, nor the other employees working with the limited licensee at the rental company shall be required to treat moneys collected from renters purchasing such insurance when renting vehicles as funds received in a fiduciary capacity, provided that the charges for coverage shall be itemized and be ancillary to a rental transaction. The sale of insurance not in conjunction with a rental transaction is not permitted.
(a) Definitions. For purposes of this section, the following terms have the following meanings:(1) "Authorized Representative" means any individual who is authorized by a vendor to engage in portable electronic transactions on behalf of the vendor and who conducts such transactions under the direction and authority of such vendor;(2) "Customer" means a person who purchases portable electronics or services;(3) "Enrolled Customer" means a customer who elects coverage under a portable electronics insurance policy and issued to a vendor of portable electronics;(4) "Location" means any physical location in the State of West Virginia or any website, call center site, or similar location directed to residents of the State of West Virginia.(5) "Portable Electronics" means electronic devices that are portable in nature, their accessories and services related to the use of the device;(6) (A) "Portable Electronic Insurance" means insurance providing coverage for the repair or replacement of portable electronics which may cover portable electronics against any one or more of the following causes of loss: loss, theft, mechanical failure, malfunction, damage or other applicable perils.(B) "Portable Electronics Insurance" does not include:(i) A service contract or extended warranty providing coverage limited solely to the repair, replacement, or maintenance of property for the operational or structural failure of property due to a defect in materials, workmanship, accidental damage from handling or normal wear and tear;(ii) A policy of insurance covering a seller's or a manufacturer's obligations under a warranty; or(iii) A homeowner's, renter's, private passenger automobile, commercial multi-peril, or similar policy. (7) "Portable Electronics Transaction" means:(A) The sale or lease of portable electronics by a vendor to a customer; or(B) The sale of a service related to the use of portable electronics by a vendor to a customer.(8) "Supervising Entity" means a business entity that is a licensed insurance producer or an insurer;(9) "Vendor" means a person in the business of engaging in portable electronics transactions directly or indirectly, whether through an entity that is a corporate affiliate or an entity with which it has a contractual relationship to market portable electronics.(b) Exemption from licensing.(1) A vendor that complies with the provisions of this section is deemed to be in compliance with the requirements of this article regarding producer licensing not only for the vendor, but also for any employee or authorized representative of the vendor selling or offering coverage under a policy of portable electronics insurance to a customer at each location at which the vendor engages in portable electronics transactions.(2) A vendor shall maintain, and share with its supervising entity, a list of all locations in this state that offer portable electronics insurance on its behalf. The supervising entity shall submit the list to the Insurance Commissioner within thirty days upon request.(c) Requirements for Sale of Portable Electronics Insurance.(1) At every location where portable electronics insurance is offered to customers, brochures or other written materials must be made available to a prospective customer which:(A) Disclose that portable electronics insurance may provide a duplication of coverage already provided by a customer's homeowner's insurance policy, renter's insurance policy or other source of coverage;(B) State that the enrollment by the customer in a portable electronics insurance program is not required in order to purchase or lease portable electronics or services;(C) Summarize the material terms of the insurance coverage, including:(i) The identity of the insurer;(ii) The identity of the supervising entity;(iii) The amount of any applicable deductible and how it is to be paid; (iv) Benefits of the coverage; and(v) Key terms and conditions of coverage such as whether portable electronics may be repaired or replaced with similar make and model reconditioned or non-original manufacturer parts or equipment.(D) Summarize the process for filing a claim, including a description of any requirements:(i) To return portable electronics and the maximum fee applicable in the event the enrolled customer fails to comply with any equipment return requirements; and(ii) Proof of loss requirements.(E) State that the enrolled customer may cancel enrollment for coverage under a portable electronics insurance policy at any time and the person paying the premium shall receive a refund of any applicable unearned premium.(2) Portable electronics insurance may be offered on a month to month or other periodic basis as a group or master commercial insurance policy issued to a vendor of portable electronics under which individual customers may elect to enroll for coverage.(3) Eligibility and underwriting standards for customers electing to enroll in coverage shall be established for each portable electronics insurance program.(d) Authority of Vendors of Portable Electronics.(1) The employees and authorized representatives of vendors may sell or offer portable electronics insurance to customers and shall not be subject to licensure as an insurance producer under this article provided that:(A) The vendor complies with the provisions of this section;(B) The insurer issuing the portable electronics insurance appoints a supervising entity to supervise the administration of the program including development of a training program for employees and authorized representatives of the vendors. The training required by this subdivision shall comply with the following:(i) The training shall be delivered to all employees and authorized representatives of the vendors who sell or offer portable electronics insurance. (ii) The training may be provided in electronic form. However, if conducted in an electronic form the supervising entity shall implement a supplemental education program regarding portable electronics insurance that is conducted and overseen by licensed employees of the supervising entity; and(iii) Each employee and authorized representative shall receive basic instruction about the portable electronics insurance offered to customers and the disclosures required under subsection (C);(C) No employee or authorized representative of a vendor of portable electronics shall advertise, represent or otherwise hold himself or herself out as a licensed insurance producer.(D) No employee or authorized representative of a vendor of portable electronics is compensated based primarily on the number of customers enrolled for portable electronics insurance coverage but may receive compensation for enrolling customers for portable electronics insurance coverage so long as the compensation for those activities is incidental to their overall compensation.(2) The charges for portable electronics insurance coverage may be billed and collected by the vendor of portable electronics. Any charge to the enrolled customer for coverage that is not included in the cost associated with the purchase or lease of portable electronics or related services shall be separately itemized on the enrolled customer's bill. If the coverage is included in the purchase or lease of portable electronics or related services the vendor shall clearly and conspicuously disclose to the enrolled customer that the portable electronics insurance coverage is included with the portable electronics or related services. No vendor shall require the purchase of any kind of insurance specified in this section as a condition of the purchase or lease of portable electronics or services. Vendors billing and collecting such charges shall not be required to maintain such funds in a segregated account provided that the vendor is authorized by the insurer to hold such funds in an alternative manner and remits such amounts to the supervising entity within sixty (60) days of receipt. All funds received by a vendor from an enrolled customer for the sale of portable electronics insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for the benefit of the insurer. Vendors may receive compensation for billing and collection services. (e) Suspension of Privileges.(1) If a vendor of portable electronics or its employee or authorized representative violates any provision of this section, the Insurance Commissioner may do any of the following:(A) After notice and hearing, impose fines not to exceed $500 per violation or $5,000 in the aggregate for such conduct.(B) After notice and hearing, impose other penalties that the commissioner deems necessary and reasonable to carry out the purpose of this article, including:(i) Suspending the privilege of transacting portable electronics insurance pursuant to this section at specific business locations where violations have occurred; and(ii) Suspending or revoking the ability of individual employees or authorized representatives to act under the section.(f) Termination of Portable Electronics Insurance.(1) Notwithstanding any other provision of law:(A) An insurer may terminate or otherwise change the terms and conditions of a policy of portable electronics insurance only upon providing the policyholder and enrolled customers with at least thirty (30) days notice.(B) If the insurer changes the terms and conditions, then the insurer shall provide the vendor policyholder with a revised policy of endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure, or other evidence indicating a change in the terms and conditions has occurred and a summary of material changes. (2) Notwithstanding subdivision (1) of this subsection, an insurer may terminate an enrolled customer's enrollment under a portable electronics insurance policy upon fifteen (15) days notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim number.(3) Notwithstanding subdivision (2) of this subsection, an insurer may immediately terminate an enrolled customer's enrollment under a portable electronics insurance policy: (A) For nonpayment of premium;(B) If the enrolled customer ceases to have an active service with the vendor of portable electronics; or(C) If an enrolled customer exhausts the aggregate limit of liability, if any, under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the enrolled customer within thirty (30) calendar days after exhaustion of the limit. However, if notice is not timely sent, enrollment shall continue notwithstanding the aggregate limit of liability until the insurer sends notice of termination to the enrolled customer.(4) Where a portable electronics insurance policy is terminated by a policyholder, the policyholder shall mail or deliver written notice to each enrolled customer advising the enrolled customer of the termination. The written notice shall be mailed or delivered to the enrolled customer at least (30) days prior to the termination. (5) Whenever notice is required pursuant to this section, it shall be in writing and may be mailed or delivered to the vendor of portable electronics at the vendor's mailing address and to its affected enrolled customers' last known mailing addresses on file with the insurer. If notice is mailed, the insurer or vendor of portable electronics, as the case may be, shall maintain proof of mailing in a form authorized or accepted by the United States Postal Service or other commercial mail delivery service. Alternatively, an insurer or vendor policyholder may comply with any notice required by this section by providing electronic notice to a vendor or its affected enrolled customers, as the case may be, by electronic means. If notice is accomplished through electronic means the insurer or vendor of portable electronics, as the case may be, shall maintain proof that the notice was sent.(g) If a supervising entity is determined by the Insurance Commissioner to have not performed its required duties under this section or has otherwise violated any provision of this section, it shall be subject to the administrative actions set forth in section twenty-four of this article.
(a) Definitions.  For purposes of this section:(1) A "group policy" means a policy issued to:(A) A railroad company, steamship company, carrier by air, public bus carrier or other common carrier of passengers, which is considered the policyholder, where the policy insures its passengers; or(B) Any other group if the commissioner has determined by rule that the members are engaged in a common enterprise or have an economic or social affinity or relationship, and that issuance of the policy would not be contrary to the best interests of the public.(2) "Offer and disseminate" means providing general information, including descriptions of coverage and price, processing applications, collecting premiums and performing other activities permitted in this state without a license issued by the commissioner.(3) "Travel insurance" means:(A) An individual or group policy of insurance that provides coverage for personal risks incident to planned travel, including, but not limited to:(i) Interruption or cancellation of a trip or event;(ii) Loss of baggage or personal effects;(iii) Damages to accommodations or rental vehicles; or(iv) Sickness, accident, disability or death occurring during travel.(B) "Travel insurance" does not include major medical plans that provide comprehensive medical protection for travelers with trips lasting six months or longer, including, but not limited to, those working overseas as expatriates or military personnel deployed overseas.(4) "Travel insurance entity producer" means an entity which is licensed under this section, is appointed by an insurer, and has the duties set forth in subsection (d) of this section.(5) "Travel retailer" means an entity that makes, arranges or offers travel services, which may offer and disseminate travel insurance on behalf of and under the direction of a travel insurance entity producer.(b) License requirements.  Notwithstanding any other provision of law:(1) The commissioner may issue a travel insurance entity producer license, which authorizes the sale, solicitation or negotiation of travel insurance issued by a licensed insurer, to a person meeting the requirements of this section.(2) An entity seeking a license under this section shall apply on a form and in a manner prescribed by the commissioner.(3) The annual fee for a travel insurance entity producer license is $200.(c) Conditions for travel retailers.  A travel retailer may offer and disseminate travel insurance policies under a license issued to a travel insurance entity producer only if all of the following conditions are met:(1) The travel retailer agrees that it is bound by all applicable provisions of this section and that no employee or authorized representative, who is not licensed as an individual insurance producer, may:(A) Evaluate or interpret the technical terms, benefits, and conditions of the offered travel insurance coverage;(B) Evaluate or provide advice concerning a prospective purchaser's existing insurance coverage; or(C) Hold himself or herself out as a licensed insurer, licensed producer, or insurance expert.(2) The travel retailer makes available to prospective purchasers brochures or other written materials that:(A) State the identity and contact information of the insurer and the travel insurance entity producer;(B) Describe the material terms, or contain the actual material terms, of the travel insurance coverage;(C) Describe the process for filing a claim under the travel insurance policy;(D) Describe the review and cancellation processes for the travel insurance policy;(E) Explain that the purchase of travel insurance is not required in order to purchase any other product or service from the travel retailer; and(F) Explain that a travel retailer not licensed by the commissioner may provide general information about the travel insurance offered, including a description of the coverage and price, but is not qualified or authorized to answer technical questions about the travel insurance or to evaluate the adequacy of a prospective purchaser's existing insurance coverage.(3) The travel retailer ensures that each employee and authorized representative of the travel retailer whose duties include offering and disseminating travel insurance successfully completed the training required by this section.(d) Conditions for travel insurance entity producers.  A travel insurance entity producer may offer and disseminate travel insurance policies through a travel retailer only if all of the following conditions are met:(1) On a form prescribed by the commissioner, the travel insurance entity producer establishes, maintains and updates annually a register of all travel retailers that offer travel insurance on behalf of the travel insurance entity producer:(A) The register shall include the name, address, and contact information of each travel retailer and of the person who directs or controls the travel retailer's operations, and the travel retailer's federal tax identification number;(B) The travel insurance entity producer shall certify that the register complies with 18 U.S.C. 1033; and(C) The travel insurance entity producer shall submit the register to the commissioner within thirty days upon request.(2) The travel insurance entity producer designates one of its employees who is a licensed individual producer as the responsible producer for the travel insurance entity producer's compliance with this section and any rules promulgated under this section.(3) The designated responsible producer, and the president, secretary, treasurer and any other person who directs or controls the travel insurance entity producer's insurance operations, comply with the fingerprinting requirements applicable to insurance producers in the resident state of the travel insurance entity producer.(4) The travel insurance entity producer pays all applicable insurance producer licensing fees set forth in this chapter or rules promulgated under this chapter.(5) The travel insurance entity producer requires each employee and authorized representative of the travel retailer whose duties include offering and disseminating travel insurance to receive a program of instruction or training, which the commissioner may review and approve or disapprove. The training program shall, at a minimum, contain instructions on the types of insurance offered, ethical sales practices and required disclosures to prospective customers.(e) A licensee under this section, and those registered under its license pursuant to subdivision one, subsection (d) of this section, are exempt from examination under section five of this article and from continuing education requirements under section eight of this article.(f) A licensee under this section is subject to the provisions of section six-b of this article as if it were an insurance agency.(g) License renewal.  The commissioner shall annually renew, on the expiration date as provided in this subsection, the license of a licensee who qualifies and applies for renewal on a form prescribed by the commissioner and pays the fee set forth in subdivision three, subsection (b) of this section: Provided, That the commissioner may fix the dates of expiration of travel insurance entity producer licenses as he or she considers advisable for efficient distribution of the workload of his or her office:(1) If the fixed expiration date would upon first occurrence shorten the period for which a license fee has been paid, no refund of unearned fee shall be made;(2) If the fixed expiration date would upon first occurrence lengthen the period for which a license fee has been paid, the commissioner shall charge no additional fee for the lengthened period;(3) If a date is not fixed by the commissioner, each license shall, unless continued as provided in this subsection, expire at midnight on June 30 following issuance; and(4) A licensee that fails to timely renew its license may reinstate its license, retroactive to the expiration date, upon submission of the renewal application within twelve months after the expiration date and payment of a penalty in the amount of $50.(h) Appointment.  A travel insurance entity producer may not act as an agent of an insurer unless the insurer appoints the travel insurance entity producer as its agent, as follows:(1) The insurer shall file, in a format approved by the commissioner, a notice of appointment within fifteen days from the date the agency contract is executed and shall pay a nonrefundable appointment processing fee in the amount of $25: Provided, That an insurer may elect to appoint a travel insurance entity producer to all or some insurers within the insurer's holding company system or group by filing a single notice of appointment;(2) Upon receipt of a notice of appointment, the commissioner shall verify within a reasonable time, not to exceed thirty days, that the travel insurance entity producer is eligible for appointment: Provided, That the commissioner shall notify the insurer within five days of a determination that the travel insurance entity producer is ineligible for appointment; and(3) The insurer shall remit, no later than midnight on May 31 annually and in a manner prescribed by the commissioner, a renewal appointment fee for each appointed travel insurance entity producer in the amount of $25; and(4) The insurer shall maintain a current list of travel insurance entity producers appointed to accept applications on behalf of the insurer, and shall make the list available to the commissioner upon reasonable request for purposes of conducting investigations and enforcing the provisions of this chapter.(i) Effect of registration.  Notwithstanding any other provision of law, if a travel retailer's insurance-related activities, and those of its employees and authorized representatives, are limited to offering and disseminating travel insurance on behalf of and under the direction of a licensed travel insurance entity producer, the travel retailer may perform those activities and receive related compensation, upon registration by the travel insurance entity producer pursuant to subdivision one, subsection (d) of this section.(j) Liability.  As the insurer's appointed agent, the travel insurance entity producer is liable for the acts or omissions of the travel retailer in offering and disseminating travel insurance under the travel insurance entity producer's license and shall use reasonable means to ensure compliance by the travel retailer with this section.(k) Enforcement.  In enforcing the provisions of this section, the commissioner may use any enforcement mechanisms in this chapter.(1) If the commissioner determines that a travel retailer or its employee has violated this section, the commissioner may after notice and hearing:(A) Impose fines not to exceed $500 per violation or $5,000 in the aggregate for the conduct; and(B) Impose other or additional penalties that the commissioner considers necessary and reasonable to carry out the purpose of this section, including but not limited to:(i) Suspending or revoking the privilege of offering and disseminating travel insurance pursuant to this section by specific business retailers or at specific business retail locations where violations have occurred;(ii) Suspending or revoking the privilege of individual employees of a travel retailer to act under this section; and(iii) Placing the travel retailer or its employees on probation under terms and conditions prescribed by the commissioner.(2) If the commissioner determines that a travel insurance entity producer has failed to perform its duties under this section or has otherwise violated this section, the travel insurance entity producer is subject to the provisions of section twenty-four of this article.(l) The commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to implement this section.
(a) The Insurance Commissioner shall waive any requirements for a nonresident license applicant with a valid license from his or her home state, except the requirements imposed by section twelve of this article, if the applicant's home state awards nonresident licenses to residents of this state on the same basis.(b) An individual nonresident producer's satisfaction of his or her home state's continuing education requirements for licensed insurance producers shall constitute satisfaction of this state's continuing education requirements if the nonresident producer's home state recognizes the satisfaction of its continuing education requirements imposed upon producers from this state on the same basis.
(a) A producer shall report to the Insurance Commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency in this state within thirty days of the final disposition of the matter. This report shall include a copy of the order, consent to order or other relevant legal documents.(b) Within thirty days of the initial pretrial hearing date, a producer shall report to the Insurance Commissioner any criminal prosecution of the producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing and any other relevant legal documents.
The Insurance Commissioner may, in accordance with article three, chapter twenty-nine-a of this code, promulgate reasonable regulations as are necessary or proper to carry out the purposes of this article. Any legislative rules promulgated under the former article twelve of this chapter shall remain in full force and effect but shall henceforth relate to the redesignated statutory provisions contained herein.
If any provisions of this article, or the application of a provision to any person or circumstances, shall be held invalid, the remainder of the article, and the application of the provision to persons or circumstances other than those to which it is held invalid, shall not be affected.
(a) In furtherance of the national goal of promoting uniformity and reciprocity among the states with regard to producer licensing, this section sets forth the requirements to obtain access to the Federal Bureau of Investigation Criminal Justice Information Services Division criminal history record information and to secure information or reports from the Federal Bureau of Investigation Criminal Justice Information Services Division. The scope of this section is to set forth the applicability of the criminal history record check to applicants for a home state insurance producer license.(b) As used in this section, the following terms have the meanings ascribed in this subsection, unless a different meaning is clearly required by the context:(1)"Applicant" means a natural person applying for:(A) An initial home state license as an insurance producer;(B) An additional line of authority under an existing home state insurance producer license where a criminal history record check has not been obtained; or(C) A resident insurance producer license under change of home state provisions."Applicant" does not mean a person applying for renewal or continuation of a home state insurance producer license or a nonresident insurance producer license.(2) "Fingerprint" means an impression of the lines on the finger taken for the purpose of identification. The impression may be obtained electronically or in ink converted to an electronic format.(c) In order to make a determination of license eligibility, the commissioner is authorized to require fingerprints of applicants and to submit the fingerprints and the fee required to perform the criminal history record checks to the West Virginia State Police and to the Federal Bureau of Investigation for the state and national criminal history record checks.(d) The commissioner shall require a criminal history record check on each applicant in accordance with this section. The commissioner shall require each applicant to submit a full set of fingerprints, including a scanned file from a hard copy fingerprint, in order for the commissioner to obtain and receive national criminal history records from the Federal Bureau of Investigation Criminal Justice Information Services Division.(e) The commissioner shall collect a fee from each applicant in an amount established by rule. The amount of the fee must be sufficient to cover:(1) The cost of the collection and transmittal of fingerprints by persons, including local law enforcement agencies that are approved by the commissioner to capture fingerprints, to the West Virginia State Police and the Federal Bureau of Investigation; and(2) The cost of any amounts charged by the State Police and the Federal Bureau of Investigation to perform the criminal history record checks.(f) The commissioner may contract for the collection and transmission of fingerprints authorized under this section and may order that the fee for collecting and transmitting fingerprints be payable directly by the applicant to the contractor.(g) The commissioner is authorized to receive criminal history record information directly from the Federal Bureau of Investigation, in lieu of via transmission of the information from the Federal Bureau of Investigation to the West Virginia State Police.(h) The commissioner shall treat and maintain an applicant's fingerprints and any criminal history record information obtained under this section as confidential and shall apply security measures consistent with the Federal Bureau of Investigation Criminal Justice Information Services Division standards for the electronic storage of fingerprints and necessary identifying information. The commissioner shall limit the use of records solely to the purposes authorized in this section. The fingerprints and the criminal history record information in the custody of the commissioner are not subject to subpoena, other than one issued in a criminal action or investigation; are confidential by law and privileged; and are not subject to discovery or admissible in evidence in any private civil action.(i) The commissioner shall promulgate emergency rules pursuant to the provisions of section fifteen, article three, chapter twenty-nine-a of this code as are necessary for the administration of this section, including rules governing the issuance of provisional producer licences pending receipt of the criminal background check.
(a) Definitions. For purposes of this section, the following terms have the following meanings:(1) "Leased space" means the individual storage space at the self-service storage facility which is leased or rented to an occupant pursuant to a rental agreement;(2) "Location" means any physical location in the State of West Virginia or any website, call center site, or similar location directed to residents of the State of West Virginia;(3) "Occupant" means a person entitled to the use of a leased space at a self-service storage facility under a rental agreement, or the persons sublessee, successor, or assign;(4) "Owner" means the owner, operator, lessor, or sublessor of a self-service storage facility or the owners agent or any other person authorized to manage the facility or to receive rent from any occupant under a rental agreement;(5) "Personal property" means movable property not affixed to land and includes, but is not limited to, goods, wares, merchandise, motor vehicles, and household items and furnishings;(6) "Rental agreement" means any agreement or lease that establishes or modifies the terms, conditions or rules concerning the lawful and reasonable use and occupancy of leased space at a self-service storage facility;(7) "Self-service storage facility" means any real property used for renting or leasing individual storage spaces, other than storage spaces which are leased or rented as an incident to the lease or rental of residential property or dwelling units, to which the occupants have access for storing or removing their personal property; (8) "Self-service storage insurance" means personal property insurance offered in connection with and incidental to the lease or rental of leased space at a self-service storage facility that provides coverage to occupants at the self-service storage facility where the insurance is transacted for the loss of or damage to personal property that occurs at that facility or when the property is in transit to or from that facility during the period of the rental agreement; and(9) "Supervising entity" means a business entity that is a licensed insurance producer or an insurer.(b) Licensure of owners.(1) An owner shall hold a limited lines license under this section if the owner sells, solicits, or offers coverage for self-service storage insurance. Notwithstanding any other provision of this section to the contrary, an owner is not required to be licensed solely to display and make available to occupants and prospective occupants brochures and other promotional materials created by or on behalf of an authorized insurer or surplus lines insurer.(2) A limited lines license issued under this section is limited to authorizing an owner and the owners employees and authorized representatives to sell, solicit, and offer coverage for self-service storage insurance to occupants.(3) A limited lines license issued under this section authorizes an owner and the owners employees and authorized representatives to sell, solicit, and offer self-service storage insurance coverage at each location at which the owner conducts business.(4) An owner shall maintain, and share with its supervising entity, a list of all locations in this state at which self-service storage insurance is offered on its behalf. The supervising entity shall submit the list to the Insurance Commissioner within 30 days upon request.(5) An owner and its employees and authorized representatives are not subject to the agent pre-licensing education, examination, or continuing education requirements of this article.(c) Requirements for Sale of Self-Service Storage Insurance.(1) At every location where self-service storage insurance is offered, the owner shall make brochures or other written or electronic materials available to occupants which:(A) Disclose that self-service storage insurance may provide a duplication of coverage already provided by an occupants homeowners insurance policy, renters insurance policy, or other source of coverage;(B) State that the enrollment by the occupant for the self-service storage insurance coverage offered by the owner is not required in order to lease or rent leased space from the owner;(C) Provide the actual terms of the self-service storage insurance coverage, or summarize the material terms of the insurance coverage, including:(i) The identity of the insurer;(ii) The identity of the supervising entity;(iii) The amount of any applicable deductible and how it is to be paid; (iv) Benefits of the coverage; and(v) Key terms and conditions of coverage;(D) Summarize the process for filing a claim;(E) State that the occupant may cancel enrollment for the self-service storage insurance coverage at any time and the person paying the premium shall receive a refund of any applicable unearned premium.(2) Self-service storage insurance may be provided under an individual policy or under a commercial, corporate, group, or master policy.(3) Eligibility and underwriting standards for occupants electing to enroll in coverage shall be established for each self-service storage insurance program.(d) Authority of owners.(1) The employees and authorized representatives of owners may sell, solicit, and offer self-service storage insurance to occupants and are not subject to licensure as an insurance producer under this article provided that:(A) The owner obtains a limited lines license to authorize the owners employees and authorized representatives to sell, solicit, and offer self-service storage insurance;(B) The insurer issuing the self-service storage insurance appoints a supervising entity to supervise the administration of the program including development of a training program for employees and authorized representatives of the owner who sell, solicit, or offer self-service storage insurance. The training required by this subdivision shall comply with the following:(i) The training shall be delivered to all employees and authorized representatives of the owner who sell, solicit, or offer self-service storage insurance; (ii) The training may be provided in electronic form. However, if provided in an electronic form the supervising entity shall implement a supplemental education program regarding the self-service storage insurance that is provided and overseen by licensed employees of the supervising entity; and(iii) Each employee and authorized representative selling, soliciting, or offering self-service storage insurance shall receive basic instruction about the self-service storage insurance offered to occupants and the disclosures required under paragraph (C) of this subdivision.(C) An employee or authorized representative of an owner does not advertise, represent, or otherwise hold himself or herself out as a licensed insurance producer, unless so licensed;(D) An employee or authorized representative of an owner is compensated based primarily on the number of occupants enrolled for self-service storage insurance coverage. Employees and authorized representatives may receive compensation for enrolling occupants for self-service storage insurance coverage as long as the compensation for those activities is incidental to their overall compensation;(2) The charges for self-service storage insurance coverage may be billed and collected by the owner. Any charge to the occupant for coverage that is not included in the cost associated with the lease or rental of leased space shall be separately itemized on the occupants bill. If the coverage is included in the lease or rental of leased space, the owner shall clearly and conspicuously disclose to the occupant that the self-service storage insurance coverage is included with the lease or rental of leased space. An owner billing and collecting the charges is not required to maintain the funds in a segregated account, provided that the owner is authorized by the insurer to hold the funds in an alternative manner and remits the amounts to the supervising entity or insurer within 60 days of receipt. All premiums received by an owner from an occupant for self-service storage insurance shall be considered funds held by the owner in a fiduciary capacity for the benefit of the insurer. Owners may receive compensation for billing and collection services. (e) Suspension of Privileges.(1) If an owner or its employee or authorized representative violates any provision of this section, the commissioner may do any of the following:(A) After notice and hearing, impose fines not to exceed $500 per violation or $5,000 in the aggregate for such conduct.(B) After notice and hearing, impose other penalties that the commissioner considers necessary and reasonable to carry out the purpose of this article, including:(i) Suspending the privilege of transacting self-service storage insurance pursuant to this section at specific business locations where violations have occurred; and(ii) Suspending or revoking the ability of individual employees or authorized representatives to act under this section.(2) If a supervising entity is determined by the commissioner to have not performed its required duties under this section or has otherwise violated any provision of this section, it is subject to the administrative actions set forth in 33-12-24 of this code.
(a) Nothing in this article shall be construed to require an insurer to obtain an insurance producer license. In this section, the term "insurer" does not include an insurer's officers, directors, employees, subsidiaries or affiliates.(b) A license as an insurance producer shall not be required of the following:(1) An officer, director or employee of an insurer or of an insurance producer: Provided, That the officer, director or employee does not receive any commission on policies written or sold to insure risks residing, located or to be performed in this state and:(A) The officer, director or employee's activities are executive, administrative, managerial, clerical or a combination of these, and are only indirectly related to the sale, solicitation or negotiation of insurance; or(B) The officer, director or employee's function relates to underwriting, loss control, inspection or the processing, adjusting, investigating or settling of a claim on a contract of insurance; or(C) The officer, director or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers where the person's activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation or negotiation of insurance;(2) A person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group or blanket accident and health insurance; or for the purpose of enrolling individuals under plans; issuing certificates under plans or otherwise assisting in administering plans; or performs administrative services related to mass marketed property and casualty insurance; where no commission is paid to the person for the service;(3) An employer or association or its officers, directors, employees, or the trustees of an employee trust plan, to the extent that the employers, officers, employees, director or trustees are engaged in the administration or operation of a program of employee benefits for the employer's or association's own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, as long as the employers, associations, officers, directors, employees or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts; (4) Employees of insurers or organizations employed by insurers who are engaging in the inspection, rating or classification of risks, or in the supervision of the training of insurance producers and who are not individually engaged in the sale, solicitation or negotiation of insurance; (5) A person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the state: Provided, That the person does not sell, solicit or negotiate insurance that would insure risks residing, located or to be performed in this state; (6) An individual who is not a resident of this state who sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract: Provided, That individual is otherwise licensed as an insurance producer to sell, solicit or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state; or(7) A salaried full-time employee who counsels or advises his or her employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer provided that the employee does not sell or solicit insurance or receive a commission.
(a) A resident individual applying for an insurance producer license shall pass a written examination unless exempt pursuant to section fourteen of this article. The examination shall test the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer and the insurance laws and regulations of this state. Examinations required by this section may be developed and conducted under rules and regulations prescribed by the Insurance Commissioner.(b) The Insurance Commissioner may make arrangements, including contracting with an outside testing service, for administering examinations and collecting the nonrefundable fee set forth in subdivision (8), subsection (a), section six of this article.(c) Each individual applying for an examination shall remit a nonrefundable fee as prescribed by the Insurance Commissioner as set forth in subdivision (8), subsection (a), section six of this article.(d) An individual who fails to appear for the examination as scheduled or fails to pass the examination, shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination.(e) An individual who fails to pass examination is limited to seven additional attempts to pass the examination.
(a) An individual applying for a resident insurance producer license shall make application to the Insurance Commissioner on the Uniform Application and declare under penalty of refusal, suspension or revocation of the license that the statements made in the application are true, correct and complete to the best of the individual's knowledge and belief. Before approving the application, the Insurance Commissioner shall find that the individual:(1) Is at least eighteen years of age;(2) Has not committed any act that is a ground for denial, suspension or revocation set forth in section twenty-four of this article;(3) Where required by the Insurance Commissioner, has completed a prelicensing course of study for the lines of authority for which the person has applied;(4) Has paid the fees set forth in section thirteen, article three of this chapter; and section ten of this article;(5) Has successfully passed the examinations for the lines of authority for which the person has applied;(6) On or after June 1, 1990, no solicitor's license will be issued which is not a renewal of an existing license; (7) Does not intend to use the license principally for the purpose, in the case of life or accident and sickness insurance, of procuring insurance on himself or herself, members of his or her family or his or her relatives; or, as to insurance other than life and accident and sickness, upon his or her property or insurable interests of those of his or her family or his or her relatives or those of his or her employer, employees or firm, or corporation in which he or she owns a substantial interest, or of the employees of the firm or corporation, or on property or insurable interests for which the applicant or any relative, employer, firm or corporation is the trustee, bailee or receiver. For the purposes of this provision, a vendor's or lender's interest in property sold or being sold under contract or which is the security for any loan, shall not be considered to constitute property or an insurable interest of the vendor or lender;(8) Satisfies the commissioner that he or she is trustworthy and competent. The commissioner may test the competency of an applicant for a license under this section by examination. Each examinee shall pay a $25 examination fee for each examination to the commissioner who shall deposit said examination fee into the state Treasury for the benefit of the state fund, general revenue. The commissioner may, at his or her discretion, designate an independent testing service to prepare and administer the examination subject to direction and approval by the commissioner, and examination fees charged by the service shall be paid by the applicant. In addition to examination fees charged by the independent testing service, the independent testing service shall collect and remit to the commissioner the $25 examination fee; and(9) For new agents first licensed on or after July 1, 1989, completes a program of insurance education as established in section seven of this article.(b) A business entity acting as an insurance agency is required to obtain an insurance producer license. Application shall be made using the uniform business entity application. Before approving the application, the Insurance Commissioner shall find that:(1) The insurance agency has disclosed to the Insurance Commissioner all officers, partners, and directors, whether or not they are licensed as insurance producers;(2) The insurance agency's officers, directors, or partners are trustworthy, of good moral character, and of good business reputation;(3) The insurance agency has paid the fees set forth as set forth in section ten of this article;(4) The insurance agency has designated an individual licensed producer who is an officer, partner, or director responsible for the insurance agency's or business entity's compliance with the insurance laws and rules of this state;(5) The insurance agency has registered with the commissioner the name of each natural person who, as an officer, director, partner, owner, or member of the agency, is acting as and is licensed as an insurance producer;(6) The insurance agency has registered with the commissioner the name of each natural person who, as an officer, director, partner, owner, or member of the insurance agency or business entity, is acting as and is licensed as an insurance producer;(7) The insurance agency or business entity has registered with the commissioner at least one individual who holds a valid insurance producer license for the line or lines of authority requested in the application;(8) If the insurance agency's filing status is nonresident, the insurance agency or business entity has complied with the qualification requirements of section twelve of this article; and(9) An insurance agency may qualify as a resident if the agency has its principal office in this state.(c) The Insurance Commissioner may require any documents reasonably necessary to verify the information contained in an application.(d) Each insurer that sells, solicits or negotiates any form of limited line credit insurance shall provide to each individual whose duties will include selling, soliciting or negotiating limited line credit insurance a program of instruction that may be approved by the Insurance Commissioner.
The commissioner may qualify an applicant as a resident of this state and shall issue an insurance producer license to any qualified resident person of this state in accordance with the following:(1) An individual applicant may qualify as a resident only if he or she resides in this state. Any license issued pursuant to any application claiming residency for licensing purposes shall constitute an election of residency in this state and shall be void if the licensee, while holding a resident license in this state, also holds or makes application for a license in or thereafter claims to be a resident of any other state or jurisdiction, or if the licensee ceases to be a resident of this state.(2) An insurance agency or business entity may qualify as a resident if the agency has its principal office in this state;(3) The resident person is in compliance with the requirements of section six of this article.
(a) For the purposes set forth in section twenty-three of this article, an insurance agency shall be licensed as an insurance producer.(b) The insurance agency shall maintain a current list with the name of every individual who, as a member, officer, director, stockholder, owner, or employee of the insurance agency, is acting as and is licensed as an insurance producer. Each insurance agency shall make such list available to the commissioner upon reasonable request for purposes of conducting investigations and enforcing the provisions of this chapter.(c) The insurance agency shall, within ten days, notify the commissioner, on a form prescribed by the commissioner, of every change relative to the licensed individual insurance producers registered and authorized to act as insurance producers for the insurance agency.(d) The insurance agency shall, within ten days, notify the commissioner, on a form prescribed by the commissioner, of any change relative to the insurance agency or business entity name, officers, directors, partners, or owners, to report a merger, or that the insurance agency or business entity has ceased doing business in this state.(e) When an insurance agency ceases to do business in this state, the insurance agency shall return the producer license to the commissioner within ten days after ceasing to do business.(f) When an insurance agency changes its principal address to another state, the insurance agency shall, within ten days, notify the commissioner and return the producer license for cancellation. Relicensing will be subject to section twelve of this article.(g)(1) The insurance agency shall comply with section six of this article.(2) A nonresident insurance agency shall also comply with the qualification requirements of section twenty-three of this article.(h) The provisions of this section become effective on or after July 1, 2003.
The Board of Insurance Agent Education shall continue in existence. The Board of Insurance Agent Education shall consist of the commissioner of insurance and six members appointed by the commissioner. The members appointed by the commissioner shall be two licensed property and casualty insurance agents, one licensed life insurance agent, one licensed health and accident insurance agent, one representative of a domestic insurance company, and one representative of a foreign insurance company: Provided, That no board shall be appointed that fails to include companies or agents for companies representing at least two thirds of the net written insurance premiums in the state. Each member shall serve a term of three years and shall be eligible for reappointment.(a) The Board of Insurance Agent Education shall establish the criteria for a program of insurance education and submit the proposal for the approval of the commissioner on or before December 31, of each year.(b) The commissioner and the board, under standards established by the board, may approve any course or program of instruction developed or sponsored by an authorized insurer, accredited college or university, agents association, insurance trade association, or independent program of instruction that presents the criteria and the number of hours that the board and commissioner determine appropriate for the purpose of this article.
The purpose of this section is to provide continuing education requirements under guidelines set up under the Insurance Commissioners office in conjunction with the Board of Insurance Agent Education.(a) This section applies to individual insurance producers licensed to engage in the sale of the following types of insurance:(1) Life. Life insurance coverage on human lives, including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income;(2) Accident and health or sickness. Insurance coverage for sickness, bodily injury, or accidental death and may include benefits for disability income;(3) Property. Property insurance coverage for the direct or consequential loss or damage to property of every kind;(4) Casualty. Insurance coverage against legal liability, including that for death, injury, or disability or damage to real or personal property;(5) Variable life and variable annuity products. Insurance coverage provided under variable life insurance contracts and variable annuities;(6) Personal lines. Property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes; and(7) Any other line of insurance permitted under state laws or regulations.(b) This section does not apply to:(1) Individual insurance producers holding limited line credit insurance licenses for any kind or kinds of insurance offered in connection with loans or other credit transactions or insurance for which an examination is not required by the commissioner, nor does it apply to any limited or restricted license as the commissioner may exempt; and(2) Individual insurance producers selling credit life or credit accident and health insurance.(c)(1) The Board of Insurance Agent Education as established by 33-12-7 of this code shall develop a program of continuing insurance education and submit the proposal for the approval of the commissioner on or before December 31 of each year. No program may be approved by the commissioner that includes a requirement that any individual insurance producer complete more than 24 hours of continuing insurance education biennially. No program may be approved by the commissioner that includes a requirement that any of the following individual insurance producers complete more than six hours of continuing insurance education biennially:(A) Individual insurance producers who sell only preneed burial insurance contracts; and(B) Individual insurance producers who engage solely in telemarketing insurance products by a scripted presentation which scripted presentation has been filed with and approved by the commissioner.(C) The biennium mandatory continuing insurance education provisions of this section become effective on the reporting period beginning July 1, 2006.(2) The commissioner and the board, under standards established by the board, may approve any course or program of instruction developed or sponsored by an authorized insurer, accredited college or university, agents association, insurance trade association, or independent program of instruction that presents the criteria and the number of hours that the board and commissioner determine appropriate for the purpose of this section.(d) Individual insurance producers licensed to sell insurance and who are not otherwise exempt shall satisfactorily complete the courses or programs of instructions the commissioner may prescribe.(e) Every individual insurance producer subject to the continuing education requirements shall furnish, at intervals and on forms as may be prescribed by the commissioner, written certification listing the courses, programs, or seminars of instruction successfully completed by the person. The certification shall be executed by, or on behalf of, the organization sponsoring the courses, programs, or seminars of instruction.(f) Subject to the approval by the commissioner, the active annual membership by an individual insurance producer in an organization or association recognized and approved by the commissioner as a state, regional, or national professional insurance organization or association may be approved by the commissioner for up to two hours of continuing insurance education: Provided, That not more than two hours of continuing insurance education may be awarded to an individual insurance producer for membership in a professional insurance organization during a biennial reporting period. Credit for continuing insurance education pursuant to this subdivision may only be awarded to individual insurance producers who are required to complete more than six hours of continuing education biennially.(g) Individual insurance producers who are required to complete more than six hours of continuing education biennially and who exceed the minimum continuing education requirement for the biennial reporting period may carry-over a maximum of six credit hours only into the next reporting period.(h) Any individual insurance producer failing to meet the requirements mandated in this section and who has not been granted an extension of time, with respect to the requirements, or who has submitted to the commissioner a false or fraudulent certificate of compliance shall have his or her license automatically suspended and no further license may be issued to the person for any kind or kinds of insurance until the person demonstrates to the satisfaction of the commissioner that he or she has complied with all of the requirements mandated by this section and all other applicable laws or rules.(i) The commissioner shall notify the individual insurance producer of his or her suspension pursuant to 33-12-8(h) of this code by electronic mail or regular mail, if requested, to the last respective address on file with the commissioner pursuant to 33-12-9(f) of this code. Any individual insurance producer who has had a suspension notice entered against him or her pursuant to this section may, within 30 calendar days of receipt of the notice, file with the commissioner a request for a hearing for reconsideration of the matter.(j) Any individual insurance producer who does not satisfactorily demonstrate compliance with this section and all other laws applicable thereto as of the last day of the biennium following his or her suspension shall have his or her license automatically canceled and is subject to the education and examination requirements of 33-12-5 of this code.(k) The commissioner is authorized to hire personnel and make reasonable expenditures considered necessary for purposes of establishing and maintaining a system of continuing education for insurers. The commissioner shall charge a fee of $25 to continuing education providers for each continuing education course submitted for approval which shall be used to maintain the continuing education system. The commissioner may, at his or her discretion, designate an outside administrator to provide all of or part of the administrative duties of the continuing education system subject to direction and approval by the commissioner. The fees charged by the outside administrator shall be paid by the continuing education providers. In addition to fees charged by the outside administrator, the outside administrator shall collect and remit to the commissioner the $25 course submission fee.
(a) (1) No individual may sell, solicit or negotiate long-term care insurance unless he or she is licensed as a producer for accident and sickness insurance in accordance with the provisions of this article and has completed a one-time training course that meets the requirements of subsection (b) of this section: Provided, That a producer selling, soliciting or negotiating long-term care insurance on July 1, 2009, is permitted to continue such activities and must complete the one-time training course prior to July 1, 2010.(2) In addition to the one-time training course required in subdivision (1) of this subsection, every producer who sells, solicits or negotiates long-term care insurance shall complete ongoing training that meets the requirements of subsection (b) of this section.(b) (1) The one-time training shall be no less than eight hours.(2) Beginning July 1, 2010, the ongoing training required by subsection (a) of this section shall be no less than four hours in each mandatory continuing education biennium subsequent to that in which the one-time training was completed.(3) The training required by this section shall consist of topics related to long-term care insurance, long-term care services and, if applicable, qualified state long-term care insurance partnership programs, including, but not limited to, state and federal regulations and requirements and the relationship between qualified state long-term care insurance partnership programs and other public and private coverage of long-term care services, including Medicaid; available long-term services and providers; changes or improvements in long-term care services or providers; alternatives to the purchase of private long-term care insurance; the effect of inflation on benefits and the importance of inflation protection; and consumer suitability standards and guidelines: Provided, That the training required by this section may not include training that is insurer or company product-specific or that includes any sales or marketing information, materials or training, other than those required by state or federal law.(4) The training required by this section may be approved for continuing education credit by the board of Insurance Agent Education in the manner as set forth in section eight of this article.(c) An insurer subject to this chapter shall:(1) Verify that each producer appointed to sell its long-term care products is compliant with this section before the producer is permitted to sell, solicit or negotiate such products; and(2) Maintain records supporting the verification for five years and make the records available to the commissioner upon request.(d) If this state participates in the federal Long-Term Care Partnership Program established under the Deficit Reduction Act of 2005, Pub. L. 109-171:(1) All training required by this section must be approved by the commissioner; and(2) Any insurer subject to this chapter shall maintain records with respect to the training of its appointed producers that will allow the commissioner to provide assurances to the state Medicaid agency that producers have received the training required by this section and that completion of such training is sufficient to demonstrate that the producer understands partnership policies and their relationship to public and private coverage of long-term care, including Medicaid, in this state.(e) A nonresident individual producer's satisfaction of another state's training requirements is satisfaction of this section.
(a) Unless denied licensure pursuant to 33-12-24 of this code, individuals who have met the requirements of 33-12-5 and 33-12-6 of this code shall be issued an insurance producer license. An insurance producer may receive qualification for a license in one or more of the following lines of authority:(1) Life insurance coverage on human lives including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income;(2) Accident and health or sickness. Insurance coverage for sickness, bodily injury, or accidental death and may include benefits for disability income;(3) Property insurance coverage for the direct or consequential loss or damage to property of every kind;(4) Casualty. Insurance coverage against legal liability, including that for death, injury, or disability or damage to real or personal property;(5) Variable life and variable annuity products. Insurance coverage provided under variable life insurance contracts and variable annuities;(6) Personal lines. Property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes;(7) Credit. Limited line credit insurance; or(8) Any other line of insurance permitted under state laws or regulations.(b) An insurance producer license shall remain in effect unless revoked or suspended as long as the fee set forth in 33-3-13 of this code is paid and education requirements for resident individual producers are met by the due date.(c) An individual insurance producer who allows his or her license to lapse may, within 12 months from the due date of the renewal fee, reinstate the same license without the necessity of passing a written examination. However, a penalty in the amount of double the unpaid renewal fee shall be required for any renewal fee received after the due date.(d) An individual licensed insurance producer who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance (e.g., a long-term medical disability) may request a waiver of those procedures. The producer may also request a waiver of any examination requirement or any other fine or sanction imposed for failure to comply with renewal procedures.(e) The license shall contain the licensees name, address, personal identification number, and the date of issuance, the lines of authority, the expiration date, and any other information the Insurance Commissioner considers necessary.(f) At the time of application for licensure, the applicant shall inform the Insurance Commissioner of the applicants full name, physical and mailing address, if different, and electronic mail address. Each agent, insurance agency, solicitor, or service representative that is licensed on July 1, 2021, shall provide the Insurance Commissioner with the licensees electronic mail address in connection with the next license renewal application of the respective licensee. If a change occurs to the licensees name, physical address, mailing address, or electronic mail address after licensure, the licensee shall inform the Insurance Commissioner by any means acceptable to the Insurance Commissioner of the updated contact information within 30 days of the change. Failure to timely inform the Insurance Commissioner of a change in legal name, residency, mailing address, or electronic mail address may result in a penalty pursuant to 33-12-24 of this code. The commissioner shall maintain the information provided pursuant to this subsection for each agent, insurance agency, solicitor, and service representative on file.(g) In order to assist in the performance of the Insurance Commissioners duties, the Insurance Commissioner may contract with nongovernmental entities, including the National Association of Insurance Commissioners (NAIC) or any affiliates or subsidiaries that the NAIC oversees, to perform any ministerial functions, including the collection of fees, related to producer licensing that the Insurance Commissioner and the nongovernmental entity may consider appropriate.
It is hereby found and determined by the Legislature that it is essential to the best interests of the citizens of this state that the contractual relationship between insurance agents and insurance companies be established; and that this article is enacted for the purpose of prohibiting arbitrary and capricious cancellation of such contractual relationships. 
As used in this article:(a) "Insurance company" means any individual, firm or corporation engaged in the business of selling insurance in this state, excepting only: (1) Clubs or associations organized under the laws of this state which sell insurance to their members and (2) companies engaged exclusively in the sale of life or accident and sickness insurance.(b) "Insurance agent" means any individual, firm or corporation appointed by an insurance company, as defined herein, whose exclusive activity in this field is in behalf of a single insurance company and who is authorized by that company to solicit insurance or to negotiate insurance on its behalf, and who is authorized by the insurance company to effectuate and countersign insurance contracts on its behalf.
No insurance company may cancel, refuse to renew or otherwise terminate a written contractual relationship with any insurance agent who has been employed or appointed pursuant to that written contract by such insurance company for a period of more than five years, except for "good cause," as prescribed herein. If an insurance company proposes to cancel, fail to renew or otherwise terminate a contractual relationship with the agent, the company shall so notify the agent by certified mail at least ninety days prior to the date upon which the company proposed to cancel, fail to renew or terminate the contractual relationship. Such notice shall include a statement of the grounds upon which the insurance company bases its decision to cancel, refuse to renew or terminate any contractual relationship.The following matters are "good cause" for an insurance company to terminate the contractual relationship with its agent:(a) Criminal misconduct or gross negligence relating to the business or premises of the insurance agency;(b) Fraud or moral turpitude;(c) Abandonment or unattendance of the business or premises of the insurance agency for such period of time as may unreasonably interfere with the transacting of business;(d) The failure by the agent to pay moneys over to the company for insurance contracts sold by the agency;(e) The death or disability of the agent; and(f) Upon the company becoming insolvent or discontinuing any line of insurance for any business purpose: Provided, That the Insurance Commissioner shall notify or cause to be notified in writing all agents of such insolvent insurance company that they are no longer entitled to any benefit under their contract with the insolvent company.
If, upon receipt by the insurance agent of the notice of proposed cancellation provided by the preceding section, the insurance agent prior to the established cancellation date as stated in the notice rectifies or eliminates the stated ground constituting "good cause" for cancellation of the contract, the notice shall be void.
If any insurance company cancels, refuses to renew or otherwise terminates the contractual relationship with any agent in violation of the provisions of this article, the agent who has been damaged thereby has a cause of action against the insurance company for specific performance, injunctive relief or for damages sustained by the plaintiff as a result of the termination of the relationship, including ascertainable loss of goodwill as a result of the termination of the relationship: Provided, That any action brought by an insurance agent against an insurance company for wrongful termination of the contractual relationship shall be commenced within two years after such wrongful termination.
(a) "Automated claims adjudication system" means a preprogrammed computer system designed for the collection, data entry, calculation, and final resolution of portable electronics insurance claims which:(1) May only be used by a licensed adjuster, licensed producer, or supervised individuals operating pursuant to 33-12B-3(a)(14) of this code;(2) Must comply with all claims payments requirements of the insurance code; and(3) Must be certified as compliant with this section by a licensed adjuster that is an officer of the entity which employs the individuals operating pursuant to 33-12B-3(a)(14) of this code.(b) "Business entity" means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.(c) "Company adjuster" means an adjuster who is a staff employee of an insurance company, who is paid by the insurance company, and who investigates, negotiates, or settles claims.(d) "Home state" means the District of Columbia or any state, commonwealth, or territory of the United States in which an adjuster maintains his or her principal place of residence or business and in which he or she is licensed to act as a resident adjuster. If a persons principal place of residence or business does not license adjusters for the type of adjuster license sought in this state, he or she shall designate as his or her home state any state in which he or she has such a license. (e) "Independent adjuster" means a person who: (1) Is an individual, a business entity, an independent contractor, or an employee of a contractor, who contracts for compensation with insurers or self-insurers;(2) Is one whom the insurers or self-insurers tax treatment of the individual is consistent with that of an independent contractor, rather than as an employee, as defined in the Internal Revenue Code, United States Code, Title 26, Subtitle C; and (3) Investigates, negotiates, or settles property, casualty, or workers compensation claims for insurers or self-insurers.(f) "Individual" means a natural person.(g) "Insurance emergency" means a temporary situation, as declared by the commissioner pursuant to 33-2-10a of this code, when the number of licensed adjusters in this state is inadequate to meet the demands of the public.(h) "Person" means an individual or business entity.(i) "Public adjuster" means any person who, for compensation or any other thing of value on behalf of the insured: (1) Acts or aids, solely in relation to first-party claims arising under insurance contracts that insure the real or personal property of the insured, on behalf of an insured in negotiating for, or effecting the settlement of, a claim for loss or damage covered by an insurance contract; (2) Advertises for employment as a public adjuster of insurance claims or solicits business or represents himself or herself to the public as a public adjuster of first-party insurance claims for losses or damages arising out of policies of insurance that insure real or personal property; or(3) Directly or indirectly solicits business, investigates or adjusts losses, or advises an insured about first-party claims for losses or damages arising out of policies of insurance that insure real or personal property for another person engaged in the business of adjusting losses or damages covered by an insurance policy on behalf of an insured.
(a) The commissioner may, in his or her discretion, fix the dates of expiration of respective licenses for all adjusters in any manner as is considered by him or her to be advisable for an efficient distribution of the workload of his or her office. If the expiration date so fixed would upon first occurrence shorten the period for which a license fee has theretofore been paid, no refund of the unearned fee shall be made. If the expiration date so fixed would upon first occurrence lengthen the period for which license fee had theretofore been paid, the commissioner shall charge no additional fee for the lengthened period. If another date is not so fixed by the commissioner, each license shall, unless continued as herein above provided, expire at midnight on May 31 next following the date of issuance, and the commissioner shall renew annually the license of all such licensees who qualify, and make application therefor, and have paid the fees set forth in this article. (b) An adjuster whose license expires may, if application is made within one year of the expiration date, be reissued a license upon payment of twice the renewal fee.(c) The commissioner may waive any renewal requirement for any adjuster who is unable to comply due to military service, long-term medical disability, or other extenuating circumstance.(d) As a condition of the renewal of an adjuster license with the designation of a crop insurance line of authority, the commissioner may require that the licensee demonstrate that he or she has maintained certification of proficiency issued or approved by the United States Department of Agriculture Risk Management Agency.
(a) An adjuster shall report to the commissioner any administrative action taken against the adjuster in another jurisdiction or by another governmental agency in this state within thirty days of the final disposition of the matter, including decertification or other action related to the adjuster's proficiency to adjust multi-peril crop insurance claims. The report shall include a copy of the order, consent to order and any other relevant legal documents.(b) Within thirty days of the initial pretrial hearing date, an adjuster shall report to the commissioner any criminal prosecution of the adjuster in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing and any other relevant legal documents.
(a) The commissioner may examine and investigate the business affairs and conduct of persons applying for or holding an adjuster license to determine whether such person is trustworthy and competent or has been or is engaged in any violation of the insurance laws or rules of this state or in any unfair or deceptive acts or practices in any state.(b) If the commissioner denies an initial or renewal application for a license, he or she shall notify the applicant or licensee in writing of the reason for such action. The applicant or licensee may, within 10 days of receipt of such notice, make written demand for a hearing before the commissioner to determine the reasonableness of the action, and such hearing shall be held in accordance with the provisions of 33-2-13 of this code.(c) Whenever, after notice and hearing, the commissioner is satisfied that any adjuster has violated any provision of this chapter or of rules promulgated or proposed hereunder, or is incompetent or untrustworthy, he or she shall place the adjuster on probation or refuse to issue, revoke, suspend, or, if renewal of license is pending, refuse to renew the license of such adjuster. In addition to placing a licensee on probation or revoking, suspending, or refusing to renew or issue his or her license, the commissioner may in his or her discretion order such licensee to pay to the State of West Virginia an administrative penalty in a sum not to exceed $1,000 for each violation. Upon the failure of a licensee to pay within 30 days a civil penalty imposed by the commissioner, his or her license shall be revoked or suspended by the commissioner.(d) Each of the following shall constitute a violation under this article:(1) Providing incorrect, misleading, incomplete, or materially untrue information in the license application;(2) Violating any insurance statute, rule, subpoena, or order of the commissioner or of another states insurance commissioner;(3) Obtaining or attempting to obtain a license through misrepresentation or fraud;(4) Improperly withholding, misappropriating, or converting any monies or properties received in the course of doing insurance business;(5) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;(6) Having been convicted of or pleaded nolo contendere to any felony;(7) Having been convicted of or pleaded nolo contendere to a misdemeanor in connection with his or her activities relating to the business of insurance;(8) Having admitted or been found to have committed any insurance unfair trade practice or fraud;(9) Having an insurance license or its equivalent suspended, revoked, or refused in any other state, province, district, or territory;(10) Forging any document or signature relating to an insurance transaction or fraudulently procuring a forged signature to any document related to an insurance transaction;(11) Cheating, including improperly using notes or any other reference material, in the course of taking an examination for an insurance license;(12) Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility, in the conduct of insurance business in this state or elsewhere;(13) Failing to comply with an administrative or court order imposing a child support obligation; or(14) Failing to pay state income tax or comply with any administrative or court order directing payment of state income tax which remains unpaid.(e) Orders issued pursuant to this section are subject to the judicial review provisions of 33-2-14 of this code.
[Repealed]
The commissioner may propose rules for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code to implement the provisions of this article.
(a) The purpose of this section is to provide continuing education requirements for individual adjusters under guidelines established by the commissioners office in conjunction with the Board of Insurance Agent Education as provided in 33-12-7 of this code.(b) This section applies to company adjusters, independent adjusters, and public adjusters licensed pursuant to 33-12B-2 of this code. (c) This section shall not apply to:(1) Licensees not licensed for one full year prior to the end of the applicable continuing education biennium; or(2) Licensees holding nonresident adjuster licenses who have met substantially similar continuing education requirements of their designated home state and whose home state gives credit to residents of this state on the same basis. (d)(1) The Board of Insurance Agent Education as established by 33-12-7 of this code shall develop a program of continuing education for adjusters and submit the proposal for the approval of the commissioner on or before December 31 of each year. No program may be approved by the commissioner that includes a requirement that any individual adjuster complete more than 24 hours of continuing insurance education biennially. (2) The biennium mandatory continuing education provisions of this section become effective on the reporting period beginning July 1, 2021.(3) The commissioner and the Board of Insurance Agent Education, under standards established by the board, may approve any course or program of instruction developed or sponsored by an authorized insurer, accredited college or university, adjusters association, insurance trade association, or independent program of instruction that presents the criteria and the number of hours that the board and commissioner determine appropriate for the purpose of this section.(e) An individual who holds an adjuster license and who is not exempt shall satisfactorily complete a minimum of 24 hours of continuing education courses, of which three hours must be in ethics, reported to the commissioner on a biennial basis in conjunction with their license renewal cycle.(f) Every individual adjuster subject to the continuing education requirements shall furnish, at intervals and on forms as may be proposed by the commissioner, written certification listing the courses, programs, or seminars of instruction successfully completed by the adjuster. The certification shall be executed by, or on behalf of, the organization sponsoring the courses, programs, or seminars of instruction.(g) Subject to the approval of the commissioner, the active annual membership by an adjuster in an organization or association recognized and approved by the commissioner as a state, regional, or national professional insurance organization or association may be approved by the commissioner for up to two hours of continuing insurance education: Provided, That not more than two hours of continuing education may be awarded to an adjuster for membership in a professional insurance organization during a biennial reporting period. (h) Adjusters who exceed the minimum continuing education requirement for the biennial reporting period may carry over a maximum of six credit hours only into the next reporting period. (i) Any individual adjuster failing to meet the requirements mandated in this section and who has not been granted an extension of time with respect to the requirements, or who has submitted to the commissioner a false or fraudulent certificate of compliance, shall have his or her license automatically suspended and no further license may be issued to the person until the person demonstrates to the satisfaction of the commissioner that he or she has complied with all of the requirements mandated by this section and all other applicable laws or rules.(j) The commissioner shall notify the individual adjuster of his or her suspension pursuant to 33-12B-13(i) of this code by electronic mail or regular mail, if requested, to the last respective address on file with the commissioner pursuant to 33-12B-14(a) of this code. Any individual insurance adjuster who has had a suspension notice entered against him or her pursuant to this section may, within 30 calendar days of receipt of the notice, file with the commissioner a request for a hearing for reconsideration of the matter.(k) Any individual adjuster who does not satisfactorily demonstrate compliance with this section and all other laws applicable thereto as of the last day of the biennium following his or her suspension shall have his or her license automatically terminated and is subject to the licensing and examination requirements of 33-12B-5 of this code. (l) The commissioner is authorized to hire personnel and make reasonable expenditures considered necessary for purposes of establishing and maintaining a system of continuing education for adjusters. The commissioner shall charge a fee of $25 to continuing education providers for each continuing education course submitted for approval which shall be used to maintain the continuing education system. The commissioner may, at his or her discretion, designate an outside administrator to provide all of or part of the administrative duties of the continuing education system subject to direction and approval by the commissioner. The fees charged by the outside administrator shall be paid by the continuing education providers. In addition to fees charged by the outside administrator, the outside administrator shall collect and remit to the commissioner the $25 course submission fee.
(a) Each adjuster shall file with the commissioner the complete address of his principal place of business and the complete address of his residence including the name and number of the street, or if the street where the business is located is not numbered, the number of the post office box. An adjuster shall also file with the commissioner the adjusters electronic mail address. An adjuster licensed on July 1, 2021, shall provide the commissioner with the licensees electronic mail address in connection with the licensees next license renewal application. Within 30 days of a change of business or residence address or electronic mail address by an adjuster, the adjuster must file with the commissioner notice of such change of address. The commissioner shall maintain the information provided pursuant to this subsection for each adjuster on file.(b) When conducting any hearing authorized by 33-2-13 of this code which concerns any adjuster, the commissioner shall give notice of such hearing and the matters to be determined therein to such adjuster by certified mail, return receipt requested, sent to the last address filed by such person or entity pursuant to this section.(c) If an adjuster fails to appear at such hearing, the hearing may proceed, at which time the commissioner shall establish that notice was sent to such person pursuant to this section prior to the entry of any orders adverse to the interests of such adjuster based upon the allegations against such person which were set forth in the notice of hearing. Certified copies of all orders entered by the commissioner shall be sent to the person affected therein by certified mail, return receipt requested, at the last address filed by such person with the commissioner.(d) An adjuster who fails to appear at a hearing of which notice has been provided pursuant to this section, and who has had an adverse order entered by the commissioner against them as a result of their failure to so appear may, within 30 calendar days of the entry of such adverse order, file with the commissioner a written verified appeal with any relevant documents attached thereto, which demonstrates good and reasonable cause for the adjusters failure to appear, and may request reconsideration of the matter and a new hearing. The commissioner in his or her discretion, and upon a finding that the adjuster has shown good and reasonable cause for his or her failure to appear, shall issue an order that the previous order be rescinded, that the matter be reconsidered, and that a new hearing be set.(e) Orders entered pursuant to this section are subject to the judicial review provisions of 33-2-14 of this code.
The effective date of the amendments made to this article during the 2020 regular legislative session is July 1, 2021.
(a) No person may act or hold himself, herself, or itself out as a company adjuster, an independent adjuster, or a public adjuster in this state unless the person is licensed in accordance with this article or is exempt from licensure under this article.(b) The license shall contain the licensees name, address, personal identification number, the date of issuance, expiration date, and any other information the commissioner deems necessary.(c) A person licensed as a public adjuster shall not misrepresent to a claimant that he, she, or it is an adjuster representing an insurer in any capacity, including acting as an employee of the insurer or acting as an independent adjuster unless so appointed by an insurer in writing to act on the insurers behalf for that specific claim or purpose. A licensed public adjuster is prohibited from charging that specific claimant a fee when appointed by the insurer and the appointment is accepted by the public adjuster.(d) The commissioner shall license an individual as a company adjuster, independent adjuster, or public adjuster. An individual may be licensed concurrently under separate licenses but shall not act as an adjuster representing the interests of the insured and the insurer with respect to the same claim.
(a) Notwithstanding any other provisions of this article, a company adjuster license or independent adjuster license shall not be required of the following:(1) Attorneys-at-law admitted to practice in this state, when acting in their professional capacity as an attorney;(2) A person employed only for the purpose of obtaining facts surrounding a claim or furnishing technical assistance to a licensed company or independent adjuster;(3) An individual who is employed to investigate suspected fraudulent insurance claims but who does not adjust losses, investigate or determine coverage, or determine claim payments;(4) A person who solely performs executive, administrative, managerial, or clerical duties, or any combination thereof, and who does not investigate, negotiate, or settle insurance claims with policyholders, claimants, or their legal representative;(5) A licensed health care provider or its employee who is not responsible for determining compensability;(6) A managed care organization or any of its employees or an employee of any organization providing managed care services, so long as the managed care organization or employee referenced herein is not determining compensability;(7) A person who settles reinsurance or subrogation claims between insurers;(8) An officer, director, or manager of an authorized insurer, surplus lines insurer, a risk retention group, or an attorney-in-fact of a reciprocal insurer;(9) A manager of the United States branch of an alien insurer;(10) A person who investigates, negotiates, or settles life, accident and health, annuity, or disability insurance claims;(11) An individual employee, under a self-insured arrangement, who adjusts claims on behalf of his or her employer;(12) A licensed individual producer, attorney-in-fact of a reciprocal insurer, or managing general agent of the insurer to whom claim authority has been granted by the insurer; (13) A business entity licensed under the authority of 33-46-1 et seq. of this code; (14) Individuals who collect claim information from, or furnish claim information to, insureds or claimants, and who conduct data entry, including entering data into an automated claims adjudication system are exempt from licensure under this article: Provided, That the individuals are under the supervision of a licensed adjuster or licensed producer: Provided, however, That no more than 25 persons are under the supervision of one licensed adjuster or licensed producer; or(15) Company adjusters employed by an insurer outside of this state who adjust claims solely by telephone, fax, Unites States mail, and electronic mail, and who do not physically enter this state in the course of adjusting such claims: Provided, That such adjusters shall be subject to the jurisdiction of, and regulation by, the commissioner in regard to their adjustment of West Virginia claims: Provided, however, That the commissioner may require such adjusters to complete continuing education, not to exceed requirements pursuant to 33-12B-13(d) of this code, to address any deficiencies with respect to their claims handling practices.(b) Notwithstanding any other provisions of this article, a public adjuster license shall not be required of the following:(1) Attorneys-at-law admitted to practice in this state, when acting in their professional capacity as an attorney;(2) A person who negotiates or settles claims arising under a life or health insurance policy or an annuity contract; (3) A person employed only for the purpose of obtaining facts surrounding a loss or furnishing technical assistance to a licensed public adjuster; (4) A licensed health care provider, or employee of a licensed health care provider, who prepares or files a health claim form on behalf of a patient; or(5) A person who settles subrogation claims between insurers.
(a) In the event of a declared insurance emergency, an insurer shall notify the commissioner with an application for temporary emergency licensure for each individual who will act as an emergency company adjuster or emergency independent adjuster on behalf of the insurer. (b) A person who is otherwise qualified to adjust claims, but not already licensed in this state when the insurance emergency has been declared, may act as an emergency company or independent adjuster and adjust claims if, within five days of the declared insurance emergency, the insurer notifies the commissioner by providing the following information in a format proposed by the commissioner:(1) Name and address of the individual;(2) National Producer Number of the individual if the individual has a National Producer Number;(3) Name of the insurer which the company or independent adjuster will represent;(4) Effective date of the contract between the insurer and independent adjuster, if applicable;(5) Insurance emergency or loss control number;(6) Insurance emergency event name; and(7) Any other information the commissioner deems necessary. (c) An emergency company or independent adjusters license shall remain in force for a period not to exceed 90 days, unless extended for an additional period by the commissioner.(d) The fee for emergency company or independent adjuster application for licensure shall be in an amount specified in 33-12B-8 of this code. The fee shall be due and payable at the time of application for licensure.
[Repealed]
(a) An individual applying for a resident adjuster license shall make application to the commissioner and declare under penalty of suspension, revocation, or refusal of the license that the statements made in the application are true, correct, and complete to the best of the individuals knowledge and belief. Before approving the application, the commissioner shall find that the individual:(1) Is 18 years of age or more;(2) Is a resident of West Virginia, or eligible to designate West Virginia as his or her home state;(3) Is trustworthy, competent, reliable, and of good reputation, evidence of which may be determined by the commissioner;(4) Has a business or mailing address in this state for acceptance of service of process or, if residing outside of this state, acknowledges that by adjusting claims in this state he or she is subject to this states jurisdiction, pursuant to 56-3-33 of this code, and automatically appoints the West Virginia Secretary of State as his or her agent for service of process;(5) Has not committed any act that is a ground for probation, suspension, revocation, or refusal of an adjusters license as set forth in 33-12B-11 of this code;(6) Has successfully passed the written examination for the line or lines of authority for which the person has applied; and(7) Has paid the fees applicable to licensure.(b)(1) A resident individual applying for an adjuster license shall pass a written examination unless exempt pursuant to 33-12B-5(b)(5) or 33-12B-5(b)(6) of this code. The examination shall test the knowledge of the individual concerning the line or lines of authority for which application is made, if applicable, the duties and responsibilities of an adjuster, and the insurance laws and rules of this state. However, to qualify for an adjuster license with the crop line of authority, the commissioner may accept, in lieu of such an examination, certification that the individual has passed a proficiency examination approved by the United States Department of Agriculture Risk Management Agency.(2) Each examinee shall pay a nonrefundable $25 examination fee for each examination to the commissioner, which fees shall be used for the purposes set forth in 33-3-13 of this code. The commissioner may, at his or her discretion, designate an independent testing service to prepare and administer such examination subject to direction and approval by the commissioner, and examination fees charged by such service shall be paid by the applicant.(3) An individual who fails to appear for the examination as scheduled, or fails to pass the examination, shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination.(4) An individual who initially fails to pass an examination required by this section is limited to seven additional attempts to pass the examination.(5) An individual who applies for an adjuster license in this state, who was previously licensed for the same lines of authority in another jurisdiction, shall not be required to complete any prelicensing examination. This exemption is only available if the individual is currently licensed in that jurisdiction, or if the application is received within 90 days of the cancellation of the applicants previous license, and if the prior jurisdiction issues a certification that, at the time of cancellation, the applicant was in good standing in that jurisdiction or the jurisdictions adjuster database records, maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries, indicate that the adjuster is or was licensed in good standing for the line of authority requested. The certification must be of a license with the same line of authority for which the individual has applied.(6) An individual licensed as an adjuster in another jurisdiction who moves to this state shall make application within 90 days of establishing legal residence to become a resident licensee pursuant to this section: Provided, That no pre-licensing examination shall be required of that individual to obtain any line of authority previously held in the prior jurisdiction, except where the commissioner determines otherwise by rule. (7) Examinations may be developed and conducted under rules proposed by the commissioner. (8) Examinations required by this subsection are applicable for individual adjusters first licensed on or after July 1, 2021, or for individual adjusters who add a line of authority to an existing adjuster license on or after July 1, 2021. (c) A business entity applying for a resident independent or public adjuster license shall make application to the commissioner on forms proposed by the commissioner and shall declare under penalty of suspension, revocation, or refusal of the license that the statements made in the application are true, correct, and complete to the best of the business entitys knowledge and belief. Before approving the application, the commissioner shall find that the business entity:(1) Is eligible to designate West Virginia as its home state;(2) Has a business or mailing address in this state for acceptance of service of process;(3) Has designated a licensed independent or public adjuster responsible for the business entitys compliance with the insurance laws and rules of this state; and(4) Has not committed an act that is a ground for probation, suspension, revocation, or refusal of an independent or public adjusters license as set forth in 33-12B-11 of this code.  (d) The requirements of this section do not apply to temporary licenses issued to emergency company adjusters or emergency independent adjusters.
(a) In furtherance of the national goal of promoting uniformity and reciprocity among the states, commonwealths, territories, and the District of Columbia with regard to adjuster licensing, this section sets forth the requirements to obtain access to the Federal Bureau of Investigation Criminal Justice Information Services Division criminal history record information and to secure information or reports from the Federal Bureau of Investigation Criminal Justice Information Services Division. The scope of this section is to set forth the applicability of the criminal history record check to applicants for a home state insurance adjuster license.(b) As used in this section, the following terms have the meanings ascribed in this subsection, unless a different meaning is clearly required by the context: (1) "Applicant" means a natural person applying for:(A) An initial home state license as an insurance adjuster;(B) An additional line of authority under an existing home state insurance adjuster license where a criminal history record check has not been obtained; or(C) A resident insurance adjuster license under change of home state provisions."Applicant" does not mean a person applying for renewal or continuation of a home state insurance adjuster license or a nonresident insurance adjuster license.(2) "Fingerprint" means an impression of the lines on the finger taken for the purpose of identification. The impression may be obtained electronically or in ink converted to an electronic format.(c) In order to make a determination of adjuster license eligibility, the commissioner is authorized to require fingerprints of applicants and to submit the fingerprints and the fee required to perform a criminal history record check to the West Virginia State Police and to the Federal Bureau of Investigation.(d) The commissioner shall require a criminal history record check on each applicant in accordance with this section. The commissioner shall require each applicant to submit a full set of fingerprints, including a scanned file from a hard copy fingerprint, in order for the commissioner to obtain and receive national criminal history records from the Federal Bureau of Investigations Criminal Justice Information Services Division.(e) The commissioner shall collect a fee from each applicant in an amount sufficient to cover:(1) The cost of the collection and transmittal of fingerprints by persons, including local law enforcement agencies that are approved by the commissioner to capture fingerprints, to the West Virginia State Police and the Federal Bureau of Investigation; and(2) The cost of any amounts charged by the West Virginia State Police and the Federal Bureau of Investigation to perform the criminal history record checks.(f) The commissioner may contract for the collection and transmission of fingerprints authorized under this section and may order that the fee for collecting and transmitting fingerprints be payable directly by the applicant to the contractor.(g) The commissioner is authorized to receive criminal history record information directly from the Federal Bureau of Investigation, in lieu of via transmission of the information from the Federal Bureau of Investigation to the West Virginia State Police.(h) The commissioner shall treat and maintain an applicants fingerprints and any criminal history record information obtained under this section as confidential and shall apply security measures consistent with the Federal Bureau of Investigations Criminal Justice Information Services Division standards for the electronic storage of fingerprints and necessary identifying information. The commissioner shall limit the use of records solely to the purposes authorized in this section. The fingerprints and the criminal history record information in the custody of the commissioner are not subject to subpoena, other than one issued in a criminal action or investigation, are confidential by law and privileged, and are not subject to discovery or admissible in evidence in any private civil action.
(a) An independent adjuster or a company adjuster may qualify for a license in one or more of the following lines of authority:(1) Property and casualty;(2) Workers compensation; or(3) Crop.(b) A public adjuster may only qualify for a license designating a property and casualty line of authority. 
(a) The annual fee for an individual adjuster license shall be $25. (b) The annual fee for a business entity adjuster license shall be $200. (c) The fee for a temporary emergency adjuster license shall be $25. (d) All fees collected pursuant to this section shall be used for the purposes set forth in 33-3-13 of this code.
(a) A nonresident applicant for an adjuster license who holds a similar license in his or her home state may be licensed as a nonresident adjuster in this state if the applicants home state has established, by law or regulation, like requirements for the licensing of a resident of this state as a nonresident adjuster.(b) As a condition of continuing a nonresident adjuster license, the licensee must maintain a license in his or her home state. The commissioner may verify the adjusters licensing status through the producer database maintained by the National Association of Insurance Commissioners, its affiliates, or subsidiaries.(c) If a nonresident adjuster desires to become a resident adjuster, he or she must apply to become one within 90 days of establishing legal residency in this state.(d) If a nonresident adjuster has his or her license suspended, terminated, or revoked by his or her home state, the adjuster must immediately notify the commissioner of that action and, with respect to license terminations or revocations, surrender the license to the commissioner.(e) A resident of Canada may be licensed as a nonresident adjuster under this section if that person has obtained a resident or home state adjuster license in another United States jurisdiction.
This article shall be known and may be cited as "The Nonadmitted Insurance Act".
(a) An eligible surplus lines insurer may be sued upon a cause of action arising in this state under a surplus lines insurance contract made by it or evidence of insurance issued or delivered by the surplus lines licensee. A policy issued by the eligible surplus lines insurer shall contain a provision stating the substance of this section and designating the person to whom the commissioner shall mail process.(b) The remedies provided in this section are in addition to any other methods provided by law for service of process upon insurers.
(a) On or before March 1, 2004, and on or before March 1 thereafter, each surplus lines licensee shall file, on a form prescribed by the commissioner, a report under oath, setting forth facts from which it may be determined whether the requirements of section five of this article have been met with respect to each surplus line policy procured by the surplus lines licensee during the preceding calendar year. (b) The written report shall include, but not be limited to, the following:(1) The name and address of the insured;(2) The identity of the insurer or insurers;(3) A description of the subject and location of the risk and the risk insured against;(4) Return premium paid, if any;(5) The amount of gross premium charged for the insurance;(6) The amount of the insurance;(7) Such other pertinent information as the commissioner may reasonably require; and(8) An affidavit on a standardized form promulgated by the commissioner, as to the diligent efforts to place the coverage with admitted insurers and the results of that effort. The affidavit shall be open to public inspection. The affidavit shall affirm that the insured was expressly advised in writing prior to placement of the insurance that:(A) The surplus lines insurer with whom the insurance was to be placed is not licensed in this state and is not subject to its supervision; and(B) In the event of the insolvency of the surplus lines insurer, losses will not be paid by the state insurance guaranty fund.
(a) Upon placing surplus lines insurance, the surplus lines licensee shall promptly deliver to the insured the policy, or if the policy is not then available, a certificate as described in subsection (d) of this section, cover note, binder or other evidence of insurance. The certificate described in subsection (d) of this section, cover note, binder or other evidence of insurance shall be executed by the surplus lines licensee and shall show the description and location of the subject of the insurance, coverages including any material limitations other than those in standard forms, a general description of the coverages of the insurance, the premium and rate charged and taxes to be collected from the insured, and the name and address of the insured and surplus lines insurer or insurers and proportion of the entire risk assumed by each, and the name of the surplus lines licensee and the licensee's license number.(b) A surplus lines licensee shall not issue or deliver any evidence of insurance or purport to insure or represent that insurance will be or has been written by any eligible surplus lines insurer, or a nonadmitted insurer pursuant to subdivision (4), subsection (c), section five of this article, unless the licensee has authority from the insurer to cause the risk to be insured, or has received information from the insurer in the regular course of business that the insurance has been granted.(c) If, after delivery of any evidence of insurance, there is any change in the identity of the insurers, or the proportion of the risk assumed by any insurer, or any other material change in coverage as stated in the surplus lines licensee's original evidence of insurance, or in any other material as to the insurance coverage so evidenced, the surplus lines licensee shall promptly issue and deliver to the insured or the original producing individual insurance producer appropriate substitute for, or endorsement of the original document, accurately showing the current status of the coverage and the insurers responsible for the coverage.(d) As soon as reasonably possible after the placement of the insurance, the surplus lines licensee shall deliver a copy of the policy or, if not available, a certificate of insurance to the insured to replace any evidence of insurance previously issued. Each certificate or policy of insurance shall contain or have attached a complete record of all policy insuring agreements, conditions, exclusions, clauses, endorsements or any other material facts that would regularly be included in the policy.(e) A surplus lines licensee who fails to comply with the requirements of this subsection shall be subject to the penalties provided in this article.(f) The surplus lines licensee shall give the following consumer notice to every person applying for insurance with a nonadmitted insurer. The notice shall be printed in sixteen-point type on a separate document affixed to the application. The applicant shall sign and date a copy of the notice to acknowledge receiving it. The surplus lines licensee shall maintain the signed notice in its file for a period of ten years from expiration of the policy. The surplus lines licensee shall tender a copy of the signed notice to the insured at the time of delivery of each policy the licensee transacts with a nonadmitted insurer. The copy shall be a separate document affixed to the policy."Notice: 1. An insurer that is not licensed in this state is issuing the insurance policy that you have applied to purchase. These companies are called "nonadmitted" or "surplus lines" insurers. 2. The insurer is not subject to the financial solvency regulation and enforcement that applies to licensed insurers in this state. 3. These insurers generally do not participate in insurance guaranty funds created by state law. These guaranty funds will not pay your claims or protect your assets if the insurer becomes insolvent and is unable to make payments as promised. 4. Some states maintain lists of approved or eligible surplus lines insurers and surplus lines brokers may use only insurers on the lists. Some states issue orders that particular surplus lines insurers cannot be used. 5. For additional information about the above matters and about the insurer, you should ask questions of your insurance agent or surplus lines licensee. You may also contact your Insurance Commission consumer help line."
(a) No contract of insurance placed by a surplus lines licensee under this article shall be binding upon the insured and no premium or fee charged shall be due and payable until the surplus lines licensee shall have notified the insured in writing, in a form acceptable to the commissioner, a copy of which shall be maintained by the licensee with the records of the contract and available for possible examination, that:(1) The insurer with which the licensee places the insurance is not licensed by this state and is not subject to its supervision; and(2) In the event of the insolvency of the surplus lines insurer, losses will not be paid by the state insurance guaranty fund.(b) Nothing herein contained shall nullify any agreement by any insurer to provide insurance.
A payment of premium to a surplus lines licensee acting for a person other than itself in procuring, continuing or renewing any policy of insurance procured under this section shall be deemed to be payment to the insurer, whatever conditions or stipulations may be inserted in the policy or contract notwithstanding.
A surplus lines licensee may originate surplus lines insurance or accept such insurance from any other individual insurance producer duly licensed as to the kinds of insurance involved, and the surplus lines licensee may compensate the individual insurance producer for the business. The surplus lines licensee shall have the right to receive from the insurer the customary commission.
(a) Each surplus lines licensee shall keep in this state a full and true record of each surplus lines insurance contract placed by or through the licensee, including a copy of the policy, certificate, cover note or other evidence of insurance showing each of the following items applicable:(1) Amount of the insurance, risks and perils insured;(2) Brief description of the property insured and its location;(3) Gross premium charged;(4) Any return premium paid;(5) Rate of premium charged upon the several items of property;(6) Effective date and terms of the contract;(7) Name and address of the insured;(8) Name and address of the insurer;(9) Amount of tax and other sums to be collected from the insured;(10) Allocation of taxes by state as referred to in subsection (f) of this section; and (11) Identity of the producing broker, any confirming correspondence from the insurer or its representative, and the application.(b) The record of each contract shall be kept open at all reasonable times to examination by the commissioner without notice for a period not less than ten years following termination of the contract. In lieu of maintaining offices in this state, each nonresident surplus lines licensee shall make available to the commissioner any and all records that the commissioner deems necessary for examination.
(a) On or before May 1, 2004, and on or before May 1 thereafter, the end of the month following each year, each surplus lines licensee shall file with the commissioner, on forms prescribed by the commissioner, a verified report in duplicate of all surplus lines insurance transacted during the preceding period;(b) The report shall show the following:(1) Aggregate gross premiums written;(2) Aggregate return premiums;(3) Amount of aggregate tax remitted to this state; and(4) Amount of aggregate tax due or remitted to each other state for which an allocation is made pursuant to section seven of this article.
(a) A person who in this state represents or aids a nonadmitted insurer in violation of this article is guilty of a misdemeanor and, upon conviction thereof, may be fined not more than $10,000 per each act or sentenced to not less than ten days nor more than one year, or both fined and imprisoned. (b) In addition to any other penalty provided herein or otherwise provided by law, including any suspension, revocation or refusal to renew a license, any person, firm, association or corporation violating any provision of this article shall be liable to a civil penalty not exceeding $10,000 for the first offense, and not exceeding $20,000 for each succeeding offense.(c) The above penalties are not exclusive remedies. Penalties may also be assessed under article eleven of this chapter.
Whenever the commissioner believes, from evidence satisfactory to him or her, that a person is violating or about to violate the provisions of this article, the commissioner may cause a complaint to be filed in the circuit court of Kanawha County for restitution and to enjoin and restrain the person from continuing the violation or engaging in or doing any act in furtherance thereof. The court shall have jurisdiction of the proceeding and shall have the power to make and enter an order of judgment awarding such preliminary or final injunctive relief and restitution as in its judgment is proper.
This article shall be liberally construed and applied to promote its underlying purposes which include:(a) Protecting persons seeking insurance in this state;(b) Permitting surplus lines insurance to be placed with reputable and financially sound nonadmitted insurers and exported from this state pursuant to this article;(c) Establishing a system of regulation which will permit orderly access to surplus lines insurance in this state and encourage admitted insurers to provide new and innovative types of insurance available to consumers in this state; (d) Providing a system through which persons may purchase insurance other than surplus lines insurance, from nonadmitted insurers pursuant to this article;(e) Protecting revenues of this state; and(f) Providing a system pursuant to this article which subjects nonadmitted insurance activities in this state to the jurisdiction of the Insurance Commissioner and state and federal courts in suits by or on behalf of the state.
(a) Any act of transacting insurance by an unauthorized person or a nonadmitted insurer is equivalent to and shall constitute an irrevocable appointment by the unauthorized person or insurer, binding upon it, its executor or administrator, or successor in interest of the Secretary of State or his or her successor in office, to be the true and lawful attorney of the unauthorized person or insurer upon whom may be served all lawful process in any action, suit or proceeding in any court by the commissioner or by the state and upon whom may be served any notice, order, pleading or process in any proceeding before the commissioner and which arises out of transacting insurance in this state by the unauthorized person or insurer. Any act of transacting insurance in this state by a nonadmitted insurer shall signify its acceptance of its agreement that any lawful process in such court action, suit or proceeding and any notice, order, pleading or process in such administrative proceeding before the commissioner so served shall be of the same legal force and validity as personal service of process in this state upon the unauthorized person or insurer.(b) Service of process in the action shall be made by delivering to and leaving with the Secretary of State, or some person in apparent charge of the office, two copies thereof and by payment to the Secretary of State of the fee prescribed by law. Service upon the Secretary of State as attorney shall be service upon the principal.(c) The Secretary of State shall forward by certified mail one of the copies of the process or notice, order, pleading or process in proceedings before the commissioner to the defendant in the court proceeding or to whom the notice, order, pleading or process in the administrative proceeding is addressed or directed at its last known principal place of business and shall keep a record of all process so served on the commissioner which shall show the day and hour of service. Service is sufficient, provided:(1) Notice of service and a copy of the court process or the notice, order, pleading or process in the administrative proceeding are sent within fifteen days by certified mail by the plaintiff or the plaintiff's attorney in the court proceeding or by the commissioner in the administrative proceeding to the defendant in the court proceeding or to whom the notice, order, pleading or process in the administrative proceeding is addressed or directed at the last known principal place of business of the defendant in the court or administrative proceeding; and(2) The defendant's receipt or receipts issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person or insurer to whom the letter is addressed, and an affidavit of the plaintiff or the plaintiff's attorney in a court proceeding or of the commissioner in an administrative proceeding, showing compliance are filed with the clerk of the court in which the action, suit or proceeding is pending or with the commissioner in administrative proceedings, on or before the date the defendant in the court or administrative proceeding is required to appear or respond, or within such further time as the court or commissioner may allow.(d) A plaintiff shall not be entitled to a judgment or a determination by default in any court or administrative proceeding in which court process or notice, order, pleading or process in proceedings before the commissioner is served under this section until the expiration of forty-five days from the date of filing of the affidavit of compliance.(e) Nothing in this section shall limit or affect the right to serve any process, notice, order or demand upon any person or insurer in any other manner now or hereafter permitted by law.(f) Each nonadmitted insurer assuming insurance in this state, or relative to property, risks or exposures located or to be performed in this state, shall be deemed to have subjected itself to this article.(g) Notwithstanding conditions or stipulations in the policy or contract, a nonadmitted insurer may be sued upon any cause of action arising in this state, or relative to property, risks or exposures located or to be performed in this state, under any insurance contract made by it.(h) Notwithstanding conditions or stipulations in the policy or contract, a nonadmitted insurer subject to arbitration or other alternative dispute resolution mechanism arising in this state or relative to property, risks or exposures located or to be performed in this state under an insurance contract made by it shall conduct the arbitration or other alternative dispute resolution mechanism in this state.(i) A policy or contract issued by the nonadmitted insurer or one which is otherwise valid and contains a condition or provision not in compliance with the requirements of this article is not thereby rendered invalid but shall be construed and applied in accordance with the conditions and provisions which would have applied had the policy or contract been issued or delivered in full compliance with this article.
(a) Before any nonadmitted insurer files or causes to be filed any pleading in any court action, suit or proceeding or in any notice, order, pleading or process in an administrative proceeding before the commissioner instituted against the person or insurer, by services made as provided in this article, the insurer shall either:(1) File with the clerk of the court in which the action, suit or proceeding is pending, or with the commissioner of insurance in administrative proceedings before the commissioner a bond with good and sufficient sureties, to be approved by the clerk or commissioner in an amount to be fixed by the court or commissioner sufficient to secure the payment of any final judgment which may be rendered in the action or administrative proceeding; or(2) Procure a certificate of authority to transact the business of insurance in this state. In considering the application of an insurer for a certificate of authority, for the purposes of this paragraph the commissioner need not assert the provisions of section sixteen, article three of this chapter against the insurer with respect to its application if the commissioner determines that the company would otherwise comply with the requirements for a certificate of authority.(b) The commissioner of insurance, in any administrative proceeding in which service is made as provided in this article, may in the commissioner's discretion, order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with the provisions of subsection (a) of this section and to defend the action.(c) Nothing in subsection (a) of this section shall be construed to prevent a nonadmitted insurer from filing a motion to quash a writ or to set aside service thereof made in the manner provided in this article, on the ground that the nonadmitted insurer has not done any of the acts enumerated in the pleadings.(d) Nothing in subsection (a) of this section shall apply to placements of insurance which were lawful in the state in which the placement took place and which were not unlawful placements under the laws of this state. Without limiting the generality of the foregoing, nothing in subsection (a) of this section shall apply to a placement made pursuant to section five of this article.
(a) The commissioner shall have the authority to proceed in the courts of this state or any other United States jurisdiction to enforce an order or decision in any court proceeding or in any administrative proceeding before the commissioner of insurance.(b) Filing and status of foreign decrees.A copy of a foreign decree authenticated in accordance with the statutes of this state may be filed in the office of the clerk of any circuit court of this state. The clerk, upon verifying with the commissioner that the decree or order qualifies as a "foreign decree" shall treat the foreign decree in the same manner as a decree of a circuit court of this state. A foreign decree so filed has the same effect and shall be deemed a decree of a circuit court of this state, and is subject to the same procedures, defenses and proceedings for reopening, vacating or staying as a decree of a circuit court of this state and may be enforced or satisfied in like manner.(c) Notice of filing.(1) At the time of the filing of the foreign decree, the plaintiff shall make and file with the clerk of the court an affidavit setting forth the name and last known post-office address of the defendant.(2) Promptly upon the filing of the foreign decree and the affidavit, the clerk shall mail notice of the filing of the foreign decree to the defendant at the address given and to the commissioner of this state and shall make a note of the mailing in the docket. In addition, the plaintiff may mail a notice of the filing of the foreign decree to the defendant and to the commissioner of this state and may file proof of mailing with the clerk. Lack of mailing notice of filing by the clerk shall not affect the enforcement proceedings if proof of mailing by the plaintiff has been filed.(3) No execution or other process for enforcement of a foreign decree filed hereunder may issue until thirty days after the date the decree is filed.(d) Stay of the foreign decree.(1) If the defendant shows the circuit court that an appeal from the foreign decree is pending or will be taken, or that a stay of execution has been granted, the court shall stay enforcement of the foreign decree until the appeal is concluded, the time for appeal expires, or the stay of execution expires or is vacated, upon proof that the defendant has furnished the security for the satisfaction of the decree required by the state in which it was rendered.(2) If the defendant shows the circuit court any ground upon which enforcement of a decree of any circuit court of this state would be stayed, the court shall stay enforcement of the foreign decree for an appropriate period, upon requiring the same security for satisfaction of the decree which is required in this state.(e) It shall be the policy of this state that the Insurance Commissioner shall cooperate with regulatory officials in other United States jurisdictions to the greatest degree reasonably practicable in enforcing lawfully issued orders of such other officials subject to public policy and the insurance laws of the state. Without limiting the generality of the foregoing, the commissioner may enforce an order lawfully issued by other officials provided the order does not violate the laws or public policy of this state.
A nonadmitted insurer may not commence or maintain an action in law or equity, including arbitration or any other dispute resolution mechanism, in this state to enforce any right arising out of any insurance transaction except with respect to:(a) Claims under policies lawfully written in this state;(b) Liquidation of assets and liabilities of the insurer (other than collection of new premium), resulting from its former authorized operations in this state;(c) Transactions subsequent to issuance of a policy not covering domestic risks at the time of issuance, and lawfully procured under the laws of the jurisdiction where the transaction took place;(d) Surplus lines insurance placed by a licensee under authority of section eight of this article;(e) Reinsurance placed under the authority of article thirty-eight of this chapter;(f) The continuation and servicing of life insurance, health insurance policies or annuity contracts remaining in force as to residents of this state where the formerly authorized insurer has withdrawn from the state and is not transacting new insurance in the state;(g) Servicing of policies written by an admitted insurer in a state to which the insured has moved but in which the company does not have a certificate of authority until the term expires; (h) Claims under policies covering wet marine and transportation insurance;(i) Placements of insurance which were lawful in the jurisdiction in which the transaction took place and which were not unlawful placements under the laws of this state.
Surplus lines insurance shall be countersigned by a duly licensed resident surplus lines licensee: Provided, That the countersignature requirements imposed by this section shall no longer be required for any surplus line of insurance executed, issued or delivered after December 31, 2004.
The commissioner shall receive the following fees from surplus lines licensees: For letters of certification, $5; for letters of clearance, $10; for duplicate license, $5. All fees and moneys so collected shall be used for the purposes set forth in section thirteen, article three of this chapter.
No surplus lines licensee may knowingly place any coverage in an insolvent insurer.
A surplus lines licensee shall notify the commissioner of any change in his or her mailing address within thirty days of such change. The commissioner shall maintain the mailing address of each surplus lines licensee on file. Failure to timely inform the Insurance Commissioner of a change in legal name or address may result in a penalty pursuant to section twenty-four, article twelve of this chapter.
If any provisions of this article, or the application of the provision to any person or circumstance, shall be held invalid, the remainder of the article and the application of the provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.
(a) When conducting any hearing authorized by section thirteen, article two of this chapter which concerns any surplus lines licensee, the commissioner shall give notice of the hearing and the matters to be determined therein to the surplus lines licensee by certified mail, return receipt requested, sent to the last address filed by a person or entity pursuant to section eight of this article.(b) If a surplus lines licensee fails to appear at the hearing, the hearing may proceed, at which time the commissioner shall establish that notice was sent to the person pursuant to this section prior to the entry of any orders adverse to the interests of a surplus lines licensee based upon the allegations against the person which were set forth in the notice of hearing. Certified copies of all orders entered by the commissioner shall be sent to the person affected therein by certified mail, return receipt requested, at the last address filed by a person with the commissioner.(c) A surplus lines licensee who fails to appear at a hearing of which notice has been provided pursuant to this section, and who has had an adverse order entered by the commissioner against them as a result of their failure to so appear may, within thirty calendar days of the entry of an adverse order, file with the commissioner a written verified appeal with any relevant documents attached thereto, which demonstrates good and reasonable cause for the person's failure to appear, and may request reconsideration of the matter and a new hearing. The commissioner in his or her discretion, and upon a finding that the surplus lines licensee has shown good and reasonable cause for his or her failure to appear, shall issue an order that the previous order be rescinded, that the matter be reconsidered, and that a new hearing be set.(d) Orders entered pursuant to this section are subject to the judicial review provisions of section fourteen, article two of this chapter.
As used in this article:(a) "Admitted insurer" means an insurer licensed to do an insurance business in this state.(b) "Business entity" means a corporation, association, partnership, limited liability company, or other legal entity.(c) "Capital", as used in the financial requirements of section five of this article, means funds paid in for stock or other evidence of ownership.(d) "Commissioner" means the Insurance Commissioner of West Virginia, or the commissioner's deputies or staff, or the commissioner, director or superintendent of insurance in any other state.(e) "Eligible surplus lines insurer" means a nonadmitted insurer with which a surplus lines licensee may place surplus lines insurance pursuant to section five of this article.(f) "Exempt commercial purchaser" means any person purchasing commercial insurance that, at the time of placement, employs or retains a qualified risk manager to negotiate insurance coverage, has paid aggregate nationwide commercial property and casualty insurance premiums in excess of $100,000 in the immediately preceding twelve months, and meets at least one of the following criteria:(1) Has a net worth in excess of $20 million;(2) Generates annual revenues in excess of $50 million;(3) Employs more than five hundred full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than one thousand employees in the aggregate;(4) Is a not-for-profit organization or public entity generating annual budgeted expenditures of at least $30 million; or (5) Is a municipality with a population in excess of fifty thousand persons: Provided, That on January 1, 2015 and every five years thereafter, the amounts in subdivisions (1), (2) and (4) of this subsection shall be adjusted to reflect the percentage change for such five-year period in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the federal Department of Labor.(g) "Export" means to place surplus lines insurance with a nonadmitted insurer.(h) "Foreign decree" means any decree or order in equity of a court located in any United States jurisdiction, including a federal court of the United States, against any person engaging in the transaction of insurance in this state.(i) "Home state" means, with respect to an insured:(1) The state in which an insured maintains its principal place of business or, in the case of an individual, the individual's principal residence; or(2) If one-hundred percent of the insured risk is located out of the state referred to in subdivision one of this subsection, the state to which the greatest percentage of the insured's taxable premium for that insurance contract is allocated.(j) "Individual" means any private or natural person as distinguished from a partnership, corporation, limited liability company or other legal entity.(k) "Insurance" means any of the lines of authority in section ten, article one of this chapter.(l) "Insurance producer" means a person required to be licensed under the laws of this state to sell, solicit or negotiate insurance. Wherever the word "agent" appears in this chapter, it shall mean an individual insurance producer.(m) "Insurer" means any person, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyds insurer, insurance exchange syndicate, fraternal benefit society, and any other legal entity engaged in the business of making contracts of insurance under section two, article one of this chapter.(n) "Kind of insurance" means one of the types of insurance required to be reported in the annual statement which must be filed with the commissioner by admitted insurers.(o) "License" means a document issued by this state's Insurance Commissioner authorizing an individual to act as a surplus lines licensee for the lines of authority specified in the document. The license itself does not create any authority, actual, apparent or inherent, in the holder to represent or commit an insurer.(p) "Nonadmitted insurer" means an insurer not licensed to do an insurance business in this state.(q) "Nonadmitted and Reinsurance Reform Act of 2010" or "NRRA" means those provisions incorporated as Subtitle B of the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-517.(r) "Nonadmitted Insurance Multi-State Agreement" or "NIMA" means the model agreement adopted by the National Association of Insurance Commissioners on December 16, 2010, to facilitate the collection, allocation and disbursement of premium taxes attributable to the placement of nonadmitted insurance, provide for uniform methods of allocation and reporting among nonadmitted insurance risk classifications, and share information among states relating to nonadmitted insurance premium taxes; such term includes the agreements' allocation tables and any changes made thereto in response to changes to the laws of signatory states.(s) "Person" means any natural person or other entity, including, but not limited to, individuals, partnerships, associations, trusts or corporations.(t) "Policy" or "contract" means any contract of insurance including, but not limited to, annuities, indemnity, medical or hospital service, workers' compensation, fidelity or suretyship.(u) " Signatory state" means a state that has entered into NIMA or a similar allocation procedure with this state.(v) "Surplus", as used in the financial requirements of section five of this article, means funds over and above liabilities and capital of the company for the protection of policyholders.(w) "Surplus lines insurance" means any property and casualty insurance in this state on properties, risks or exposures, located or to be performed in this state, permitted to be placed through a surplus lines licensee with a nonadmitted insurer eligible to accept such insurance, pursuant to section seven of this article. Wherever the term "excess line" appears in this chapter, it shall mean surplus lines insurance.(x) "Surplus lines licensee" means an individual licensed under section five of this article to place insurance on properties, risks or exposures located or to be performed in this state with nonadmitted insurers eligible to accept such insurance. Wherever the term "excess line broker" appears in this chapter, it shall mean surplus lines licensee.(y) "Transaction of insurance"  (1) For purposes of this article, any of the following acts in this state effected by mail or otherwise by a nonadmitted insurer or by any person acting with the actual or apparent authority of the insurer, on behalf of the insurer, is deemed to constitute the transaction of an insurance business in or from this state:(A) The making of or proposing to make, as an insurer, an insurance contract;(B) The making of or proposing to make, as guarantor or surety, any contract of guaranty or suretyship as a vocation and not merely incidental to any other legitimate business or activity of the guarantor or surety;(C) The taking or receiving of an application for insurance;(D) The receiving or collection of any premium, commission, membership fees, assessments, dues or other consideration for insurance or any part thereof;(E) The issuance or delivery in this state of contracts of insurance to residents of this state or to persons authorized to do business in this state;(F) The solicitation, negotiation, procurement or effectuation of insurance or renewals thereof;(G) The dissemination of information as to coverage or rates, or forwarding of applications, or delivery of policies or contracts, or inspection of risks, the fixing of rates or investigation or adjustment of claims or losses or the transaction of matters subsequent to effectuation of the contract and arising out of it, or any other manner of representing or assisting a person or insurer in the transaction of risks with respect to properties, risks or exposures located or to be performed in this state;(H) The transaction of any kind of insurance business specifically recognized as transacting an insurance business within the meaning of the statutes relating to insurance;(I) The offering of insurance or the transacting of insurance business; or(J) Offering an agreement or contract which purports to alter, amend or void coverage of an insurance contract.(2) The provisions of this subsection shall not operate to prohibit employees, officers, directors or partners of a commercial insured from acting in the capacity of an insurance manager or buyer in placing insurance on behalf of the employer, provided that the person's compensation is not based on buying insurance.(3) The venue of an act committed by mail is at the point where the matter transmitted by mail is delivered or issued for delivery or takes effect.(z) "Line of insurance" means coverage afforded under the particular policy that is being placed.(aa) "Model allocation schedule and reporting form" means the current version of the NAIC model allocation schedule and reporting form for surplus lines insurers.(bb) "Wet marine and transportation insurance" means:(1) Insurance upon vessels, crafts, hulls and other interests in them or with relation to them;(2) Insurance of marine builder's risks, marine war risks and contracts of marine protection and indemnity insurance;(3) Insurance of freight and disbursements pertaining to a subject of insurance within the scope of this subsection; and(4) Insurance of personal property and interests therein, in the course of exportation from or importation into any country, or in the course of transportation coastwise or on inland waters, including transportation by land, water or air from point of origin to final destination, in connection with any and all risks or perils of navigation, transit or transportation, and while being prepared for and while awaiting shipment, and during any incidental delays, transshipment, or reshipment; provided, however, that insurance of personal property and interests therein shall not be considered wet marine and transportation insurance if the property has:(A) Been transported solely by land; or(B) Reached its final destination as specified in the bill of lading or other shipping document; or(C) The insured no longer has an insurable interest in the property.
(a) An insurer shall not engage in the transaction of insurance unless authorized by a license in force pursuant to the laws of this state, or exempted by this article or otherwise exempted by the insurance laws of this state.(b) A person shall not engage in a transaction of insurance or shall in this state directly or indirectly act as agent for, or otherwise represent or aid on behalf of another, a nonadmitted insurer in the solicitation, negotiation, procurement or effectuation of insurance, or renewals thereof, or forwarding of applications, or delivery of policies or contracts or inspection of risks, or fixing of rates, or investigation or adjustment of claims or losses, or collection or forwarding of premiums, or in any other manner represent or assist the insurer in the transaction of insurance.(c) A person who represents or aids a nonadmitted insurer in violation of this section shall be subject to the penalties set forth in section eighteen of this article. No insurance contract entered into in violation of this section shall preclude the insured from enforcing his rights under the contract in accordance with the terms and provisions of the contract of insurance and the laws of this state, to the same degree those rights would have been enforceable had the contract been lawfully procured.(d) If the nonadmitted insurer fails to pay a claim or loss within the provisions of the insurance contract and the laws of this state, a person who assisted or in any manner aided directly or indirectly in the procurement of the insurance contract, shall be liable to the insured for the full amount under the provisions of the insurance contract.(e) This section shall not apply to a person, properly licensed as an agent in this state who, for a fee and pursuant to a written agreement, is engaged solely to offer to the insured advice, counsel or opinion, or service with respect to the benefits, advantages or disadvantages promised under any proposed or in-force policy of insurance if the person does not, directly or indirectly, participate in the solicitation, negotiation or procurement of insurance on behalf of the insured;(f) The insurance must be procured only through an individual licensed surplus lines licensee;(g) This section shall not apply to a person acting in material compliance with the insurance laws of this state in the placement of the types of insurance identified in subdivisions (1), (2), (3) and (4) below:(1) Surplus lines insurance as provided in section five of this article. For the purposes of this subsection, a licensee shall be deemed to be in material compliance with the insurance laws of this state, unless the licensee committed a violation of section five of this article that proximately caused loss to the insured;(2) Transactions for which a license to do business is not required of an insurer under the insurance laws of this state;(3) Reinsurance provided that, unless the commissioner waives the requirements of this subsection:(A) The assuming insurer is authorized to do an insurance or reinsurance business by its domiciliary jurisdiction and is authorized to write the type of reinsurance in its domiciliary jurisdiction; and(B) The assuming insurer satisfies all legal requirements for such reinsurance in the state of domicile of the ceding insurer;(4) The property and operation of railroads or aircraft engaged in interstate or foreign commerce, wet marine and transportation insurance;(5) Transactions subsequent to issuance of a policy not covering properties, risks or exposures located, or to be performed in this state at the time of issuance, and lawfully solicited, written or delivered outside this state.
(a) The placement of surplus lines insurance is subject to this section only if this state is the insured's home state.(b) Surplus lines insurance may be placed by a surplus lines licensee if:(1) Each insurer is an eligible surplus lines insurer; and(2) Each insurer is authorized to write the type of insurance in its domiciliary jurisdiction; and(3) The full amount or line of insurance cannot be obtained from insurers who are admitted to do business in this state. The full amount or type of insurance may be procured from eligible surplus lines insurers, provided that a diligent search is made by the individual insurance producer among the insurers who are admitted to transact and are actually writing the particular type of insurance in this state if any are writing it: Provided, That such a search is not required when the licensee is seeking to procure or place nonadmitted insurance for an exempt commercial purchaser if the licensee disclosed to such purchaser that such insurance may or may not be available from the admitted market that may provide greater protection with more regulatory oversight and that such purchaser has subsequently requested in writing that the licensee procure or place such insurance from a nonadmitted insurer; and(4) All other requirements of this article are met.(c) Subject to subdivision (3), subsection (b) of this section, a surplus lines licensee may place any coverage with a nonadmitted insurer eligible to accept the insurance, unless specifically prohibited by the laws of this state.(d) A surplus lines licensee shall not place coverage with a nonadmitted insurer, unless, at the time of placement, the surplus lines licensee has determined that the nonadmitted insurer:(1) Has established satisfactory evidence of good repute and financial integrity; and(2) Qualifies under one of the following paragraphs:(A) Has capital and surplus or its equivalent under the laws of its domiciliary jurisdiction which equals the greater of:(i)(I) The minimum capital and surplus requirements under the law of this state; or(II) $15 million;(ii) The requirements of subparagraph (i), paragraph (A) of this subdivision may be satisfied by an insurer's possessing less than the minimum capital and surplus upon an affirmative finding of acceptability by the commissioner. The finding shall be based upon such factors as quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability and company record and reputation within the industry. In no event shall the commissioner make an affirmative finding of acceptability when the nonadmitted insurer's capital and surplus is less than $4,500,000; or(B) In the case of an insurance exchange created by the laws of a state other than this state:(i) The syndicates of the exchange shall maintain under terms acceptable to the commissioner capital and surplus, or its equivalent under the laws of its domiciliary jurisdiction, of not less than $75 million in the aggregate; and(ii) The exchange shall maintain under terms acceptable to the commissioner not less than fifty percent of the policyholder surplus of each syndicate in a custodial account accessible to the exchange or its domiciliary commissioner in the event of insolvency or impairment of the individual syndicate; and(iii) In addition, each individual syndicate to be eligible to accept surplus lines insurance placements from this state shall meet either of the following requirements:(I) For insurance exchanges which maintain funds in an amount of not less than $15 million for the protection of all exchange policyholders, the syndicate shall maintain under terms acceptable to the commissioner minimum capital and surplus, or its equivalent under the laws of the domiciliary jurisdiction, of not less than $5 million; or(II) For insurance exchanges which do not maintain funds in an amount of not less than $15 million for the protection of all exchange policyholders, the syndicate shall maintain under terms acceptable to the commissioner minimum capital and surplus, or its equivalent under the laws of its domiciliary jurisdiction, of not less than the minimum capital and surplus requirements under the laws of its domiciliary jurisdiction or $15 million, whichever is greater; or(C) In the case of a Lloyd's plan or other similar group of insurers, which consists of unincorporated individual insurers, or a combination of both unincorporated and incorporated insurers:(i) The plan or group maintains a trust fund that shall consist of a trusteed account representing the group's liabilities attributable to business written in the United States; and(ii) In addition, the group shall establish and maintain in trust a surplus in the amount of $100 million; which shall be available for the benefit of United States surplus lines policyholders of any member of the group.(iii) The incorporated members of the group shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of solvency regulation and control by the group's domiciliary regulator as are the unincorporated members.(iv) The trust funds shall be maintained in an irrevocable trust account in the United States in a qualified financial institution, consisting of cash, securities, letters of credit or investments of substantially the same character and quality as those which are eligible investments for the capital and statutory reserves of admitted insurers to write like kinds of insurance in this state and, in addition, the trust required by subparagraph (ii) of this subdivision shall satisfy the requirements of the standard trust agreement required for listing with the National Association of Insurance Commissioners (NAIC) International Insurers Department or any successor thereto; or(D) In the case of a group of incorporated insurers under common administration, which has continuously transacted an insurance business outside the United States for at least three years immediately prior to this time, and which submits to this state's authority to examine its books and records and bears the expense of the examination:(i) The group shall maintain an aggregate policyholders' surplus of $10 billion; and(ii) The group shall maintain in trust a surplus in the amount of $10 billion; which shall be available for the benefit of United States surplus lines policyholders of any member of the group; and(iii) Each insurer shall individually maintain capital and surplus of not less than $25 million per company.(iv) The trust funds shall satisfy the requirements of the standard trust agreement requirement for listing with the NAIC International Insurers Department or any successor thereto, and shall be maintained in an irrevocable trust account in the United States in a qualified financial institution, and shall consist of cash, securities, letters of credit or investments of substantially the same character and quality as those which are eligible investments for the capital and statutory reserves of admitted insurers to write like kinds of insurance in this state.(v) Additionally, each member of the group shall make available to the commissioner an annual certification of the member's solvency by the member's domiciliary regulator and its independent public accountant; or(E) Except for an exchange or plan complying with paragraph (B), (C) or (D) of this subdivision, an insurer not domiciled in one of the United States or its territories shall satisfy the capital and surplus requirements of paragraph (A), subdivision (2), subsection (d) of this section and shall have in force a trust fund of not less than the greater of:(i) $5,400,000; or(ii) Thirty percent of the United States surplus lines gross liabilities, excluding aviation, wet marine and transportation insurance liabilities, not to exceed $60 million, to be determined annually on the basis of accounting practices and procedures substantially equivalent to those promulgated by this state, as of December 31 next preceding the date of determination, where:(I) The liabilities are maintained in an irrevocable trust account in the United States in a qualified financial institution, on behalf of U.S. policyholders consisting of cash, securities, letters of credit or other investments of substantially the same character and quality as those which are eligible investments pursuant to article eight of this chapter for the capital and statutory reserves of admitted insurers to write like kinds of insurance in this state. The trust fund, which shall be included in any calculation of capital and surplus or its equivalent, shall satisfy the requirements of the Standard Trust Agreement required for listing with the NAIC International Insurers Department or any successor thereto; and(II) The insurer may request approval from the commissioner to use the trust fund to pay valid surplus lines claims; Provided, however, That the balance of the trust fund is never less than the greater of $5,400,000 or thirty percent of the insurer's current gross U.S. surplus lines liabilities, excluding aviation, wet marine and transportation insurance liabilities; and(III) In calculating the trust fund amount required by this subsection, credit shall be given for surplus lines deposits separately required and maintained for a particular state or U.S. territory, not to exceed the amount of the insurer's loss and loss adjustment reserves in the particular state or territory;(F) An insurer or group of insurers meeting the requirements to do a surplus lines business in this state at the effective date of this law shall have two years from the date of enactment to meet the requirements of paragraph (E) of this subdivision, as follows:YearFollowingEnactmentTrust Fund Requirement115% of U.S. surplus lines liabilities, excluding aviation, wet marine and transportation insurance, with a maximum of $30 million230% of U.S. surplus lines liabilities, excluding aviation, wet marine and transportation insurance, with a maximum of $60 million(G) The commissioner shall have the authority to adjust, in response to inflation, the trust fund amounts required by paragraph (E) of this subdivision.(3) In addition to all of the other requirements of this subsection, an insurer not domiciled in the United States or its territories shall be listed on the NAIC's quarterly listing of alien insurers. The commissioner may waive the requirement in this subdivision or the requirements of subparagraph (ii), paragraph (E), subdivision (2), subsection (d) of this section may be satisfied by an insurer's possessing less than the trust fund amount specified in subparagraph (ii), paragraph (E), subdivision (2), subsection (d) of this section upon an affirmative finding of acceptability by the commissioner if the commissioner is satisfied that the placement of insurance with the insurer is necessary and will not be detrimental to the public and the policyholder. In determining whether business may be placed with the insurer, the commissioner may consider such factors as:(A) The interests of the public and policyholders;(B) The length of time the insurer has been authorized in its domiciliary jurisdiction and elsewhere;(C) Unavailability of particular coverages from authorized insurers or unauthorized insurers meeting the requirements of this section;(D) The size of the company as measured by its assets, capital and surplus, reserves, premium writings, insurance in force or other appropriate criteria;(E) The kinds of business the company writes, its net exposure and the extent to which the company's business is diversified among several lines of insurance and geographic locations; and(F) The past and projected trend in the size of the company's capital and surplus considering such factors as premium growth, operating history, loss and expense ratios, or other appropriate criteria; and(4) Has caused to be provided to the commissioner a copy of its current annual statement certified by the insurer and an actuarial opinion as to the adequacy of, and methodology used to determine, the insurer's loss reserves. The statement shall be provided at the same time it is provided to the insurer's domicile, but in no event more than eight months after the close of the period reported upon, and shall be certified as a true and correct copy by an accounting or auditing firm licensed in the jurisdiction of the insurer's domicile and certified by a senior officer of the nonadmitted insurer as a true and correct copy of the statement filed with the regulatory authority in the domicile of the nonadmitted insurer. In the case of an insurance exchange qualifying under paragraph (B), subdivision (2) of this subsection, the statement may be an aggregate combined statement of all underwriting syndicates operating during the period reported; and(5) In addition to meeting the requirements in subdivisions (1) to (4) of this subsection an insurer shall be an eligible surplus lines insurer if it appears on the most recent list of eligible surplus lines insurers published by the commissioner from time to time but at least annually. Nothing in this subdivision shall require the commissioner to place or maintain the name of any nonadmitted insurer on the list of eligible surplus lines insurers.(6) Notwithstanding subsection (a) of this section, only that portion of any risk eligible for export for which the full amount of coverage is not procurable from listed eligible surplus lines insurers may be placed with any other nonadmitted insurer which does not appear on the list of eligible surplus lines insurers published by the commissioner pursuant to subdivision (5) of this subsection but nonetheless meets the requirements set forth in subdivisions (1) and (2), subsection (d) of this section and any regulations of the commissioner. The surplus lines licensee seeking to provide coverage through an unlisted nonadmitted insurer shall make a filing specifying the amounts and percentages of each risk to be placed, and naming the nonadmitted insurers with which placement is intended. Within thirty days after placing the coverage, the surplus lines licensee shall also send written notice to the insured that the insurance, or a portion thereof, has been placed with the nonadmitted insurer.(e) Insurance procured under this section shall be valid and enforceable as to all parties.
(a) The commissioner may declare a surplus lines insurer ineligible if the commissioner has reason to believe that:(1) Is in unsound financial condition or has acted in an untrustworthy manner;(2) No longer meets standards set forth in subsection (c) of this section;(3) Has willfully violated the laws of this state; or(4) Does not conduct a proper claims practice;(b) The commissioner shall promptly mail notice of all such declarations to each surplus lines licensee.
The commissioner may declare a surplus lines insurer ineligible for committing any violation of the provisions of article ten-e, chapter thirty-eight of this code.
(a) In addition to the full amount of gross premiums charged by the insurer for the insurance, every person licensed pursuant to section eight of this article shall collect and pay to the commissioner a sum equal to four and fifty-five one-hundredths percent of the gross premiums and gross fees charged, less any return premiums, for surplus lines insurance provided by the licensee pursuant to the license. Where the insurance covers properties, risks or exposures located or to be performed both in and out of this state and this state is the insured's home state, the sum payable shall be computed on that portion of the gross premiums allocated to this state, plus an amount equal to the portion of the gross premiums allocated to other states or territories on the basis of the tax rates and fees applicable to properties, risks or exposures located or to be performed outside of this state, and less the amount of gross premiums allocated to this state and returned to the insured due to cancellation of policy: Provided, That the surcharge imposed by section thirty-three, article three of this chapter on surplus lines policies shall no longer be effective with respect to premium attributable to coverage under such policies for periods after June 30, 2011: Provided, however, That twelve per cent of taxes collected under this subsection with respect to premium attributable to coverage under such policies after June 30, 2011, shall be disbursed and distributed in accordance with subsection (d), section thirty-three, article three of this chapter and eighty-eight per cent in accordance with subdivision two, subsection (f) of this section. The tax on any portion of the premium unearned at termination of insurance having been credited by the state to the licensee shall be returned to the policyholder directly by the surplus lines licensee or through the producing broker, if any.(b) The individual insurance producer may not:(1) Pay directly or indirectly the tax or any portion thereof, either as an inducement to the policyholder to purchase the insurance or for any other reason; or(2) Rebate all or part of the tax or the surplus lines licensee's commission, either as an inducement to the policyholder to purchase the insurance or for any reason.(c) The surplus lines licensee may charge the prospective policyholder a fee for the cost of underwriting, issuing, processing, inspecting, service or auditing the policy for placement with the surplus lines insurer if:(1) The service is required by the surplus lines insurer;(2) The service is actually provided by the individual insurance producer or the cost of the service is actually incurred by the surplus lines licensee; and(3) The provision or cost of the service is reasonable, documented and verifiable.(d) The surplus lines licensee shall make a clear and conspicuous written disclosure to the policyholder of:(1) The total amount of premium for the policy;(2) Any fee charged;(3) The total amount of any fee charged; and(4) The total amount of tax on the premium and fee.(e) The clear and conspicuous written disclosure required by subdivision (4) of this subsection is subject to the record maintenance requirements of section eight of this article.(f)(1) This tax is imposed for the purpose of providing additional revenue for municipal policemen's and firemen's pension and relief funds and additional revenue for volunteer and part-volunteer fire companies and departments. This tax is required to be paid and remitted, on a calendar year basis and in quarterly estimated installments due and payable on or before the twenty-fifth day of the month succeeding the close of the quarter in which they accrued, except for the fourth quarter, in respect of which taxes shall be due and payable and final computation of actual total liability for the prior calendar year shall be made, less credit for the three quarterly estimated payments prior made, and filed with the annual return to be made on or before March 1 of the succeeding year. Provisions of this chapter relating to the levy, imposition and collection of the regular premium tax are applicable to the levy, imposition and collection of this tax to the extent that the provisions are not in conflict with this section. (2) Except as provided in subsection (a) of this section, all taxes remitted to the commissioner pursuant to subdivision one of this subsection shall be paid by him or her into a special account in the State Treasury, designated Municipal Pensions and Protection Fund, or pursuant to section eighteen-b, article twenty-two, chapter eight of this code, the Municipal Pensions Security Fund, and after appropriation by the Legislature, shall be distributed in accordance with the provisions of subsection (c), section fourteen-d, article three of this chapter. The surplus lines licensee shall return to the policyholder the tax on any unearned portion of the premium returned to the policyholder because of cancellation of policy.(g) In determining the amount of gross premiums taxable in this state for a placement of surplus lines insurance covering properties, risks or exposures only partially located or to be performed in this state, the tax due shall be computed on the portions of the premiums which are attributable to properties, risks or exposures located or to be performed in this state and which relates to the kinds of insurance being placed as determined by reference to an appropriate allocation table.(1) If a policy covers more than one classification:(A) For any portion of the coverage identified by a classification on the allocation schedule, the tax shall be computed by using the allocation schedule for the corresponding portion of the premium;(B) For any portion of the coverage not identified by a classification on the allocation schedule, the tax shall be computed by using an alternative equitable method of allocation for the property or risk;(C) For any portion of the coverage where the premium is indivisible, the tax shall be computed by using the method of allocation which pertains to the classification describing the predominant coverage.(2) If the information provided by the surplus lines licensee is insufficient to substantiate the method of allocation used by the surplus lines licensee, or if the commissioner determines that the licensee's method is incorrect, the commissioner shall determine the equitable and appropriate amount of tax due to this state as follows:(A) By use of the allocation schedule where the risk is appropriately identified in the schedule;(B) Where the allocation schedule does not identify a classification appropriate to the coverage, the commissioner may give significant weight to documented evidence of the underwriting bases and other criteria used by the insurer. The commissioner may also consider other available information to the extent sufficient and relevant, including the percentage of the insured's physical assets in this state, the percentage of the insured's sales in this state, the percentage of income or resources derived from this state, and the amount of premium tax paid to another jurisdiction for the policy.(h) The commissioner is authorized to participate in a clearinghouse established through NIMA or in a similar allocation procedure for the purpose of collecting and disbursing to signatory states any funds collected pursuant to this section that are allocable to properties, risks or exposures located or to be performed outside of this state: Provided, That twelve per cent of any moneys received from a clearinghouse or through a similar allocation procedure is subject to the provisions of subsection (d), section thirty-three, article three of this chapter and eighty-eight per cent of such moneys is subject to the provisions of subdivision (2), subsection (f) of this section: Provided, however, That to the extent other states where portions of the properties, risks or exposures reside have failed to enter into NIMA or a similar allocation procedure with this state, the net premium tax collected shall be retained by this state and shall be disbursed and distributed in the same manner as moneys received through a clearinghouse or similar allocation procedure.(i) Collection of tax.If the tax owed by a surplus lines licensee under this section has been collected and is not paid within the time prescribed, the same shall be recoverable in a suit brought by the commissioner against the surplus lines licensee. The commissioner may charge interest for any unpaid tax, fee, financial assessment or penalty, or portion thereof: Provided, That interest may not be charged on interest. Interest shall be calculated using the annual rates which are established by the Tax Commissioner pursuant to section seventeen-a of article ten, chapter eleven of this code and shall accrue daily.
(a) No person shall procure a contract of surplus lines insurance with a nonadmitted insurer for an insured whose home state is West Virginia unless the person possesses a current surplus lines insurance license issued by the commissioner.(b) The commissioner may issue a surplus lines license to a qualified holder of a current property and casualty individual insurance producer's license but only when the individual insurance producer has:(1) Remitted the $200 annual fee to the commissioner, of which all fees so collected are to be used for the purposes set forth in section thirteen, article three of this chapter;(2) Submitted a completed license application on a form supplied by the commissioner;(3) Passed a qualifying examination approved by the commissioner, except that all holders of a license prior to the effective date of this article shall be deemed to have passed such an examination; and(4) If a resident, established and continues to maintain an office in this state.(c) If the commissioner determines that a surplus lines licensee of another state is competent, trustworthy and meets the licensing requirements of this state, the commissioner may, in his or her discretion, issue a nonresident surplus lines license. A license shall not be issued unless the prospective licensee furnishes the commissioner with the name and address of a resident of this state upon whom notices or orders of the commissioner or process affecting the nonresident surplus lines licensee may be served. The licensee shall promptly notify the commissioner in writing of every change in its designated agent for service of process, and the change shall not become effective until acknowledged by the commissioner.(d) Each surplus lines license shall expire at midnight on May 31 next following the date of issuance, and an application for renewal shall be filed before May 1 of each year upon payment of the annual fee and compliance with other provisions of this article. A surplus lines licensee who fails to apply for renewal of the license before May 1 shall pay a penalty of $100 and be subject to penalties provided by law before the license will be renewed.
(a) The commissioner may examine and investigate the business affairs of every individual applying for or holding a surplus lines insurance license to determine whether such individual has been or is engaged in unfair or deceptive practices in any state.(b) The commissioner may place on probation, suspend, revoke or refuse to issue or renew the license of a surplus lines licensee or may levy a civil penalty in a sum not to exceed $5,000 or any combination of actions after notice and hearing pursuant to section thirteen, article two of this chapter upon one or more of the following grounds:(1) Removal of the resident surplus lines licensee's office from this state;(2) Removal of the resident surplus lines licensee's office accounts and records from this state during the period during which the accounts and records are required to be maintained under section sixteen of this article;(3) Closing of the surplus lines licensee's office for a period of more than thirty business days, unless permission is granted by the commissioner;(4) Failure to make and file required reports;(5) Failure to transmit required tax on surplus lines premiums to this state or a reciprocal state to which a tax is owing;(6) Violation of any provision of this article; or(7) For any cause for which an insurance license could be denied, revoked, suspended or renewal refused pursuant to section twenty-four, article twelve of this chapter.
This article applies to life insurance (including annuities), other than reinsurance and group life insurance (including group annuities); except that sections sixteen (contestability as to excluded or restricted coverage), twenty-five (limitation of liability), twenty-six (incontestability after reinstatement), twenty-nine (dual pay policies), thirty (standard nonforfeiture law) and sections thirty-one to forty-six, inclusive (which specifically relate only to industrial life insurance), shall be the only sections of this article which apply to industrial life insurance.
There shall be a table showing in figures the loan value and the options available under the policy each year upon default in premium payments, during the first twenty years or during the term of the policy, whichever is shorter.
In cash the policy provides that the proceeds may be payable in installments which are determinable at issue of the policy, there shall be a table showing the amounts of the guaranteed installments.
There shall be a provision that unless the policy has been surrendered for its cash surrender value or unless the paid-up term insurance, if any, has expired, the policy will be reinstated at any time within three years from the date of premium default upon written application therefor, the production of evidence of insurability satisfactory to the insurer, the payment of all premiums in arrears, and the payment or reinstatement of any other indebtedness to the insurer upon the policy, all with interest at a rate not exceeding six percent per annum compounded annually. However, with respect to policies issued on or after June 1, 1983, the rate of interest on the payment or reinstatement of any other indebtedness to the insurer upon the policy shall be as provided in section eight-a of this article.
There shall be a provision that all premiums after the first shall be payable in advance.
There shall be a provision that when a policy shall become a claim by the death of the insured settlement shall be made upon receipt of due proof of death and, at the insurer's option, surrender of the policy and/or proof of the interest of the claimant. If an insurer shall specify a particular period prior to the expiration of which settlement shall be made, such period shall not exceed two months from the receipt of such proofs.
(a) On and after the effective date of this section, any life insurance company authorized to do business in this state shall pay interest, in accordance with subsection (b) of this section and subject to subsection (c) of this section, on any proceeds that become due upon the death of the insured pursuant to the terms of a life insurance policy other than a credit life insurance policy and that are not paid in accordance with the terms of the contract, upon the date the proceeds become due. For purposes of this section, the proceeds of a life insurance policy become due on the date of death of the insured.(b) Interest payable pursuant to subsection (a) of this section shall be computed from the date of death at the current rate of interest on proceeds left on deposit with the insurer.(c) Subsection (a) of this section does not require, and shall not be construed as requiring, the payment of interest unless the insured was a resident of this state on the date of his or her death.
There shall be a title on the face of the policy, briefly describing the same.
A clause in any policy of life insurance providing that such policy shall be incontestable after a specified period shall preclude only a contest of the validity of the policy, and shall not preclude the assertion at any time of defenses based upon provisions in the policy which exclude or restrict coverage, whether or not such restrictions or exclusions are excepted in such clause.
(a) No annuity or pure endowment contract, other than reversionary annuities, survivorship annuities or group annuities and except as stated herein, shall be delivered or issued for delivery in this state unless it contains in substance each of the provisions specified in sections eighteen to twenty-three, inclusive, of this article. Any of such provisions not applicable to single premium annuities or single premium pure endowment contracts shall not, to that extent, be incorporated therein.(b) This section shall not apply to contracts for deferred annuities included in, or upon the lives of beneficiaries under, life insurance policies.
In an annuity or pure endowment contract, other than a reversionary, survivorship or group annuity, there shall be a provision that there shall be a period of grace of not less than thirty-one days, within which any stipulated payment to the insurer falling due after the first may be made, subject at the option of the insurer to an interest charge thereon at a rate to be specified in the contract but not exceeding six percent per annum for the number of days of grace elapsing before such payment, during which period of grace the contract shall continue in full force; but in case a claim arises under the contract on account of death prior to expiration of the period of grace before the overdue payment to the insurer or the deferred payments of the current contract year, if any, are made, the amount of such payments, with interest on any overdue payments, may be deducted from any amount payable under the contract in settlement.
If any statements, other than those relating to age, sex and identity are required as a condition to issuing an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, and subject to section twenty-one of this article, there shall be a provision that the contract shall be incontestable after it has been in force during the lifetime of the person or of each of the persons as to whom such statements are required, for a period of two years from its date of issue, except for nonpayment of stipulated payments to the insurer; and at the option of the insurer such contract may also except any provisions relative to benefits in the event of disability and any provisions which grant insurance specifically against death by accident or accidental means.
(a) No policy of life insurance other than industrial, group, and pure endowments with or without return of premiums or of premiums and interest, shall be delivered or issued for delivery in West Virginia unless it contains in substance all of the provisions required by sections three to fifteen, inclusive, of this article. This section shall not apply to annuity contracts nor to any provision of a life insurance policy or contract supplemental thereto relating to disability benefits or to additional benefits in the event of death by accident or accidental means.(b) Any of such provisions or portions thereof not applicable to single premium or term policies shall to that extent not be incorporated therein.
In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that the contract shall constitute the entire contract between the parties or, if a copy of the application is endorsed upon or attached to the contract when issued, a provision that the contract and the application therefor shall constitute the entire contract between the parties.
In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that if the age or sex of the person or persons upon whose life or lives the contract is made, or of any of them, has been misstated, the amount payable or benefits accruing under the contract shall be such as the stipulated payment or payments to the insurer would have purchased according to the correct age or sex; and that if the insurer shall make or has made any overpayment or overpayments on account of any such misstatement, the amount thereof with interest at the rate to be specified in the contract but not exceeding six percent per annum, may be charged against the current or next succeeding payment or payments to be made by the insurer under the contract.
If an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, is participating, there shall be a provision that the insurer shall annually ascertain and apportion any divisible surplus accruing on the contract.
In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision that the contract may be reinstated at any time within one year from the default in making stipulated payments to the insurer, unless the cash surrender value has been paid, but all overdue stipulated payments and any indebtedness to the insurer on the contract shall be paid or reinstated with interest thereon at a rate to be specified in the contract but not exceeding six percent per annum payable annually, and in cases where applicable the insurer may also include a requirement of evidence of insurability satisfactory to the insurer.
(a) Except as stated herein, no contract for a reversionary annuity shall be delivered or issued for delivery in this state unless it contains in substance each of the following provisions:(1) Any such reversionary annuity contract shall contain the provisions specified in sections eighteen, nineteen, twenty, twenty-one and twenty-two of this article, except that under said section eighteen the insurer may at its option provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue or deferred payment in lieu of providing for deduction of such payments from an amount payable upon settlement under the contract.(2) In such reversionary annuity contracts there shall be a provision that the contract may be reinstated at any time within three years from the date of default in making stipulated payments to the insurer, upon production of evidence of insurability satisfactory to the insurer, and upon condition that all overdue payments and any indebtedness to the insurer on account of the contract be paid, or, within the limits permitted by the then cash values of the contract, reinstated, with interest as to both payments and indebtedness at a rate to be specified in the contract but not exceeding six percent per annum compounded annually.(b) This section shall not apply to group annuities or to annuities included in life insurance policies, and any of such provisions not applicable to single premium annuities shall not to that extent be incorporated therein.
(a) No policy of life insurance shall be delivered or issued for delivery in this state if it contains a provision which excludes or restricts liability for death caused in a certain specified manner or occurring while the insured has a specified status, except that a policy may contain provisions excluding or restricting coverage as specified therein in the event of death under any one or more of the following circumstances:(1) Death as a result, directly or indirectly, of war, declared or undeclared, or of action by military forces, or of any act or hazard of such war or action, or of service in the military, naval, or air forces or in civilian forces auxiliary thereto, or from any cause while a member of such military, naval, or air forces of any country at war, declared or undeclared, or of any country engaged in such military action;(2) Death as a result of aviation;(3) Death as a result of a specified hazardous occupation or occupations;(4) Death while the insured is outside continental United States and Canada;(5) Death within two years from the date of issue of the policy as a result of suicide, while sane or insane.(b) A policy which contains any exclusion or restriction pursuant to subsection (a) of this section shall also provide that in the event of death under the circumstances to which any such exclusion or restriction is applicable, the insurer will pay an amount not less than a reserve determined according to the commissioners' reserve valuation method upon the basis of the mortality table and interest rate specified in the policy for the calculation of nonforfeiture benefits (or if the policy provides for no such benefits, computed according to a mortality table and interest rate determined by the insurer and specified in the policy) with adjustment for indebtedness or dividend credit.(c) This section shall not apply to group life insurance, accident and sickness insurance, reinsurance, or annuities, or to any provision in a life insurance policy relating to disability benefits or to additional benefits in the event of death by accident or accidental means.(d) Nothing contained in this section shall prohibit any provision which in the opinion of the commissioner is more favorable to the policyholder than a provision permitted by this section.
The reinstatement of any policy of life insurance or annuity contract hereafter delivered or issued for delivery in this state may be contested on account of fraud or misrepresentation of facts material to the reinstatement only for the same period following reinstatement and with the same conditions and exceptions as the policy provides with respect to contestability after original issuance.
Any life insurer shall have the power to hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries, and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy, in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate the funds so held but may hold them as part of its general assets.
In determining the amount due under any life insurance policy heretofore or hereafter issued, deduction may be made of:(a) Any unpaid premiums or installments thereof for the current policy year due under the terms of the policy, and of(b) The amount of principal and accrued interest of any policy loan or other indebtedness against the policy then remaining unpaid.
No life insurance policy shall be delivered or issued for delivery in this state if it provides that on the death of anyone not insured thereunder, the owner or beneficiary of the policy shall receive the payment or granting of anything of value.
There shall be a provision that a grace period of thirty-one days shall be allowed within which the payment of any premium after the first may be made, during which period of grace the policy shall continue in full force; but if a claim arises under the policy during such period of grace before the overdue premium is paid the amount of such premium may be deducted from the policy proceeds.
(a) In the case of policies issued on or after the original operative date of this subsection as set forth in subsection (l) of this section, no policy of life insurance, except as stated in subsection (k) of this section, shall be delivered or issued for delivery in this state unless it shall contain in substance the following provisions, or corresponding provisions which in the opinion of the commissioner are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements hereinafter specified and are essentially in compliance with subsection subsection (j) of this section:(1) That, in the event of default in any premium payment, the insurer will grant, upon proper request not later than sixty days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as may be hereinafter specified. In lieu of such stipulated paid-up nonforfeiture benefit, the insurer may substitute, upon proper request not later than sixty days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits;(2) That, upon surrender of the policy within sixty days after the due date of any premium payment in default after premiums have been paid for at least three full years in the case of ordinary insurance or five full years in the case of industrial insurance, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be hereinafter specified;(3) That a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than sixty days after the due date of the premium in default;(4) That, if the policy shall have become paid up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance the insurer will pay, upon surrender of the policy within thirty days after any policy anniversary, a cash surrender value of such amount as may be hereinafter specified;(5) In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefits, if any, available under the policy on each policy anniversary either during the first twenty policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy; and(6) A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of the state in which the policy is delivered; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the company on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein a statement that such method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefits available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy.Any of the foregoing provisions or portions thereof, not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy.The insurer shall reserve the right to defer the payment of any cash surrender value for a period of six months after demand therefor with surrender of the policy.(b) Computation of Cash Surrender Value. -- (1) Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by subsection (a) of this section, shall be an amount not less than the excess, if any, of the present value, on such anniversary, of the future guaranteed benefits which would have been provided by the policy, including any existing paid-up additions, if there had been no default, over the sum of:(A) The then present value of the adjusted premiums as defined in subsections (d), (e), (f) and (g) of this section, corresponding to premiums which would have fallen due on and after such anniversary; and(B) The amount of any indebtedness to the insurer on the policy: Provided, That for any policy issued on or after the operative date of subsection (g) of this section as defined therein, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in subdivision (1) of this subsection shall be an amount not less than the sum of the cash surrender value for an otherwise similar policy issued at the same age without such rider or supplemental policy provision and the cash surrender value as defined in subdivision (1) of this subsection for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision: Provided, however, That for any family policy issued on or after the operative date of subsection (g) of this section, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse's age seventy-one, the cash surrender value referred to in the first paragraph of this subsection shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such term insurance on the life of the spouse and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such term insurance on the life of the spouse.(2) Any cash surrender value available within thirty days after any policy anniversary under any policy paid up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefit, whether or not required by subsection one, shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided by the policy, including any existing paid-up additions decreased by any indebtedness to the insurer on the policy.(c) Any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due on any policy anniversary shall be such that its present value as of such anniversary shall be at least equal to the cash surrender value then provided for by the policy or, if none is provided for, that cash surrender value which would have been required by this section in the absence of the condition that premiums shall have been paid for at least a specific period.(d) Calculation of Adjusted Premiums. --(1) This subsection does not apply to policies issued on or after the operative date of subsection (g) of this section. Except as provided in subdivision (4) of this subsection, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts stated in the policy as extra premiums to cover impairments or special hazards, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of: (A) The then present value of the future guaranteed benefits provided by the policy;(B) Two percent of the amount of insurance, if the insurance be uniform in amount, or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with duration of the policy;(C) Forty percent of the adjusted premium for the first policy year;(D) Twenty-five percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less. (2) In applying the percentages specified in, no adjusted premium shall be deemed to exceed four percent of the amount of insurance or uniform amount equivalent thereto. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined.(3) In the case of a policy providing an amount of insurance varying with duration of the policy, the equivalent uniform amount for the purpose of this subsection shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy.(4) The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall be equal to: (A) The adjusted premiums for an otherwise similar policy issued at the same age without such term insurance benefits, increased, during the period for which premiums for such term insurance benefits are payable, by;(B) The adjusted premiums for such term insurance; and(C) Paragraphs (A) and (B) of this subdivision being calculated separately and as specified in subdivisions (1), (2) and (3) of this subsection except that, for the purposes of paragraphs (B), (C) and (D), subdivision (1) of this subsection, the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in paragraph (B), subdivision (1) of this subsection shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in paragraph (A), subdivision (4) of this subsection.(5) Except as otherwise provided in subsections (e) and (f) of this section, all adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioners 1941 Standard Ordinary Mortality Table: Provided, That for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than three years younger than the actual age of the insured, and such calculations for all policies of industrial insurance shall be made on the basis of the 1941 Standard Industrial Mortality Table. All calculations shall be made on the basis of the rate of interest, not exceeding three and one-half percent per annum, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits: Provided, however, That in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than one hundred and thirty percent of the rates of mortality according to such applicable table: Provided further, That for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the commissioner.(e) This subsection does not apply to ordinary policies issued on or after the operative date of subsection (g) of this section. In the case of ordinary policies issued on or after the operative date of this subsection, all adjusted premiums and present values referred to in this section shall be calculated on the basis of the Commissioners 1958 Standard Ordinary Mortality Table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits provided that such rate of interest shall not exceed three and one-half percent per annum except that a rate of interest not exceeding four percent per annum may be used for policies issued on or after June 3, 1974 and prior to April 6, 1977, and a rate of interest not exceeding five and one-half percent per annum may be used for policies issued on or after April 6, 1977, except that for any single premium whole life or endowment insurance policy a rate of interest not exceeding six and one-half percent per annum may be used: Provided, That for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six years younger than the actual age of the insured: Provided, however, That in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1958 Extended Term Insurance Table: Provided further, That for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner.After June 3, 1959, any company may file with the commissioner a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1966. After the filing of such notice, then upon such specified date (which shall be the operative date of this subsection for such company), this subsection shall become operative with respect to the ordinary policies thereafter issued by such company. If a company makes no such election, the operative date of this subsection for such company shall be January 1, 1966.(f) This subsection does not apply to industrial policies issued on or after the operative date of subsection (g) of this section. In the case of industrial policies issued on or after the operative date of this subsection, all adjusted premiums and present values referred to in this section shall be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits provided that such rate of interest shall not exceed three and one-half percent per annum except that a rate of interest not exceeding four percent per annum may be used for policies issued on or after June 3, 1974 and prior to April 6, 1977, and a rate of interest not exceeding five and one-half percent per annum may be used for policies issued on or after April 6, 1977, except that for any single premium whole life or endowment insurance policy a rate of interest not exceeding six and one-half percent per annum may be used: Provided, That in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1961 Industrial Extended Term Insurance Table: Provided, however, That for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner.After May 31, 1965, any company may file with the commissioner a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1968. After the filing of such notice, then upon such specified date (which shall be the operative date of this subsection for such company), this subsection shall become operative with respect to the industrial policies thereafter issued by such company. If a company makes no such election, the operative date of this subsection for such company shall be January 1, 1968.(g)(1) This subsection applies to all policies issued on or after the operative date of this subsection. Except as provided in subdivision (7) of this subsection, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of; (A) The then present value of the future guaranteed benefits provided for by the policy; (B) One percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years; and (C) One hundred twenty-five percent of the nonforfeiture net level premium as hereinafter defined: Provided, That in applying this percentage no nonforfeiture net level premium shall be deemed to exceed four percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined;(2) The nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided by the policy divided by the present value, at the date of issue of the policy, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of such policy on which a premium falls due;(3) In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any such change in the benefits or premiums the future adjusted premiums, nonforfeiture net level premiums and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change;(4) Except as otherwise provided in subdivision (7) of this subsection, the recalculated future adjusted premiums for any such policy shall be such uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums shall be equal to the excess of:(A) The sum of:(i) The then present value of the then future guaranteed benefits provided by the policy; and (ii) The additional expense allowance, if any, over(B) The then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy;(5) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of:(A) One percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first ten policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first ten policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and(B) One hundred twenty-five percent of the increase, if positive, in the nonforfeiture net level premium;(6) The recalculated nonforfeiture net level premium shall be equal to the result obtained by dividing paragraph (A) of this subdivision by paragraph (B) of this subdivision where:(A) Equals the sum of(i) The nonforfeiture net level premium applicable prior to the change times the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred; and(ii) The present value of the increase in future guaranteed benefits provided for by the policy;(B) Equals the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due.(7) Notwithstanding any other provisions of this subsection to the contrary, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, such policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values for such substandard policy may be calculated as if it were issued to provide such higher uniform amounts of insurance on the standard basis;(8) All adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of (i) the Commissioners 1980 Standard Ordinary Mortality Table or (ii) at the election of the company for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with ten-year select mortality factors; shall for all policies of industrial insurance be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table; and shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this subsection for policies issued in that calendar year: Provided, That:(A) At the option of the company, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection, for policies issued in the immediately preceding calendar year;(B) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by subsection (a) of this section, shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of such paid-up nonforfeiture benefit and paid-up dividend additions, if any;(C) A company may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values;(D) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners 1961 Industrial Extended Term Insurance Table for policies of industrial insurance;(E) For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables;(F) For policies issued prior to the operative date of the valuation manual, any Commissioners Standard ordinary mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by rule promulgated by the commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without ten-year select mortality factors or for the Commissioners 1980 Extended Term Insurance Table. For policies issued on or after the operative date of the valuation manual the valuation manual shall provide the Commissioner's Standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioner's 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. If the commissioner approves by rule any Commissioners Standard ordinary mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual. For purposes of this paragraph, paragraph (G) of this subdivision and subdivision (9) of this subsection, the operative date of the valuation manual is that date determined in accordance with subsection (n), section nine, article seven of this chapter;(G) For policies issued prior to the operative date of the valuation manual, any industrial mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by rule promulgated by the commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the Commissioners Standard Mortality Table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table: Provided, That if the Legislature approves a rule providing that a Commissioners Standard Industrial Mortality Table adopted by the National Association of Insurance Commissioners shall be used in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual;(9) The nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be equal to one hundred and twenty-five percent of the calendar year statutory valuation interest rate for such policy as defined in the Standard Valuation Law, rounded to the nearer one quarter of one percent: Provided, That, that the nonforfeiture interest rate may not be less than four percent. For policies issued on and after the operative date of the valuation manual the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be provided by the valuation manual;(10) Notwithstanding any other provision in this code to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form; and(11) After May 30, 1983, any company may file with the commissioner a written notice of its election to comply with the provisions of this section after a specified date before January 1, 1989, which shall be the operative date of this subsection for such company. If a company makes no such election, the operative date of this section for such company shall be January 1, 1989.(h) In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurance company based on then estimates of future experience, or in the case of any plan of life insurance which is of such a nature that minimum values cannot be determined by the methods described in subsection (a), (b), (c), (d),(e), (f) or (g) of this section, then:(1) The commissioner must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by subsection (a), (b), (c), (d),(e), (f) or (g) of this section;(2) The commissioner must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds; and(3) The cash surrender values and paid-up nonforfeiture benefits provided by such plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Standard Nonforfeiture Law for Life Insurance, as determined by rules promulgated by the commissioner.(i) Any cash surrender value and any paid-up nonforfeiture benefit, available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary, shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in subsections (b), (c), (d),(e), (f) and (g) of this section may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide such additions. Notwithstanding the provisions of subsection (2), additional benefits payable:(1) In the event of death or dismemberment by accident or accidental means;(2) In the event of total and permanent disability;(3) As reversionary annuity or deferred reversionary annuity benefits;(4) As term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this subsection would not apply;(5) As term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child's age is twenty-six, is uniform in amount after the child's age is one, and has not become paid up by reason of the death of a parent of the child; and(6) As other policy benefits additional to life insurance and endowment benefits, and premiums for all such additional benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this section, and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits.(j)(1) This subsection, in addition to all other applicable subsections of this law, shall apply to all policies issued on or after January 1, 1985. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than two tenths of one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years, from the sum of;(A) The greater of zero and the basic cash value hereinafter specified; and(B) The present value of any existing paid-up additions less the amount of any indebtedness to the company under the policy.(2) The basic cash value shall be equal to the present value, on such anniversary, of the future guaranteed benefits which would have been provided by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the company, if there had been no default, less the then present value of the nonforfeiture factors, as hereinafter defined, corresponding to premiums which would have fallen due on and after such anniversary: Provided, That the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in subsection (b) or (d) of this section, whichever is applicable, shall be the same as are the effect specified in subsection (b) or (d) of this section, whichever is applicable, on the cash surrender values defined in that subsection.(3) The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in subsection (d) or (g), whichever is applicable. Except as is required by the next succeeding sentence of this paragraph, such percentage:(A) Must be the same percentage for each policy year between the second policy anniversary and the later of:(i) The fifth policy anniversary; and(ii) The first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two tenths of one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years; and(B) Must be such that no percentage after the later of the two policy anniversaries specified in subparagraph (i), paragraph (A) of this subdivision may apply to fewer than five consecutive policy years: Provided, That no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in subsection (g) of this section, were substituted for the nonforfeiture factors in the calculation of the basic cash value.(4) All adjusted premiums and present values referred to in this subsection shall for a particular policy be calculated on the same mortality and interest bases as are used in demonstrating the policy's compliance with the other sections of this law. The cash surrender values referred to in this subsection shall include any endowment benefits provided by the policy.(5) Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in subsections (a), (b),(c), (g) and (i) of this section. The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed as subdivisions (1) through (6), subsection (i) of this section shall conform with the principles of this subsection.(k) This section does not apply to any of the following:(1) Reinsurance;(2) Group insurance;(3) Pure endowment;(4) Annuity or reversionary annuity contract;(5) Term policy of uniform amount, which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of twenty years or less expiring before age seventy-one, for which uniform premiums are payable during the entire term of the policy;(6) Term policy of decreasing amount, which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in subsections (d), (e), (f) and (g) of this section, is less than the adjusted premium so calculated on a policy of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance and for a term of twenty years or less expiring before age seventy-one, for which uniform premiums are payable during the entire term of the policy;(7) Policy, which provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in subsections (b), (c), (d), (e) (f) and (g) of this section, exceeds two and one-half percent of the amount of insurance at the beginning of the same policy year; and(8) Policy which shall be delivered outside this state through an agent or other representative of the insurer issuing the policy. For purposes of determining the applicability of this section, the age at expiry for a joint term life insurance policy shall be the age at expiry of the oldest life.(l) After the effective date of the amendments made to this section during the 2014 regular session of the Legislature, any company may file with the commissioner a written notice of its election to comply with the provisions of this section after a specified date before January 1, 1948. After the filing of such notice, then upon the specified date (which shall be the operative date for the company), this section shall become operative with respect to the policies thereafter issued by such company. If a company makes no such election, the operative date of this section for the company shall be January 1, 1948.
(a) This section shall be known as the "Standard Nonforfeiture Law for Individual Deferred Annuities."(b) This section may not apply to any reinsurance, group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as now or hereafter amended, premium deposit fund, variable annuity, investment annuity, immediate annuity, any deferred annuity contract after annuity payments have commenced or reversionary annuity, nor to any contract which shall be delivered outside this state through an agent or other representative of the company issuing the contract.(c) In the case of contracts issued on or after the operative date of this section, no contract of annuity, except as stated in subsection (b) of this section, shall be delivered or issued for delivery in this state unless it contains in substance the following provisions or corresponding provisions which, in the opinion of the commissioner, are at least as favorable to the contract holder, upon cessation of payment of considerations under the contract:(1) That upon cessation of payment of considerations under a contract, the company will grant a paid-up annuity benefit on a plan stipulated in the contract of the value as is specified in subsections (e), (f), (g), (h) and (j) of this section;(2) If a contract provides for a lump sum settlement at maturity or at any other time that, upon surrender of the contract at or prior to the commencement of any annuity payments, the company will pay in lieu of any paid-up annuity benefit a cash surrender benefit of the amount as is specified in subsections (e), (f), (h) and (j) of this section. The company shall reserve the right to defer the payment of the cash surrender benefit for a period of six months after demand therefor with surrender of the contract;(3) A statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of the benefits; and(4) A statement that any paid-up annuity, cash surrender or death benefits that may be available under the contract are not less than the minimum benefits required by any statute of the state in which the contract is delivered and an explanation of the manner in which the benefits are altered by the existence of any additional amounts credited by the company to the contract, any indebtedness to the company on the contract or any prior withdrawals from or partial surrenders of the contract.Notwithstanding the requirements of this subsection, any deferred annuity contract may provide that if no considerations have been received under a contract for a period of two full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from considerations paid prior to the period would be less than $20 monthly, the company may at its option terminate the contract by payment in cash of the then present value of the portion of the paid-up annuity benefit, calculated on the basis of the mortality table, if any, and interest rate specified in the contract for determining the paid-up annuity benefit and by the payment shall be relieved of any further obligation under the contract.(d)(1) The minimum values as specified in subsections (e), (f), (g), (h) and (j) of this section of any paid-up annuity, cash surrender or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in this subdivision:(A) With respect to contracts providing for flexible considerations, the minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to the time at a rate of interest of three percent per annum of percentages of the net considerations (as hereinafter defined) paid prior to the time, decreased by the sum of:(i) Any prior withdrawals from or partial surrenders of the contract accumulated at a rate of interest of three percent per annum; and(ii) The amount of any indebtedness to the company on the contract, including interest due and accrued; and increased by any existing additional amounts credited by the company to the contract;The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount not less than zero and shall be equal to the corresponding gross considerations credited to the contract during that contract year less than an annual contract charge of $30 and less a collection charge of $1.25 per consideration credited to the contract during that contract year. The percentages of net considerations shall be sixty-five percent of the net consideration for the first contract year and eighty-seven and one-half percent of the net considerations for the second and later contract years. Notwithstanding the provisions of the preceding sentence, the percentage shall be sixty-five percent of the portion of the total net consideration for any renewal contract year which exceeds by not more than two times the sum of those portions of the net considerations in all prior contract years for which the percentage was sixty-five percent;Notwithstanding any other provision of this section, any contract issued on or after July 1, 2003, and before July 1, 2006, the interest rate at which net considerations, prior withdrawals and partial surrenders shall be accumulated for the purpose of determining nonforfeiture amounts may not be less than one and one-half percent per annum;(B) With respect to contracts providing for fixed scheduled considerations, minimum nonforfeiture amounts shall be calculated on the assumption that considerations are paid annually in advance and shall be defined as for contracts with flexible considerations which are paid annually with two exceptions:(i) The portion of the net consideration for the first contract year to be accumulated shall be the sum of sixty-five percent of the net consideration for the first contract year plus twenty-two and one-half percent of the excess of the net consideration for the first contract year over the lesser of the net considerations for the second and third contract years;(ii) The annual contract charge shall be the lesser of: (1) $30; or (2) ten percent of the gross annual consideration;(C) With respect to contracts providing for a single consideration, minimum nonforfeiture amounts shall be defined as for contracts with flexible considerations except that the percentage of net consideration used to determine the minimum nonforfeiture amount shall be equal to ninety percent and the net consideration shall be the gross consideration less a contract charge of $75;(D) This subdivision applies to contracts issued before July 1, 2004, and may be applied by a company on a contract-by-contract basis to contracts issued on or after July 1, 2004, and before July 1, 2006;(2) The minimum values as specified in subsections (e), (f), (g), (h) and (j) of any paid-up annuity, cash surrender or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in this subdivision;(A)(i) The minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to such time at rates of interest as indicated in paragraph (B) of this subdivision of the net considerations (as hereinafter defined) paid prior to such time, decreased by the sum of subparagraphs (I) through (IV) below:(I) Any prior withdrawals from or partial surrenders of the contract accumulated at rates of interest as indicated in paragraph (B) of this subdivision;(II) An annual contract charge of $50, accumulated at rates of interest as indicated in paragraph (B) of this subdivision;(III) Any premium tax paid by the company for the contract, accumulated at rates of interest as indicated in subparagraph (ii), paragraph (B) of this subdivision; and(IV) The amount of any indebtedness to the company on the contract, including interest due and accrued;(ii) The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount equal to eighty-seven and one-half percent of the gross considerations credited to the contract during that contract year;(B) The interest rate used in determining minimum nonforfeiture amounts shall be an annual rate of interest determined as the lesser of three percent per annum and the following, which shall be specified in the contract if the interest rate will be reset:(i) The five-year constant maturity treasury rate reported by the federal reserve as of a date, or average over a period, rounded to the nearest 1/20th of one percent, specified in the contract no longer than fifteen months prior to the contract issue date or redetermination date under subparagraph (iv) of this paragraph;(ii) Reduced by one hundred twenty-five basis points;(iii) Where the resulting interest rate is not less than one percent; and(iv) The interest rate shall apply for an initial period and may be redetermined for additional periods. The redetermination date, basis and period, if any, shall be stated in the contract. The basis is the date or average over a specified period that produces the value of the five-year constant maturity treasury rate to be used at each redetermination date;(C) During the period or term that a contract provides substantive participation in an equity indexed benefit, it may increase the reduction described in subparagraph (ii), paragraph (B) of this subdivision by up to an additional one hundred basis points to reflect the value of the equity index benefit. The present value at the contract issue date, and at each redetermination date thereafter, of the additional reduction may not exceed the market value of the benefit. The commissioner may require a demonstration that the present value of the additional reduction does not exceed the market value of the benefit. Lacking a determination that is acceptable to the commissioner, the commissioner may disallow or limit the additional reduction;(D) The commissioner may adopt rules to implement the provisions of this subsection and to provide for further adjustments to the calculation of minimum nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit and for other contracts that the commissioner determines their adjustments are justified;(E) This subdivision shall apply to contracts outstanding on July 1, 2004, and may be applied by a company on a contract-by-contract basis to any contract issued after July 1, 2004, and before July 1, 2006.(e) Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. The present value shall be computed using the mortality table, if any, and the interest rate specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract.(f) For contracts which provide cash surrender benefits, the cash surrender benefits available prior to maturity may not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit which would be provided under the contract at maturity arising from consideration paid prior to the time of cash surrender reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract, the present value being calculated on the basis of an interest rate not more than one percent higher than the interest rate specified in the contract for accumulating the net considerations to determine the maturity value, decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract. In no event shall any cash surrender benefit be less than the minimum nonforfeiture amount at that time. The death benefit under the contracts shall be at least equal to the cash surrender benefit.(g) For contracts which do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity may not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid prior to the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity, the present value being calculated for the period prior to the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine the maturity value and increased by any existing additional amounts credited by the company to the contract. For contracts which do not provide any death benefits prior to the commencement of any annuity payments, the present values shall be calculated on a basis of the interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. However, in no event shall the present value of a paid-up annuity benefit be less than the minimum nonforfeiture amount at that time.(h) For the purpose of determining the benefits calculated under subsections (f) and (g) of this section, in the case of annuity contracts under which an election may be made to have annuity payments commence at optional maturity dates, the maturity date is considered to be the latest date for which election is permitted by the contract, but is not considered to be later than the anniversary of the contract next following the annuitant's seventieth birthday or the tenth anniversary of the contract, whichever is later.(i) Any contract which does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the commencement of any annuity payments shall include a statement in a prominent place in the contract that the benefits are not provided.(j) Any paid-up annuity, cash surrender or death benefits available at any time, other than on the contract anniversary under any contract with fixed scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs.(k) For any contract which provides, within the same contract by rider or supplemental contract provision, both annuity benefits and life insurance benefits that are in excess of the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding the provisions of subsections (e), (f), (g), (h) and (j) of this section, additional benefits payable: (1) In the event of total and permanent disability; (2) as reversionary annuity or deferred reversionary annuity benefits; or (3) as other policy benefits additional to life insurance, endowment and annuity benefits and considerations for all the additional benefits shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits that may be required by this section. The inclusion of the additional benefits may not be required in any paid-up benefits unless the additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits.(l) After the effective date of this section, any company may file with the commissioner a written notice of its election to comply with the provisions of this section after a specified date before the second anniversary of the effective date of this section. After the filing of the notice, then upon the specified date which shall be the operative date of this section for the company, this section shall become operative with respect to annuity contracts thereafter issued by the company. If a company makes no election, the operative date of this section for the company is the second anniversary of the effective date of this section.(m) (1) During the period from July 1, 2004, through July 1, 2006, an insurer may elect on a contract-by-contract basis to apply the provisions of either subdivision (1) or (2), subsection (d) of this section to any annuity contract issued during that period of time;(2) The provisions of subdivision (1), subsection (d) of this section expires July 1, 2006.
No policy of industrial life insurance, which is that form of life insurance provided by an individual insurance contract under which premiums are payable monthly or oftener, and bearing the words "industrial policy" or "weekly premium policy" printed upon the policy as a part of the descriptive matter, shall be delivered or be issued for delivery in this state unless it complies with sections sixteen, twenty-five, twenty-six, twenty-nine, and thirty of this article, nor unless such policy contains in substance the applicable provisions set forth in sections thirty-two to forty- four, inclusive, of this article.
There shall be a provision in each industrial life insurance policy that the insured is entitled to a grace period of four weeks within which the payment of any premium after the first may be made, except that in policies the premiums for which are payable monthly, the period of grace shall be not less than thirty-one days, and that during the period of grace the policy shall continue in full force, but if during the grace period the policy becomes a claim, then any overdue and unpaid premiums may be deducted from any settlement under the policy.
There shall be a provision in each industrial life insurance policy that the policy shall constitute the entire contract between the parties, or, if a copy of the application is endorsed upon or attached to the policy when issued, a provision that the policy and the application therefor shall constitute the entire contract. If the application is so made a part of the contract, the policy shall also provide that all statements made by the applicant in such application shall, in the absence of fraud, be deemed to be representations and not warranties.
There shall be a provision in each industrial life insurance policy that the policy (exclusive of provisions relating to disability benefits or to additional benefits in the event of death by accident or accidental means) shall be incontestable, except for nonpayment of premiums, after it has been in force during the lifetime of the insured for a period of two years from its date of issue.
There shall be a provision in each industrial life insurance policy that if it is found that the age of the individual insured, or the age of any other individual considered in determining the premium, has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium would have purchased at the correct age or ages.
If an industrial life insurance policy is a participating policy, there shall be a provision that the insurer shall annually ascertain and apportion any divisible surplus accruing on the policy, except that at the option of the insurer such participation may be deferred to the end of the fifth policy year. This provision shall not prohibit the payment of additional dividends on default of payment of premiums or termination of the policy.
There shall be in each policy of industrial life insurance provisions for nonforfeiture benefits and cash surrender values as required by section thirty of this article.
There shall be in each industrial life insurance policy a provision that unless the policy has been surrendered for its cash surrender value or unless the paid-up term insurance, if any, has expired, the policy will be reinstated at any time within two years from the date of premium default upon written application therefor, the production of evidence of insurability satisfactory to the insurer, the payment of all premiums in arrears, and the payment or reinstatement of any other indebtedness to the insurer upon the policy, all with interest at a rate not exceeding six percent per annum compounded annually.
There shall be a provision in each industrial life insurance policy that when the policy becomes a claim by the death of the insured, settlement shall be made upon surrender of the policy and receipt of due proof of death.
There shall be a provision that the policy (exclusive of provisions relating to disability benefits or to additional benefits in the event of death by accident or accidental means) shall be incontestable, except for nonpayment of premiums, after it has been in force during the lifetime of the insured for a period of two years from its date of issue.
(a) Each such industrial life insurance policy shall have a space on the front or back page of the policy for the name of the beneficiary designated with a reservation of the right to designate or change the beneficiary after the issuance of the policy.(b) The policy may also provide that no designation or change of beneficiary shall be binding on the insurer unless endorsed on the policy by the insurer, and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insured to have an insurable interest in the life of the insured. Such a policy may also provide that if the beneficiary designated in the policy does not surrender the policy with due proof of death within the period stated in the policy, which shall be not less than thirty days after the death of the insured, or if the beneficiary is the estate of the insured or is a minor, or dies before the insured, or is not legally competent to give a valid release, then the insurer may make payment thereunder to the executor or administrator of the insured, or to any of the insured's relatives by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled thereto by reason of having been named beneficiary, or by reason of having incurred expense for the maintenance, medical attention or burial of the insured. Such policy may also include a similar provision applicable to any other payment due under the policy.
In the case of weekly premium industrial life insurance policies, there may be a provision that upon proper notice to the insurer, while premiums on the policy are not in default beyond the grace period, of the intention to pay future premiums directly to the insurer at its home office or any office designated by the insurer for the purpose, the insurer will, at the end of each period of a year from the due date of the first premium so paid, for which period such premiums are so paid continuously without default beyond the grace period, refund a stated percentage of the premiums in an amount which fairly represents the savings in collection expense.
There shall be a provision in the case of weekly premium industrial life insurance policies granting to the insured, upon proper written request and upon presentation of evidence of insurability satisfactory to the insurer, the privilege of converting a weekly premium industrial insurance policy to any form of life insurance with less frequent premium payments regularly issued by the insurer, in accordance with terms and conditions agreed upon with the insurer. The privilege of making such conversion need be granted only if the insurer's weekly premium industrial policies on the life insured, in force as premium paying insurance and on which conversion is requested, grant benefits in event of death, exclusive of additional accidental death benefits and exclusive of any dividend additions, in an amount not less than the minimum amount of such insurance with less frequent premium payments issued by the insurer at the age of the insured on the plan of industrial or ordinary insurance desired.
There shall be a provision, in the case of monthly premium industrial life insurance policies, granting, upon proper written request and upon presentation of evidence of insurability satisfactory to the insurer, the privilege of converting a monthly premium industrial life insurance policy to any form of ordinary life insurance regularly issued by the insurer, in accordance with terms and conditions agreed upon with the insurer. The privilege of making such conversion need be granted only if the insurer's monthly premium industrial policies on the life insured, in force as premium paying insurance and on which conversion is requested, grant benefits in event of death, exclusive of additional accidental death benefits and exclusive of any dividend additions, in an amount not less than the minimum amount of ordinary insurance issued by the insurer at the age of the insured on the plan of ordinary insurance desired.
There shall be a title on the face of each industrial life insurance policy briefly describing its form.
Any of the provisions required in industrial life insurance policies by sections thirty-two to forty-four, inclusive, of this article or any portion thereof which are not applicable to single premium or term policies or to policies issued or granted pursuant to nonforfeiture provisions shall to that extent not be incorporated therein.
No policy of industrial life insurance shall contain any of the following provisions:(a) A provision by which the insurer may deny liability under the policy for the reason that the insured has previously obtained other insurance from the same insurer.(b) A provision giving the insurer the right to declare the policy void because the insured has had any disease or ailment, whether specified or not, or because the insured has received institutional, hospital, medical or surgical treatment or attention, except a provision which gives the insurer the right to declare the policy void if the insured has, within two years prior to the issuance of the policy, received institutional, hospital, medical or surgical treatment or attention and if the insured or claimant under the policy fails to show that the condition occasioning such treatment or attention was not of a serious nature or was not material to the risk.(c) A provision giving the insurer the right to declare the policy void because the insured has been rejected for insurance, unless such right be conditioned upon a showing by the insurer that knowledge of such rejection would have led to a refusal by the insurer to make such contract.
(a) Burial insurance is that type of insurance whereby an insurer agrees to pay for any or all of the incidents of the burial of the body of a named or designated person, whether such insurance is evidenced or effected by any kind of agreement, policy, contract, bond, assurance, guarantee, bylaw, regulation, or otherwise. No provision of this article except this section shall apply to burial insurance, and no provision of article fourteen of this chapter shall apply to burial insurance.(b) Burial insurance shall be transacted only by insurers licensed in this state to transact life insurance.(c) All burial insurance benefits shall be paid in cash to the beneficiary. No insurer issuing burial insurance shall contract to pay or pay such benefits or any part thereof to any official undertaker, designated undertaker or undertaking concern, or to any particular tradesman or businessman.(d) This section shall not apply to fraternal benefit societies operating under article twenty-three of this chapter or to any organization of employees under a common employer.
The Commissioner shall propose and file with the Secretary of State an emergency rule pursuant to the provisions of section fifteen, article three, chapter twenty-nine-a of this code that is based on the model regulation regarding the replacement of life insurance and annuities approved by the National Association of Insurance Commissioners in nineteen ninety-eight and amended in two thousand. This emergency rule will be effective upon approval by the Secretary of State and will replace the legislative rule previously filed by the Commissioner on May 16, nineteen ninety-seven as Title 114, Series 8 of the Code of State Rules: Provided, That the rule filed as an emergency rule pursuant to this section shall be refiled at the earliest opportunity as a legislative rule for review and promulgation in accordance with the provisions of article three, chapter twenty-nine-a of this code.
There shall be a provision that the policy, or the policy and the application therefor if a copy of such application is endorsed upon or attached to the policy when issued, shall constitute the entire contract between the parties, and that all statements contained in the application shall, in the absence of fraud, be deemed representations and not warranties.
There shall be a provision that if the age of the insured or of any other person whose age is considered in determining the premium has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium would have purchased at the correct age or ages.
There shall be a provision in participating policies that, beginning not later than the end of the third policy year, the insurer shall annually ascertain and apportion the divisible surplus, if any, that will accrue on the policy anniversary or other dividend date specified in the policy provided the policy is in force and all premiums to that date are paid. Except as hereinafter provided, any dividend so apportioned shall at the option of the party entitled to elect such option be either (a) payable in cash or (b) applied to any one of such other dividend options as may be provided by the policy. If any such other dividend options are provided, the policy shall further state which option shall be automatically effective if such party shall not have elected some other option. If the policy specifies a period within which such other dividend option may be elected, such period shall be not less than thirty days following the date on which such dividend is due and payable. The annually apportioned dividend shall be deemed to be payable in cash within the meaning of (a) above even though the policy provides that payment of such dividend is to be deferred for a specified period, provided such period does not exceed six years from the date of apportionment and that interest will be added to such dividend at a specified rate. If a participating policy provides that the benefit under any paid-up nonforfeiture provision is to be participating, it may provide that any divisible surplus apportioned while the insurance is in force under such nonforfeiture provision shall be applied in the manner set forth in the policy.
(a) There shall be a provision that after the policy has a cash surrender value and while no premium is in default beyond the grace period for payment, the insurer will advance, on proper assignment of pledge of the policy and on the sole security thereof, at a specified rate of interest not exceeding eight percent per annum, or seven and four-tenths percent per annum if payable annually in advance, an amount equal to or, at the option of the party entitled thereto, less than the loan value of the policy. The loan value of the policy shall be at least equal to the cash surrender value at the end of the then current policy year: Provided, That the insurer may deduct, either from such loan value or from the proceeds of the loan, any existing indebtedness not already deducted in determining such cash surrender value including any interest then accrued but not due, any unpaid balance of premium for the current policy year, and interest on the loan to the end of the current policy year. The policy may also provide that if interest on any indebtedness is not paid when due it shall then be added to the existing indebtedness and shall bear interest at the same rate, and that if and when the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of the loan value thereof, then the policy shall terminate and become void. The policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for six months after application therefor. The policy, at the insurer's option, may provide for automatic premium loan, subject to an election of the party entitled to elect. In any policy issued by conversion of a term insurance policy in force prior to the effective date of this act, the policyholder shall be entitled to a loan at an interest rate in effect on the date of original purchase.(b) This section shall not apply to term policies nor to term insurance benefits provided by rider or supplemented policy provision.(c) This section shall not impair the terms and conditions of any policy of life insurance in force prior to the effective date thereof.(d) As a condition for approval of a policy loan interest rate in excess of six percent per annum, but not in excess of the rate provided in this section, the Insurance Commissioner shall require the insurer to furnish such assurances as he deems necessary that the holders of such policies will benefit through higher dividends or lower premiums or both.
(a) For purposes of this section the "published monthly average" means:(1) Moody's corporate bond yield average - monthly average corporates as published by Moody's Investors Service, Inc., or any successor thereto; or(2) In the event that Moody's corporate bond yield average - monthly average corporates is no longer published, a substantially similar average, established by regulation issued by the commissioner.(b) Policies issued on or after June 1, 1983, shall provide for maximum policy loan interest rates as follows:(1) A provision permitting a maximum interest rate of not more than eight percent per annum; or(2) A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as permitted by law.(c) The rate of interest charged on a policy loan made under subdivision (2), subsection (b) of this section shall not exceed the higher of the following:(1) The published monthly average for the calendar month ending two months before the date on which the rate is determined; or(2) The rate used to compute the cash surrender values under the policy during the applicable period plus one percent per annum.(d) If the maximum rate of interest is determined pursuant to subdivision (2), subsection (b) of this section, the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy.(e) The maximum rate for each policy shall be determined at regular intervals at least once every twelve months, but not more frequently than once in any three-month period. At the intervals specified in the policy:(1) The rate being charged may be increased whenever such increase as determined under subsection (c) of this section would increase that rate by one-half percent or more per annum; and(2) The rate being charged shall be reduced whenever such reduction as determined under subsection (c) of this section would decrease that rate by one-half percent or more per annum.(f) The life insurer shall:(1) Notify the policyholder at the time a cash loan is made of the initial rate of interest on the loan;(2) Notify the policyholder with respect to premium loans of the initial rate of interest on the loan within forty-five days after making the loan. Notice need not be given to the policyholder when a further premium loan is added, except as provided in subdivision (3) below;(3) Send to policyholder with loans reasonable advance notice of any increase in the rate; and(4) Include in the notices required above the substance of the pertinent provisions of subsections (b) and (d) of this section.(g) No policy shall terminate in a policy year as the sole result of a change in the interest rate during that policy year, and the life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change during that policy year.(h) The substance of the pertinent provisions of subsections (b) and (d) shall be set forth in the policies to which they apply.(i) For purposes of this section:(1) The rate of interest on policy loans permitted under this section includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy;(2) The term "policy loan" includes any premium loan made under a policy to pay one or more premiums that were not paid to the life insurer as they fell due;(3) The term "policyholder" includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer; and(4) The term "policy" includes certificates issued by a fraternal benefit society and annuity contracts which provide for policy loans.(j) No other provision of law shall apply to policy loan interest rates unless made specifically applicable to such rates.(k) The provisions of this section shall not apply to any insurance contract issued before June 1, 1983, unless the policyholder agrees in writing to the applicability of such provisions.
There shall be provisions for nonforfeiture benefits and cash surrender values as required by section thirty of this article.
A domestic life insurer may establish one or more separate accounts, and may allocate thereto amounts, including without limitation proceeds applied under optional modes of settlement or under dividend options, to provide for life insurance or annuities and benefits incidental thereto, payable in fixed or variable amounts or both, subject to the following:(a) The income, gains and losses, realized or unrealized, from assets allocated to a separate account shall be credited to or charged against the account, without regard to other income, gains or losses of the company.(b) Except as may be provided with respect to reserves for guaranteed benefits and funds referred to in subdivision (c) of this section, (i) amounts allocated to any separate account and accumulations thereon may be invested and reinvested without regard to any requirements or limitations prescribed by the laws of this state governing the investments of life insurance companies and (ii) the investments in such separate account or accounts shall not be taken into account in applying the investment limitations otherwise applicable to the investments of the company.(c) Except with the approval of the commissioner and under such conditions as to investments and other matters as he may prescribe, which shall recognize the guaranteed nature of the benefits provided, reserves for (i) benefits guaranteed as to dollar amount and duration and (ii) funds guaranteed as to principal amount or stated rate of interest shall not be maintained in a separate account.(d) Unless otherwise approved by the commissioner, assets allocated to a separate account shall be valued at their market value on the date of valuation, or if there is no readily available market, then as provided under the terms of the contract or the rules or other written agreement applicable to such separate account: Provided, That unless otherwise approved by the commissioner, the portion if any of the assets of such separate account equal to the company's reserve liability with regard to the guaranteed benefits and funds referred to in subdivision (c) of this section shall be valued in accordance with the rules otherwise applicable to the company's assets.(e) Amounts allocated to a separate account in the exercise of the power granted by this article shall be owned by the company, and the company shall not be, nor hold itself out to be, a trustee with respect to such amounts. If and to the extent so provided under the applicable contracts, that portion of the assets of any such separate account equal to the reserves and other contract liabilities with respect to such account shall not be chargeable with liabilities arising out of any other business the company may conduct.(f) No sale, exchange or other transfer of assets may be made by a company between any of its separate accounts or between any other investment account and one or more of its separate accounts unless, in case of a transfer into a separate account, such transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made, and unless such transfer, whether into or from a separate account, is made (i) by a transfer of cash, or (ii) by a transfer of securities having a readily determinable market value, provided that such transfer of securities is approved by the commissioner. The commissioner may approve other transfers among such accounts if, in his opinion, such transfers would not be inequitable.(g) To the extent such company deems it necessary to comply with any applicable federal or state laws, such company, with respect to any separate account, including without limitation any separate account which is a management investment company or a unit investment trust, may provide for persons having an interest therein appropriate voting and other rights and special procedures for the conduct of the business of such account, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants, and the selection of a committee, the members of which need not be otherwise affiliated with such company, to manage the business of such account.
Any contract providing benefits payable in variable amounts delivered or issued for delivery in this state shall contain a statement of the essential features of the procedures to be followed by the insurance company in determining the dollar amount of such variable benefits. Any such contract under which the benefits vary to reflect investment experience, including a group contract and any certificate in evidence of variable benefits issued thereunder, shall state that such dollar amount will so vary and shall contain on its first page a statement to the effect that the benefits thereunder are on a variable basis.
No company shall deliver or issue for delivery within this state variable contracts unless it is licensed or organized to do a life insurance or annuity business in this state, and the commissioner is satisfied that its condition or method of operation in connection with the issuance of such contracts will not render its operation hazardous to the public or its policyholders in this state. In this connection, the commissioner shall consider among other things:(a) The history and financial condition of the company;(b) The character, responsibility and fitness of the officers and directors of the company; and(c) The law and regulation under which the company is authorized in the state of domicile to issue variable contracts. The state of entry of an alien company shall be deemed its place of domicile for this purpose.If the company is a subsidiary of an admitted life insurance company, or affiliated with such company through common management or ownership, it may be deemed by the commissioner to have met the provisions of this section if either it or the parent or the affiliated company meets the requirements hereof.
Notwithstanding any other provision of law, the commissioner shall have sole authority to regulate the issuance and sale of variable contracts, and to issue such reasonable rules and regulations as may be appropriate to carry out the purposes and provisions of this article.
Except for sections eighteen, twenty-three, twenty-four and thirty-a, article thirteen of this chapter, and section twenty- three, article fourteen of this chapter in the case of a variable annuity contract, and sections three, eight to twelve, inclusive, and thirty, article thirteen of this chapter and section nine, article fourteen of this chapter in the case of a variable life insurance policy and except as otherwise provided in this article, all pertinent provisions of this chapter shall apply to separate accounts and contracts relating thereto. Any individual variable life insurance or annuity contract, delivered or issued for delivery in this state shall contain grace, reinstatement and nonforfeiture provisions appropriate to such a contract. Any individual variable annuity contract delivered or issued for delivery in this state shall contain grace and reinstatement provisions appropriate to such a contract. Any group variable life insurance or annuity contract, delivered or issued for delivery in this state shall contain a grace provision appropriate to such a contract.The reserve liability for variable contracts shall be established in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees.
(a) "Charitable gift annuity" means a transfer of cash or other property by a donor to a charitable organization in return for an annuity payable over one or two lives, under which the actuarial value of the annuity is less than the value of the cash or other property transferred and the difference in value constitutes a charitable deduction for federal tax purposes.(b) "Charitable organization" means an entity described by:(1) Section 501(c)(3), of the Internal Revenue Code of 1986 (26 U.S.C. 501(c) (3)); or(2) Section 170(c), of the Internal Revenue Code of 1986 (26 U.S.C. 170 (c)).(c) "Qualified charitable gift annuity" means a charitable gift annuity described by 501(m) (5), of the Internal Revenue Code of 1986 (26 U.S.C. 501(m) (5)), and 514(c) (5), of the Internal Revenue Code of 1986 (26 U.S.C. 514(c) (5)), that is issued by a charitable organization that on the date of the annuity agreement:(1) Has a minimum of $300,000 in unrestricted cash, cash equivalents, or publicly traded securities, exclusive of the assets funding the annuity agreement; and(2) Has been in continuous operation for at least three years or is a successor or affiliate of a charitable organization that has been in continuous operation for at least three years.
Notwithstanding any other provision of this code to the contrary, the issuance of a qualified charitable gift annuity does not constitute engaging in the business of insurance in this state, and the issuance of any charitable gift annuity prior to July 1, 2006, does not constitute engaging in the business of insurance in this state.
(a) When entering into an agreement for a qualified charitable gift annuity, the charitable organization shall disclose to the donor in writing in the annuity agreement that a qualified charitable gift annuity is not insurance under the laws of this state, is not subject to regulation by the commissioner and is not protected by the West Virginia Life and Health Insurance Guaranty Association established in article twenty-six-a of this chapter or by any other guaranty association established by this code. (b) The notice required by this section shall be in a separate paragraph in a print size no smaller than that employed in the annuity agreement generally.
(a) A charitable organization that issues qualified charitable gift annuities shall notify the commissioner of such fact in writing by the later of September 30, 2006 or the date on which it enters into the organization's first qualified charitable gift annuity agreement.(b) The notice required by subsection (a) of this section shall identify the organization, be signed by an officer or director of the organization, and certify that the organization is a charitable organization and that the annuities issued by the organization are qualified charitable gift annuities.
Any person who violates any provision of section three or four of this article may, after notice and hearing pursuant to section thirteen, article two of this chapter, be fined by the commissioner a sum not to exceed $1,000 per qualified charitable gift annuity agreement issued: Provided, That the failure of a charitable organization to comply with the notice requirements imposed under section three or four of this article does not prevent a charitable gift annuity that otherwise meets the requirements of this article from constituting a qualified charitable gift annuity.
The issuance of a qualified charitable gift annuity does not constitute a violation of article eleven of this chapter.
This article may be cited as the "Viatical Settlements Act".
(a)(1) A viatical settlement provider entering into a viatical settlement contract shall first obtain:(A) If the viator is the insured, a written statement from a licensed attending physician that the viator is of sound mind and under no constraint or undue influence to enter into a viatical settlement contract; and(B) A document in which the insured consents to the release of his or her medical records to a licensed viatical settlement provider, viatical settlement broker and the insurance company that issued the life insurance policy covering the life of the insured.(2) Within twenty days after a viator executes documents necessary to transfer any rights under an insurance policy or within twenty days of entering any agreement, option, promise or any other form of understanding, expressed or implied, to viaticate the policy, the viatical settlement provider shall give written notice to the insurer that issued that insurance policy that the policy has or will become a viaticated policy. The notice shall be accompanied by the documents required by subdivision (3) of this subsection.(3) The viatical provider shall deliver a copy of the medical release required under paragraph (B), subdivision (1) of this subsection, a copy of the viator's application for the viatical settlement contract, the notice required under subdivision (2) of this subsection and a request for verification of coverage to the insurer that issued the life insurance policy that is the subject of the viatical transaction. The request for verification of coverage shall be on a form prescribed by the commissioner.(4) The insurer shall respond to a request for verification of coverage within thirty calendar days of the date the request is received and shall indicate whether, based on the medical evidence and documents provided, the insurer intends to pursue an investigation at this time regarding the validity of the insurance contract or possible fraud. The insurer shall accept a request for verification made on an approved form or any facsimile or electronic copy of such request and any accompanying authorization signed by the viator. Failure by the insurer to meet its obligations under this subsection shall be a violation of subsection (c), section eleven of this article and section sixteen of this article.(5) Prior to or at the time of execution of the viatical settlement contract, the viatical settlement provider shall obtain a witnessed document in which the viator consents to the viatical settlement contract, represents that the viator has a full understanding of the viatical settlement contract, that he or she has a full understanding of the benefits of the life insurance policy, acknowledges that he or she is entering into the viatical settlement contract freely and voluntarily and, for persons with a terminal or chronic illness or condition, acknowledges that the insured has a terminal or chronic illness and that the terminal or chronic illness or condition was diagnosed after the life insurance policy was issued.(6) If a viatical settlement broker performs any of these activities required of the viatical settlement provider, the provider is deemed to have fulfilled the requirements of this section.(b) All medical information solicited or obtained by any licensee shall be subject to the applicable provisions of state law relating to confidentiality of medical information.(c) All viatical settlement contracts entered into in this state shall provide the viator with an absolute right to rescind the contract before the earlier of sixty calendar days after the date upon which the viatical settlement contract is executed by all parties or thirty calendar days after the viatical settlement proceeds have been sent to the viator as provided in subsection (e) of this section. Rescission by the viator may be conditioned upon the viator both giving notice and repaying to the viatical settlement provider within the rescission period all proceeds of the settlement and any premiums, loans and loan interest paid by or on behalf of the viatical settlement provider in connection with or as a result of the viatical settlement. If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment to the viatical settlement provider or purchaser of all viatical settlement proceeds, any premiums, loans and loan interest that have been paid by the viatical settlement provider or purchaser, which shall be paid within sixty calendar days of the death of the insured. In the event of any rescission, if the viatical settlement provider has paid commissions or other compensation to a viatical settlement broker in connection with the rescinded transaction, the viatical settlement broker shall refund all such commissions and compensation to the viatical settlement provider within five business days following receipt of written demand from the viatical settlement provider, which demand shall be accompanied by either the viator's notice of rescission if rescinded at the election of the viator, or notice of the death of the insured if rescinded by reason of the death of the insured within the applicable rescission period.(d) The viatical settlement provider shall instruct the viator to send the executed documents required to effect the change in ownership, assignment or change in beneficiary directly to the independent escrow agent. Within three business days after the escrow agent receives the document or, if the viator erroneously provides the documents directly to the provider, after the viatical settlement provider receives the documents, the provider shall pay or transfer the proceeds of the viatical settlement into an escrow or trust account maintained in a state or federally charted financial institution whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC). Upon payment of the settlement proceeds into the escrow account, the escrow agent shall deliver the original change in ownership assignment or change in beneficiary forms to the viatical settlement provider or related provider trust or other designated representative of the viatical settlement provider. Upon the escrow agent's receipt of the acknowledgment of the properly completed transfer of ownership, assignment or designation of beneficiary from the insurance company, the escrow agent shall pay the settlement proceeds to the viator.(e) Failure to tender consideration to the viator for the viatical settlement contract within the time set forth in the disclosure pursuant to subdivision (7), subsection (a), section eight of this article renders the viatical settlement contract voidable by the viator for lack of consideration until the time consideration is tendered to and accepted by the viator. Funds shall be deemed sent by a viatical settlement provider to a viator as of the date that the escrow agent either releases funds for wire transfer to the viator or places a check for delivery to the viator via United State Postal Service or other nationally recognized delivery service.(f) Contacts with the insured for the purpose of determining the health status of the insured by the viatical settlement provider or viatical settlement broker after the viatical settlement has occurred shall only be made by the viatical settlement provider or broker licensed in this state or its authorized representatives and shall be limited to once every three months for insureds with a life expectancy of more than one year, and to no more than once per month for insureds with a life expectancy of one year or less. The provider or broker shall explain the procedure for these contacts at the time the viatical settlement contract is entered into. The limitations set forth in this subsection shall not apply to any contacts with an insured for reasons other than determining the insured's health status. Viatical settlement providers and viatical settlement brokers shall be responsible for the actions of their authorized representatives.
(a) It is a violation of this article for any person to enter into a viatical settlement contract at any time prior to the application for or issuance of a policy that is the subject of a viatical settlement contract or within a five-year period commencing with the date of issuance of the insurance policy or certificate unless the viator certifies to the viatical settlement provider that one or more of the following conditions have been met within the five-year period after issuance of the policy or certificate:(1) The policy was issued upon the viator's exercise of conversion rights arising out of a group or individual policy, provided the total of the time covered under the conversion policy plus the time covered under the prior policy is at least sixty (60) months. The time covered under a group policy shall be computed without regard to any change in insurance carriers, provided the coverage has been continuous and under the same group sponsorship;(2) The viator certifies and submits independent evidence to the viatical settlement provider that one or more of the following conditions have been met within that five-year period:(A) The viator or insured is terminally or chronically ill;(B) The viator's spouse dies;(C) The viator divorces his or her spouse;(D) The viator retires from full-time employment;(E) The viator becomes physically or mentally disabled and a physician determines that the disability prevents the viator from maintaining full-time employment; or(F) A court of competent jurisdiction enters a final order, judgment or decree on the application of a creditor of the viator and adjudicates the viator bankrupt or insolvent or approves a petition seeking reorganization of the viator or appoints a receiver, trustee or liquidator to all or a substantial part of the viator's assets; or(3) The viator enters into a viatical settlement contract more than two years after the date of issuance of a policy and, at all times during that two-year period, all of the following conditions are true with respect to the policy;(A) Policy premiums have been funded exclusively with unencumbered assets, including an interest in the life insurance policy being financed only to the extent of its net cash surrender value, provided by, or fully recourse liability incurred by, the insured on a person described in subparagraph (iv), paragraph (C), subdivision (13), section two of this article;(B) There is no agreement or understanding with any other person to guarantee any such liability or to purchase, or stand ready to purchase, the policy, including through an assumption or forgiveness of the loan; and(C) Neither the insured nor the policy has been evaluated for settlement.(b) Copies of the independent evidence described in subdivision (2), subsection (a) of this section and documents required by subsection (a), section ten of this article shall be submitted to the insurer when the viatical settlement provider or other party entering into a viatical settlement contract with a viator submits a request to the insurer for verification of coverage. The copies shall be accompanied by a letter of attestation from the viatical settlement provider that the copies are true and correct copies of the documents received by the viatical settlement provider.(c) If the viatical settlement provider submits to the insurer a copy of the owner or insured's certification described in and the independent evidence required by subdivision (2), subsection (a) of this section when the provider submits a request to the insurer to effect the transfer of the policy or certificate to the viatical settlement provider, the copy shall be deemed to conclusively establish that the viatical settlement contract satisfies the requirements of this section and the insurer shall timely respond to the request.(d) No insurer may, as a condition of responding to a request for verification of coverage or effecting the transfer of a policy pursuant to a viatical settlement contract, require that the viator, insured, viatical settlement provider or viatical settlement broker sign any forms, disclosures, consent or waiver form that has not been expressly approved by the commissioner for use in connection with viatical settlement contracts in this state.(e) Upon receipt of a properly completed request for change of ownership or beneficiary of a policy, the insurer shall respond in writing within thirty calendar days with written acknowledgment confirming that the change has been effected or specifying the reasons why the request change cannot be processed. The insurer shall not unreasonably delay effecting change of ownership or beneficiary and shall not otherwise seek to interfere with any viatical settlement contract lawfully entered into in this state.
(a) With respect to any viatical settlement contract or insurance policy, no viatical settlement broker knowingly shall solicit an offer from, effectuate a viatical settlement with or make a sale to any viatical settlement provider, viatical settlement purchaser, financing entity or related provider trust that is controlling, controlled by or under common control with such viatical settlement broker.(b) With respect to any viatical settlement contract or insurance policy, no viatical settlement provider knowingly may enter into a viatical settlement contract with a viator, if, in connection with such viatical settlement contract, anything of value will be paid to a viatical settlement broker that is controlling, controlled by or under common control with such viatical settlement provider or the viatical settlement purchaser, financing entity or related provider trust that is involved in such viatical settlement contract.(c) A violation of subsection (a) or (b) of this section shall be deemed a fraudulent viatical settlement act.(d) No viatical settlement provider shall enter into a viatical settlement contract unless the viatical settlement promotional, advertising and marketing materials, as may be prescribed by rule, have been filed with the commissioner. In no event shall any marketing materials expressly reference that the insurance is "free" for any period of time. The inclusion of any reference in the marketing materials that would cause a viator to reasonably believe that the insurance is free for any period of time shall be considered a violation of this article.(e) No life insurance producer, insurance company, viatical settlement broker or viatical settlement provider shall make any statement or representation to the applicant or policyholder in connection with the sale or financing of a life insurance policy to the effect that the insurance is free or without cost to the policyholder for any period of time unless provided in the policy.
(a) The purpose of this section is to provide prospective viators with clear and unambiguous statements in the advertisement of viatical settlements and to assure the clear, truthful and adequate disclosure of the benefits, risks, limitations and exclusions of any viatical settlement contract. This purpose is intended to be accomplished by the establishment of guidelines and standards of permissible and impermissible conduct in the advertising of viatical settlements to assure that product descriptions are presented in a manner that prevents unfair, deceptive or misleading advertising and is conducive to accurate presentation and description of viatical settlements through the advertising media and material used by viatical settlement licensees.(b) This section shall apply to any advertising of viatical settlement contracts or related products or services intended for dissemination in this state, including Internet advertising viewed by persons located in this state. Where disclosure requirements are established pursuant to federal regulation, this section shall be interpreted so as to minimize or eliminate conflict with federal regulation wherever possible.(c) Every viatical settlement licensee shall establish and at all times maintain a system of control over the content, form and method of dissemination of all advertisements of its contracts, products and services. All advertisements, regardless of by whom written, created, designed or presented, shall be the responsibility of the viatical settlement licensees, as well as the individual who created or presented the advertisement. A system of control shall include regular routine notification, at least once a year, to agents and others authorized by the viatical settlement licensee who disseminates advertisements of the requirements and procedures for approval prior to the use of any advertisements not furnished by the viatical settlement license.(d) Advertisements shall be truthful and not misleading in fact or by implication. The form and content of an advertisement of a viatical settlement contract shall be sufficiently complete and clear so as to avoid deception. It shall not have the capacity or tendency to mislead or deceive. Whether an advertisement has the capacity or tendency to mislead or deceive shall be determined by the commissioner from the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence within the segment of the public to which it is directed.(e) The information required to be disclosed under this section shall not be minimized, rendered obscure, or presented in an ambiguous fashion or intermingled with the text of the advertisement so as to be confusing or misleading.(1) An advertisement shall not omit material information or use words, phrases, statements, references or illustrations if the omission or use has the capacity, tendency or effect of misleading or deceiving viators as to the nature or extent of any benefit, loss covered, premium payable or state or federal tax consequence. The fact that the viatical settlement contract offered is made available for inspection prior to consummation of the sale, or an offer is made to refund the payment if the viator is not satisfied or that the viatical settlement contract includes a "free look" period that satisfies or exceeds legal requirements, does not remedy misleading statements.(2) An advertisement shall not use the name or title of a life insurance company or a life insurance policy unless the advertisement has been approved by the insurer.(3) An advertisement shall not state or imply that interest charged on an accelerated death benefit or a policy loan is unfair, inequitable or in any manner an incorrect or improper practice.(4) The words "free", "no cost", "without cost", "no additional cost", "at no extra cost" or words of similar import shall not be used with respect to any benefit or service unless true. An advertisement may specify the charge for a benefit or a service or may state that a charge is included in the payment or use other appropriate language.(5) Testimonials, appraisals or analysis used in advertisements must be genuine; represent the current opinion of the author; be applicable to the viatical settlement contract product or service advertised, if any; and be accurately reproduced with sufficient completeness to avoid misleading or deceiving prospective viators as to the nature or scope of the testimonials, appraisals or analysis, a licensee under this article makes as its own all the statements contained therein, and the statements are subject to all the provisions of this section.(A) If the individual making a testimonial, appraisal, analysis or an endorsement has a financial interest in the party making use of the testimonial, appraisal, analysis or endorsement, either directly or through a related entity as a stockholder, director, officer, employee or otherwise, or receives any benefit directly or indirectly other than required union scale wages, that fact shall be prominently disclosed in the advertisement.(B) An advertisement shall not state or imply that a viatical settlement contract benefit or service has been approved or endorsed by a group of individuals, society, association or other organization unless that is the fact and unless any relationship between an organization and the viatical settlement licensee is disclosed. If the entity making the endorsement or testimonial is owned, controlled or managed by the viatical settlement licensee, or receives any payment or other consideration from the viatical settlement licensee for making an endorsement or testimonial, the fact shall be disclosed in the advertisement.(C) When an endorsement refers to benefits received under a viatical settlement contract all pertinent information shall be retained for a period of five years after its use.(f) An advertisement shall not contain statistical information unless it accurately reflects recent and relevant facts. The course of all statistics used in an advertisement shall be identified.(g) An advertisement shall not disparage insurers, viatical settlement providers, viatical settlement brokers, viatical settlement investment agents, insurance producers, policies, services or methods of marketing.(h) The name of the viatical settlement licensee shall be clearly identified in all advertisements about the licensee or its viatical settlement contract, products or services, and if any specific viatical settlement contract is advertised, the viatical settlement contract shall be identified either by form number or some other appropriate description. If an application is part of the advertisement, the name of the viatical settlement provider shall be shown on the application.(i) An advertisement shall not use a trade name, group designation, name of the parent company of a viatical settlement licensee, name of a particular division of the viatical settlement licensee, service mark, slogan, symbol or other device or reference without disclosing the name of the viatical settlement licensee, if the advertisement would have the capacity or tendency to mislead or deceive as to the true identity of the viatical settlement licensee, or to create the impression that a company other than the viatical settlement licensee would have any responsibility for the financial obligation under a viatical settlement contract.(j) An advertisement shall not use any combination of words, symbols or physical materials that by their content, phraseology, shape, color or other characteristics are so similar to a combination of words, symbols or physical materials used by a government program or agency or otherwise appear to be of such a nature that they tend to mislead prospective viators into believing that the solicitation is in some manner connected with a government program or agency.(k) An advertisement may state that a viatical settlement licensee is licensed in the state where the advertisement appears, provided it does not exaggerate that fact or suggest or imply that competing viatical settlement licensees may not be so licensed. The advertisement may ask the audience to consult the licensee's website or contact the department of insurance to find out if the state requires licensing and, if so, whether the viatical settlement provider or viatical settlement broker is licensed.(l) An advertisement shall not create the impression that the viatical settlement provider, its financial condition or status, the payment of its claims or the merits, desirability, or advisability of its viatical settlement contracts are recommended or endorsed by any government entity.(m) The name of the actual licensee shall be stated in all of its advertisements. An advertisement shall not use a trade name, any group designation, name of any affiliate or controlling entity of the licensee, service mark, slogan, symbol or other device in a manner that would have the capacity or tendency to mislead or deceive as to the true identity of the actual licensee or create the false impression that an affiliate or controlling entity would have any responsibility for the financial obligation of the licensee.(n) An advertisement shall not, directly or indirectly, create the impression that any division or agency of the state or of the United States government endorses, approves or favors:(1) Any viatical settlement licensee or its business practices or methods of operation;(2) The merits, desirability or advisability of any viatical settlement contract;(3) Any viatical settlement contract; or(4) Any life insurance policy or life insurance company.(o) If the advertiser emphasizes the speed with which the viatication will occur, the advertising must disclose the average time frame from completed application to the date of offer and from acceptance of the offer to receipt of the funds by the viator.(p) If the advertising emphasizes the dollar amounts available to viators, the advertising shall disclose the average purchase price as a percent of face value obtained by viators contracting with the licensee during the past six months.
(a) Fraudulent viatical settlement acts, interference and participation of convicted felons prohibited. --(1) A person shall not commit a fraudulent viatical settlement act.(2) A person shall not knowingly or intentionally interfere with the enforcement of the provisions of this article or investigations of suspected or actual violations of this article.(3) A person in the business of viatical settlements shall not knowingly or intentionally permit any person convicted of a felony involving dishonesty or breach of trust to participate in the business of viatical settlements.(b) Fraud warning required. --(1) Viatical settlement contracts and applications for viatical settlements, regardless of the form of transmission shall contain the following statement or a substantially similar statement:"Any person who knowingly presents false information in an application for insurance or viatical settlement contract is guilty of a crime and may be subject to fines and confinement in prison."(2) The lack of a statement as required in subdivision (1) of this subsection does not constitute a defense in any prosecution for a fraudulent viatical settlement act.(c) (1) Any person engaged in the business of viatical settlements having knowledge or a reasonable suspicion that a fraudulent viatical settlement act is being, will be or has been committed shall provide such information to the commissioner.(2) Any other person having knowledge or a reasonable belief that a fraudulent viatical settlement act is being, will be or has been committed may provide to the commissioner the information required by, and in a manner prescribed by, the commissioner.(d) (1) No civil liability shall be imposed on and no cause of action shall arise from a person's furnishing information concerning suspected, anticipated or completed fraudulent viatical settlement acts or suspected or completed fraudulent insurance acts if the information is provided without actual malice and is provided to or received from:(A) The commissioner or the commissioner's employees, agents or representatives;(B) Federal, state or local law enforcement or regulatory officials or their employees, agents or representatives;(C) A person involved in the prevention and detection of fraudulent viatical settlement acts or that person's agents, employees or representatives;(D) The National Association of Insurance Commissioners (NAIC), National Association of Securities Dealers (NASD), the North American Securities Administrators Association (NASAA), or their employees, agents or representatives, or other regulatory body overseeing life insurance, viatical settlements, securities or investment fraud; or(E) The life insurer that issued the life insurance policy covering the life of the insured.(2) A person furnishing information pursuant to subdivision (1) of this subsection shall be entitled to an award of attorney's fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out the provisions of this article and the party bringing the action was not substantially justified in doing so.(3) This subsection does not abrogate or modify common law or statutory privileges or immunities enjoyed by a person described in subdivision (1) of this subsection.(e) (1) Documents and evidence provided pursuant to subsection (d) of this section or obtained by the commissioner in an investigation of suspected or actual fraudulent viatical settlement acts shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action.(2) The commissioner may release documents and evidence obtained in an investigation of suspected or actual fraudulent viatical settlement acts in administrative or judicial proceedings to enforce laws administered by the commissioner; to federal, state or local law enforcement or regulatory agencies, to an organization established for the purpose of detecting and preventing fraudulent viatical settlement acts or to the NAIC; or, at the discretion of the commissioner, to a person in the business of viatical settlements that is aggrieved by a fraudulent viatical settlement act: Provided, That release of documents and evidence under this subdivision does not abrogate or modify the privilege granted in subdivision (1) of this subsection.(f) This section does not:(1) Preempt the authority or relieve the duty of other law enforcement or regulatory agencies to investigate, examine and prosecute suspected violations of law;(2) Prevent or prohibit a person from disclosing voluntarily information concerning viatical settlement fraud to a law enforcement or regulatory agency other than the insurance department; or(3) Limit the powers granted elsewhere by the laws of this state to the commissioner or an insurance fraud unit to investigate and examine possible violations of law and to take appropriate action against wrongdoers.(g) (1) Viatical settlement providers and viatical settlement brokers shall have in place antifraud initiatives reasonably computed to detect, prosecute and prevent fraudulent viatical settlement acts. At the discretion of the commissioner, the commissioner may order, or a licensee may request and the commissioner may grant, such modifications of the following required initiatives as necessary to ensure an effective antifraud program. The modifications may be more or less restrictive than the required initiatives so long as the modifications may reasonably be expected to accomplish the purpose of this section.(2) Antifraud initiatives shall include:(A) Fraud investigators who may be viatical settlement provider or viatical settlement broker employees or independent contractors; and(B) An antifraud plan, which shall be submitted to the commissioner. The antifraud plan shall include, but not be limited to:(i) A description of the procedures for detecting and investigating possible fraudulent viatical settlement acts and procedures for resolving material inconsistencies between medical records and insurance applications;(ii) A description of the procedures for reporting possible fraudulent viatical settlement acts to the commissioner;(iii) A description of the plan for antifraud education and training of underwriters and other personnel; and(iv) A description or chart outlining the organization arrangement of the antifraud personnel who are responsible for the investigation and reporting of possible fraudulent viatical settlement acts and investigating unresolved material inconsistencies between medical records and insurance applications.(3) Antifraud plans submitted to the commissioner shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action.
(a) In addition to the penalties and other enforcement provisions of this chapter, if any person violates any provision of this article or of any rule implementing this article, the commissioner may seek an injunction in a court of competent jurisdiction and may apply for temporary and permanent orders that the commissioner determines are necessary to restrain the person from committing the violation.(b) Any person damaged by the acts of a person in violation of this article may bring a civil action against the person committing the violation in a court of competent jurisdiction.(c) The commissioner may issue cease and desist order upon a person that violates any provision of this article or any rule promulgated thereunder, any order adopted by the commissioner, or any written agreement entered into with the commissioner.(d) When the commissioner finds that an activity in violation of this article presents an immediate danger to the public that requires an immediate final order, the commissioner may issue an emergency cease and desist order reciting with particularity the facts underlying the findings. The emergency cease and desist order is effective immediately upon service of a copy of the order on the respondent and remains effective for ninety days. If the commissioner begins nonemergency cease and desist proceedings, the emergency cease and desist order remains effective, absent an order by a court of competent jurisdiction pursuant to this chapter.(e) In addition to the penalties and other enforcement provisions of this article, any person who violates this article is subject to civil penalties of up to $10,000 per violation. Imposition of civil penalties shall be pursuant to an order of the commissioner issued after notice and hearing. The commissioner's order may require a person found to be in violation of this article to make restitution to persons aggrieved by violations of this article.
(a) A person convicted of a fraudulent viatical settlement act is guilty of a felony and, upon conviction thereof, shall be sentenced as follows:(1) Imprisonment in a state correctional facility for not more than twenty years or payment of a fine of not more than $100,000, or both, if the value of the viatical settlement contract is more than $35,000;(2) Imprisonment in a state correctional facility for not more than ten years or to payment of a fine of not more than $20,000, or both, if the value of the viatical settlement contract is more than $2,500, but not more than $35,000;(3) Imprisonment in a state correctional facility for not more than five years or payment of a fine of not more than $10,000, or both, if the value of the viatical settlement contract is more than $500, but not more than $2,500.(b) Any person who violates any other provision of this article is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $1,000 or confined in jail not more than one year, or both fined and confined.
The commissioner shall have the authority to promulgate legislative rules, including emergency rules, implementing this article, pursuant to article three, chapter twenty-nine-a of this code. Such rules may include standards for evaluating reasonableness of payments under viatical settlement contracts for persons who are terminally or chronically ill; regulation of discount rates used to determine the amount paid in exchange for assignment, transfer, sale, devise or bequest of a benefit under a life insurance policy insuring the life of a person that is chronically or terminally ill; and provisions governing the relationship and responsibilities of both insurers and viatical settlement providers and viatical settlement brokers during the viatication of a life insurance policy or certificate.
This article shall not preempt, supersede or limit any provision of any state securities law or any rule, order or notice issued thereunder.
As used in this article:(1) "Advertising" means any written, electronic or printed communication or any communication by means of recorded telephone messages or transmitted on radio, television, the Internet or similar communications media, including film strips, motion pictures and videos, published, disseminated, circulated or placed, directly or indirectly, before the public in this state for the purpose of creating an interest in or inducing a person to sell, assign, devise, bequest or transfer the death benefit or ownership of a life insurance policy pursuant to a viatical settlement contract.(2) "Business of viatical settlements" means an activity involved in, but not limited to, the offering, soliciting, negotiating, procuring, effectuating, purchasing, investing, financing, monitoring, tracking, underwriting, selling, transferring, assigning, pledging, hypothecating or in any other manner, acquiring an interest in a life insurance policy by means of a viatical settlement contract.(3) "Chronically ill" means having been certified within the preceding twelve-month period by a licensed health professional as:(A) Being unable to perform, without substantial assistance from another individual, at least two of the following activities of daily living, including, but not limited to, eating, toileting, transferring, bathing, dressing or continence due to a loss of functional capacity;(B) Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment; or(C) Having a level of disability similar to that described in paragraph (A) of this subdivision as determined under regulations prescribed by the United States Secretary of the Treasury in consultation with the United States Secretary of Health and Human Services.(4) "Financing entity" means an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a viatical settlement provider, credit enhancer or any entity that has a direct ownership in a policy or certificate that is the subject of a viatical settlement contract, but whose principal activity related to the transaction is providing funds to effect the viatical settlement or purchase of one or more viaticated policies and who has an agreement in writing with one or more licensed viatical settlement providers to finance the acquisition of viatical settlement contracts. "Financing entity" does not include a nonaccredited investor or a viatical settlement purchaser.(5) "Fraudulent viatical settlement act" includes:(A) Acts or omissions committed by any person who knowingly or with intent to defraud, for the purpose of depriving another of property or for pecuniary gain, commits or permits its employees or its agents to engage in acts including:(i) Presenting, causing to be presented or preparing with knowledge or belief that it will be presented to or by a viatical settlement provider, viatical settlement broker, viatical settlement purchaser, financing entity, insurer, insurance producer or any other person, false material information or concealing material information, as part of, in support of or concerning a fact material to one or more of the following:(I) An application for the issuance of a viatical settlement contract or insurance policy;(II) The underwriting of a viatical settlement contract or insurance policy;(III) A claim for payment or benefit pursuant to a viatical settlement contract or insurance policy;(IV) Premiums paid on an insurance policy;(V) Payments and changes in ownership or beneficiary made in accordance with the terms of a viatical settlement contract or insurance policy;(VI) The reinstatement or conversion of an insurance policy;(VII) In the solicitation, offer, effectuation or sale of a viatical settlement contract or insurance policy;(VIII) The issuance of written evidence of viatical settlement contract or insurance; or(IX) A financing transaction; and(ii) Employing any plan, financial structure, device, scheme or artifice to defraud related to viaticated policies;(B) In the furtherance of a fraud or to prevent the detection of a fraud any person commits or permits its employees or its agents to:(i) Remove, conceal, alter, destroy or sequester from the commissioner the assets or records of a licensee or other person engaged in the business of viatical settlements;(ii) Misrepresent or conceal the financial condition of a licensee, financing entity, insurer or other person;(iii) Transact the business of viatical settlements in violation of laws requiring a license, certificate of authority or other legal authority for the transaction of the business of viatical settlements; or(iv) File with the commissioner or the equivalent chief insurance regulatory official of another jurisdiction a document containing false information or otherwise conceals information about a material fact from the commissioner;(C) Embezzlement, theft, misappropriation or conversion of moneys, funds, premiums, credits or other property of a viatical settlement provider, insurer, insured, viator, insurance policyowner or any other person engaged in the business of viatical settlements or insurance;(D) Recklessly entering into, negotiating, brokering, otherwise dealing in a viatical settlement contract, the subject of which is a life insurance policy that was obtained by presenting false information concerning any fact material to the policy or by concealing, for the purpose of misleading another, information concerning any fact material to the policy, where the person or the persons intended to defraud the policy's issuer, the viatical settlement provider or the viator;(E) Facilitating the change of state of ownership of a policy or certificate or the state of residency of a viator to a state or jurisdiction that does not have a law similar to this article for the express purposes of evading or avoiding the provisions of this article;(F) Issuing, soliciting, marketing or otherwise promoting stranger-originated life insurance; or(G) Attempting to commit, assisting, aiding or abetting in the commission of, or conspiracy to commit the acts or omissions specified in this subsection.(6) "Life insurance producer" means any person licensed in accordance with the provisions of article twelve of this chapter as a resident or nonresident insurance producer who has received qualification or authority for a license in the life insurance coverage line of authority.(7) "Person" means a natural person or a legal entity, including, without limitation, an individual, partnership, limited liability company, association, trust or corporation.(8) "Policy" means an individual or group policy, group certificate, contract or arrangement of life insurance owned by a resident of this state, regardless of whether delivered or issued for delivery in this state.(9) "Related provider trust" means a titling trust or other trust established by a licensed viatical settlement provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction. The trust shall have a written agreement with the licensed viatical settlement provider under which the licensed viatical settlement provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files related to viatical settlement transactions available to the commissioner as if those records and files were maintained directly by the licensed viatical settlement provider.(10) "Special purpose entity" means a corporation, partnership, trust, limited liability company or other similar entity formed solely to provide either directly or indirectly access, either directly or indirectly, to institutional capital markets for a financing entity or licensed viatical settlement provider or in connection with a transaction in which the securities in the special purpose entity are acquired by qualified institutional buyers.(11) "Terminally ill" means certified by a physician as having an illness or physical condition that can reasonably be anticipated to result in death in twenty-four months or less.(12) "Viatical settlement broker" means a person who, working exclusively on behalf of a viator and for a fee, commission or other valuable consideration, offers or attempts to negotiate viatical settlement contracts between a viator and one or more viatical settlement providers or one or more viatical settlement brokers. Notwithstanding the manner in which the viatical settlement broker is compensated, a viatical settlement broker is deemed to represent only the viator, and not the insurer or the viatical settlement provider, and owes a fiduciary duty to the viator to act according to the viator's instructions and in the best interest of the viator. The term does not include an attorney, certified public accountant or a financial planner accredited by a nationally recognized accreditation agency, who is retained to represent the viator and whose compensation is not paid directly or indirectly by the viatical settlement provider or purchaser, provided that the viatical settlement activities are incidental to the professional practice of the attorney, certified public accountant or financial planner.(13) "Viatical settlement contract" means any of the following:(A) A written agreement between a viator and a viatical settlement provider or any affiliate of the viatical settlement provider establishing the terms under which compensation or anything of value is or will be paid, which compensation or value is less than the expected death benefits of the policy, in return for the viator's present or future assignment, transfer, sale, devise or bequest of the death benefit or ownership of any portion of the insurance policy or certificate of insurance;(B) A premium finance loan made for a life insurance policy by a lender to a viator on, before or after the date of issuance of the policy in either of the following situations:(i) The viator or the insured receives a guarantee of a future viatical settlement value of the policy; or(ii) The viator or the insured agrees to sell the policy or any portion of its death benefit on any date following the issuance of the policy.(C) The transfer or acquisition for compensation or anything of value for ownership or beneficial interest in a trust or other person that owns such a policy if the trust or other person was formed or availed of for the principal purpose of acquiring one or more life insurance policies.(D) "Viatical settlement contract" does not include any of the following unless part of a plan, scheme, device or artifice to avoid the application of this article:(i) A policy loan or accelerated death benefit made by the insurer pursuant to the policy's terms;(ii) Loan proceeds that are used solely to pay premiums for the policy and the costs of the loan, including interest, arrangement fees, utilization fees and similar fees, closing costs, legal fees and expenses, trustee fees and expenses and third-party collateral provider fees and expenses, including fees payable to letter of credit issuers;(iii) A loan made by a bank or other licensed financial institution in which the lender takes an interest in a life insurance policy solely to secure repayment of a loan or, if there is a default on the loan and the policy is transferred, the transfer of such a policy by the lender, provided that the default itself is not pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this article;(iv) An agreement where all the parties are closely related to the insured by blood or law or have a lawful substantial economic interest in the continued life, health and bodily safety of the person insured or are trusts established primarily for the benefit of such parties;(v) Any designation, consent or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or trust established by the employer, of life insurance on the life of the employee;(vi) Any of the following business succession planning arrangements if those arrangements are bona fide arrangements:(I) An arrangement between one or more shareholders in a corporation or between a corporation and one or more of its shareholders or one or more trusts established by its shareholders;(II) An arrangement between one or more partners in a partnership or between a partnership and one or more of its partners or one or more trusts established by its partners; or(III) An arrangement between one or more members in a limited liability company or between a limited liability company and one or more of its members or one or more trusts established by its members;(vii) An agreement entered into by a service recipient, or a trust established by the service recipient and a service provider, or a trust established by the service provider who performs significant services for the service recipient's trade or business; or(viii) Any other contract, transaction or arrangement exempted from the definition of a viatical settlement contract by the commissioner based on a determination that the contract, transaction or arrangement is not of the type intended to be regulated by this article.(14) (A) "Viatical settlement provider" means a person, other than a viator, that enters into or effectuates a viatical settlement contract with a viator resident in this state.(B) "Viatical settlement provider" does not include:(i) A bank, savings bank, savings and loan association, credit union or other licensed lending institution that takes an assignment of a life insurance policy solely as collateral for a loan;(ii) The issuer of the life insurance policy;(iii) An authorized or eligible insurer that provides stop loss coverage or financial guaranty insurance to a viatical settlement provider, purchaser, financing entity, special purpose entity or related provider trust;(iv) An individual who enters into or effectuates no more than one viatical settlement contract in a calendar year for the transfer of life insurance policies for any value less than the expected death benefit;(v) A financing entity;(vi) A special purpose entity;(vii) A related provider trust;(viii) A viatical settlement purchaser; or(ix) Any other person that the commissioner determines is not the type of person intended to be covered by the definition of viatical settlement provider.(15)(A) "Viatical settlement purchaser" means a person who provides a sum of money as consideration for a life insurance policy or an interest in the death benefits of a life insurance policy, or a person who owns or acquires or is entitled to a beneficial interest in a trust that owns a viatical settlement contract or is the beneficiary of a life insurance policy that has been or will be the subject of a viatical settlement contract, for the purpose of deriving an economic benefit.(B) "Viatical settlement purchaser" does not include:(i) A licensee under this article;(ii) An accredited investor or qualified institution buyer as defined in, respectively, Rule 501(a) or Rule 144A promulgated under the Federal Securities Act of 1933, as amended;(iii) A financing entity;(iv) A special purpose entity; or(v) A related provider trust.(16) "Viaticated policy" means a life insurance policy or certificate that has been acquired by a viatical settlement provider pursuant to a viatical settlement contract.(17)(A) "Viator" means the owner of a life insurance policy or a certificate holder under a group policy who resides in this state and enters or seeks to enter into a viatical settlement contract. For the purposes of this article, a viator shall not be limited to an owner of a life insurance policy or a certificate holder under a group policy insuring the life of an individual with a terminal or chronic illness or condition except where specifically addressed. If there is more than one viator on a single policy and the viators are residents of different states, the transaction shall be governed by the law of the state in which the viator having the largest percentage ownership resides or, if the viators hold equal ownership, the state of residence of one viator agreed upon in writing by all the viators.(B) "Viator" does not include:(i) A licensee under this article, including a life insurance producer acting as a viatical settlement broker pursuant to this article;(ii) Qualified institution buyer as defined, respectively, in Rule 144A promulgated under the Federal Securities Act of 1933, as amended;(iii) A financing entity;(iv) A special purpose entity; or(v) A related provider trust.(18) "Stranger-originated life insurance" or "STOLI" means a plan or agreement that provides for both of the following at the time of the origination of a life insurance policy.(A) The purchase of a life insurance policy by an applicant primarily for the benefit of a third-party investor that lacks insurable interest in the insured person; and(B) The subsequent accrual, directly or indirectly, to that third-party investor of the legal or beneficial ownership of the policy or the benefits of the policy.
(a)(1) A person may not operate as a viatical settlement provider or viatical settlement broker without first obtaining a license from the commissioner.(2)(A) An insurance producer who is authorized to sell life insurance in this state pursuant to a resident or nonresident license issued in accordance with the provisions of 33-12-1 et seq. of this code may operate as a viatical settlement broker without obtaining a license pursuant to this section if the viatical settlement activities of the producer are incidental to the producers insurance business activities.(B) The insurer that issued the policy being viaticated is not responsible for any act or omission of a viatical settlement broker or viatical settlement provider arising out of or in connection with the viatical settlement transaction, unless the insurer receives compensation for the placement of a viatical settlement contract from the viatical settlement provider or viatical settlement broker in connection with the viatical settlement contract.(3) A person licensed as an attorney, certified public accountant, or financial planner accredited by a nationally recognized accreditation agency who is retained to represent the viator, whose compensation is not paid directly or indirectly by the viatical settlement provider, may negotiate viatical settlement contracts on behalf of the viator without having to obtain a license as a viatical settlement broker.(b) Application for a viatical settlement provider or viatical settlement broker license and for renewals of the licenses shall be made in the manner prescribed by the commissioner and shall be accompanied by fees established in legislative rules, including emergency rules, promulgated by the commissioner. (1) The commissioner may not disqualify an applicant from initial licensure because of a prior criminal conviction that remains unreversed unless that conviction is for a crime that bears a rational nexus to the activity requiring licensure. In determining whether a criminal conviction bears a rational nexus to a profession or occupation, the commissioner shall consider at a minimum:(A) The nature and seriousness of the crime for which the individual was convicted; (B) The passage of time since the commission of the crime; (C) The relationship of the crime to the ability, capacity, and fitness required to perform the duties and discharge the responsibilities of the profession or occupation; and (D) Any evidence of rehabilitation or treatment undertaken by the individual. (2) Notwithstanding any other provision of this code to the contrary, if an applicant is disqualified from licensure because of a prior criminal conviction, unless that conviction is a felony pursuant to 33-13C-14 of this code, the commissioner shall permit the applicant to apply for initial licensure if:(A) A period of five years has elapsed from the date of conviction or the date of release from incarceration, whichever is later; (B) The individual has not been convicted of any other crime during the period of time following the disqualifying offense; and (C) The conviction was not for an offense of a violent or sexual nature: Provided, That a conviction for an offense of a violent or sexual nature may subject an individual to a longer period of disqualification from licensure, to be determined by the commissioner.(3) An individual with a criminal record who has not previously applied for licensure may petition the commissioner at any time for a determination of whether the individuals criminal record will disqualify the individual from obtaining a license. This petition shall include sufficient details about the individuals criminal record to enable the commissioner to identify the jurisdiction where the conviction occurred, the date of the conviction, and the specific nature of the conviction. The commissioner shall provide the determination within 60 days of receiving the petition from the applicant. The commissioner may charge a fee to recoup its costs for each petition.(c) The commissioner has the authority, at any time, to require the applicant to fully disclose the identity of all stockholders, partners, officers, members, and employees and the commissioner may, in the exercise of the commissioners discretion, refuse to issue a license in the name of a legal entity if not satisfied that any officer, employee, stockholder, partner, or member of the entity who may materially influence the applicants conduct meets the standards of this article.(d) The commissioner shall make an investigation of each applicant and issue a license if the commissioner finds that the applicant:(1) If a viatical settlement provider, has provided a detailed plan of operation;(2) Is competent and trustworthy and acts in good faith in the capacity of a licensee;(3) Has a good business reputation and is qualified by experience, training, or education as a viatical settlement provider or broker;(4) Has demonstrated evidence of financial responsibility, in a format prescribed by the commissioner, by possessing a minimum equity of not less than $250,000 in cash or cash equivalents reflected in the applicants audited financial statements or through a surety bond executed and issued by an insurer authorized to issue surety bonds in this state in the amount of $250,000: Provided, That the commissioner may permit an applicant for a brokers license to demonstrate evidence of financial responsibility through a policy of insurance covering legal liability resulting from erroneous acts or failure to act in their capacity as a viatical settlement broker and inuring to the benefit of any aggrieved party as the result of any single occurrence in the sum of not less than $100,000 and $300,000 in the aggregate for all occurrences within one year. Any surety bond issued pursuant to this subdivision shall be in the favor of this state and shall specifically authorize recovery by the commissioner on behalf of any person in this state who sustained damages as the result of erroneous acts, failure to act, conviction of fraud, or conviction of unfair practices by the viatical settlement provider or viatical settlement broker. The commissioner shall accept, as evidence of financial responsibility, proof that financial instruments in accordance with the requirements in this paragraph have been filed with a state in which the applicant is licensed as a viatical settlement provider or viatical settlement broker. The commissioner may ask for evidence of financial responsibility at any time he or she considers it necessary.(5) If a legal entity has provided a certificate of good standing from the state of its domicile; and(6) Has provided an antifraud plan that meets the requirements of 33-13C-14(g) of this code.(e) The commissioner may not issue a license to a nonresident applicant unless the applicant files with the commissioner either a written designation of an agent for service of process or the applicants written irrevocable consent that any action against the applicant may be commenced against the applicant by service of process on the commissioner.(f) A viatical settlement provider or viatical settlement broker shall provide to the commissioner new or revised information about officers, 10 percent or more stockholders, partners, directors, members, or designated employees within 30 days of the change.(g) An individual licensed as a viatical settlement broker shall complete on a biennial basis 15 hours of training related to viatical settlements and viatical settlement transactions as required by the commissioner. A life insurance producer operating as a viatical settlement broker pursuant to subdivision (2), subsection (a) of this section is not subject to the requirements of this subsection. Any person failing to meet the requirements of this subsection is subject to the penalties imposed by the commissioner.
(a) The commissioner may refuse to issue, suspend, revoke, place on probation, or refuse to renew the license of a viatical settlement provider or viatical settlement broker if the commissioner finds that:(1) There was any material misrepresentation in the application for the license;(2) The licensee or any officer, partner, member, or key management personnel has been convicted of fraudulent or dishonest practices, is subject to a final administrative action, or is otherwise shown to be untrustworthy or incompetent;(3) The viatical settlement provider demonstrates a pattern of unreasonable payments to viators;(4) The licensee or any officer, partner, member, or key management personnel has been found guilty of, or has pleaded guilty or nolo contendere to, any felony, or to a misdemeanor involving fraud, regardless of whether a judgment of conviction has been entered by the court: Provided, That the commissioner shall apply 33-13C-3(b) of this code and any relevant legislative rules in determining whether an applicants prior criminal convictions bear a rational nexus to the license being sought;(5) The viatical settlement provider has entered into any viatical settlement contract that has not been approved pursuant to this article;(6) The viatical settlement provider has failed to honor contractual obligations set out in a viatical settlement contract;(7) The licensee no longer meets the requirements for initial licensure;(8) The viatical settlement provider has assigned, transferred or pledged a viaticated policy to a person other than a viatical settlement provider licensed in this state, viatical settlement purchaser, an accredited investor, or qualified institutional buyer as defined respectively in Rule 501(a) or Rule 144A promulgated under the Federal Securities Act of 1933, as amended, financing entity, special purpose entity, or related provider trust; or(9) The licensee or any officer, partner, member, or key management personnel has violated any provision of this article.(b) The commissioner may suspend, revoke, or refuse to renew the license of a viatical settlement broker or a life insurance producer operating as a viatical settlement broker pursuant to this article if the commissioner finds that the viatical settlement broker or life insurance producer has violated the provisions of this article or has otherwise engaged in bad faith conduct with one or more viators.(c) If the commissioner denies a license application or suspends, revokes, or refuses to renew the license of a viatical settlement provider, viatical settlement broker, or life insurance producer operating as a viatical settlement broker, the commissioner shall conduct a hearing in accordance with 33-2-13 of this code.
(a) A person shall not use a viatical settlement contract form or provide a disclosure statement form to a viator in this state unless it has been filed with and approved by the commissioner. The commissioner shall disapprove a viatical settlement contract form, disclosure statement form or any provision contained therein if, in the commissioner's opinion, the contract, disclosure form or any provision contained therein fail to meet the requirements of section eight, ten, thirteen or fourteen of this article, is unreasonable, is contrary to the interests of the public or is otherwise misleading or unfair to the viator. At the commissioner's discretion, the commissioner may require the submission of advertising material.(b) Forms required to be filed are subject to the provisions of section eight, article six of this chapter and shall be deemed "forms for noncommercial insurance". The commissioner shall establish fees for form filings by rule, including emergency rule.
(a) On or before March 1 of each year, each viatical settlement provider shall file with the commissioner an annual statement containing such information as the commissioner may prescribe. The information shall be limited to only those transactions where the viator is a resident of this state. Individual transaction data regarding the business of viatical settlements or data that could compromise the privacy of personal, financial and health information of the viator or insured shall be filed with the commissioner on a confidential basis.(b) Except as otherwise allowed or required by law, a viatical settlement provider, viatical settlement broker, insurance company, insurance producer, information bureau, rating agency or company or any other person with actual knowledge of an insured's identity, shall not disclose that identity as an insured, or the insured's financial or medical information to any other person unless the disclosure:(1) Is necessary to effect a viatical settlement between the viator and a viatical settlement provider and the viator and insured have provided prior written consent to the disclosure;(2) Is provided in response to an investigation or examination by the commissioner or any other governmental officer or agency or pursuant to the requirements of subsection (c), section fourteen of this article;(3) Is a term of or condition to the transfer of a policy by one viatical settlement provider to another viatical settlement provider;(4) Is necessary to permit a financing entity, related provider trust or special purpose entity to finance the purchase of policies by a viatical settlement provider and the viator and insured have provided prior written consent to the disclosure;(5) Is necessary to allow the viatical settlement provider or viatical settlement broker or their authorized representative to make contacts for the purpose of determining health status; or(6) Is required to purchase stop loss coverage or financial guaranty insurance.
(a) (1) The commissioner may conduct an examination under this article of a licensee as often as he or she deems appropriate after considering such matters as consumer complaints, results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, report of independent certified public accountants and other relevant criteria as determined by the commissioner.(2) For purposes of completing an examination of a licensee under this article, the commissioner may examine or investigate any person, or the business of any person, in so far as the examination or investigation is, in the sole discretion of the commissioner, necessary or material to the examination of the licensee.(3) In lieu of an examination under this article of any foreign or alien licensee licensed in this state, the commissioner may, at the commissioner's discretion, accept an examination report on the licensee as prepared by the commissioner for the licensee's state of domicile or port-of-entry state; as far as practical, the examination of a foreign or alien licensee shall be made in cooperation with the insurance supervisory officials of other states in which the licensee transacts business.(b) (1) A person required to be licensed by this article shall for five years retain copies of all records and documents related to the requirements of this article, including, but not limited to, proposed, offered or executed contracts, purchase agreements, underwriting documents, policy forms and applications from the date of the proposal, offer or execution of the contract or purchase agreement, whichever is later; and all checks, drafts or other evidence and documentation related to the payment, transfer, deposit or release of funds from the date of the transaction: Provided, That this subsection does not relieve a person of the obligation to produce these documents to the commissioner after the retention period has expired if the person has retained the documents.(2) Records required to be retained by this section shall be legible and complete and may be retained in paper, photograph, microprocess, magnetic, mechanical or electronic media or by any process that accurately reproduces or forms a durable medium for the reproduction of a record.(c) (1) Upon determining that an examination should be conducted, the commissioner shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the Examiners Handbook adopted by the National Association of Insurance Commissioners (NAIC). The commissioner may also employ such other guidelines or procedures as the commissioner may deem appropriate.(2) Every licensee or person from whom information is sought, its officers, directors and agents shall provide to the examiners timely, convenient and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, assets and computer or other recordings relating to the property, assets, business and affairs of the licensee being examined. The officers, directors, employees and agents of the licensee or person shall facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of a licensee, by its officers, directors, employees or agents, to submit to examination or to comply with any reasonable written request of the commissioner shall be grounds for suspension or refusal of, or nonrenewal of any license or authority held by the licensee to engage in the viatical settlement business or other business subject to the commissioner's jurisdiction. Any proceedings for suspension, revocation or refusal of any license or authority shall be conducted pursuant to section eleven, article two of this chapter.(3) The commissioner shall have the power to issue subpoenas, to administer oaths and to examine under oath any person as to any matter pertinent to the examination. Upon the failure or refusal of a person to obey a subpoena, the commissioner may petition a court of competent jurisdiction and, upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order is punishable as contempt of court.(4) When making an examination under this article, the commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as examiners, the reasonable cost of which shall be borne by the licensee that is the subject of the examination.(5) Nothing contained in this article shall be construed to limit the commissioner's authority to terminate or suspend an examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state. Findings of fact and conclusions made pursuant to any examination shall be prima facie evidence in any legal or regulatory action.(6) No later than sixty days following completion of the examination, the examiner in charge shall file with the commissioner a verified written report of examination under oath. Upon receipt of the verified report, the commissioner shall transmit the report to the licensee examined, together with a notice that shall afford the licensee examined a reasonable opportunity of not more than thirty days to make a written submission or rebuttal with respect to any matters contained in the examination report.(7) In the event the commissioner determines that regulatory action is appropriate as a result of an examination, the commissioner may initiate any proceedings or actions provided by law.(d) (1) Names and individual identification data for all viators is considered private and confidential information and shall not be disclosed by the commissioner unless required by law.(2) Except as otherwise provided in this article, all examination reports, working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this article, or in the course of analysis or investigation by the commissioner of the financial condition or market conduct of a licensee is confidential by law and privileged, is not subject to the public disclosure provisions of article one, chapter twenty-nine-b of this code, is not subject to subpoena and is not subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as part of the commissioner's official duties.(3) Documents, materials or other information, including, but not limited to, all working papers, and copies thereof, in the possession or control of the NAIC and its affiliates and subsidiaries is confidential by law and privileged, is not subject to subpoena, and is not subject to discovery or admissible in evidence in any private civil action if they are:(A) Created, produced or obtained by or disclosed to the NAIC and its affiliates and subsidiaries in the course of assisting an examination made under this article, or assisting a commissioner in the analysis or investigation of the financial condition or market conduct of a licensee; or(B) Disclosed to the NAIC and its affiliates and subsidiaries under subdivision (5) of this subsection by a commissioner.(4) Neither the commissioner nor any person that received the documents, material or other information while acting under the authority of the commissioner, including the NAIC and its affiliates and subsidiaries, shall be permitted to testify in any private civil action concerning any confidential documents, materials or information subject to subdivision (1) of this subsection.(5) In order to assist in the performance of the commissioner's duties, the commissioner:(A) May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subdivision (1) of this subsection, with other state, federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal and international law-enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, communication or other information;(B) May receive documents, materials, communications or information, including otherwise confidential and privileged documents, materials or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law-enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the jurisdiction that is the source of the document, material or information; and(C) May enter into agreements governing sharing and use of information consistent with this subsection.(6) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subdivision (5) of this subsection.(7) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subsection shall be available and enforced in any proceeding in, and in any court of, this state.(8) Nothing contained in this article shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the commissioner of any other state or country, or to law-enforcement officials of this or any other state or agency of the federal government at any time or to the NAIC, so long as such agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this article.(e) (1) An examiner may not be appointed by the commissioner if the examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under this article. This section shall not be construed to automatically preclude an examiner from being:(A) A viator;(B) An insured in a viaticated insurance policy; or(C) A beneficiary in an insurance policy that is proposed to be viaticated.(2) Notwithstanding the requirements of this clause, the commissioner may retain, from time to time, on an individual basis, qualified actuaries, certified public accountants or other similar individuals who are independently practicing their professions, even though these persons may, from time to time, be similarly employed or retained by persons subject to examination under this article.(f) (1) No cause of action shall arise nor shall any liability be imposed against the commissioner, the commissioner's authorized representatives or any examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this article.(2) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the commissioner or the commissioner's authorized representative or examiner pursuant to an examination made under this article, if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. This subdivision does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subdivision (1) of this subsection.(3) A person identified in subdivision (1) or (2) of this subsection shall be entitled to an award of attorney's fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out the provisions of this article and the party bringing the action was not substantially justified in doing so. For purposes of this section, a proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time that it was initiated.(g) The insurance fraud unit created in article forty-one of this chapter may investigate suspected violations of this article by persons engaged in the business of viatical settlements in the same manner as the fraud unit investigates suspected violators of those statutes set forth in subsection (b), section eight, article forty-one of this chapter.
(a) With each application for a viatical settlement, a viatical settlement provider or viatical settlement broker shall provide the viator with at least the following disclosures no later than the time the application for the viatical settlement contract is signed by all parties. The disclosures shall be provided in a separate document that is signed by the viator and the viatical settlement provider or viatical settlement broker, and shall provide the following information:(1) That there are possible alternatives to viatical settlement contracts, including any accelerated death benefits or policy loans offered under the viator's life insurance policy.(2) That a viatical settlement broker represents exclusively the viator, and not the insurer or the viatical settlement provider, and owes a fiduciary duty to the viator, including a duty to act according to the viator's instructions and in the best interest of the viator.(3) That some or all of the proceeds of the viatical settlement may be taxable under federal income tax and state franchise and income taxes, and assistance should be sought from a professional tax advisor.(4) That proceeds of the viatical settlement could be subject to the claims of creditors.(5) That receipt of the proceeds of a viatical settlement may adversely affect the viator's eligibility for Medicaid or other government benefits or entitlements, and advice should be obtained from the appropriate government agencies.(6) The viator has the right to rescind a viatical settlement contract by providing notice of rescission and repaying all viatical settlement proceeds paid to the viator pursuant to the escrow agreement by the earlier of sixty calendar days after the date upon which the viatical settlement contract is executed by all parties or thirty calendar days after the viatical settlement proceeds have been paid to the viator, as provided in subsection (e), section ten of this article. If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment by the viator or the viator's estate of all viatical settlement proceeds to the viatical settlement provider within sixty days of the insured's death.(7) That funds will be sent to the viator within three business days after the viatical settlement provider has received the insurer or group administrator's written acknowledgment that ownership of the policy or interest in the certificate has been transferred and the beneficiary has been designated.(8) That entering into a viatical settlement contract may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under the policy or certificate, to be forfeited by the viator and that assistance should be sought from a financial adviser.(9) Disclosure to a viator shall include distribution of a brochure prescribed by the commissioner describing the process of viatical settlements.(10) The disclosure document shall contain the following language: "All medical, financial or personal information solicited or obtained by a viatical settlement provider or viatical settlement broker about an insured, including the insured's identity or the identity of family members, a spouse or a significant other may be disclosed as necessary to effect the viatical settlement between the viator and the viatical settlement provider. If you are asked to provide this information, you will be asked to consent to the disclosure. The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew your permission to share information every two years."(11) That following execution of a viatical contract, the insured may be contacted for the purpose of determining the insured's health status and to confirm the insured's residential or business street address and telephone number or as otherwise provided in this article. This contact shall be limited to once every three months if the insured has a life expectancy of more than one year, and not more than once per month if the insured has a life expectancy of one year or less. All such contracts shall be made only by a viatical settlement provider licensed in the state in which the viator resided at the time of the viatical settlement, or by the authorized representative of a duly licensed viatical settlement provider.(b) A viatical settlement provider shall provide the viator with at least the following disclosures no later than the date the viatical settlement contract is signed by all parties. The disclosures shall be conspicuously displayed in the viatical settlement contract or in a separate document signed by the viator and provide the following information:(1) The affiliation, if any, between the viatical settlement provider and the issuer of the insurance policy to be viaticated;(2) The document shall include the name, business address and telephone number of the viatical settlement provider;(3) Any affiliations or contractual arrangements between the viatical settlement provider and the viatical settlement purchaser;(4) If an insurance policy to be viaticated has been issued as a point policy or involved family riders or any coverage of a life other than the insured under the policy to be viaticated, the viator shall be informed of the possible loss of coverage on the other lives under the policy and shall be advised to consult with his or her insurance producer or the insurer issuing the policy for advice on the proposed viatical settlement;(5) State the dollar amount of the current death benefit payable to the viatical settlement provider under the policy or certificate. If known, the viatical settlement provider shall also disclose the availability of any additional guaranteed insurance benefits, the dollar amount of any accidental death and dismemberment benefits under the policy or certificate and the extent to which the viator's interest in those benefits will be transferred as a result of the viatical settlement contract; and(6) State whether the funds will be escrowed with an independent third party during the transfer process and, if so, provide the name, business address and telephone number of the independent third-party escrow agent, and the fact that the viator or owner may inspect or receive copies of the relevant escrow or trust agreements or documents.(c) A viatical settlement broker shall provide the viator with at least the following disclosures no later than the date the viatical settlement contract is signed by all parties. The disclosures shall be conspicuously displayed in the viatical settlement contract or in a separate document signed by the viator and provide the following information:(1) The name, business address and telephone number of the viatical settlement broker;(2) A full, complete and accurate description of all offers, counter-offers, acceptances and rejections relating to the proposed viatical settlement contract;(3) A written disclosure of any affiliations or contractual arrangements between the viatical settlement broker and any person making an offer in connection with the proposed viatical settlement contracts;(4) The amount and method of calculating the broker's compensation, which term "compensation" includes anything of value paid or given to a viatical settlement broker for the placement of a policy; and(5) Where any portion of the viatical settlement broker's compensation, as defined in subdivision (4) of this subsection, is taken from a proposed viatical settlement offer, the broker shall disclose the total amount of the viatical settlement offer and the percentage of the viatical settlement offer comprised by the viatical settlement broker's compensation.(d) If the viatical settlement provider transfers ownership or changes the beneficiary of the insurance policy, the provider shall communicate in writing the change in ownership or beneficiary to the insured within twenty days after the change.
Before the initiation of a plan, transaction or series of transactions, a viatical settlement broker or viatical settlement provider shall fully disclose to an insurer a plan, transaction or series of transactions, to which the viatical settlement broker or viatical settlement provider is a part, to originate, renew, continue or finance a life insurance policy with the insurer for the purpose of engaging in the business of viatical settlements at anytime prior to, or during the first five years after, issuance of the policy.
(a) Definitions. --- For purposes of this section:(1) Account owner means the owner of a retained asset account who is a resident of this state.(2) Annuity contract means an annuity contract issued in this state. The term annuity contract shall not include an annuity used to fund an employment-based retirement plan or program where: (1) The insurer does not perform the record-keeping services; or (2) the insurer is not committed by terms of the annuity contract to pay death benefits to the beneficiaries of specific plan participants.(3) "Death Master File means the United States Social Security Administrations Death Master File or any other database or service that is at least as comprehensive as the United States Social Security Administrations Death Master File for determining whether a person has died.(4) Death Master File match means a search of the Death Master File that results in a match of the persons first and last name and Social Security number or the first and last name and date of birth of an insured, annuity owner or retained asset account holder.(5) Knowledge of death shall, for the purposes of this section, mean: (a) Receipt of an original or valid copy of a certified death certificate; or (b) a Death Master File match validated by the insurer in accordance with section two of this article.(6) Person means the policy insured, annuity contract owner, annuitant or account owner, as applicable under the policy, annuity contract or retained asset account at issue in this act.(7) Policy means any policy or certificate of life insurance issued in this state that provides a death benefit. The term policy shall not include: (i) Any policy or certificate of life insurance that provides a death benefit under an employee benefit plan: (a) subject to the Employee Retirement Income Security Act of 1974, as periodically amended; or (b) under any federal employee benefit program: or (ii) any policy or certificate of life insurance that is used to fund a preneed funeral contract or prearrangement; or (iii) any policy or certificate of credit life or accidental death insurance; or (iv) any policy issued to a group master policyholder for which the insurer does not provide record-keeping services.(8) Record-keeping services means those circumstances under which the insurer has agreed with a group policy or contract customer to be responsible for obtaining, maintaining and administering in its own or its agents' systems information about each individual insured under an Insureds group insurance contract (or a line of coverage thereunder), at least the following information: (1) Social Security number or name and date of birth; and (2) beneficiary designation information; (3) coverage eligibility; (4) benefit amount; and (5) premium payment status.(9) Retained asset account means any mechanism whereby the settlement of proceeds payable under a policy or annuity contract is accomplished by the insurer or an entity acting on behalf of the insurer depositing the proceeds into an account with check- or draft-writing privileges, where those proceeds are retained by the insurer or its agent, pursuant to a supplementary contract not involving annuity contract benefits other than death benefits.
(a) An insurer shall perform a comparison of its insureds in-force policies, annuity contracts and account owners against a Death Master File to identify potential death master file matches of its insureds, annuitants and account owners, on at least an annual basis, by using the full Death Master File once and thereafter using the Death Master File update files for future comparisons to identify potential Death Master File matches. The comparison using the full Death Master File should be completed within two years of the effective date of this article and must be completed on policies in force as of 1986, and all policies issued thereafter: Provided, That the Insurance Commissioner shall promulgate legislative rules requiring that the comparison against a Death Master File be completed on policies issued at earlier times if the commissioner determines that reliable technology and data exist to make such comparison accurate and cost-effective to match to the established Master Death Database.(b) The insurer comparison of policies, annuity contracts and account owners shall be conducted first to the extent that such records are available electronically and then using the most easily accessible insurer data for records that are not available electronically.(c) This section shall not apply to policies or annuity contracts for which the insurer is receiving premiums from outside the policy value, by check, bank draft, payroll deduction or any other similar method of active premium payment within the eighteen months immediately preceding the Death Master File comparison.(d) Nothing in this section shall limit the insurer from requesting a valid death certificate as part of any claims validation process.(e) For those potential matches identified as a result of a Death Master File match, or if an insurer learns of the possible death of a person otherwise, then the insurer shall, within ninety days of a Death Master File match:(1) Complete a good faith effort, which shall be documented by the insurer, to confirm the death of the person against other available records and information;(2) Review its records to determine whether the deceased person has any other products with the insurer;(3) Determine whether benefits may be due in accordance with any applicable policy, annuity contract or retained asset account.(f) Every insurer shall implement procedures to account for:(1) Common nicknames, initials used in lieu of a first or middle name, use of a middle name, compound first and middle names, and interchanged first and middle names;(2) Compound last names, maiden or married names, and hyphens, blank spaces or apostrophes in last names;(3) Transposition of the month and date portions of the date of birth; and(4) Incomplete Social Security number.(g) If the beneficiary or other authorized representative has not communicated with the insurer within the ninety-day period, the insurer shall take reasonable steps and use good faith efforts, which shall be documented by the insurer, to locate and contact the beneficiary or beneficiaries or other authorized representative on any such policy, annuity contract or retained asset account, including, but not limited to, sending the beneficiary information regarding the insurers claims process, including the need to provide an official death certificate if applicable under the policy, annuity contract or retained asset account.(h) To the extent permitted by law, the insurer may disclose minimum necessary personal information about a person or beneficiary to a person who the insurer reasonably believes may be able to assist the insurer in locating the beneficiary or a person otherwise entitled to payment of the claims proceeds.(i) An insurer or its service provider shall not charge any beneficiary or other authorized representative for any fees or costs associated with a Death Master File search or verification of Death Master File match conducted pursuant to this section.(j) The benefits from a policy, annuity contract or a retained asset account, plus any applicable accrued contractual interest shall first be payable to the designated beneficiaries or owners, and in the event said beneficiaries or owners cannot be found, shall be paid to the state as unclaimed property pursuant to article eight, chapter thirty-six of this code.(k) The West Virginia Office of the Insurance Commissioner has exclusive authority to promulgate such rules and regulations as may be required or reasonably necessary to implement the provisions of this section.(l) The commissioner may, in his or her reasonable discretion, make an order to:(1) Limit an insurers Death Master File comparisons required under subsection (a) of this section to the insurers electronic searchable files or approve a plan and timeline for conversion of the insurers files to searchable electronic files upon a demonstration of hardship by the insurer;(2) Exempt an insurer from the Death Master File comparisons required under subsection (a) of this section or permitting an insurer to perform such comparisons less frequently than annually upon a demonstration of hardship by the insurer; or(3) Phase-in compliance with this section according to a plan and timeline approved by the commissioner.
(a) No life insurance policy or certificate shall be delivered or issued for delivery in this state insuring the lives of more than one individual unless to one of the groups as provided for in sections two to five-a, inclusive, of this article, and unless in compliance with the other applicable provisions of those sections.(b) Subsection (a) above, shall not apply to life insurance policies:(1) Insuring only individuals related by marriage, blood or legal adoption;(2) Insuring only individuals having a common interest through ownership of a business enterprise, or a substantial legal interest or equity therein, and who are actively engaged in the management thereof; or(3) Insuring only individuals otherwise having an insurable interest in each other's lives.(c) Nothing in this article validates any charge or practice illegal under any rule of law or regulation governing usury, small loans, retail installment sales, or the like, or extends the application of any such rule of law or regulation to any transaction not otherwise subject thereto.
In group life policies there shall be a provision that the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue; and that no statement made by any person insured under the policy relating to his insurability shall be used in contesting the validity of the insurance with respect to which such statement was made after such insurance has been in force prior to the contest for a period of two years during such person's lifetime nor unless it is contained in a written instrument signed by him 
In group life policies there shall be a provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued, that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties, and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to such person or to his beneficiary.
In group life policies there shall be a provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of his coverage.
In group life policies there shall be a provision specifying an equitable adjustment of premiums or of benefits or of both to be made in the event the age of a person insured has been misstated, such provision to contain a clear statement of the method of adjustment to be used.
In group life policies there shall be a provision that any sum becoming due by reason of the death of the person insured shall be payable to the beneficiary designated by the person insured, subject to the provisions of the policy in the event there is no designated beneficiary, as to all or any part of such sum, living at the death of the person insured, and subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of such sum not exceeding $500 to any person appearing to the insurer to be equitably entitled thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured.
In group life policies there shall be a provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection to which he is entitled, to whom the insurance benefits are payable, and the rights and conditions set forth in sections sixteen, seventeen, and eighteen of this article.
In group life policies there shall be a provision that if the insurance, or any portion of it, on a person covered under the policy, other than the child of an employee insured pursuant to section seven of this article, ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, such person shall be entitled to have issued to him by the insurer, without evidence of insurability, an individual policy of life insurance without disability or other supplementary benefits, provided application for the individual policy shall be made, and the first premium paid to the insurer, within thirty-one days after such termination: Provided further, That(a) The individual policy shall, at the option of such person, be on any one of the forms of insurance then customarily issued by the insurer, except term insurance, at the age and for the amount applied for, except that there shall be available to a person whose term insurance under the group policy ceases, as provided above, preliminary or interim term insurance for not more than one year from such termination;(b) The individual policy shall be in an amount not in excess of the amount of life insurance which ceases because of such termination, provided that any amount of insurance which shall have matured on or before the date of such termination as an endowment payable to the person insured, whether in one sum or in instalments or in the form of an annuity, shall not, for the purposes of this provision, be included in the amount which is considered to cease because of such termination; and(c) The premium on the individual policy shall be at the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such person then belongs, and to his age attained on the effective date of the individual policy.
In group life policies there shall be a provision that if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person insured thereunder at the date of such termination, other than a child of an employee insured pursuant to section seven of this article, whose insurance terminates and who has been so insured for at least three years under a group policy issued five years or more prior to such termination date, shall be entitled to have issued to him by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided by section sixteen of this article, except that term insurance shall not be available and, except that the group policy may provide that the amount of such individual policy shall not exceed the smaller of (a) the amount of the person's life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which he is or becomes eligible under any group policy issued or reinstated by the same or another insurer within thirty-one days after such termination, and (b) $2,000.
In group life policies there shall be a provision that if a person insured under the group policy dies during the period within which he would have been entitled to have an individual policy issued to him in accordance with sections sixteen and seventeen of this article and before such an individual policy shall have become effective, the amount of life insurance which he would have been entitled to have issued to him under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made.
In the case of a group life policy issued to a creditor to insure debtors of such creditor, there shall be a provision in such policy that the insurer will furnish to the policyholder for delivery to each debtor insured under the policy a certificate or statement of coverage form which shall contain a statement that the life of the debtor is insured under the policy and that any death benefit paid thereunder by reason of his death shall be applied to reduce or extinguish the indebtedness.
The lives of a group of individuals may be insured under a policy issued to an employer, or to the trustees of a fund established by an employer, which employer or trustees shall be deemed the policyholder, to insure employees of the employer for the benefit of persons other than the employer, subject to the following requirements:(a) The employees eligible for insurance under the policy shall be all of the employees of the employer, or all of any class or classes thereof determined by conditions pertaining to their employment. The policy may provide that the term "employees" shall include the employees of one or more subsidiary corporations and the employees, individual proprietors and partners of one or more affiliated corporations, proprietors or partnerships if the business of the employer and of such affiliated corporations, proprietors or partnerships is under common control through stock ownership, contract or otherwise. The policy may provide that the term "employees" shall include the individual proprietor or partners if the employer is an individual proprietor or a partnership. The policy may provide that the term "employees" shall include retired employees. No director of a corporate employer shall be eligible for insurance under the policy unless such person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. No individual proprietor or partner shall be eligible for insurance under the policy unless he is actively engaged in and devotes a substantial part of his time to the conduct of the business of the proprietor or partnership. A policy issued to trustees may provide that the term "employees" shall include the trustees or their employees, or both, if their duties are principally connected with such trusteeship. A policy issued to insure the employees of a public body may provide that the term "employees" shall include elected or appointed officials.(b) The premium for the policy shall be paid either from the employer's funds or from funds contributed by the insured employees, or both. Except as provided in subdivision (c) of this section, a policy on which no part of the premium is to be derived from funds contributed by the insured employees shall insure all eligible employees, except those who reject coverage in writing.(c) An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.(d) The policy must cover at least two employees at date of issue.(e) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees or by the employer or trustees.
If any individual insured under a group life insurance policy hereafter delivered in this state becomes entitled under the terms of such policy to have an individual policy of life insurance issued to him without evidence of insurability, subject to making of application and payment of the first premium within the period specified in such policy, and if such individual is not given notice of the existence of such right at least fifteen days prior to the expiration date of such period, then, in such event the individual shall have an additional period within which to exercise such right, but nothing contained in this section shall be construed to continue any insurance beyond the period provided in such policy. Such additional period shall expire fifteen days next after the individual is given such notice but in no event shall such additional period extend beyond sixty days next after the expiration date of the period provided in such policy. Written notice presented to the individual or mailed by the policyholder to the last known address of the individual or mailed by the insurer to the last known address of the individual as furnished by the policyholder shall constitute notice for the purpose of this section.
Any policy dividends hereafter declared, or reduction in rate of premiums hereafter made or continued for the first or any subsequent year of insurance, under any policy of group life insurance heretofore or hereafter issued to any policyholder may be applied to reduce the policyholder's part of the cost of such insurance, except that if the aggregate dividends or refunds or credits under such group life policy and any other group policy or contract issued to the policyholder exceed the aggregate contributions of the policyholder toward the cost of the coverages, including expenditures made in connection with administration of such policies, such excess shall be applied by the policyholder for the sole benefit of insured employees or members.
No group annuity contract shall be delivered or issued for delivery in this state and no certificate shall be used in connection therewith unless it contains in substance the provisions set forth in sections twenty-three to twenty-seven, inclusive, of this article, to the extent that such provisions are applicable to such contract or to such certificate, as the case may be, or provisions which in the opinion of the commissioner are more favorable to annuitants, or not less favorable to annuitants and more favorable to the holders.
In group annuity contracts there shall be a provision that there shall be a period of grace of thirty-one days within which any stipulated payment to be remitted by the holder to the insurer, falling due after one year from date of issue, may be made, subject, at the option of the insurer, to an interest charge thereon at a rate to be specified in the contract, which shall not exceed six percent per annum for the number of days of grace elapsing before such payment.
In group annuity contracts there shall be a provision specifying the document or documents which shall constitute the entire contract between parties. The document or documents so specified shall be only (a) the contract, (b) the contract together with the application of the holder of which a copy is attached thereto, or (c) the contract together with the application of the holder of which a copy is attached thereto, and the individual applications of annuitants on file with the insurer and referred to therein.
In group annuity contracts there shall be a provision, with an appropriate reference thereto in the certificate, for the equitable adjustment of the benefits payable under the contract or the stipulated payments thereunder, if it be found that the sex, age, service, salary or any other fact determining the amount of any stipulated payment or the amount or date or dates of payment of any benefit with respect to any annuitant covered thereby has been misstated.
In group annuity contracts there shall be a provision or provisions, with an appropriate reference thereto in the certificate, specifying the nature and basis of ascertainment of the benefits which will be available to an annuitant who contributes to the cost of the annuity and the conditions of payment thereof in the event of either the termination of employment of the annuitant, except by death, or the discontinuance of stipulated payments under the contract. Such provision or provisions shall, in either of such events, make available to an annuitant who contributed to the cost of the annuity a paid-up annuity payable commencing at a fixed date in an amount at least equal to that purchased by the contributions of the annuitant, determinable as of the respective dates of payment of the several contributions, as shown by a schedule in the contract for that purpose, based upon the same mortality table, rate of interest and loading formula used in computing the stipulated payments under such contract. Such provision or provisions may, by way of exception to the foregoing, provide that if the amount of the annuity determined as aforesaid from such fixed commencement date would be less than $120 annually, the insurer may at its option, in lieu of granting such paid-up annuity, pay a cash surrender value at least equal to that hereinafter provided.If a cash surrender value, in lieu of such paid-up annuity, is allowed to the annuitant by the terms of such contract, it may be either in a single sum or in equal instalments over a period of not more than twelve months and it shall at least equal either (a) or (b), whichever is less:(a) The amount of reserve attributable to the annuitant's contributions less a surrender charge not exceeding thirty-five percent of the average annual contribution made by the annuitant; or(b) The amount which would be payable as a death benefit at the date of surrender.Such contract shall also provide that in case of the death of an annuitant before the commencement date of the annuity, the insurer shall pay a death benefit at least equal to the aggregate amount of the annuitant's contributions without interest. If any benefits are available to the holder in either of such events, the contract shall contain a provision or provisions specifying the nature and basis of ascertainment of such benefits.
In group annuity contracts there shall be a provision that the insurer will issue to the holder of the contract for delivery to each annuitant who contributes thereunder an individual certificate setting forth a statement in substance of the benefits to which he is entitled under such contract.
No provision in this chapter or in any other law shall be interpreted so as to prohibit a person whose life is insured under any policy of group life insurance from making an assignment of all or any part of his incidents of ownership under such policy including specifically, but not by way of limitation, any right to designate a beneficiary or beneficiaries thereunder and any right to have an individual policy issued to him in accordance with sections sixteen and seventeen of this article. Subject to the terms of the policy relating to assignment of incidents of ownership thereunder, such an assignment by the insured, made either before or after the effective date of this section, is valid for the purpose of vesting in the assignee, in accordance with any provisions included therein as to the time at which it is to be effective, all of such incidents of ownership so assigned, but without prejudice to the insurer on account of any payment it may make or individual policy it may issue in accordance with other provisions of this article prior to receipt of notice of the assignment.
The provisions in subdivisions (b), (c) and (d) of section two of this article shall not apply to group annuity contracts issued by insurance companies to county boards of education, the Teachers' Retirement Board, the West Virginia Board of Education, and the board of regents and their agencies. The boards of education, the Teachers' Retirement Board, the West Virginia Board of Education, and the board of regents and their agencies shall be the holders of the master policies under which annuities are insured for the benefit of their employees who elect to participate in a "tax sheltered group annuity plan" established pursuant to section 403(b) of the Internal Revenue Code of 1954 and amendments and successor provisions thereto: Provided, however, That no such plan shall be adopted unless the board of Education first secures the written approval of the Insurance Commissioner: Provided further, That no group annuity contract shall be awarded, approved or issued by any county board of education without competitive bid.
The lives of a group of individuals may be insured under a policy issued to a creditor, who shall be deemed the policyholder, to insure debtors of the creditor, subject to the following requirements:(a) The debtors eligible for insurance under the policy shall be all of the debtors of the creditor whose indebtedness is repayable either (i) in installments, or (ii) in one sum at the end of a period not in excess of eighteen months from the initial date of debt, or all of any class or classes thereof determined by conditions pertaining to the indebtedness or to the purchase giving rise to the indebtedness. The policy may provide that the term "debtors" shall include the debtors of one or more subsidiary corporations, and the debtors of one or more affiliated corporations, proprietors or partnerships if the business of the policyholder and of such affiliated corporations, proprietors or partnerships is under common control through stock ownership, contract or otherwise. No debtor shall be eligible unless the contract of indebtedness constitutes an obligation to repay which is binding upon him during his lifetime, at and from the date the insurance becomes effective upon his life.(b) The premium for the policy shall be paid by the policyholder, either from the creditor's funds, or from charges collected from the insured debtors, or from both. A policy on which part or all of the premium is to be derived from the collection from the insured debtors of identifiable charges not required of uninsured debtors shall not include, in the class or classes of debtors eligible for insurance, debtors under obligations outstanding at its date of issue without evidence of individual insurability unless at least seventy-five percent of the then eligible debtors elect to pay the required charges. A policy on which no part of the premium is to be derived from the collection of such identifiable charges must insure all eligible debtors, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.(c) The policy may be issued only if the group of eligible debtors is then receiving new entrants at the rate of at least one hundred persons yearly, or may reasonably be expected to receive at least one hundred new entrants during the first policy year, and only if the policy reserves to the insurer the right to require evidence of individual insurability if less than seventy-five percent of the new entrants become insured. The policy may exclude from the classes eligible for insurance classes of debtors determined by age.(d) The amount of insurance on the life of any debtor shall at no time exceed the amount owed by him which is repayable in installments to the creditor. Where the indebtedness is repayable in one sum to the creditor, the insurance on the life of any debtor shall in no instance be in effect for a period in excess of eighteen months except that such insurance may be continued for an additional period not exceeding six months in the case of default, extension or recasting of the loan.(e) The insurance shall be payable to the policyholder. Such payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of such payment.
There shall be a provision that when a policy shall become a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and, at the insurer's option, surrender of the policy and/or proof of the interest of the claimant. If an insurer shall specify a particular period prior to the expiration of which settlement shall be made, such period shall not exceed two months from the receipt of such proofs.
(a) On and after the effective date of this section, any life insurance company authorized to do business in this state shall pay interest, in accordance with subsection (b) of this section and subject to subsection (c) of this section, on any proceeds that become due upon the death of the insured pursuant to the terms of a life insurance policy other than a credit life insurance policy and that are not paid in accordance with the terms of the contract, upon the date the proceeds become due. For purposes of this section, the proceeds of a life insurance policy become due on the date of death of the insured.(b) Interest payable pursuant to subsection (a) of this section shall be computed from the date of death at the current rate of interest on proceeds left on deposit with the insurer.(c) Subsection (a) of this section does not require, and shall not be construed as requiring, the payment of interest unless the insured was a resident of this state on the date of his or her death.
The lives of a group of individuals may be insured under a policy issued to a labor union, which shall be deemed the policyholder, to insure members of such union for the benefit of persons other than the union or any of its officials, representatives or agents, subject to the following requirements: (a) The members eligible for insurance under the policy shall be all of the members of the union, or all of any class or classes thereof determined by conditions pertaining to their employment, or to membership in the union, or both.(b) The premium for the policy shall be paid by the policyholder, either wholly from the union's funds, or partly from such funds and partly from funds contributed by the insured members specifically for their insurance, except that the entire premium may be paid from funds contributed by the insured members specifically for their insurance if the amount of insurance does not exceed $1,000 on the life of any member. A policy on which part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed in force only if at least seventy-five percent of the then eligible members, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.(c) The policy must cover at least twenty-five members at date of issue.(d) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the members or by the union.
The lives of a group of individuals may be insured under a policy issued to the trustees of a fund established by two or more employers in the same industry or by one or more labor unions, or by one or more employers and one or more labor unions, which trustees shall be deemed the policyholders, to insure employees of the employers or members of the union for the benefit of persons other than the employers or the unions, subject to the following requirements:(a) The persons eligible for insurance shall be all of the employees of the employers or all of the members of the unions, or all of any class or classes thereof determined by conditions pertaining to their employment, or to membership in the unions, or to both. The policy may provide that the term "employees" shall include retired employees, and the individual proprietor or partner if an employer is an individual proprietor or a partnership. No director of a corporate employer shall be eligible for insurance under the policy unless such person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. No individual proprietor or partner shall be eligible for insurance under the policy unless he is actively engaged in and devotes a substantial part of his time to the conduct of the business of the proprietor or partnership. The policy may provide that the term "employees" shall include the trustees or their employees, or both, if their duties are principally connected with such trusteeship.(b) The premium for the policy shall be paid by the trustees wholly from funds contributed by the employer or employers of the insured persons, or by the union or unions, or by both, or partly from such funds and partly from funds contributed by the insured persons. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured persons specifically for their insurance. A policy on which part of the premium is to be derived from funds contributed by the insured persons specifically for their insurance may be placed in force only if at least seventy-five percent of the then eligible persons, excluding any as to whom evidence of insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured persons specifically for their insurance must insure all eligible persons, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.(c) The policy must cover at date of issue at least one hundred persons and not less than an average of five persons per employer unit; and if the fund is established by the members of an association of employers the policy may be issued only if (A) either (1) the participating employers constitute at date of issue at least sixty percent of those employer members whose employees are not already covered for group life insurance or (2) the total number of persons covered at date of issue exceeds six hundred; and (B) the policy shall not require that, if a participating employer discontinues membership in the association, the insurance of his employees shall cease solely by reason of such discontinuance.(d) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the insured persons or by the policyholder, employers, or unions.
The lives of a group of individuals may be insured under a policy issued to a credit union or to the trustees of a fund established by one or more credit unions, which credit union or trustees shall be deemed to be the policyholder for the purpose of this section, for the benefit of some person or persons other than the credit union or credit unions or trustees or any of their officials, and subject to the following requirements:(1) The members of a credit union eligible for insurance shall be all of the members of the credit union or all of any class or classes thereof determined by conditions pertaining to their age or to their membership in the credit union or to both;(2) The premium for the policy shall be paid by the policyholder wholly from the funds of the credit union or credit unions or from any fund established by such credit union or credit unions. No part of the premium may be paid from funds contributed by or charged to the insured members specifically for their insurance;(3) The policy must insure at least twenty-five eligible members at date of issue;(4) The policy shall, at all times while it is in force, insure all eligible members, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer; and(5) The amounts of insurance under the policy must be based upon some plan which precludes individual selection either by the members or by the credit union, the credit unions or the trustees.
The lives of a group of individuals may be insured under a policy issued to a group other than one of the groups provided in sections two, three, four, five and five-a of this article subject to the following requirements:(a) The policy shall not be delivered in this state unless the commissioner finds that:(1) The issuance of the policy is not contrary to the best interest of the public;(2) The issuance of the policy would result in economics of acquisition or administration; and(3) The benefits are reasonable in relation to the premiums charged.(b) No such group life insurance coverage may be offered in this state by an insurer under a policy issued in another state unless this state or another state having requirements substantially similar to those contained in subsection (a) of this section has made a determination that the requirements have been met.(c) The premium for the policy shall be paid either from the policyholder's funds or from funds contributed by the covered persons, or from both.(d) An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.
Any policy issued pursuant to sections two, four and five of this article may be extended to insure the employees or members against loss due to the death of their spouses and minor children, or any class or classes thereof, subject to the following requirements:(a) The premium for the insurance shall be paid by the policyholder, either from the employer's or union's funds or funds contributed by the employer or union, or from funds contributed by the insured employees or members, or from both. If any part of the premium is to be derived from funds contributed by the insured employees or members, the insurance with respect to spouses and children may be placed in force only if at least seventy-five percent of the then eligible employees or members, excluding any as to whose family members evidence of insurability is not satisfactory to the insurer, elect to make the required contribution. If no part of the premium is to be derived from funds contributed by the employees or members, all eligible employees or members, excluding any as to whose family members evidence of insurability is not satisfactory to the insurer, must be insured with respect to their spouses and children.(b) The amounts of insurance must be based upon some plan precluding individual selection either by the employees or members or by the policyholder, employer or union.(c) Upon termination of the insurance with respect to the members of the family of any employee or member by reason of the employee's or member's termination of employment, termination of membership in the class or classes eligible for coverage under the policy, or death, the spouse shall be entitled to have issued by the insurer, without evidence of insurability, an individual policy of life insurance without disability or other supplementary benefits, providing application for the individual policy shall be made, and the first premium paid to the insurer, within thirty-one days after such termination, subject to the requirements of paragraphs (a), (b) and (c) of section sixteen of this article. If the group policy terminates or is amended so as to terminate the insurance of any class of employees or members and the employee or member is entitled to have issued an individual policy under section seventeen of this article, the spouse shall also be entitled to have issued by the insurer an individual policy, subject to the conditions and limitations provided above. If the spouse dies within the period during which he would have been entitled to have an individual policy issued in accordance with this provision, the amount of life insurance which he would have been entitled to have issued under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made.(d) Notwithstanding section fifteen of this article, only one certificate need be issued for delivery to an insured person if a statement concerning any dependent's coverage is included in such certificate.
(a) Except as set forth in subsection (b), below, no policy of group life insurance shall be delivered in this state unless it contains in substance the standard provisions as required by sections nine to eighteen, inclusive, of this article, or provisions which in the opinion of the commissioner are more favorable to the persons insured, or at least as favorable to the persons insured and more favorable to the policyholder.(b) The provisions of sections fourteen to eighteen, inclusive, of this article shall not apply to policies issued to a creditor to insure debtors of such creditor. The standard provisions required for individual life insurance policies shall not apply to group life insurance policies. If the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision or provisions which in the opinion of the commissioner is or are equitable to the insured persons and to the policyholder, but nothing herein shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies.
In group life policies there shall be a provision that the policyholder is entitled to a grace period of thirty-one days for the payment of any premium due except the first, during which grace period the death benefit coverage shall continue in force, unless the policyholder shall have given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during such grace period.
Nothing in this article shall apply to or affect:(a) Any policy of liability or workers' compensation insurance nor shall any of the references to "other insurance" contained in this article be interpreted to mean, include, or apply to, any policy of liability or workers' compensation insurance.(b) Any group accident and sickness policy issued in accordance with article sixteen of this chapter.(c) Life insurance (including endowment or annuity contracts), or contracts supplemental thereto, which contain only such provisions relating to accident and sickness insurance as (1) provide additional benefits in case of death by accidental means, or as (2) operate to safeguard such contracts against lapse, or to give a special surrender value or special benefit or an annuity in the event that the insured shall become totally and permanently disabled as defined by the contract or supplemental contract.(d) Reinsurance.
Accident and sickness insurance on a franchise plan is hereby declared to be that form of accident and sickness insurance issued to:(a) Five or more employees of any corporation, copartnership or individual employer or any governmental corporation, agency or department thereof, or(b) Five or more members of any trade or professional association or of a labor union or of any other association having had an active existence for at least two years where such association or union has a Constitution or bylaws and is formed in good faith for purposes other than that of obtaining insurance; where such persons, with or without their dependents, are issued the same form of an individual policy varying only as to amounts and kinds of coverage applied for by such persons, under an arrangement whereby the premiums on such policies may be paid to the insurer periodically by the employer, with or without payroll deductions, or by the association or union for its members, or by some designated person acting on behalf of such employer or association or union. The term "employees" as used in this section shall be deemed to include the officers, managers, employees and retired employees of the employer and the individual proprietor or partners if the employer is an individual proprietor or partnership.
No policy providing hospital indemnity coverage may exclude coverage because of confinement in a hospital operated by the federal or state government.
Any insurer which, on or after July 1, 1986, delivers or issues for delivery in this state any policy of accident and sickness insurance under the provisions of this article, shall make available for purchase, at a reasonable rate, supplemental insurance coverage for continuum of care services pursuant to article five-d, chapter sixteen of this code: Provided, That any insurance carrier required to provide supplemental insurance coverage for continuum of care services hereunder shall not be required to expend funds for underwriting such supplemental coverage until the continuum of care board, in cooperation with the West Virginia state Insurance Commissioner, shall have completed a written master plan related to insurance coverage as set forth in section five, article five-d, chapter sixteen of the Code of West Virginia, 1931, as amended, including, but not limited to, the specific standards and coverages to be provided in such supplemental coverage: Provided, however, That a public hearing shall be held pursuant to the provisions of chapter twenty-nine-a of this code applicable to such proceedings prior to the considerations of the aforesaid plan by said board. The rates for continuum of care coverage shall accurately reflect the cost of such coverage and shall not be subsidized by the rate structure for any other coverage.
No insurer may cancel or nonrenew the accident and sickness insurance policy of any insured because of diagnosis or treatment of acquired immune deficiency syndrome.
Notwithstanding any other provisions of law, when any health insurance policy, health care services plan or other contract provides for the payment of medical expenses, benefits or procedures, such policy, plan or contract shall be construed to include payment to all health care providers including medical physicians, osteopathic physicians, podiatric physicians, chiropractic physicians, midwives, physician assistants and nurse practitioners who provide medical services, benefits or procedures which are within the scope of each respective providers license. Any limitation or condition placed upon services, diagnoses or treatment by, or payment to, any particular type of licensed provider shall apply equally to all types of licensed providers without unfair discrimination as to the usual and customary treatment procedures of any of the aforesaid providers.
(a) An insurer issuing accident and sickness policies in this state shall provide coverage for the child or children of the insured without regard to the amount of child support ordered to be paid or actually paid by the insured, if any, and without regard to the fact that the insured may not have legal custody of the child or children or that the child or children may not be residing in the home of the insured.(b) An insurer issuing accident and sickness policies in this state shall provide benefits to dependent children placed with participants or beneficiaries for adoption under the same terms and conditions as apply to natural, dependent children of participants and beneficiaries, irrespective of whether the adoption has become final.(c) An insurer shall not deny enrollment of a child under the health plan of the child's parent on the grounds that:(1) The child was born out of wedlock;(2) The child is not claimed as a dependent on the parent's federal tax return; or(3) The child does not reside with the parent or in the insurer's service area.(d) Where a child has health coverage through an insurer of a noncustodial parent the insurer shall:(1) Provide such information to the custodial parent as may be necessary for the child to obtain benefits through that coverage;(2) Permit the custodial parent, or the provider, with the custodial parent's approval, to submit claims for covered services without the approval of the noncustodial parent; and(3) Make payments on claims submitted in accordance with subdivision (2) of this subsection directly to the custodial parent, the provider or the state Medicaid agency: Provided, That upon payment to the custodial parent, the provider or the state Medicaid agency, the insurer's obligation to the noncustodial parent under the policy with respect to the covered child's claims shall be fully satisfied.(e) Where a parent is required by a court or administrative order to provide health coverage for a child, and the parent is eligible for family health coverage, the insurer shall:(1) Permit the parent to enroll, under the family coverage, a child who is otherwise eligible for the coverage without regard to any enrollment season restrictions;(2) If the parent is enrolled but fails to make application to obtain coverage for the child, enroll the child under family coverage upon application of the child's other parent, the state agency administering the Medicaid program or the state agency administering 42 U.S.C. 651 through 669, the child support enforcement program; and(3) Not disenroll or eliminate coverage of the child unless the insurer is provided satisfactory written evidence that:(A) The court or administrative order is no longer in effect; or(B) The child is or will be enrolled in comparable health coverage through another insurer which will take effect not later than the effective date of disenrollment.
All policies issued pursuant to this article shall cover the cost of child immunization services as described in section five, article three, chapter sixteen of this code, including the cost of the vaccine, if incurred by the health care provider, and all costs of vaccine administration. These services shall be exempt from any deductible, per-visit charge and/or copayment provisions which may be in force in these policies or contracts. This section does not require that other health care services provided at the time of immunization be exempt from any deductible and/or copayment provisions.
An insurer may not impose requirements on a state agency, which has been assigned the rights of an individual eligible for medical assistance under Medicaid and covered for health benefits from the insurer, that are different from requirements applicable to an agent or assignee of any other individual so covered.
Any health insurer, health maintenance organization as defined in article twenty-five-a of this chapter, prepaid limited health service organization as defined in article twenty-five-d of this chapter or hospital and medical service corporations as defined in article twenty-four of this chapter is prohibited from considering the availability or eligibility for medical assistance in this or any other state under 42 U.S.C. 1396a, Section 1902 of the Social Security Act, referred to in this article as Medicaid, when considering eligibility for coverage or making payments under its plan for eligible enrollees, subscribers, policyholders or certificateholders.
To be eligible to make a premium rate increase request after July 1, 1995, any insurer offering or which has in force accident and sickness insurance policies which are subject to the provisions of this article shall have a minimum anticipated loss ratio of sixty-five percent as to such policy form. In calculating its minimum anticipated loss ratio, an insurer shall include in its actual incurred claims the amount of premium taxes for the same experience period which are attributable to the policy forms affected by this section and which were paid to the State of West Virginia pursuant to the provisions of article three of this chapter.
(a) No individual major medical coverage policy may be approved by the commissioner for use in this state unless:(1) The premium rates for the policy, after adjustment for any difference in policy benefits, which include, but are not limited to, deductibles, copayments and levels of care management, do not exceed by more than thirty percent the premium rates charged by the same insurer on any and all other individual major medical policies for those individuals with similar characteristics and factors, which the insurer has had approved by the commissioner within a five-year period preceding the date of the new policy filing by the insurer;(2) The insurer files with the commissioner the opinion of a qualified actuary or other person acceptable to the commissioner which states:(A) That the policy premium rate is in compliance with subdivision (1) of this subsection; and(B) That the anticipated loss ratio for the combined experience of the policy taken together with all other individual major medical coverage policies which the insurer has had approved by the commissioner within a five-year period preceding the date of the new policy filing is equal to or greater than the loss ratio requirements set forth in section one-a of this article.(3) For a period of three years after the effective date of this section, an insurer may have one or more policy forms which exceed the one hundred thirty percent requirement of subdivision (2) of this subsection: Provided, That any rate schedule increase for such policy form shall not exceed thirty-three and one-third percent of the rate schedule increase for the lowest rate policy form. During the final twelve months of this three- year period, an insurer may request an extension of time for compliance from the commissioner based on extenuating circumstances. (b) An initial individual major medical policy form may be disapproved by the commissioner if the commissioner determines that the rates proposed by the insurer for the policy form are set at a level substantially less than rates charged by other insurers for comparable insurance coverage.(c) Nothing contained in this section may be construed to prevent the use of age, sex, area, industry, occupational, and avocational factors in setting premium rates or to prevent the use of different rates after approval by the commissioner for smokers and nonsmokers or for any other habit or habits of an insured person which have a statistically proven effect on the health of the person. Nothing contained in this section shall preclude the establishment of a substandard classification based upon the health condition of the insured: Provided, That the initial classification may not be changed adversely to the insured after the initial issuance of the policy.(d) The commissioner has the right, upon application by an insurer, and for good cause shown, to grant relief from any requirement of this section.
No policy of accident and sickness insurance shall be delivered or issued for delivery to any person in this state unless:(a) The entire money and other considerations therefor are expressed therein; and(b) The time at which the insurance takes effect and terminates is expressed therein; and(c) It purports to insure only one person, except that a policy may insure, originally or by subsequent amendment upon the application of an adult member of a family who shall be deemed the policyholder, any two or more eligible members of that family, including husband, wife, dependent children or any children under a specified age which shall not exceed nineteen years and any other person dependent upon the policyholder; and(d) The policy is guaranteed to be renewable at the option of the insured except as provided in section two-d of this article; and(e) The style, arrangement and over-all appearance of the policy give no undue prominence to any portion of the text, and unless every printed portion of the text of the policy and of any endorsements or attached papers is plainly printed in light-faced type of a style in general use, the size of which shall be uniform and not less than ten-point with a lowercase unspaced alphabet length not less than one hundred and twenty-point (the "text" shall include all printed matter except the name and address of the insurer, name or title of the policy, the brief description, if any, and captions and subcaptions), the policy shall clearly indicate on the first page the conditions of renewability; and(f) The exceptions and reductions of indemnity are set forth in the policy and, except those which are set forth in sections four and five of this article, are printed, at the insurer's option, either included with the benefit provisions to which they apply, or under an appropriate caption such as "Exceptions," or "Exceptions and Reductions": Provided, That if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies; and(g) Each such form, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first part thereof; and(h) It contains no provision purporting to make any portion of the charter, rules, Constitution, or bylaws of the insurer a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks, or short-rate table filed with the commissioner; and(i) Effective July 1, 1997, the insurer offers and accepts for enrollment pursuant to section two-b of this article every eligible individual who applies for coverage within sixty-three days after termination of the individual's prior creditable coverage.
(a) Any individual resident of this state may establish an individual medical savings account to serve as self-insurance for the payment of medical expenses: Provided, That an individual establishing an individual medical savings account may designate a percentage of the account assets that may be withdrawn by the individual if not needed for the payment of medical expenses: Provided, however, That any amount remaining in an individual medical savings account on the earlier of the date of retirement, at the age of fifty-nine and one-half years or more, of the individual who established the account, or the date of death of that individual, may be withdrawn by the individual or by his or her personal representative for a purpose other than the payment of medical expenses: Provided further, That no withdrawal pursuant to this subsection shall be subject to the additional twenty percent tax as provided in subsection (d) of this section. As used in this section, "individual medical savings account" means a trust that meets the definition of "medical savings account" set forth in paragraph (1), subsection (d), section 220 of the Internal Revenue Code of 1986, as amended, when that definition is applied without regard to sub-subparagraph (ii), subparagraph (A) of that paragraph. "Medical expenses" means expenses that fall within the definition of "qualified medical expenses" set forth in paragraph (2), subsection (d), section 220 of the Internal Revenue Code of 1986, as amended, when that definition is applied without regard to subparagraph (C) of that paragraph.(b) Any insurer issuing accident and sickness policies in this state in accordance with the provisions of this article may offer a benefit plan including deductibles or copayments combined with individual self-insurance through the establishment of individual medical savings accounts. A benefit plan established pursuant to this subsection shall provide that medical expenses included within deductible or copayment provisions of the accident and sickness policy for the individual or for his or her covered dependents and therefore not payable under that policy be paid by the trustee, either directly or as reimbursement to an individual who has previously paid medical expenses, from the individual medical savings account. A benefit plan may limit payment of medical expenses until the group plan annual deductible is met from the individual medical savings account to expenses which are covered services under the policy.(c) Within one hundred eighty days of the passage of this legislation, the Tax Commissioner may promulgate emergency rules as to the keeping of records, the content and form of returns and statements, and the filing of copies of income tax returns and determination by trustees of individual medical savings accounts and by individuals establishing individual medical savings accounts: Provided, That for purposes of sections fifteen, fifteen-a and fifteen-b, article three, chapter twenty-nine-a of this code, a sufficient emergency to justify the promulgation of those rules shall be deemed to exist. The power granted by this subsection shall be in addition to the rule-making powers granted to the Tax Commissioner elsewhere in this code.(d) If any amount distributed out of an individual medical savings account is used for any purpose other than to defray medical expenses, except as specifically provided in subsection (a) of this section or except for a distribution of account assets pursuant to order of a federal bankruptcy court, the West Virginia personal income tax of the individual establishing the account, for the taxable year in which the distribution is made shall be increased by an amount equal to twenty percent of the distribution.
From July 1, 1998: (a) Every insurer shall provide coverage for emergency medical services, including prehospital services, to the extent necessary to screen and to stabilize an emergency medical condition. The insurer shall not require prior authorization of the screening services if a prudent layperson acting reasonably would have believed that an emergency medical condition existed. Prior authorization of coverage shall not be required for stabilization if an emergency medical condition exists. Payment of claims for emergency services shall be based on the retrospective review of the presenting history and symptoms of the covered person.(b) An insurer that has given prior authorization for emergency services shall cover the services and shall not retract the authorization after the services have been provided unless the authorization was based on a material misrepresentation about the covered person's health condition made by the referring provider, the provider of the emergency services or the covered person.(c) Coverage of emergency services shall be subject to coinsurance, copayments and deductibles applicable under the health benefit plan.(d) The emergency department and the insurer shall make a good faith effort to communicate with each other in a timely fashion to expedite postevaluation or poststabilization services in order to avoid material deterioration of the covered person's condition.(e) As used in this section:(1) "Emergency medical services" means those services required to screen for or treat an emergency medical condition until the condition is stabilized, including prehospital care; (2) "Prudent layperson" means a person who is without medical training and who draws on his or her practical experience when making a decision regarding whether an emergency medical condition exists for which emergency treatment should be sought;(3) "Emergency medical condition for the prudent layperson" means one that manifests itself by acute symptoms of sufficient severity, including severe pain, such that the person could reasonably expect the absence of immediate medical attention to result in serious jeopardy to the individual's health, or, with respect to a pregnant woman, the health of the unborn child; serious impairment to bodily functions; or serious dysfunction of any bodily organ or part;(4) "Stabilize" means with respect to an emergency medical condition, to provide medical treatment of the condition necessary to assure, with reasonable medical probability that no medical deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility: Provided, That this provision may not be construed to prohibit, limit or otherwise delay the transportation required for a higher level of care than that possible at the treating facility;(5) "Medical screening examination" means an appropriate examination within the capability of the hospital's emergency department, including ancillary services routinely available to the emergency department, to determine whether or not an emergency medical condition exists; and(6) "Emergency medical condition" means a condition that manifests itself by acute symptoms of sufficient severity including severe pain such that the absence of immediate medical attention could reasonably be expected to result in serious jeopardy to the individual's health or with respect to a pregnant woman the health of the unborn child, serious impairment to bodily functions or serious dysfunction of any bodily part or organ.
(a) Any entity regulated under this article that provides dental care coverage to a covered person shall honor an assignment, made in writing by the person covered under the policy, of payments due under the policy to a dentist or a dental corporation for services provided to the covered person that are covered under the policy. Upon notice of the assignment, the entity shall make payments directly to the provider of the covered services. A dentist or dental corporation with a valid assignment may bill the entity and notify the entity of the assignment. Upon request of the entity, the dentist or dental corporation shall provide a copy of the assignment to the entity.(b) A covered person may revoke an assignment made pursuant to subsection (a) of this section with or without the consent of the provider. The revocation shall be in writing. The covered person shall provide notice of the revocation to the entity. The entity shall send a copy of the revocation notice to the dentist or dental corporation subject to the assignment. The revocation is effective when both the entity and the provider have received a copy of the revocation notice. The revocation is only effective for any charges incurred after both parties have received the revocation notice.(c) If, under an assignment authorized in subsection (a) of this section, a dentist or dental corporation collects payment from a covered person and subsequently receives payment from the entity, the dentist or dental corporation shall reimburse the covered person, less any applicable copayments, deductibles, or coinsurance amounts, within 45 days.(d) Nothing in this section limits an entitys ability to determine the scope of the entitys benefits, services, or any other terms of the entitys policies or to negotiate any contract with a licensed health care provider regarding reimbursement rates or any other lawful provisions.(e) Any entity providing dental care shall provide conspicuous notice to the covered person that the assignment of benefits is optional, and that additional payments may be required if the assigned benefits are not sufficient to pay for received services.
For purposes of this section and sections two-b, two-c, two-d, two-e, two-f, two-g and four-e:(a) "Accident and sickness insurance coverage" means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care) under any hospital or medical service policy of certificate, hospital or medical service plan contract, or health maintenance organization contract offered by an insurer, but does not include short-term limited duration insurance.(b) "Bona fide association" means an association which has been actively in existence for at least five years; has been formed and maintained in good faith for purposes other than obtaining insurance; does not condition membership in the association on any health status-related factor relating to an individual; makes accident and sickness insurance coverage offered through the association available to all members regardless of any health status-related factor relating to the members or individuals eligible for coverage through a member; does not make accident and sickness insurance coverage offered through the association available other than in connection with a member of the association; and meets any additional requirements as may be set forth in this chapter or by rule.(c) "COBRA continuation provision" means any of the following:(1) Section 4980B of the Internal Revenue Code of 1986, other than subsection (f)(1) of such section insofar as it relates to pediatric vaccines;(2) Part 6 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, other than Section 609 of such act; or(3) Title XXII of the Public Health Service Act.(d) "Creditable coverage" means, with respect to an individual, coverage of the individual under any of the following:(1) A group health plan;(2) Accident and sickness insurance coverage;(3) Part A or Part B of Title XVIII of the Social Security Act;(4) Title XIX of the Social Security Act, other than coverage consisting solely of benefits under section 1928;(5) Chapter 55 of Title 10 of the United States Code;(6) A medical care program of the Indian Health Service or of a tribal organization;(7) A state health benefits risk pool;(8) A health plan offered under Chapter 89 of Title 5 of the United States Code;(9) A public health plan (as defined in federal regulations); or(10) A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)).The term "creditable coverage" does not include those benefits set forth in section two-g of this article.(e) "Eligible individual" means an individual:(1) For whom, as of the date on which the individual seeks coverage, the aggregate period of creditable coverage is eighteen months or more and whose most recent prior creditable coverage was under a group health plan, governmental plan (as defined in section 3(32) of the Employee Retirement Income Security Act of 1974), church plan (as defined in section 3(33) of the Employee Retirement Income Security Act of 1974), or accident and sickness insurance coverage offered in connection with any such plan; (2) Who is not eligible for coverage under a group health plan, Part A or Part B of Title XVIII of the Social Security Act, or state plan under Title XIX of such act (or any successor program), and does not have other accident and sickness insurance coverage;(3) With respect to whom the most recent prior creditable coverage was not terminated as a result of fraud, intentional misrepresentation of material fact under the terms of the coverage, or nonpayment of premium; (4) Who did not turn down an offer of continuation of coverage under a COBRA continuation provision or under a similar state program if it was offered; and(5) Who, if the individual elected such continuation coverage, has exhausted that coverage under the COBRA continuation provision or similar state program.(f) "Group health plan" means an employee welfare benefit plan (as defined in section 3(1) of the Employee Retirement Income Security Act of 1974) to the extent that the plan provides medical care to employees and their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement or otherwise.(g) "Health status-related factor" means an individual's health status, medical condition (including both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, and evidence of insurability (including conditions arising out of acts of domestic violence) or disability.(h) "Higher-level coverage" means a policy form for which the actuarial value of the benefits under the coverage is at least fifteen percent greater than the actuarial value of lower-level coverage offered by the insurer in this state, and the actuarial value of the benefits under the coverage is at least one hundred percent but not greater than one hundred twenty percent of a weighted average.(i) "Individual market" means the market for accident and sickness insurance coverage offered to individuals other than in connection with a group health plan.(j) "Insurer" means an entity licensed by the commissioner to transact accident and sickness insurance in this state and subject to this chapter, but does not include a group health plan or short term limited duration insurance.(k) "Lower-level coverage" means a policy form for which the actuarial value of the benefits under the coverage is at least eighty-five percent but not greater than one hundred percent of a weighted average.(l) "Medical care" means amounts paid for, or paid for insurance covering, the diagnosis, cure, mitigation, treatment or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body, including the amounts paid for transportation primarily for and essential to such care.(m) "Network plan" means accident and sickness insurance coverage of an insurer under which the financing and delivery of medical care (including items and services paid for as medical care) are provided, in whole or in part, through a definite set of providers under contract with the insurer.(n) "Preexisting condition exclusion" means a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the date of enrollment for coverage, whether or not any medical advice, diagnosis, care or treatment was recommended or received before such date.(o) "Weighted average" means the average actuarial value of the benefits provided by all the accident and sickness insurance coverage issued (as elected by the insurer) either by that insurer or by all insurers in this state in the individual accident and sickness market during the previous year (not including coverage issued under this section), weighted by enrollment for the different coverage.
(a) Each insurer that offers accident and sickness insurance coverage in the individual market in this state may not, with respect to an eligible individual desiring to enroll in individual accident and sickness insurance coverage:(1) Decline to offer coverage to, or deny enrollment of, an eligible individual; or(2) Impose any preexisting condition exclusion with respect to such coverage.(b) An insurer may elect to limit the coverage offered under subsection (a) of this section so long as:(1) The insurer offers at least two different accident and sickness insurance policy forms, both of which are designed for, made generally available to, and actively marketed to, and enroll both eligible and other individuals; and(2) As elected by the insurer:(A) The insurer offers the policy forms for individual accident and sickness insurance coverage with the largest, and next to the largest, premium volume of all such policy forms offered by the insurer in this state in the period involved; or(B) The insurer offers a lower-level coverage policy form and a higher-level coverage policy form each of which includes benefits substantially similar to other individual accident and sickness insurance coverage offered by the insurer in this state and each of which is covered under a risk adjustment, risk spreading, or financial subsidization method. The actuarial value of benefits under a lower-level coverage policy form and a higher-level coverage policy form shall be calculated based on a standardized population and a set of standardized utilization and cost factors.(c) The elections made by the insurer under subsection (b) of this section shall apply uniformly to all eligible individuals in this state for that insurer, and shall be effective for policies offered during a period of at least two years. Policy forms which have different riders or different cost-sharing arrangements shall be considered to be different policy forms.(d) An insurer may deny accident and sickness coverage in the individual market to an eligible individual if the insurer has demonstrated to the satisfaction of the commissioner that:(1) It does not have the financial reserves necessary to underwrite additional coverage; and(2) Coverage is denied uniformly to all individuals in the individual market in the state without regard to any health status-related factor of the individuals and without regard to whether the individuals are eligible individuals.(e) An insurer denying insurance coverage pursuant to the provisions of subsection (d) of this section may not offer accident and sickness coverage in the individual market for a period of one hundred eighty days after the date coverage is denied or until the insurer has demonstrated to the satisfaction of the commissioner that it has sufficient financial reserves to underwrite additional coverage, whichever is later.(f) Insurers offering accident and sickness insurance coverage in the individual market through a network plan may:(1) Limit the individuals who may be enrolled to those who live, reside or work within the service area for the network plan; and(2) Deny coverage to those individuals within the service area if the insurer has demonstrated to the satisfaction of the commissioner that:(A) It will not have the capacity to deliver services adequately to additional individual enrollees because of its obligations to existing group contract holders and enrollees and individual enrollees; and(B) It is applying this subsection uniformly to individuals without regard to any health status-related factor of the individuals and without regard to whether the individuals are eligible individuals.(g) An insurer denying accident and sickness insurance coverage through a network plan pursuant to the provisions of subsection (f) of this section may not offer coverage in the individual market within its service area for a period of one hundred eighty days after coverage is denied.(h) The provisions of this section shall not be construed to require that an insurer offering accident and sickness coverage only in connection with group health plans or through one or more bona fide associations, or both, offer such accident and sickness insurance coverage in the individual market.(i) An insurer offering accident and sickness insurance coverage in connection with group health plans shall not be deemed to be an insurer offering individual accident and sickness insurance coverage in the individual market solely because such insurer offers a conversion policy.(j) The requirements of section one-b of this article do not apply to policies issued pursuant to this section. However, premium rate charges for individual accident and sickness policies issued pursuant to this section shall be filed with and approved by the commissioner pursuant to the provisions of article sixteen-b of this chapter. (k) This section applies to individual accident and sickness insurance coverage offered, sold, issued, renewed or in effect after June 30, 1997.
The Legislature finds that alternatives to the provisions of this article relating to guaranteed issue of individual accident and sickness insurance policies do exist but the feasibility of these alternatives are not presently known. Therefore, the commissioner is to perform or have performed a study as to the feasibility of these alternatives and their impact upon the individual market. The results of this study shall be provided to the Legislature during its regular session in the year one thousand nine hundred ninety-eight.
(a) An insurer may nonrenew or discontinue accident and sickness insurance coverage of an individual in the individual market based only on one or more of the following:(1) The individual has failed to pay premiums or contributions in accordance with the terms of the policy or the insurer has not received timely premium payments;(2) The individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of coverage;(3) The insurer is ceasing to offer coverage in accordance with the provisions of section two-e of this article;(4) In the case of an insurer that offers coverage through a network plan, the individual no longer resides, lives or works in the service area but only if coverage is terminated uniformly without regard to any health status-related factor of covered individuals; or(5) In the case of coverage made available in the individual market only through one or more bona fide associations, the individual's membership in the association ceases but only if coverage is terminated uniformly without regard to any health-status related factor of covered individuals.(b) This section applies to individual accident and sickness insurance coverage offered, sold, issued, renewed or in effect after June 30, 1997.
(a) An insurer may discontinue offering a particular type of accident and sickness insurance coverage in the individual market only if:(1) The insurer provides written notice to each individual provided this type of coverage at least ninety days prior to the date of the discontinuation of coverage;(2) The insurer offers to each individual in the individual market provided this type of coverage the option to purchase any other type of individual accident and sickness insurance policy currently offered by that insurer; and(3) The insurer acts uniformly without regard to any health status-related factor of enrolled individuals or individuals who may become eligible for coverage.(b) An insurer may discontinue offering all individual accident and sickness insurance coverage in the individual market offered in this state only if:(1) The insurer provides written notice to the Insurance Commissioner and to each insured of the discontinuation at least one hundred eighty days prior to the expiration of coverage; and(2) All accident and sickness insurance policies issued or delivered for issuance in this state in the individual market are discontinued and coverage under the policies in the individual market is not renewed.(c) In the case of discontinuation under subsection (b) of this section, the insurer may not provide for the issuance of any accident and sickness insurance coverage in the individual market and state during the five-year period beginning on the date of the discontinuation of the last accident and sickness insurance coverage not so renewed.(d) At the time of renewal, an insurer may modify coverage under an accident and sickness policy only if the modification is consistent with the provisions of this article and article twenty-eight of this chapter and is effective on a uniform basis among all individuals with that policy form. For individuals who are eligible for Medicare at the time of renewal, the insurer may modify coverage to reduce benefits by an amount no more than that paid by Medicare.(e) This section applies to individual accident and sickness insurance coverage offered, sold, issued, renewed or in effect after June 30, 1997.
An insurer offering accident and sickness insurance coverage pursuant to the provisions of this article shall provide certification of creditable coverage in the same manner as provided in section three-m, article sixteen of this chapter.
(a) The requirements of sections two-b, two-d, two-e and two-f of this article and the provisions of this article which generally require policies of accident and sickness insurance to cover specific conditions or treatments, but which are not expressly made applicable to the following types of policies, do not apply to:(1) Coverage only for accident, or disability income insurance or any combination thereof;(2) Coverage issued as a supplement to liability insurance;(3) Liability insurance, including general liability insurance and automobile liability insurance;(4) Workers' Compensation or similar insurance;(5) Automobile medical payment insurance;(6) Credit-only insurance;(7) Coverage for on-site medical clinics; and(8) Other similar insurance coverage, which may be specified by rule, under which benefits for medical care are secondary or incidental to other insurance benefits.(b) The requirements of sections two-b, two-d, two-e and two-f of this article and the provisions of this article which generally require policies of accident and sickness insurance to cover specific conditions or treatments, but which are not expressly made applicable to the following types of policies, do not apply to the following if provided under a separate policy, certificate, or contract of insurance:(1) Limited scope dental or vision benefits;(2) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof;(3) Coverage for only a specified disease or illness;(4) Hospital indemnity or other fixed indemnity insurance;(5) Medicare supplement insurance (as defined under section 1882(g)(1) of the Social Security Act), coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code, and similar supplemental coverage provided to coverage under group accident and sickness insurance; and(6) Any other benefits as may be specified by rule.
If any such policy contains a provision establishing as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective, and if such date falls within a period for which premium is accepted by the insurer or if the insurer accepts a premium after such date, the coverage provided by the policy will continue in force until the end of the period for which premium has been accepted. In the event the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective, or would have ceased prior to the acceptance of such premium or premiums, then the liability of the insurer shall be limited to the refund, upon request, of all premiums paid for the period not covered by the policy.
Except as provided in section six of this article, each such policy delivered or issued for delivery to any person in this state shall contain the provisions specified in this section in the words in which the same appear in this section: Provided, That the insurer may, at its option, substitute for one or more of such provisions corresponding provisions of different wording approved by the commissioner which are in each instance not less favorable in any respect to the insured or the beneficiary. Such provisions shall be preceded individually by the caption appearing in this section or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the commissioner may approve.(a) A provision as follows:"Entire Contract; Changes: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless such approval be endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions."(b) A provision as follows:"Time Limit on Certain Defenses: (1) After two years from the date of issue of this policy no misstatements, except fraudulent misstatements, made by the applicant in the application for such policy shall be used to void the policy or to deny a claim for loss incurred or disability (as defined in the policy) commencing after the expiration of such two-year period."The foregoing policy provision shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during such initial two-year period, nor to limit the application of subdivisions (a), (b), (c), (d) and (e) of section five of this article in the event of misstatement with respect to age or occupation or other insurance. A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium (i) until at least age fifty, or (ii) in the case of a policy issued after age forty-four, for at least five years from its date of issue, may contain in lieu of the foregoing the following provision (from which the clause in parentheses may be omitted at the insurer's option) under the caption "Incontestable":"After this policy has been in force for a period of two years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application.(2) No claim for loss incurred or disability (as defined in the policy) commencing after two years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy."(c) A provision as follows:"Grace Period: A grace period of __________________ (insert a number not less than '7' for weekly premium policies, '10' for monthly premium policies and '31' for all other policies) days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force."(d) A provision as follows:"Reinstatement: If any renewal premium be not paid within the time granted the insured for payment, as subsequent acceptance of premium by the insurer or by any agent duly authorized by the insurer to accept such premium, without requiring in connection therewith an application for reinstatement, shall reinstate the policy: Provided, That if the insurer or such agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of such application by the insurer, or lacking such approval, upon the forty-fifth day following the date of such conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of such application. The reinstated policy shall cover only loss resulting from such accidental injury as may be sustained after the date of reinstatement and loss due to such sickness as may begin more than ten days after such date. In all other respects the insured and insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement."(e) A provision as follows:"Notice of Claim: Written notice of claim must be given to the insurer within twenty days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at ____________________ (insert the location of such office as the insurer may designate for the purpose), or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer."In a policy providing a loss-of-time benefit which may be payable for at least two years, an insurer may at its option insert the following between the first and second sentences of the above provision:"Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two years, he shall, at least once in every six months after having given notice of claim give to the insurer notice of continuance of said disability, except in the event of legal incapacity. The period of six months following any filing of proof by the insured or any payment by the insurer on account of such claim or any denial of liability, in whole or in part, by the insurer shall be excluded in applying this provision. Delay in the giving of such notice shall not impair the insured's right to any indemnity which would otherwise have accrued during the period of six months preceding the date on which such notice is actually given."(f) A provision as follows:"Claim Forms: The insurer, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If such forms are not furnished within fifteen days after the giving of such notice the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made."(g) A provision as follows:"Proof of Loss: Written proof of loss must be furnished to the insurer at its said office in case of claim for loss for which this policy provides any periodic payment contingent upon continuing loss within ninety days after the termination of the period for which the insurer is liable and in case of claim for any other loss within ninety days after the date of such loss. Failure to furnish such proof within the time required shall not invalidate nor reduce any claim if it was not reasonably possible to give proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required."(h) A provision as follows:"Time of Payment of Claims: Indemnities payable under this policy for any loss other than loss for which this policy provides any periodic payment will be paid immediately upon receipt of due written proof of such loss. Subject to due written proof of loss, all accrued indemnities for loss for which this policy provides periodic payment will be paid _____________ (insert period for payment which must not be less frequently than monthly) and any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof."(i) A provision as follows: "Payment of Claims: Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, such indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured's death may, at the option of the insurer, be paid either to such beneficiary or to such estate. All other indemnities will be payable to the insured."The following provisions, or either of them, may be included with the foregoing provisions at the option of the insurer:"If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay such indemnity, up to an amount not exceeding $_________ (insert an amount which shall not exceed $1,000), to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of such payment.""Subject to any written direction of the insured in the application or otherwise all or a portion of any indemnities provided by this policy on account of hospital nursing, medical, or surgical services may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proofs of such loss, be paid directly to the hospital or person rendering such services; but it is not required that the service be rendered by a particular hospital or person."(j) A provision as follows:"Physical Examinations and Autopsy: The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law."(k) A provision as follows:"Legal Actions: No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished."(l) A provision as follows:"Change of Beneficiary: Unless the insured makes an irrevocable designation of beneficiary, the right to change of beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy."The first clause of this provision, relating to the irrevocable designation of beneficiary, may be omitted at the insurer's option.
[Repealed.]
(a) Any insurer who, on or after January 1, 1984, delivers or issues a policy of accident and sickness insurance in this state under the provisions of this article shall make available as benefits to all subscribers and members coverage for primary health care nursing services as hereinafter set forth if such services are currently being reimbursed when rendered by any other duly licensed health care practitioner. No insurer may be required to pay for duplicative health care services actually provided by both a registered professional nurse or licensed midwife and other health providers.(b) For purposes of this section, section three-e, article sixteen and section seven-a, article twenty-four of this chapter, "primary health care nursing services" includes nursing care rendered by a nonsalaried duly licensed registered professional nurse engaged in private nursing practice or partnership with other health care providers within the lawful scope of practice as defined in section one, article seven, chapter thirty of this code, and care rendered by a licensed nurse-midwife or midwife as the occupation is defined in section one, article fifteen, chapter thirty of this code, and which care is within the scope of duties for such licensed nurse-midwife or midwife as permitted by the provisions of section seven, article fifteen of said chapter thirty.(c) Nothing in this section may be construed to permit any registered professional nurse licensee or midwife licensee to perform professional services beyond such individual's areas of professional competence as established by education, training and experience.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, whenever reimbursement or indemnity for laboratory or X-ray services are covered, reimbursement or indemnification shall not be denied for any of the following when performed for cancer screening or diagnostic purposes, at the direction of a person licensed to practice medicine and surgery by the board of Medicine:(1) Mammograms when medically appropriate and consistent with the current guidelines from the United States Preventive Services Task Force.(2) A pap smear, either conventional or liquid-based cytology, whichever is medically appropriate and consistent with the current guidelines from either the United States Preventive Services Task Force or The American College of Obstetricians and Gynecologists for women age eighteen or over; or(3) A test for the human papilloma virus (HPV), for women age eighteen or over when medically appropriate and consistent with the current guidelines from either the United States Preventive Services Task Force or The American College of Obstetricians and Gynecologists for women age eighteen and over.(b) A policy, provision, contract, plan or agreement may apply to mammograms, pap smears or human papilloma virus (HPV) test the same deductibles, coinsurance and other limitations as apply to other covered services.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall, on or after July 1, 1991, provide as benefits to all subscribers and members coverage for rehabilitation services as hereinafter set forth, unless rejected by the insured.(b) For purposes of this article and section, "rehabilitation services" includes those services which are designed to remediate patient's condition or restore patients to their optimal physical, medical, psychological, social, emotional, vocational and economic status. Rehabilitative services include by illustration and not limitation diagnostic testing, assessment, monitoring or treatment of the following conditions individually or in a combination:(1) Stroke;(2) Spinal cord injury;(3) Congenital deformity;(4) Amputation;(5) Major multiple trauma;(6) Fracture of femur;(7) Brain injury;(8) Polyarthritis, including rheumatoid arthritis;(9) Neurological disorders, including, but not limited to, multiple sclerosis, motor neuron diseases, polyneuropathy, muscular dystrophy and Parkinson's disease;(10) Cardiac disorders, including, but not limited to, acute myocardial infarction, angina pectoris, coronary arterial insufficiency, angioplasty, heart transplantation, chronic arrhythmias, congestive heart failure, valvular heart disease;(11) Burns.(c) Rehabilitation services includes care rendered by any of the following:(1) A hospital duly licensed by the State of West Virginia that meets the requirements for rehabilitation hospitals as described in Section 2803.2 of the Medicare Provider Reimbursement Manual, Part 1, as published by the U.S. Health Care Financing Administration;(2) A distinct part rehabilitation unit in a hospital duly licensed by the State of West Virginia. The distinct part unit must meet the requirements of Section 2803.61 of the Medicare Provider Reimbursement Manual, Part 1, as published by the U.S. Health Care Financing Administration;(3) A hospital duly licensed by the State of West Virginia which meets the requirements for cardiac rehabilitation as described in Section 35-25, Transmittal 41, dated August, 1989, as promulgated by the U.S. Health Care Financing Administration.(d) Rehabilitation services do not include services for mental health, chemical dependency, vocational rehabilitation, long-term maintenance or custodial services.(e) A policy, provision, contract, plan or agreement may apply to rehabilitation services the same deductibles, coinsurance and other limitations as apply to other covered services.
(a) Nothing in this section shall be construed to require a mother to give birth in a hospital or to stay in a hospital for a fixed period of time following the birth of her child. However, an insurer offering accident and sickness insurance coverage under this article may not restrict benefits for any hospital length of stay in connection with childbirth for the mother or her newborn child to less than forty-eight hours following a normal vaginal delivery, or to less than ninety-six hours following a cesarean section, or require a provider to obtain authorization for such length hospital stays. The mother and her newborn child may be discharged prior to the expiration of the minimum length of stay required under this section only in those cases in which the decision to discharge is made by an attending provider in consultation with the mother.(b) Coverage for maternity and pediatric care shall be provided in accordance with guidelines established by the American College of Obstetricians and Gynecologists, the American Academy of Pediatrics, or other established professional medical associations.(c) Benefits provided under this section may be subject to deductibles, coinsurance, or other cost-sharing in relation to benefits for hospital stays in connection with childbirth for a mother or newborn child if the coinsurance or other cost-sharing for any portion of the hospital stay required under subsection (a) of this section is no greater than the coinsurance or cost-sharing for any preceding portion of the stay.(d) Nothing in this section may be construed to prevent an insurer from negotiating the level and type of reimbursement with a provider for the care provided a mother or newborn child in connection with childbirth.(e) This section shall not apply with respect to any accident and sickness insurance coverage which does not provide benefits for hospital lengths of stay in connection with childbirth for a mother or her newborn child.(f) This section shall apply to accident and sickness insurance coverage offered, sold, issued, renewed, or in effect in the individual market on or after January 1, 1998.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, reimbursement or indemnification for colorectal cancer examinations and laboratory testing may not be denied for any nonsymptomatic person fifty years of age or older, or a symptomatic person under fifty years of age, when reimbursement or indemnity for laboratory or X-ray services are covered under the policy and are performed for colorectal cancer screening or diagnostic purposes at the direction of a person licensed to practice medicine and surgery by the board of Medicine. The tests are as follows: An annual fecal occult blood test, a flexible sigmoidoscopy repeated every five years, a colonoscopy repeated every ten years and a double contrast barium enema repeated every five years.(b) A symptomatic person is defined as: (i) An individual who experiences a change in bowel habits, rectal bleeding or stomach cramps that are persistent; or (ii) an individual who poses a higher than average risk for colorectal cancer because he or she has had colorectal cancer or polyps, inflammatory bowel disease, or an immediate family history of such conditions.(c) The same deductibles, coinsurance, network restrictions and other limitations for covered services found in the policy, provision, contract, plan or agreement of the covered person may apply to colorectal cancer examinations and laboratory testing.
(a) Any policy of insurance described in this article which provides medical and surgical benefits with respect to a mastectomy shall provide, in a case of a policyholder who is receiving benefits in connection with a mastectomy and who elects breast reconstruction in connection with such mastectomy, coverage for:(1) All stages of reconstruction of the breast on which the mastectomy has been performed;(2) Surgery and reconstruction of the other breast to produce a symmetrical appearance; and(3) Prostheses and physical complications of mastectomy, including lymphedemas in a manner determined in consultation with the attending physician and the patient. Coverage shall be provided for a minimum stay in the hospital of not less than forty-eight hours for a patient following a radical or modified mastectomy and not less than twenty-four hours of inpatient care following a total mastectomy or partial mastectomy with lymph node dissection for the treatment of breast cancer. Nothing in this section shall be construed as requiring inpatient coverage where inpatient coverage is not medically necessary or where the attending physician in consultation with the patient determines that a shorter period of hospital stay is appropriate. Such coverage may be subject to annual deductibles and coinsurance provisions as may be deemed appropriate and as are consistent with those established for other benefits under the health benefit plan policy or coverage. Written notice of the availability of such coverage shall be delivered to the participant upon enrollment and annually thereafter.(b) A health benefit plan policy, and a health insurer providing health insurance coverage in connection with a health benefit plan policy, shall provide notice to each participant and beneficiary under such plan regarding the coverage required by this section. Such notice shall be in writing and prominently positioned in any literature or correspondence made available or distributed by the issuer of the health benefit plan policy.(c) A health benefit plan policy and a health insurer offering health insurance coverage in connection with a health benefit plan policy, may not:(1) Deny to a patient eligibility, or continued eligibility, to enroll or to renew coverage under the terms of the plan, solely for the purpose of avoiding the requirements of this section; and(2) Penalize or otherwise reduce or limit the reimbursement of an attending provider, or provide incentives (monetary or otherwise) to an attending provider, to induce such provider to provide care to an individual participant or beneficiary in a manner inconsistent with this section.(d) Nothing in this section shall be construed to prevent a health benefit plan policy or a health insurer offering health insurance coverage from negotiating the level and type of reimbursement with a provider for care provided in accordance with this section.(e) The provisions of this section shall be included under any policy, contract or plan delivered after July 1, 2002.
The provisions relating to clinical trials established in article twenty-five-f of this chapter shall apply to the individual market regulated by this article.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, reimbursement or indemnification for annual kidney disease screening and laboratory testing as recommended by the National Kidney Foundation may not be denied for any person when reimbursement or indemnity for laboratory or X-ray services are covered under the policy and are performed for kidney disease screening or diagnostic purposes at the direction of a person licensed to practice medicine and surgery by the board of Medicine. The tests are as follows: Any combination of blood pressure testing, urine albumin or urine protein testing and serum creatinine testing.(b) The same deductibles, coinsurance, network restrictions and other limitations for covered services found in the policy, provision, contract, plan or agreement of the covered person may apply to kidney disease screening and laboratory testing.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall, on or after July 1, 2009, provide as benefits to all subscribers and members coverage for dental anesthesia services as hereinafter set forth.(b) For purposes of this article and section, "dental anesthesia services" means general anesthesia for dental procedures and associated outpatient hospital or ambulatory facility charges provided by appropriately licensed health care individuals in conjunction with dental care provided to an enrollee or insured if the enrollee or insured is:(A) Seven years of age or younger or is developmentally disabled and is an individual for whom a successful result cannot be expected from dental care provided under local anesthesia because of a physical, intellectual or other medically compromising condition of the enrollee or insured and for whom a superior result can be expected from dental care provided under general anesthesia; or(B) A child who is twelve years of age or younger with documented phobias, or with documented mental illness, and with dental needs of such magnitude that treatment should not be delayed or deferred and for whom lack of treatment can be expected to result in infection, loss of teeth or other increased oral or dental morbidity and for whom a successful result cannot be expected from dental care provided under local anesthesia because of such condition and for whom a superior result can be expected from dental care provided under general anesthesia.(c) Prior authorization. -- An entity subject to this section may require prior authorization for general anesthesia and associated outpatient hospital or ambulatory facility charges for dental care in the same manner that prior authorization is required for these benefits in connection with other covered medical care.(d) An entity subject to this section may restrict coverage for general anesthesia and associated outpatient hospital or ambulatory facility charges unless the dental care is provided by:(1) A fully accredited specialist in pediatric dentistry; (2) A fully accredited specialist in oral and maxillofacial surgery; and(3) A dentist to whom hospital privileges have been granted.(e) Dental care coverage not required. -- The provisions of this section may not be construed to require coverage for the dental care for which the general anesthesia is provided.(f) Temporal mandibular joint disorders. -- The provisions of this section do not apply to dental care rendered for temporal mandibular joint disorders.(g) A policy, provision, contract, plan or agreement may apply to dental anesthesia services the same deductibles, coinsurance and other limitations as apply to other covered services.
Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, any health insurance policy subject to this article, issued or renewed on or after January 1, 2014, which provides health insurance coverage for maternity services, shall provide coverage for maternity services for all persons participating in or receiving coverage under the policy. To the extent that the provisions of this section require benefits that exceed the essential health benefits specified under section 1302(b) of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, as amended, the specific benefits that exceed the specified essential health benefits are not required of a health benefit plan when the plan is offered by a health care insurer in this state. Coverage required under this section may not be subject to exclusions or limitations which are not applied to other maternity coverage under the policy.
(a) Any accident and sickness insurance policy issued by an insurer pursuant to this article that covers anti-cancer medications that are injected or intravenously administered by a health care provider and patient administered anti-cancer medications, including, but not limited to, those medications orally administered or self-injected, may not require a less favorable basis for a copayment, deductible or coinsurance amount for patient administered anti-cancer medications than it requires for injected or intravenously administered anti-cancer medications, regardless of the formulation or benefit category determination by the policy or plan.(b) An accident or sickness insurance policy may not comply with subsection (a) of this section by:(1) Increasing the copayment, deductible or coinsurance amount required for injected or intravenously administered anti-cancer medications that are covered under the policy or plan; or(2) Reclassifying benefits with respect to anti-cancer medications.(c) As used in this section, "anti-cancer medication" means a FDA approved medication prescribed by a treating physician who determines that the medication is medically necessary to kill or slow the growth of cancerous cells in a manner consistent with nationally accepted standards of practice.(d) This section is effective for policy and plan years beginning on or after January 1, 2016. This section applies to all group accident and sickness insurance policies and plans subject to this article that are delivered, executed, issued, amended, adjusted or renewed in this state, on and after the effective date of this section.(e) Notwithstanding any other provision in this section to the contrary, in the event that an insurer can demonstrate actuarially to the Insurance Commissioner that its total costs for compliance with this section will exceed or have exceeded two percent of the total costs for all accident and sickness insurance coverage issued by the insurer subject to this article in any experience period, then the insurer may apply whatever cost containment measures may be necessary to maintain costs below two percent of the total costs for the coverage: Provided, That the cost containment measures implemented are applicable only for the plan year or experience period following approval of the request to implement cost containment measures.(f) For any enrollee that is enrolled in a catastrophic plan as defined in Section 1302(e) of the Affordable Care Act or in a plan that, but for this requirement, would be a High Deductible Health Plan as defined in section 223(c)(2)(A) of the Internal Revenue Code of 1986, and that, in connection with every enrollment, opens and maintains for each enrollee a Health Savings Account as that term is defined in section 223(d) of the Internal Revenue Code of 1986, the cost-sharing limit outlined in subsection (a) of this section shall be applicable only after the minimum annual deductible specified in section 223(c)(2)(A) of the Internal Revenue Code of 1986 is reached. In all other cases, this limit shall be applicable at any point in the benefit design, including before and after any applicable deductible is reached.
An insurance policy issued by an insurer pursuant to this article for prescription topical eye medication may not deny coverage for the refilling of a prescription for topical eye medication when:(1) The medication is to treat a chronic condition of the eye;(2) The refill is requested by the insured prior to the last day of the prescribed dosage period and after at least 70% of the predicted days of use; and(3) A person licensed under chapter thirty and authorized to prescribe topical eye medication indicates on the original prescription that refills are permitted and that the early refills requested by the insured do not exceed the total number of refills prescribed.
(a) As used in this section:(1) Abuse-deterrent opioid analgesic drug product means a brand name or generic opioid analgesic drug product approved by the United States Food and Drug Administration with abuse-deterrent labeling that indicates its abuse-deterrent properties are expected to deter or reduce its abuse; (2) Cost-sharing means any coverage limit, copayment, coinsurance, deductible or other out-of-pocket expense requirements;(3) Opioid analgesic drug product means a drug product that contains an opioid agonist and is indicated by the United States Food and Drug Administration for the treatment of pain, regardless of whether the drug product:(A) Is in immediate release or extended release form; or(B) Contains other drug substances.(b) Notwithstanding any provision of any accident and sickness insurance policy issued by an insurer, on or after January 1, 2017:(1) Coverage shall be provided for at least one abuse-deterrent opioid analgesic drug product for each active opioid analgesic ingredient;(2) Cost-sharing for brand name abuse-deterrent opioid analgesic drug products shall not exceed the lowest tier for brand name prescription drugs on the entitys formulary for prescription drug coverage;(3) Cost-sharing for generic abuse-deterrent opioid analgesic drug products covered pursuant to this section shall not exceed the lowest cost-sharing level applied to generic prescription drugs covered under the applicable health plan or policy; and (4) An entity subject to this section may not require an insured or enrollee to first use an opioid analgesic drug product without abuse-deterrent labeling before providing coverage for an abuse-deterrent opioid analgesic drug product covered on the entity's formulary for prescription drug coverage. (c) Notwithstanding subdivision (3), subsection (b) of this section, an entity subject to this section may undertake utilization review, including preauthorization, for an abuse-deterrent opioid analgesic drug product covered by the entity, if the same utilization review requirements are applied to nonabuse-deterrent opioid analgesic drug products and with the same type of drug release, immediate or extended.(d) For purposes of subsection (b) of this section, the lowest tier and the lowest cost-sharing level shall not mean the cost-sharing tier applicable to preventive care services which are required to be provided at no cost-sharing under the Patient Protection and Affordable Care Act.
(a) As used in this article:(1) Health benefit plan means a policy, contract, certificate or agreement entered into, offered or issued by a health plan issuer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services.(2) Health plan issuer or issuer means an entity required to be licensed under this chapter that contracts, or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services under a health benefit plan, including accident and sickness insurers, nonprofit hospital service corporations, medical service corporations and dental service organizations, prepaid limited health service organizations, health maintenance organizations, preferred provider organizations, provider sponsored network, and any pharmacy benefit manager that administers a fully-funded or self-funded plan.(3) Step therapy protocol means a protocol or program that establishes the specific sequence in which prescription drugs for a specified medical condition, and medically appropriate for a particular patient, are covered by a health plan issuer or health benefit plan.(4) Step therapy override determination means a determination as to whether a step therapy protocol should apply in a particular situation, or whether the step therapy protocol should be overridden in favor of immediate coverage of the health care providers selected prescription drug. This determination is based on a review of the patients or prescribers request for an override, along with supporting rationale and documentation.(5) Utilization review organization means an entity that conducts utilization review, other than a health plan issuer performing utilization review for its own health benefit plan.(b) A health benefit plan that includes prescription drug benefits, and which utilizes step therapy protocols, and which is issued for delivery, delivered, renewed, or otherwise contracted in this state on or after January 1, 2018, shall comply with the provisions of this article.(c) Step therapy protocol exceptions include:(1) When coverage of a prescription drug for the treatment of any medical condition is restricted for use by health plan issuer or utilization review organization through the use of a step therapy protocol, the patient and prescribing practitioner shall have access to a clear and convenient process to request a step therapy exception determination. The process shall be made easily accessible on the health plan issuers or utilization review organizations website. The health plan issuer or utilization review organization must provide a prescription drug for treatment of the medical condition at least until the step therapy exception determination is made.(2) A step therapy override determination request shall be expeditiously granted if: (A) The required prescription drug is contraindicated or will likely cause an adverse reaction by or physical or mental harm to the patient.(B) The required prescription drug is expected to be ineffective based on the known relevant physical or mental characteristics of the patient and the known characteristics of the prescription drug regimen.(C) The patient has tried the required prescription drug while under their current or a previous health insurance or health benefit plan, or another prescription drug in the same pharmacologic class or with the same mechanism of action and such prescription drug was discontinued due to a lack of efficacy or effectiveness, diminished effect, or an adverse event.(D) The required prescription drug is not in the best interest of the patient, based upon medical appropriateness.(E) The patient is stable on a prescription drug selected by their health care provider for the medical condition under consideration.(3) Upon the granting of a step therapy override determination, the health plan issuer or utilization review organization shall authorize coverage for the prescription drug prescribed by the patients treating healthcare provider, provided such prescription drug is a covered prescription drug under such policy or contract.(4) This section shall not be construed to prevent:(A) A health plan issuer or utilization review organization from requiring a patient to try an AB-Rated generic equivalent prior to providing coverage for the equivalent branded prescription drug.(B) A health care provider from prescribing a prescription drug that is determined to be medically appropriate.
Any insurer who, on or after January 1, 2019, delivers or issues a policy of accident and sickness insurance in this state under the provisions of this article shall make available as benefits to all subscribers and members coverage on an expense-incurred basis and individual and group service or indemnity type contracts issued by a nonprofit corporation shall provide coverage for long-term antibiotic therapy for a patient with Lyme disease when determined to be medically necessary and ordered by a licensed physician after making a thorough evaluation of the patients symptoms, diagnostic test results, or response to treatment. 
(a) A policy, plan, or contract that is issued or renewed on or after January 1, 2019, and that is subject to this article shall provide coverage, through the age of 20, for amino acid-based formula for the treatment of severe protein-allergic conditions or impaired absorption of nutrients caused by disorders affecting the absorptive surface, function, length, and motility of the gastrointestinal tract. This includes the following conditions, if diagnosed as related to the disorder by a physician licensed to practice in this state pursuant to either 30-3-1 et seq. or 30-14-1 et seq. of this code: (1) Immunoglobulin E and Nonimmunoglobulin E-medicated allergies to multiple food proteins; (2) Severe food protein-induced enterocolitis syndrome; (3) Eosinophilic disorders as evidenced by the results of a biopsy; and(4) Impaired absorption of nutrients caused by disorders affecting the absorptive surface, function, length, and motility of the gastrointestinal tract (short bowel).(b) The coverage required by 33-15-4p(a) of this code shall include medical foods for home use for which a physician has issued a prescription and has declared them to be medically necessary, regardless of methodology of delivery.(c) For purposes of this section, medically necessary foods or medical foods shall mean prescription amino acid-based elemental formulas obtained through a pharmacy: Provided, That these foods are specifically designated and manufactured for the treatment of severe allergic conditions or short bowel. (d) The provisions of this section shall not apply to persons with an intolerance for lactose or soy. 
(a) As used in this section, the following words have the following meanings:(1) Concurrent review means inpatient care is reviewed as it is provided. Medically qualified reviewers monitor appropriateness of the care, the setting, and patient progress, and, as appropriate, the discharge plans.(2) Covered person means an individual, other than a Medicaid recipient, for whom coverage has been provided pursuant to the provisions of this article. (3) Insurance Commissioner means the person appointed pursuant to the provisions of 33-2-1 et seq. of this code. (4) Insurer means the same as that term is defined in 33-15-2 of this code. (5) Physician or psychiatrist means a person licensed pursuant to the provisions of either 30-3-1 et seq. or 30-14-1 et seq. of this code. (6) Psychologist means a person licensed pursuant to the provisions of 30-21-1 et seq. of this code. (7) Substance use disorder means the same as that term is defined by the American Psychiatric Association in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, and shall include substance use withdrawal. (b) An accident and sickness policy that provides hospital or medical expense benefits and is delivered, issued, executed, or renewed in this state, or approved for issuance or renewal by the Insurance Commissioner, on or after January 1, 2019, shall provide benefits for inpatient and outpatient treatment of substance use disorder at in-network facilities at the same level as other medical services offered by the accident and sickness policy.(c) The services for the treatment of substance use disorder shall be: (1) Prescribed by a physician or psychiatrist licensed pursuant to the provisions of 30-3-1 et seq. or 30-14-1 et seq. of this code or recommended by a psychologist licensed pursuant to the provisions of 30-21-1 et seq. of this code; and(2) Provided by licensed health care professionals or licensed or certified substance use disorder providers in licensed or otherwise state-approved facilities, as required by this code. (d) The inpatient and outpatient treatment of substance use disorders shall be provided when determined medically necessary by the covered persons physician, psychologist, or psychiatrist. The facility shall notify the insurer of both the admission and the initial treatment plan within 48 hours of the admission or initiation of treatment. If there is no in-network facility immediately available for a covered person, an accident and sickness policy shall provide necessary exceptions to its network to ensure admission in a treatment facility within 72 hours. If a covered person is being treated at an out-of-network facility and an in-network facility becomes available during the course of the treatment plan, an insurer may transfer the covered person to the in-network facility. (e) Providers of treatment for substance use disorders to persons covered under a covered contract shall not require prepayment of medical expenses during this 180 days in excess of applicable copayment, deductible, or coinsurance as provided in the contract.(f) The benefits for outpatient visits may be subject to concurrent or retrospective review of medical necessity or any other utilization management review.(g)(1) If an insurer determines that continued inpatient care in a facility is no longer medically necessary, the insurer shall, within 72 hours, provide written notice to the covered person and the covered persons physician of its decision and the right to file for an expedited review of an adverse decision. (2) The insurer shall review and make a determination with respect to the internal appeal within 72 hours and communicate that determination to the covered person and the covered persons physician.(3) If the determination is to uphold the denial, the covered person and the covered persons physician have the right to file an expedited external appeal with an independent review organization. An independent utilization review organization shall make a determination within 72 hours.(4) If the insurers determination is upheld and it is determined continued inpatient care is not medically necessary, the insurer remains responsible to provide benefits for the inpatient care through the day following the date the determination is made and the covered person is only responsible for any applicable copayment, deductible, and coinsurance for the stay through that date as applicable under the contract.(5) The covered person shall not be discharged or released from the inpatient facility until all internal appeals and independent utilization review organization appeals are exhausted. For any costs incurred after the day following the date of determination until the day of discharge, the covered person is only responsible for any applicable cost-sharing, and any additional charges shall be paid by the facility or provider. (h) The Insurance Commissioner shall propose rules in accordance with the provisions of 29A-3-1 et seq. of this code to develop a procedure for an expedited review of an adverse decision as set forth in this section. The Legislature finds that for the purposes of 20A-3-15 of this code, an emergency exists requiring the promulgation of an emergency rule to respond to the growing need in our state for substance abuse treatment. (i)(1) The benefits for the first five days of intensive outpatient or partial hospitalization services shall be provided without any retrospective review of medical necessity, and medical necessity shall be determined by the covered persons physician.(2) The benefits beginning day six and every six days thereafter of intensive outpatient or partial hospitalization services is subject to a concurrent review of the medical necessity of the services.(j) Medical necessity review shall use an evidence-based and peer-reviewed clinical review tool. This tool shall be developed by the Insurance Commissioner. Rules shall ensure that the tool is based on appropriate evidence-based criteria that has been peer reviewed. The Insurance Commissioner shall propose rules for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code to develop the tool.(k) The benefits for outpatient prescription drugs to treat substance use disorder shall be provided when determined medically necessary by the covered persons physician or psychiatrist without the imposition of any prior authorization or other prospective utilization management requirements. (l) The days per plan year of benefits shall be computed based on inpatient days. One or more unused inpatient days may be exchanged for two outpatient visits. All extended outpatient services such as partial hospitalization and intensive outpatient, shall be considered inpatient days for the purpose of the visit-to-day exchange provided in this subsection.(m) Except as provided in this section, the benefits and cost-sharing shall be provided to the same extent as for any other medical condition covered under the contract.(n) The benefits required by this section are to be provided to all covered persons with a diagnosis of substance use disorder. The presence of additional related or unrelated diagnoses shall not be a basis to reduce or deny the benefits required by this section.(o) The provisions of this section apply to all insurance contracts in which the insurer has reserved the right to change the premium.
(a) As used in this section, the following words and phrases have the meanings given to them in this section unless the context clearly indicates otherwise:"Episode of Care" means a specific medical problem, condition, or specific illness being managed including tests, procedures and rehabilitation initially requested by health care practitioner, to be performed at the site of service, excluding out of network care: Provided, That any additional testing or procedures related or unrelated to the specific medical problem, condition, or specific illness being managed may require a separate prior authorization. "National Council for Prescription Drug Programs (NCPDP) SCRIPT Standard" means the NCPDP SCRIPT Standard Version 201310 or the most recent standard adopted by the United States Department of Health and Human Services. Subsequently released versions may be used provided that the new version is backward compatible with the current version approved by the United States Department of Health and Human Services;"Prior Authorization" means obtaining advance approval from a health insurer about the coverage of a service or medication.(b)The health insurer is required to develop prior authorization forms and portals and shall accept one prior authorization for an episode of care. These forms are required to be placed in an easily identifiable and accessible place on the health insurers webpage. The forms shall: (1) Include instructions for the submission of clinical documentation; (2) Provide an electronic notification confirming receipt of the prior authorization request if forms are submitted electronically; (3) Contain a comprehensive list of all procedures, services, drugs, devices, treatment, durable medical equipment, and anything else for which the health insurer requires a prior authorization. This list shall delineate those items which are bundled together as part of the episode of care. The standard for including any matter on this list shall be science-based using a nationally recognized standard. This list is required to be updated at least quarterly to ensure that the list remains current; (4) Inform the patient if the health insurer requires a plan member to use step therapy protocols, as set forth in this chapter. This must be conspicuous on the prior authorization form. If the patient has completed step therapy as required by the health insurer and the step therapy has been unsuccessful, this shall be clearly indicated on the form, including information regarding medication or therapies which were attempted and were unsuccessful; and (5) Be prepared by October 1, 2019. (c) The health insurer shall accept electronic prior authorization requests and respond to the request through electronic means by July 1, 2020. The health insurer is required to accept an electronically submitted prior authorization and may not require more than one prior authorization form for an episode of care. If the health insurer is currently accepting electronic prior authorization requests, the health insurer shall have until January 1, 2020, to implement the provisions of this section.(d) If the health care practitioner submits the request for prior authorization electronically, and all of the information as required is provided, the health insurer shall respond to the prior authorization request within seven days from the day on the electronic receipt of the prior authorization request, except that the health insurer shall respond to the prior authorization request within two days if the request is for medical care or other service for a condition where application of the time frame for making routine or non-life-threatening care determinations is either of the following:(1) Could seriously jeopardize the life, health, or safety of the patient or others due to the patients psychological state; or(2) In the opinion of a health care practitioner with knowledge of the patients medical condition would subject the patient to adverse health consequences without the care or treatment that is the subject of the request. (e) If the information submitted is considered incomplete, the health insurer shall identify all deficiencies and within two business days from the day on the electronic receipt of the prior authorization request return the prior authorization to the health care practitioner. The health care practitioner shall provide the additional information requested within three business days from the time the return request is received by the health care practitioner or the prior authorization is deemed denied and a new request must be submitted.(f) If the health insurer wishes to audit the prior authorization or if the information regarding step therapy is incomplete, the prior authorization may be transferred to the peer review process. (g) A prior authorization approved by a health insurer is carried over to all other managed care organizations, health insurers and the Public Employees Insurance Agency for three months, if the services are provided within the state.(h) The health insurer shall use national best practice guidelines to evaluate a prior authorization.(i) If a prior authorization is rejected by the health insurer and the health care practitioner who submitted the prior authorization requests an appeal by peer review of the decision to reject, the peer review shall be with a health care practitioner similar in specialty, education, and background. The health insurers medical director has the ultimate decision regarding the appeal determination and the health care practitioner has the option to consult with the medical director after the peer-to-peer consultation. Time frames regarding this appeal process shall take no longer than 30 days. (j) (1) Any prescription written for an inpatient at the time of discharge requiring a prior authorization shall not be subject to prior authorization requirements and shall be immediately approved for not less than three days: Provided, That the cost of the medication does not exceed $5,000 per day and the physician shall note on the prescription or notify the pharmacy that the prescription is being provided at discharge. After the three-day time frame, a prior authorization must be obtained. (2) If the approval of a prior authorization requires a medication substitution, the substituted medication shall be as required under 30-5-1 et seq. (k) In the event a health care practitioner has performed an average of 30 procedures per year and in a six-month time period has received a 100 percent prior approval rating, the health insurer shall not require the health care practitioner to submit a prior authorization for that procedure for the next six months. At the end of the six-month time frame, the exemption shall be reviewed prior to renewal. This exemption is subject to internal auditing, at any time, by the health insurer and may be rescinded if the health insurer determines the health care practitioner is not performing the procedure in conformity with the health insurers benefit plan based upon the results of the health insurers internal audit. (l) The health insurer must accept and respond to electronically submitted prior authorization requests for pharmacy benefits by July 1, 2020, or if the health insurer is currently accepting electronic prior authorization requests, it shall have until January 1, 2020, to implement this provision. The health insurer shall accept and respond to prior authorizations through a secure electronic transmission using the NCPDP SCRIPT Standard ePA transactions.(m) This section is effective for policy, contract, plans, or agreements beginning on or after January 1, 2020. This section applies to all policies, contracts, plans, or agreements, subject to this article, that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section.(n) The timeframes in this section are not applicable to prior authorization requests submitted through telephone, mail, or fax.
 (a) As used in this section:"Cost sharing" means any copayment, coinsurance, or deductible required by or on behalf of an insured in order to receive a specific health care item or service covered by a health plan."Drug" means the same as the term is defined in 30-5-4(19)."Person" means a natural person, corporation, mutual company, unincorporated association, partnership, joint venture, limited liability company, trust, estate, foundation, nonprofit corporation, unincorporated organization, or government or governmental subdivision or agency."Pharmacy benefits manager" means the same as that term is defined in 33-51-3 of this code.(b) When calculating an insureds contribution to any applicable cost sharing requirement, including, but not limited to, the annual limitation on cost sharing subject to 42 U.S.C. 18022(c) and 42 U.S.C. 300gg-6(b):(1) An insurer shall include any cost sharing amounts paid by the insured or on behalf of the insured by another person; and(2) A pharmacy benefits manger shall include any cost sharing amounts paid by the insured or on behalf of the insured by another person.(c) The commissioner is authorized to propose rules for legislative approval in accordance with 29A-3-1 et seq. of this code, to implement the provisions of this section.(d) This section is effective for policy, contract, plans, or agreements beginning on or after January 1, 2020. This section applies to all policies, contracts, plans, or agreements, subject to this article that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section. 
(a) As used in this section, the following words and phrases have the meaning given them in this section unless the context clearly indicates otherwise:To the extent that coverage is provided "behavioral health, mental health, and substance use disorder" means a condition or disorder, regardless of etiology, that may be the result of a combination of genetic and environmental factors and that falls under any of the diagnostic categories listed in the mental disorders section of the most recent version of:(A) The International Statistical Classification of Diseases and Related Health Problems;(B) The Diagnostic and Statistical Manual of Mental Disorders; or(C) The Diagnostic Classification of Mental Health and Developmental Disorders of Infancy and Early Childhood; and Includes autism spectrum disorder: Provided, That any service, even if it is related to the behavioral health, mental health, or substance use disorder diagnosis if medical in nature, shall be reviewed as a medical claim and undergo all utilization review as applicable.(b) The carrier is required to provide coverage for the prevention of, screening for, and treatment of behavioral health, mental health, and substance use disorders that is no less extensive than the coverage provided for any physical illness and that complies with the requirements of this section. This screening shall include, but is not limited to, unhealthy alcohol use for adults, substance use for adults and adolescents, and depression screening for adolescents and adults. (c) The carrier shall:(1) Include coverage and reimbursement for behavioral health screenings using a validated screening tool for behavioral health, which coverage and reimbursement is no less extensive than the coverage and reimbursement for the annual physical examination; (2) Comply with the nonquantitative treatment limitation requirements specified in 45 CFR 146.136(c)(4), or any successor regulation, regarding any limitations that are not expressed numerically but otherwise limit the scope or duration of benefits for treatment, which in addition to the limitations and examples listed in 45 CFR 146.136(c)(4)(ii) and (c)(4)(iii), or any successor regulation and 78 FR 68246, include the methods by which the carrier establishes and maintains its provider network and responds to deficiencies in the ability of its networks to provide timely access to care;(3) Comply with the financial requirements and quantitative treatment limitations specified in 45 CFR 146.136(c)(2) and (c)(3), or any successor regulation;(4) Not apply any nonquantitative treatment limitations to benefits for behavioral health, mental health, and substance use disorders that are not applied to medical and surgical benefits within the same classification of benefits;(5) Establish procedures to authorize treatment with a nonparticipating provider if a covered service is not available within established time and distance standards and within a reasonable period after service is requested, and with the same coinsurance, deductible, or copayment requirements as would apply if the service were provided at a participating provider, and at no greater cost to the covered person than if the services were obtained at, or from a participating provider; and(6) If a covered person obtains a covered service from a nonparticipating provider because the covered service is not available within the established time and distance standards, reimburse treatment or services for behavioral health, mental health, or substance use disorders required to be covered pursuant to this subsection that are provided by a nonparticipating provider using the same methodology that the carrier uses to reimburse covered medical services provided by nonparticipating providers and, upon request, provide evidence of the methodology to the person or provider. (d) If the carrier offers a plan that does not cover services provided by an out-of-network provider, it may provide the benefits required in subsection (c) of this section if the services are rendered by a provider who is designated by and affiliated with the carrier only if the same requirements apply for services for a physical illness. (e) In the event of a concurrent review for a claim for coverage of services for the prevention of, screening for, and treatment of behavioral health, mental health, and substance use disorders, the service continues to be a covered service until the carrier notifies the covered person of the determination of the claim. (f) Unless denied for nonpayment of premium, a denial of reimbursement for services for the prevention of, screening for, or treatment of behavioral health, mental health, and substance use disorders by the carrier must include the following language:(1) A statement explaining that covered persons are protected under this section, which provides that limitations placed on the access to mental health and substance use disorder benefits may be no greater than any limitations placed on access to medical and surgical benefits;(2) A statement providing information about the Consumer Services Division of the West Virginia Office of the Insurance Commissioner if the covered person believes his or her rights under this section have been violated; and(3) A statement specifying that covered persons are entitled, upon request to the carrier, to a copy of the medical necessity criteria for any behavioral health, mental health, and substance use disorder benefit.(g) On or after June 1, 2021, and annually thereafter, the Insurance Commissioner shall submit a written report to the Joint Committee on Government and Finance that contains the following information on plans which fall under this section regarding plans offered pursuant to this section:(1) Data that demonstrates parity compliance for adverse determination regarding claims for behavioral health, mental health, or substance use disorder services and includes the total number of adverse determinations for such claims;(2) A description of the process used to develop and select:(A) The medical necessity criteria used in determining benefits for behavioral health, mental health, and substance use disorders; and(B) The medical necessity criteria used in determining medical and surgical benefits;(3) Identification of all nonquantitative treatment limitations that are applied to benefits for behavioral health, mental health, and substance use disorders and to medical and surgical benefits within each classification of benefits; and(4) The results of analyses demonstrating that, for medical necessity criteria described in subdivision (2) of this subsection and for each nonquantitative treatment limitation identified in subdivision (3) of this subsection, as written and in operation, the processes, strategies, evidentiary standards, or other factors used in applying the medical necessity criteria and each nonquantitative treatment limitation to benefits for behavioral health, mental health, and substance use disorders within each classification of benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the medical necessity criteria and each nonquantitative treatment limitation to medical and surgical benefits within the corresponding classification of benefits.(5) The Insurance Commissioners report of the analyses regarding nonquantitative treatment limitations shall include at a minimum: (A) Identifying factors used to determine whether a nonquantitative treatment limitation will apply to a benefit, including factors that were considered but rejected;(B) Identify and define the specific evidentiary standards used to define the factors and any other evidence relied on in designing each nonquantitative treatment limitation;(C) Provide the comparative analyses, including the results of the analyses, performed to determine that the processes and strategies used to design each nonquantitative treatment limitation, as written, and the written processes and strategies used to apply each nonquantitative treatment limitation for benefits for behavioral health, mental health, and substance use disorders are comparable to, and are applied no more stringently than, the processes and strategies used to design and apply each nonquantitative treatment limitation, as written, and the written processes and strategies used to apply each nonquantitative treatment limitation for medical and surgical benefits;(D) Provide the comparative analyses, including the results of the analyses, performed to determine that the processes and strategies used to apply each nonquantitative treatment limitation, in operation, for benefits for behavioral health, mental health, and substance use disorders are comparable to, and are applied no more stringently than, the processes and strategies used to apply each nonquantitative treatment limitation, in operation, for medical and surgical benefits; and(E) Disclose the specific findings and conclusions reached by the Insurance Commissioner that the results of the analyses indicate that each health benefit plan offered under the provisions of this section complies with subsection (c) of this section.(h) The Insurance Commissioner shall adopt legislative rules to comply with the provisions of this section. These rules shall specify the information and analyses that carriers shall provide to the Insurance Commissioner necessary for the Insurance Commissioner to complete the report described in subsection (g) of this section and shall delineate the format in which the carriers shall submit such information and analyses. These rules or amendments to rules shall be proposed pursuant to the provisions of 29A-3-1 et seq. of this code within the applicable time limit to be considered by the Legislature during its regular session in the year 2021. The rules shall require that each carrier first submit the report to the Insurance Commissioner no earlier than one year after the rules are promulgated, and any year thereafter during which the carrier makes significant changes to how it designs and applies medical management protocols.(i) This section is effective for policies, contracts, plans, or agreements, beginning on or after January 1, 2021. This section applies to all policies, contracts, plans, or agreements, subject to this article that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section.(j) The Insurance Commissioner shall enforce this section and may conduct a financial examination of the carrier to determine if it is in compliance with this section, including, but not limited to, a review of policies and procedures and a sample of mental health claims to determine these claims are treated in parity with medical and surgical benefits. The results of this examination shall be reported to the Legislature. If the Insurance Commissioner determines that the carrier is not in compliance with this section, the Insurance Commissioner may fine the carrier in conformity with the fines established in the legislative rule. 
The provisions of the Health Benefit Plan Network Access and Adequacy Act codified at 33-55-1 et seq. of this code are made applicable to the provisions of this article.
The provision requiring coverage for 12-month refill for contraceptive drugs codified at 33-58-1 of this code is made applicable to the provisions of this article.
Except as provided in section six of this article, no such policy delivered or issued for delivery to any person in this state shall contain provisions respecting the matters set forth below unless such provisions are in the words in which the same appear in this section: Provided, That the insurer may, at its option, use in lieu of any such provision a corresponding provision of different wording approved by the commissioner which is not less favorable in any respect to the insured or the beneficiary. Any such provision contained in the policy shall be preceded individually by the appropriate caption appearing in this section or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the commissioner may approve.(a) A provision as follows:"Change of Occupation: If the insured be injured or contract sickness after having changed his occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only such portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for such more hazardous occupation. If the insured changes his occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of such change of occupation, will reduce the premium rate accordingly, and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of such proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued; but if such filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in such state prior to the occurrence of the loss or prior to the date of proof of change in occupation."(b) A provision as follows:"Misstatement of Age: If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age."(c) A provision as follows:"Other Insurance in This Insurer: If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured be in force concurrently herewith, making the aggregate indemnity for ____________ (insert type of coverage or coverages) in excess of $____________ (insert maximum limit of indemnity or indemnities) the excess insurance shall be void and all premiums paid for such excess shall be returned to the insured or to his estate."Or, in lieu thereof:"Insurance effective at any one time on the insured under a like policy or policies in this insurer is limited to the one such policy elected by the insured, his beneficiary or his estate, as the case may be, and the insurer will return all premiums paid for all other such policies."Provided that no policy hereafter issued for delivery in this state which provides, with or without other benefits, for the payment of benefits or reimbursement for expenses with respect to hospitalization, nursing care, medical or surgical examination or treatment, or ambulance transportation shall contain any provision for a reduction of such benefits or reimbursement, or any provision for avoidance of the policy, on account of other insurance of such nature carried by the same insured with the same or another insurer.(d) A provision as follows:"Insurance with Other Insurers: If there be other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for such benefits under this policy shall be for such proportion of the indemnities otherwise provided hereunder for such loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for such loss, and for the return of such portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined."The insurer may, at its option, include in this provision a definition of "other valid coverage," approved as to form by the commissioner, which definitions shall be limited in subject matter to coverage provided by organizations subject to regulations by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and to any other coverage the inclusion of which may be approved by the commissioner. In the absence of such definition such term shall not include group insurance, or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the foregoing policy provisions with respect to any insured any amount of benefit provided for such insured pursuant to any compulsory benefit statute (including any workers' compensation or employer's liability statute) whether provided by a governmental agency or otherwise shall in all cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying the foregoing policy provision no third party liability coverage shall be included as "other valid coverage."(e) A provision as follows:"Relation of Earnings to Insurance: If the total monthly amount of loss of time benefits promised for the same loss under all valid loss of time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or his average monthly earnings for the period of two years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of such monthly earnings or such average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of such part of the premiums paid during such two years as shall exceed the pro rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of $200 or the sum of the monthly benefits specified in such coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time."The insurer may, at its option, include in this provision a definition of "valid loss of time coverage," approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, or to any other coverage the inclusion of which may be approved by the commissioner or any combination of such coverages. In the absence of such definition such term shall not include any coverage provided for such insured pursuant to any compulsory benefit statute (including any workers' compensation or employer's liability statute), or benefits provided by union welfare plans or by employer or employee benefit organizations.(f) A provision as follows:"Unpaid Premium: Upon the payment of a claim under this policy, any premiums then due and unpaid or covered by any note or written order may be deducted therefrom."(g) A provision as follows:"Return of Premium on Cancellation: If the insured cancels this policy, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation."(h) A provision as follows:"Conformity with State Statutes: Any provision of this policy which, on its effective date, is in conflict with the statutes of the state in which the insured resides on such date is hereby amended to conform to the minimum requirements of such statutes."(i) A provision as follows:"Illegal Occupation: The insurer shall not be liable for any loss to which a contributing cause was the insured's commission of or attempt to commit a felony or to which a contributing cause was the insured's being engaged in an illegal occupation."(j) A provision as follows:"Intoxicants and Narcotics: The insurer shall not be liable for any loss sustained or contracted in consequence of the insured's being intoxicated or under the influence of any narcotic unless administered on the advice of a physician."
If any provision of this article is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the commissioner, shall omit from such policy any inapplicable provision or part of a provision, and shall modify any inconsistent provision or part of the provision in such manner as to make the provision as contained in the policy consistent with the coverage provided by the policy.
The provisions which are the subject of sections four and five of this article or any corresponding provisions which are used in lieu thereof in accordance with such sections, shall be printed in consecutive order of the provisions in such sections or, at the option of the insurer, any such provisions may appear as a unit in any part of the policy, with other provisions to which it may be logically related, provided the resulting policy shall not be in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered or issued.
The word "insured" as used in this article, shall not be construed as preventing a person other than the insured with a proper insurable interest from making application for and owning a policy covering the insured or from being entitled under such a policy to any indemnities, benefits and rights provided therein.
(a) Any policy of a foreign or alien insurer, when delivered or issued for delivery to any person in this state, may contain any provision which is not less favorable to the insured or the beneficiary than the provisions of this article and which is prescribed or required by the law of the state under which the insurer is organized.(b) Any policy of a domestic insurer may, when issued for delivery in any other state or country, contain any provision permitted or required by the laws of such other state or country.
This article may be known and cited as the West Virginia Long-Term Care Insurance Act.
 The commissioner may issue reasonable rules pursuant to chapter twenty-nine-a of this code to promote premium adequacy and to protect the policyholder in the event of substantial rate increases and to establish minimum standards for marketing practices, agent compensation, agent testing, penalties and reporting practices for long-term care insurance.
 In addition to any other penalties provided by the laws of this state, any insurer and any agent found to have violated any requirement of this state relating to the regulation of long-term care insurance or the marketing of such insurance shall be subject to a fine of up to three times the amount of any commissions paid for each policy involved in the violation or up to $10,000, whichever is greater.
The purpose of this act is to promote the public interest, to promote the availability of long-term care insurance policies, to protect applicants for long-term care insurance, as defined, from unfair or deceptive sales or enrollment practices, to establish standards for long-term care insurance, to facilitate public understanding and comparison of long-term care insurance policies, and to facilitate flexibility and innovation in the development of long-term care insurance coverage.
The requirements of this act shall apply to policies delivered or issued for delivery in this state on or after the effective date of this act. This act is not intended to supersede the obligations of entities subject to this act to comply with the substance of other applicable insurance laws insofar as they do not conflict with this act, except that laws and regulations designed and intended to apply to Medicare supplement insurance policies shall not be applied to long-term care insurance.
(a) "Long-term care insurance" means any insurance policy or rider advertised, marketed, offered or designed to provide coverage for not less than twelve consecutive months for each covered person on an expense incurred, indemnity, prepaid or other basis; for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services, provided in a setting other than an acute care unit of a hospital. The term includes group and individual, annuities and life insurance policies or riders that provide directly or supplement long-term care insurance. The term also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. The term shall also include qualified long-term care insurance contracts. Long-term care insurance may be issued by insurers; fraternal benefit societies; nonprofit health, hospital, and medical service corporations; prepaid health plans; health maintenance organizations or any similar organization to the extent they are otherwise authorized to issue life or health insurance. Long-term care insurance shall not include any insurance policy that is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income or related asset-protection coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage. With regard to life insurance, this term does not include life insurance policies that accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention or permanent institutional confinement and that provide the option of a lump-sum payment for those benefits and where neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care. Notwithstanding any other provision of this article, any product advertised, marketed or offered as long-term care insurance shall be subject to the provisions of this article.(b) "Applicant" means:(1) In the case of an individual long-term care insurance policy, the person who seeks to contract for benefits; and(2) In the case of a group long-term care insurance policy, the proposed certificate holder.(c) "Certificate" means, for the purposes of this article, any certificate issued under a group long-term care insurance policy delivered or issued for delivery in this state.(d) "Commissioner" means the Insurance Commissioner of this state.(e) "Group long-term care insurance" means a long-term care insurance policy that is delivered or issued for delivery in this state and issued to:(1) One or more employers or labor organizations, or to a trust or to the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees or a combination thereof or for members or former members or a combination thereof, of the labor organizations; or(2) Any professional, trade or occupational association for its members or former or retired members, or combination thereof, if the association:(A) Is composed of individuals all of whom are or were actively engaged in the same profession, trade or occupation; and(B) Has been maintained in good faith for purposes other than obtaining insurance; or(3) An association or a trust or the trustees of a fund established, created or maintained for the benefit of members of one or more associations. Prior to advertising, marketing or offering the policy within this state, the association or associations, or the insurer of the association or associations, shall file evidence with the commissioner that the association or associations have at the outset a minimum of one hundred persons and have been organized and maintained in good faith for the purposes other than that of obtaining insurance; have been in active existence for at least one year; and have a Constitution and bylaws that provide that:(A) The association or associations hold regular meetings not less than annually to further purposes of the members;(B) Except for credit unions, the association or associations collect dues or solicit contributions from members; and(C) The members have voting privileges and representation on the governing board and committees.Thirty days after the filing the association or associations will be deemed to satisfy the organizational requirements, unless the commissioner makes a finding that the association or associations do not satisfy those organizational requirements.(4) A group other than as described in subdivisions (1), (2) and (3), subsection (e) of this section, subject to a finding by the commissioner that:(A) The issuance of the group policy is not contrary to the best interest of the public;(B) The issuance of the group policy would result in economies of acquisition or administration; and(C) The benefits are reasonable in relation to the premiums charged.(f) "Policy" means, for the purposes of this article, any policy, contract, subscriber agreement, rider or endorsement delivered or issued for delivery in this state by an insurer; fraternal benefit society; nonprofit health, hospital, or medical service corporation; prepaid health plan; health maintenance organization or any similar organization.(g)(1) "Qualified long-term care insurance contract" or "federally tax qualified long-term care insurance contract" means an individual or group insurance contract that meets the requirements of Section 7702B(b) of the Internal Revenue Code of 1986, as amended, as follows:(A) The only insurance protection provided under the contract is coverage of qualified long-term care services. A contract shall not fail to satisfy the requirements of this paragraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;(B) The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act, as amended, or would be so reimbursable but for the application of a deductible or coinsurance amount. The requirements of this paragraph do not apply to expenses that are reimbursable under Title XVIII of the Social Security Act only as a secondary payor. A contract shall not fail to satisfy the requirements of this paragraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;(C) The contract is guaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986, as amended;(D) The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed except as provided in paragraph E of this subdivision.(E) All refunds of premiums and all policyholder dividends or similar amounts under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract; and(F) The contract meets the consumer protection provisions set forth in Section 7702B(g) of the Internal Revenue Code of 1986, as amended.(2) "Qualified long-term care insurance contract" or "federally tax-qualified long-term care insurance contract" also means the portion of a life insurance contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies the requirements of Sections 7702B(b) and (e) of the Internal Revenue Code of 1986, as amended.
No group long-term care insurance coverage may be offered to a resident of this state under a group policy issued in another state to a group described in subdivision (4), subsection (e), section four of this article unless this state or another state having statutory and regulatory long-term care insurance requirements substantially similar to those adopted in this state has made a determination that such requirements have been met.
(a) The commissioner may adopt rules that include standards for full and fair disclosure setting forth the manner, content and required disclosures for the sale of long-term care insurance policies, terms of renewability, initial and subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, continuation or conversion, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions and definitions of terms.(b) No long-term care insurance policy may:(1) Be canceled, nonrenewed or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificate holder;(2) Contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; or(3) Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care.(c) Preexisting condition:(1) No long-term care insurance policy or certificate other than a policy or certificate thereunder issued to a group as defined in subdivision (1), subsection (e), section four of this article shall use a definition of "preexisting condition" that is more restrictive than the following: Preexisting condition means a condition for which medical advice or treatment was recommended by, or received from, a provider of health care services within six months preceding the effective date of coverage of an insured person.(2) No long-term care insurance policy or certificate other than a policy or certificate thereunder issued to a group as defined in subdivision (1), subsection (e), section four of this article may exclude coverage for a loss or confinement that is the result of a preexisting condition unless loss or confinement begins within six months following the effective date of coverage of an insured person.(3) The commissioner may extend the limitation periods set forth in subdivision (1) and (2), subsection (c) of this section as to specific age group categories in specific policy forms upon findings that the extension is in the best interest of the public.(4) The definition of "preexisting condition" does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant, and, on the basis of the answers on that application, from underwriting in accordance with that insurer's established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in subdivision (2), subsection (c) of this section expires. No long-term care insurance policy or certificate may exclude or use waivers or riders of any kind to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subdivision (2), subsection (c) of this section.(d) Prior hospitalization/institutionalization:(1) No long-term care insurance policy may be delivered or issued for delivery in this state if the policy:(A) Conditions eligibility for any benefits on a prior hospitalization requirement;(B) Conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care; or(C) Conditions eligibility for any benefits other than waiver of premium, post-confinement, post-acute care or recuperative benefits on a prior institutionalization requirement.(2)(A) A long-term care insurance policy containing post-confinement, post-acute care or recuperative benefits shall clearly label in a separate paragraph of the policy or certificate entitled "Limitations or Conditions on Eligibility for Benefits" such limitations or conditions, including any required number of days of confinement.(B) A long-term care insurance policy or rider that conditions eligibility of noninstitutional benefits on the prior receipt of institutional care shall not require a prior institutional stay of more than thirty days.(3) No long-term care insurance policy or rider that provides benefits only following institutionalization shall condition such benefits upon admission to a facility for the same or related conditions within a period of less than thirty days after discharge from the institution.(e) The commissioner may adopt rules establishing loss ratio standards for long-term care insurance policies provided that a specific reference to long-term care insurance policies is contained in the rule.(f) Right to return - free look:(1) Long-term care insurance applicants shall have the right to return the policy or certificate within thirty days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Long-term care insurance policies and certificates shall have a notice prominently printed on the first page or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within thirty days of its delivery and to have the premium refunded if, after examination of the policy or certificate, other than a certificate issued pursuant to a policy issued to a group defined in subdivision (1), subsection (e), section four of this article, the applicant is not satisfied for any reason.(2) This subsection shall also apply to denials of applications and any refund must be made within thirty days of the return or denial.(g) Outline of coverage:(1) An outline of coverage shall be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means that prominently direct the attention of the recipient to the document and its purpose.(A) The commissioner shall prescribe a standard format, including style, arrangement and overall appearance, and the content of an outline of coverage.(B) In the case of agent solicitations, an agent must deliver the outline of coverage prior to the presentation of an application or enrollment form.(C) In the case of direct response solicitations, the outline of coverage must be presented in conjunction with any application or enrollment form.(D) In the case of a policy issued to a group defined in subdivision (1), subsection (e), section four of this article, an outline of coverage shall not be required to be delivered, provided that the information described in paragraphs (A) through (F), inclusive, subdivision (2) of this subsection is contained in other materials relating to enrollment. Upon request, these other materials shall be made available to the commissioner.(2) The outline of coverage shall include:(A) A description of the principal benefits and coverage provided in the policy;(B) A statement of the principal exclusions, reductions, and limitations contained in the policy;(C) A statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation in the policy of a right to change premium. Continuation or conversion provisions of group coverage shall be specifically described;(D) A statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contain governing contractual provisions;(E) A description of the terms under which the policy or certificate may be returned and premium refunded;(F) A brief description of the relationship of cost of care and benefits; and(G) A statement that discloses to the policyholder or certificate holder whether the policy is intended to be a federally tax-qualified long-term care insurance contract under Section 7702(B)(b) of the Internal Revenue Code of 1986, as amended.(h) A certificate issued pursuant to a group long-term care insurance policy that is delivered or issued for delivery in this state shall include:(1) A description of the principal benefits and coverage provided in the policy;(2) A statement of the principal exclusions, reductions and limitations contained in the policy; and(3) A statement that the group master policy determines governing contractual provisions.(i) If an applicant for a long-term care insurance contract or certificate is approved, the issuer shall deliver the contract or certificate of insurance to the applicant no later than thirty days after the date of approval.(j) At the time of policy delivery, a policy summary shall be delivered for an individual life insurance policy that provides long-term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant's request, but regardless of request shall make delivery no later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary shall also include:(1) An explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits;(2) An illustration of the amount of benefits, the length of benefit, and the guaranteed lifetime benefits if any, for each covered person;(3) Any exclusions, reductions and limitations on benefits of long-term care;(4) A statement that any long-term care inflation protection option required by section eight of the commissioner's rule relating to long-term care insurance is not available under this policy; and(5) If applicable to the policy type, the summary shall also include:(A) A disclosure of the effects of exercising other rights under the policy;(B) A disclosure of guarantees related to long-term care costs of insurance charges; and(C) Current and projected maximum lifetime benefits.(k) Any time a long-term care benefit, funded through a life insurance vehicle by the acceleration of the death benefit, is in benefit payment status, a monthly report shall be provided to the policyholder. The report shall include:(1) Any long-term care benefits paid out during the month;(2) An explanation of any changes in the policy, for example death benefits or cash values, due to long-term care benefits being paid out; and(3) The amount of long-term care benefits existing or remaining.(l) If a claim under a long-term care insurance contract is denied, the issuer shall, within sixty days of the date of a written request by the policyholder or certificate holder, or a representative thereof:(1) Provide a written explanation of the reasons for the denial; and(2) Make available all information directly related to the denial.(m) Any policy or rider advertised, marketed or offered as long-term care or nursing home insurance shall comply with the provisions of this article.
If any provision of this act or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the act and application of such provision to other persons or circumstances shall not be affected thereby.
(a) For a policy or certificate that has been in force for less than six months an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is material to the acceptance for coverage.(b) For a policy or certificate that has been in force for at least six months but less than two years, an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is both material to the acceptance for coverage and which pertains to the condition for which benefits are sought.(c) After a policy or certificate has been in force for two years it is not contestable upon the grounds of misrepresentation alone. The policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health.(d) No long-term care insurance policy or certificate may be field issued based on medical or health status. For purposes of this subsection, "field issued" means a policy or certificate issued by an agent or a third-party administrator pursuant to the underwriting authority granted to the agent or third-party administrator by an insurer.(e) If an insurer has paid benefits under the long-term care insurance policy or certificate, the benefit payments may not be recovered by the insurer in the event that the policy or certificate is rescinded.(f) In the event of the death of the insured, this section shall not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care. In this situation, the remaining death benefits under these policies shall be governed by section four, article thirteen of this chapter. In all other situations, this section shall apply to life insurance policies that accelerate benefits for long-term care.
(a) Except as provided in subsection (b) of this section, a long-term care insurance policy may not be delivered or issued for delivery in this state unless the policyholder or certificate holder has been offered the option of purchasing a policy or certificate including a nonforfeiture benefit. The offer of a nonforfeiture benefit may be in the form of a rider that is attached to the policy. In the event the policyholder or certificate holder declines the nonforfeiture benefit, the insurer shall provide a contingent benefit upon lapse that shall be available for a specified period of time following a substantial increase in premium rates.(b) When a group long-term care insurance policy is issued, the offer required in subsection (a) of this section shall be made to the group policyholder. However, if the policy is issued as group long-term care insurance as defined in subdivision (4), subsection (e), section four of this article, other than to a continuing care retirement community or other similar entity, the offering shall be made to each proposed certificate holder.(c) The commissioner may promulgate rules pursuant to chapter twenty-nine-a of this code specifying the type or types of nonforfeiture benefits to be offered as part of long-term care insurance policies and certificates, the standards for nonforfeiture benefits and the rules regarding contingent benefit upon lapse, including a determination of the specified period of time during which a contingent benefit upon lapse will be available and the substantial premium rate increase that triggers a contingent benefit upon lapse as described in subsection (a) of this section.
The Legislature hereby finds that there is a need to provide guidelines regarding uniform health care administration in order to best serve consumers, health care providers and insurers and to organize and streamline the claims process. The purpose of this article is to authorize the insurance commissioner to develop standard forms and procedures regarding health care claims and to require that all insurers, third party payers, and health care providers implement and use such standards in a uniform manner.
The provisions of this article apply to all health care providers in the state; all health insurers writing or issuing accident and sickness policies, including hospital service corporations, health service corporations, medical service corporations, dental service corporations and HMOs; all third party payers; all state agencies and departments, including, but not limited to, the public employees insurance agency and providers of services under Medicare and Medicaid; and all entities involved in the payment of health care claims.
(a) The commissioner shall propose rules for legislative approval, in accordance with the provisions of chapter twenty-nine-a of this code, regarding the implementation and use of uniform health care administrative forms. Such rules shall establish, where practicable, the acceptance and use throughout the health care system of standard administrative forms, terms or procedures, including, but not limited to, the following:(1) The standard CMS 1500 health insurance claim form, as amended, or other similar forms, terms, and definitions to be used which are consistent with health care and insurance industry standards.(2) International classification of disease, ninth clinical modifications (ICD-9-CM) and common procedural terminology (CPT) codes, as amended, or other similar forms, terms, and definitions to be used which are consistent with health care and insurance industry standards.(3) National uniform billing data element specifications (UB-04), as amended, and as supplemented by the West Virginia uniform billing committee, or other similar forms, terms, and definitions to be used which are consistent with health care and insurance industry standards.(4) Consideration of current practices involving reimbursement of claims and explanation of benefits, and the implementation of standards and guidelines regarding explanation of benefits, including, but not limited to, consideration of line item explanations of payments or denial of payments.(b) The legislative rules required herein shall be developed with the advice of an advisory group to be appointed by the commissioner. Such advisory group shall consist of representatives of consumers, providers, payors, and regulatory agencies, including representatives from the following: The department of health and human resources; the West Virginia health care authority; West Virginia dental association; West Virginia pharmacists association; the West Virginia hospital association; commercial health insurers; third party administrators; the West Virginia state medical association; the West Virginia nurses association; public employees insurance agency; and consumers.(c) The commissioner and the advisory group shall review the legislative rules to be proposed pursuant to this section as necessary and update the same in a timely manner in order to conform to current legislation and health care and insurance industry standards and trends.
Any person, partnership, corporation, limited liability company, professional corporation, health care provider, insurer or other payer, or other entity violating any provision of this article shall be subject to a fine imposed by the commissioner of not more than $1000 for each violation and, in addition to or in lieu of any fine imposed, the West Virginia health care authority is empowered to withhold rate approval or a certificate of need for any health care provider violating any provision of this article.
This article may be known as the "Uniform Health Care Administration Act."
[Repealed.]
This article shall be cited as the "Discount Medical Plan Organizations and Discount Prescription Drug Plan Organizations Act."
(a) (1) A discount medical plan organization shall have a written provider agreement with all providers offering medical or ancillary services to its members. The written provider agreement may be entered into directly with the provider or indirectly with a provider network to which the provider belongs.(2) A provider agreement between a discount medical plan organization and a provider shall provide the following:(A) A list of the medical or ancillary services and products to be provided at a discount;(B) The amount or amounts of the discounts or, alternatively, a fee schedule that reflects the provider's discounted rates; and(C) A written document demonstrating that the provider has agreed that it will not charge members more than the discounted rates.(3) A provider agreement between a discount medical plan organization and a provider network shall require that the provider network have written agreements with its providers that:(A) Contain the provisions described in subdivision (2) of this subsection;(B) Authorize the provider network to contract with the discount medical plan organization on behalf of the provider; and(C) Require the provider network to maintain an up-to-date list of its contracted providers and to provide the list on a monthly basis to the discount medical plan organization.(4) A provider agreement between a discount medical plan organization and an entity that contracts with a provider network shall require that the entity, in its contract with the provider network, require the provider network to have written agreements with its providers that comply with subdivision (3) of this subsection.(5) The discount medical plan organization shall maintain a copy of each of its active provider agreements; each such organization shall also retain a copy of every inactive provider agreement for at least two years after the expiration date of each such agreement.(b) Each discount medical plan organization shall maintain on its Internet website page a current list of the names and addresses of the providers with which it has contracted directly or through a provider network; the address of the website shall be prominently displayed on all of the discount medical plan organization's advertisements, marketing materials, brochures and discount medical plan cards.
(a) A discount medical plan organization may market directly or contract with other marketers for the distribution of its product.(b) (1) A discount medical plan organization shall have a written agreement with a marketer prior to the marketer's marketing, promoting, selling or distributing the discount medical plan.(2) The agreement between the discount medical plan organization and the marketer shall prohibit the marketer from using advertising, marketing materials, brochures and discount medical plan cards without the discount medical plan organization's approval in writing.(3) The discount medical plan organization shall be bound by and responsible for the activities of a marketer that are within the scope of the marketer's agency relationship with the organization.(c) A discount medical plan organization shall approve in writing all advertisements, marketing materials, brochures and discount cards used by marketers to market, promote, sell or distribute the discount medical plan prior to their use.
(a) If the information required in subsection (b) of this section is not provided at the time of renewal of a license under section four of this article, a discount medical plan organization shall file an annual report with the commissioner in the form prescribed by the commissioner, within three months after the end of each fiscal year.(b) The report shall include:(1) Audited financial statements prepared in accordance with generally accepted accounting principals certified by an independent certified public accountant, including the organization's balance sheet, income statement and statement of changes in cash flow for the preceding year, except that, subject to the approval of the commissioner, an organization that is an affiliate of a parent entity that is publicly traded and that prepares audited financial statements reflecting the consolidated operations of the parent entity may instead submit the audited financial statements of the parent entity and a written guaranty that the minimum capital requirements required under section five of this article will be met by the parent entity;(2) Any changes in the list of names and residence addresses of all persons responsible for the conduct of the organization's affairs, together with a disclosure of the extent and nature of any contracts or arrangements with these persons and the discount medical plan organization, including any possible conflicts of interest;(3) The number of discount medical plan members in the state; and(4) Any other information relating to the performance of the discount medical plan organization that may be required by the commissioner.(c) Any discount medical plan organization that fails to file an annual report in the form and within the time required by this section may be fined up to $500 per day for the first ten days during which the violation continues and up to $1,000 per day after the first ten days during which the violation continues. The commissioner may also suspend the organization's authority to enroll new members or to do business in this state while the violation continues.
(a) A discount prescription drug plan organization shall comply with sections eight, nine, ten and eleven of this article and shall report any of the information described in section twelve of this article in the form and manner as the commissioner may require. A discount prescription drug plan organization is also subject to sections fourteen, fifteen and sixteen of this article.(b) Each discount prescription drug plan organization shall designate and provide the commissioner with the name, address and telephone number of a discount prescription drug plan compliance officer responsible for ensuring compliance with the provisions of this article that are applicable to discount prescription drug plans and discount prescription drug plan organizations.
(a) The commissioner may investigate the business affairs and conduct of every person applying for or holding a discount medical plan organization license and the operational affairs of a discount prescription drug plan organization to determine whether a violation of this article or any rule promulgated hereunder has occurred or is occurring.(b) If the commissioner has cause to believe that a violation of this article or any rule promulgated hereunder has occurred or is occurring and that an enforcement action may be warranted, he or she shall notify the discount medical plan organization or discount prescription drug plan organization in writing, specifically stating the grounds for enforcement action and informing the organization that it may pursue a hearing on the matter in accordance with the provisions of section thirteen, article two of this chapter.(c) If, after notice and hearing, a violation of this article or any legislative rule promulgated under this article is found, the Insurance Commissioner may take one or more of the following enforcement actions:(1) Place a discount medical plan organization on probation or suspend, revoke or refuse to issue or renew the organization's license;(2) Levy a civil penalty on the organization in an amount not exceeding $10,000 for each violation;(3) Issue an administrative order requiring the discount medical plan organization or discount prescription drug plan organization to cease and desist from engaging in the act or practice that constitutes the violation; or(4) Suspend the authority of the discount medical plan organization or discount prescription drug plan organization to enroll new members.(d) In addition to the penalties and other provisions of this article, the commissioner may seek both temporary and permanent injunctive relief in the circuit court of Kanawha County when a discount medical plan is being operated by a person or entity that is not licensed pursuant to this article or any person has engaged or is engaging in any activity prohibited by this article or any rule adopted pursuant to this article.
(a) A person that willfully operates as or aids and abets another operating as a discount medical plan organization in violation of subsection (a), section four of this article is guilty of a felony and, upon conviction thereof, shall be fined not more than $20,000 for each unauthorized act or imprisoned in the state correctional facility not less than one nor more than five years, or both fined and imprisoned.(b) No person shall collect a fee for purported membership in a discount medical plan or discount prescription drug plan and knowingly and willfully fail to provide the promised benefits of the plan.(1) Any person who violates this subsection and in doing so collects fees totaling $1,000 or more is guilty of a felony and, upon conviction thereof, shall be fined not more than $2,500 or imprisoned in a state correctional facility not less than one nor more than ten years or, in the discretion of the court, be confined in jail for not more than one year, or both fined and imprisoned or confined.(2) Any person who violates this subsection and in doing so collects fees totaling less than $1,000 is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $2,500 or confined in jail not more than one year, or both fined and confined.
The insurance fraud unit created pursuant to the provisions of section eight, article forty-one of this chapter may investigate suspected violations of this article.
The commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to carry out the provisions of this article. The commissioner may also promulgate emergency legislative rules to carry out the provisions of this article, including rules setting forth the requirements and prohibited practices with regard to the marketing of discount medical plans and discount prescription drug plans and for disclosures to members and prospective members of the plans.
The purpose of this article is to establish standards for discount medical plan organizations and discount prescription drug plan organizations in order to better protect consumers from unfair or deceptive marketing, sales and enrollment practices and to facilitate consumer understanding of the role and function of the organizations in providing access to medical or ancillary services.
For purposes of this article:(1) "Affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the specified person.(2) "Ancillary services" includes audiology, dental, vision, mental health, substance abuse, chiropractic and podiatry services.(3) "Control" or "controlled by" or "under common control with" has the same meaning ascribed to them in subsection (d), section two, article forty-six of this chapter.(4) "Discount medical plan" means a business arrangement or contract in which a person, in exchange for fees, dues, charges or other consideration, offers access for its plan members to providers of medical or ancillary services and the right to receive discounts on medical or ancillary services provided under the discount medical plan from those providers. "Discount medical plan" does not include any plan that does not charge a membership or other fee to use the plan's discount medical card.(5) "Discount prescription drug plan" means a business arrangement or contract in which a person, in exchange for fees, dues, charges or other consideration, provides access for its plan members to providers of pharmacy services and the right to receive discounts on pharmacy services provided under the discount prescription drug plan from those providers. "Discount prescription drug plan" does not include:(A) Any plan that does not charge a membership or other fee to use the plan's discount prescription drug card;(B) A patient access program; or(C) A Medicare prescription drug plan.(6) "Discount medical plan organization" means an entity that contracts with providers, provider networks or other discount medical plan organizations to offer access to medical or ancillary services at a discount to plan members, provides access for discount medical plan members to the services in exchange for fees, dues, charges or other consideration, and determines the charges to plan members.(7) "Discount prescription drug plan organization" means an entity that contracts with providers, pharmacy networks or other discount prescription drug plan organizations to offer access to pharmacy services to plan members at a discount, provides access for discount prescription drug plan members to the services in exchange for fees, dues, charges or other consideration, and determines the charges to plan members.(8) "Facility" means an institution providing medical or ancillary services or a health care setting, including, hospitals or other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, rehabilitation centers or diagnostic laboratories or imaging centers.(9) "Health care professional" means a physician, pharmacist or other health care practitioner who is licensed to perform specified medical or ancillary services within the scope of his or her license.(10) "Marketer" means a person that markets, promotes, sells or distributes a discount medical plan, including any entity that places its name on and markets or distributes a discount medical plan pursuant to a marketing agreement with a discount medical plan organization.(11) "Medical services" means any maintenance, care of or preventive care for the human body or care, service or treatment of an illness or dysfunction of or injury to the human body, and includes, physician care, inpatient care, hospital surgical services, emergency services, ambulance services, laboratory services and medical equipment and supplies. "Medical services" does not include pharmacy or ancillary services.(12) "Medicare prescription drug plan" means a plan that provides a Medicare Part D prescription drug benefit in accordance with the requirements of the federal Medicare Prescription Drug, Improvement and Modernization Act of 2003, Pub. L. 108-173 101 et seq.(13) "Member" means any person who pays fees, dues, charges or other consideration for the right to receive the benefits of a discount medical plan or discount prescription drug plan.(14) "Patient access program" means a voluntary program sponsored by one or more pharmaceutical manufacturers that provides free or discounted health care products directly to low income or uninsured individuals either through a discount card or direct shipment.(15) "Person" means an individual, a corporation, a partnership, a joint venture, a joint stock company, a trust, an unincorporated organization, any similar entity or any combination of the foregoing.(16) "Pharmacy services" includes pharmaceutical supplies and prescription drugs.(17) "Provider" means any health care professional or facility that has contracted, directly or indirectly, with a discount medical plan organization to provide medical or ancillary services to members.(18) "Provider network" means an entity that negotiates directly or indirectly with a discount medical plan organization on behalf of more than one provider to provide medical or ancillary services to members.
(a) A person is required to obtain a license prior to doing business in this state as a discount medical plan organization.(b) The commissioner shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code, as well as emergency rules in accordance with section fifteen of said article, setting forth the licensing requirements. These rules shall include, at a minimum:(1) All necessary forms and other information considered necessary and required by the commissioner for processing the license application;(2) Applicable fees;(3) Reciprocity requirements;(4) Time frames for the application and approval process;(5) Conditions of approval of the license application or denial of the license;(6) Renewal process;(7) Notice requirements; and(8) Any other provisions considered necessary by the commissioner to effectuate the provisions of this article.
(a) Before the commissioner issues a license to any person required to obtain a license under section four of this article, the person seeking to operate a discount medical plan organization shall demonstrate that it has a positive net worth of at least $150,000.(b) Each discount medical plan organization shall at all times maintain a positive net worth of at least $150,000.
Each licensed discount medical plan organization shall maintain in force a surety bond in its own name, in an amount not less than $35,000, in favor of the commissioner for the benefit of any person who is damaged by any violation of this article. The bond shall cover any violation occurring during the time period during which the bond is in effect and shall be issued by an insurance company licensed to do business in this state. A copy of the bond or a statement identifying the depository, trustee, and account number of the surety account, and thereafter proof of annual renewal of the bond or maintenance of the surety account, shall be filed with the commissioner.
The commissioner may examine the business and affairs of any discount medical plan organization to protect the interests of the residents of this state based on the following reasons, including complaint indices, recent complaints or information from other states, or as he or she deems necessary. An examination shall be performed in accordance with the provisions of section nine, article two of this chapter, except that a discount medical plan organization that is the subject of the examination shall pay the expenses incurred in conducting the examination. Failure by the discount medical plan organization to pay the expenses is grounds for the refusal to renew, revoke or suspend a license to operate as a discount medical plan organization.
(a) A discount medical plan organization may charge a periodic charge as well as a reasonable one-time processing fee for a discount medical plan.(b)(1) All discount medical plan certificates or other document demonstrating membership in the plan issued to persons in this state shall have a notice, prominently printed on the first page of the document or in a similarly conspicuous manner, stating that the member has the right to cancel his or her membership for any reason within thirty days of its receipt. If a member cancels his or her membership in the discount medical plan organization within the first thirty days after the date of receipt of the written document demonstrating membership, the member shall, upon return of the discount medical plan card to the discount medical plan organization, receive a reimbursement of all periodic charges and the amount of any one-time processing fee that exceeds $30. Notice of cancellation is deemed given when delivered by hand or deposited in a mailbox, properly addressed and postage prepaid to the mailing address of the discount medical plan organization or e-mailed to the e-mail address of the discount medical plan organization.(2) If the discount medical plan organization cancels a membership for any reason other than nonpayment of charges by the member, the discount medical plan organization shall make a pro rata reimbursement of all periodic charges to the member.(c) When a marketer or discount medical plan organization sells a discount medical plan in conjunction with any other products, the marketer or discount medical plan organization shall:(1) Provide the charges for each discount medical plan in writing to the member; or(2) Reimburse the member for all periodic charges for the discount medical plan and all periodic charges for any other product if the member cancels his or her membership in accordance with subdivision (1), subsection (b) of this section.(d) A health carrier that provides a discount medical plan product that is incidental to the insured product is not subject to this section.
(a) (1) Upon demand by the commissioner, a discount medical plan organization shall file with the commissioner a list of prospective member fees and charges associated with the discount medical plan.(b) A copy of every form to be used by a discount medical plan organization, including the form for the written document demonstrating membership in the plan and all advertising, marketing materials and brochures, shall be retained by such organization and available for inspection by the commissioner for at least two years from the date on which such form was last used.
(a) Nothing in this article shall apply to or affect any policy of liability or workers' compensation insurance, or any policy of individual accident and sickness insurance issued in accordance with article fifteen of this chapter, or any policy issued by a fraternal benefit society.(b) Nothing in this article shall apply to or in any way affect life insurance, endowment or annuity contracts or contracts supplemental thereto which contain no provisions relating to accident or sickness insurance except (a) such as provide additional benefits in case of death by accidental means and except (b) such as operate to safeguard such contracts against lapse, or to give a special surrender value or special benefit or an annuity in the event that the insured or annuitant shall become totally and permanently disabled as defined by the contract or supplemental contract.(c) No accident and sickness policy or certificate shall be delivered or issued for delivery in this state insuring more than one individual (subject to the same exceptions provided for group life insurance in section one of article fourteen of this chapter) unless to one of the groups set forth in section two of this article and unless otherwise in compliance with this article.
Notwithstanding any other provisions of law, when any health insurance policy, health care services plan or other contract provides for the payment of medical expenses, benefits or procedures, such policy, plan or contract shall be construed to include payment to all health care providers including medical physicians, osteopathic physicians, podiatric physicians, chiropractic physicians, midwives and nurse practitioners who provide medical services, benefits or procedures which are within the scope of each respective provider's license. Any limitation or condition placed upon services, diagnoses or treatment by, or payment to any particular type of licensed provider shall apply equally to all types of licensed providers without unfair discrimination as to the usual and customary treatment procedures of any of the aforesaid providers.
(a) An insurer issuing group accident and sickness policies in this state shall provide coverage for the child or children of each employee or member of the insured group without regard to the amount of child support ordered to be paid or actually paid by such employee or member, if any, and without regard to the fact that the employee or member may not have legal custody of the child or children or that the child or children may not be residing in the home of the employee or member.(b) An insurer issuing group accident and sickness policies in this state shall provide benefits to dependent children placed with participants or beneficiaries for adoption under the same terms and conditions as apply to natural, dependent children of participants and beneficiaries, irrespective of whether the adoption has become final.(c) An insurer shall not deny enrollment of a child under the health plan of the child's parent on the grounds that:(1) The child was born out of wedlock;(2) The child is not claimed as a dependent on the parent's federal tax return; or(3) The child does not reside with the parent or in the insurer's service area.(d) Where a child has health coverage through an insurer of a noncustodial parent the insurer shall:(1) Provide such information to the custodial parent as may be necessary for the child to obtain benefits through that coverage;(2) Permit the custodial parent, or the provider, with the custodial parent's approval, to submit claims for covered services without the approval of the noncustodial parent; and(3) Make payments on claims submitted in accordance with subdivision (2) of this subsection directly to the custodial parent, the provider or the state Medicaid agency: Provided, That upon payment to the custodial parent, the provider or the state Medicaid agency the insurer's obligation to the noncustodial parent under the policy with respect to the covered child's claims shall be fully satisfied.(e) Where a parent is required by court or administrative order to provide health coverage for a child, and the parent is eligible for family health coverage, the insurer shall:(1) Permit the parent to enroll, under the family coverage, a child who is otherwise eligible for the coverage without regard to any enrollment season restrictions;(2) If the parent is enrolled but fails to make application to obtain coverage for the child, enroll the child under family coverage upon application of the child's other parent, the state agency administering the Medicaid program or the state agency administering 42 U.S.C. 651 through 669, the child support enforcement program; and(3) Not disenroll or eliminate coverage of the child unless the insurer is provided satisfactory written evidence that:(A) The court or administrative order is no longer in effect; or(B) The child is or will be enrolled in comparable health coverage through another insurer which will take effect not later than the effective date of disenrollment.
All policies issued pursuant to this article shall cover the cost of child immunization services as described in section five, article three, chapter sixteen of this code, including the cost of the vaccine, if incurred by the health care provider, and all costs of vaccine administration. These services shall be exempt from any deductible, per-visit charge and/or copayment provisions which may be in force in these policies or contracts. This section does not require that other health care services provided at the time of immunization be exempt from any deductible and/or copayment provisions.
An insurer may not impose requirements on a state agency, which has been assigned the rights of an individual eligible for medical assistance under Medicaid and covered for health benefits from the insurer, that are different from requirements applicable to an agent or assignee of any other individual so covered.
Any health insurer, including a group health plan, as defined in 29 U.S.C. 1167, Section 607(1) of the Employee Retirement Income Security Act of 1974, health maintenance organization as defined in article twenty-five-a of this chapter or hospital and medical service corporations as defined in article twenty-four of this chapter is prohibited from considering the availability or eligibility for medical assistance in this or any other state under 42 U.S.C. 1396a, Section 1902 of the Social Security Act herein referred to as Medicaid, when considering eligibility for coverage or making payments under its plan for eligible enrollees, subscribers, policyholders or certificateholders.
(a) Any insurer issuing group accident and sickness policies in this state, the Public Employees Insurance Agency and any employer offering a health benefit plan pursuant to the Employee Retirement Income Security Act of 1974, as amended, may offer a benefit plan including deductibles or copayments combined with employee self-insurance through the establishment of individual medical savings accounts. An insurer offering a benefit plan consisting of deductibles or copayments combined with employee self-insurance and individual medical savings accounts shall not be deemed to be an insurer offering individual accident and sickness insurance coverage solely because the insurer offers such a benefit plan. Notwithstanding any provision of this section, an employer may not compel an employee as a condition of employment to contribute any amount to an individual medical savings account which has been established for the employee, or to accept contributions to an individual medical savings account in lieu of other compensation or benefits. An employer may not charge an employee a fee, by any name whatsoever, in return for establishing an individual medical savings account for the employee: Provided, That a reasonable fee may be charged for any necessary services rendered in the establishment of the individual medical savings account and which fee is fully disclosed to the employee or account holder: Provided, however, That any qualified person serving as trustee of an individual medical savings account established for any employee or account holder], may impose reasonable fees, charges and expenses for administration.An employee establishing an individual medical savings account, or for whom an account is established by an employer, may designate a percentage of the employee's contributions, if any, to that account that may be withdrawn by the employee if not needed for the payment of medical expenses: Provided, That any amount remaining in an individual medical savings account on the earlier of the date of retirement, at the age of fifty-nine and one-half years or more, of the employee or the date of death of the employee, may be withdrawn by the employee or by his or her personal representative for a purpose other than the payment of medical expenses: Provided, however, That no withdrawal pursuant to this subsection shall be subject to the additional twenty percent tax as provided in subsection (d) of this section. As used in this section, "individual medical savings account" means a trust that meets the definition of "medical savings account" set forth in paragraph (1), subsection (d), section 220 of the Internal Revenue Code of 1986, as amended, when that definition is applied without regard to sub-subparagraph (ii), subparagraph (A) of that paragraph. "Medical expenses" means expenses that fall within the definition of "qualified medical expenses" set forth in paragraph (2), subsection (d), Section 220 of the Internal Revenue Code of 1986, as amended, when that definition is applied without regard to subparagraph (C) of that paragraph. (b) A benefit plan established pursuant to this section shall provide that medical expenses included within deductible or copayment provisions of the group accident and sickness policy and therefore not payable under the group policy for the employee or for his or her covered dependents be paid by the trustee, either directly or as reimbursement to an employee who has previously paid medical expenses, from the individual medical savings account. A benefit plan may limit payment of medical expenses until the group plan annual deductible is met from the medical savings account to expenses which are covered services under the group policy. Combined plans are subject to the protections afforded by article twenty-six-a of this chapter. (c) Within one hundred eighty days of the passage of this legislation, the Tax Commissioner may promulgate emergency rules as to the keeping of records, the content and form of returns and statements, and the filing of copies of income tax returns and determination by trustees of individual medical savings accounts and by employees establishing those accounts or for whom those accounts are established: Provided, That for purposes of sections fifteen, fifteen-a and fifteen-b, article three, chapter twenty-nine-a of this code, a sufficient emergency to justify the promulgation of those rules shall be deemed to exist. The power granted by this subsection shall be in addition to the rule-making power granted to the Tax Commissioner elsewhere in this code.(d) If any amount distributed out of an individual medical savings account is used for any purpose other than to defray medical expenses, except as specifically provided in subsection (a) of this section or except for a distribution of account assets pursuant to order of a federal bankruptcy court, the West Virginia personal income tax of the employee establishing the account or for whom the account is established, for the taxable year in which the distribution is made shall be increased by an amount equal to twenty percent of the distribution.
[Repealed.]
Pursuant to chapter twenty-nine-a of this code, the commissioner shall have the power to propose rules, subject to legislative approval, necessary to implement the provisions of this article.
(a) Any entity regulated under this article that provides dental care coverage to a covered person shall honor an assignment, made in writing by the person covered under the policy, of payments due under the policy to a dentist or a dental corporation for services provided to the covered person that are covered under the policy. Upon notice of the assignment, the entity shall make payments directly to the provider of the covered services. A dentist or dental corporation with a valid assignment may bill the entity and notify the entity of the assignment. Upon request of the entity, the dentist or dental corporation shall provide a copy of the assignment to the entity.(b) A covered person may revoke an assignment made pursuant to subsection (a) of this section with or without the consent of the provider. The revocation shall be in writing. The covered person shall provide notice of the revocation to the entity. The entity shall send a copy of the revocation notice to the dentist or dental corporation subject to the assignment. The revocation is effective when both the entity and the provider have received a copy of the revocation notice. The revocation is only effective for any charges incurred after both parties have received the revocation notice.(c) If, under an assignment authorized in subsection (a) of this section, a dentist or dental corporation collects payment from a covered person and subsequently receives payment from the entity, the dentist or dental corporation shall reimburse the covered person, less any applicable copayments, deductibles, or coinsurance amounts, within 45 days.(d) Nothing in this section limits an entitys ability to determine the scope of the entitys benefits, services, or any other terms of the entitys policies or to negotiate any contract with a licensed health care provider regarding reimbursement rates or any other lawful provisions.(e) Any entity providing dental care shall provide conspicuous notice to the covered person that the assignment of benefits is optional, and that additional payments may be required if the assigned benefits are not sufficient to pay for received services. 
As used in this article:(a) "Bona fide association" means an association which has been actively in existence for at least five years; has been formed and maintained in good faith for purposes other than obtaining insurance; does not condition membership in the association on any health status-related factor relating to an individual; makes accident and sickness insurance offered through the association available to all members regardless of any health status-related factor relating to members or individuals eligible for coverage through a member; does not make accident and sickness insurance coverage offered through the association available other than in connection with a member of the association; and meets any additional requirements as may be set forth in this chapter or by rule.(b) "Commissioner" means the commissioner of insurance.(c) "Creditable coverage" means, with respect to an individual, coverage of the individual after June 30, 1996, under any of the following, other than coverage consisting solely of excepted benefits:(1) A group health plan;(2) A health benefit plan;(3) Medicare Part A or Part B, 42 U. S. C. 1395 et seq.; Medicaid, 42 U. S. C. 1396a et seq. (other than coverage consisting solely of benefits under Section 1928 of the Social Security Act); Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), 10 U. S. C., Chapter 55; and a medical care program of the Indian Health Service or of a tribal organization;(4) A health benefits risk pool sponsored by any state of the United States or by the District of Columbia; a health plan offered under 5 U. S. C., chapter 89; a public health plan as defined in regulations promulgated by the federal secretary of health and human services; or a health benefit plan as defined in the Peace Corps Act, 22 U. S. C. 2504(e).(d) "Dependent" means an eligible employee's spouse or any unmarried child or stepchild under the age of twenty-five if that child or stepchild meets the definition of a "qualifying child" or a "qualifying relative" in section 152 of the Internal Revenue Code. (e) "Eligible employee" means an employee, including an individual who either works or resides in this state, who meets all requirements for enrollment in a health benefit plan.(f) "Excepted benefits" means:(1) Any policy of liability insurance or contract supplemental thereto; coverage only for accident or disability income insurance or any combination thereof; automobile medical payment insurance; credit-only insurance; coverage for on-site medical clinics; workers' compensation insurance; or other similar insurance under which benefits for medical care are secondary or incidental to other insurance benefits; or(2) If offered separately, a policy providing benefits for long-term care, nursing home care, home health care, community-based care or any combination thereof, dental or vision benefits or other similar, limited benefits; or(3) If offered as independent, noncoordinated benefits under separate policies or certificates, specified disease or illness coverage, hospital indemnity or other fixed indemnity insurance, or coverage, such as Medicare supplement insurance, supplemental to a group health plan; or(4) A policy of accident and sickness insurance covering a period of less than one year.(g) "Group health plan" means an employee welfare benefit plan, including a church plan or a governmental plan, all as defined in section three of the Employee Retirement Income Security Act of 1974, 29 U. S. C. 1003, to the extent that the plan provides medical care.(h) "Health benefit plan" means benefits consisting of medical care provided directly, through insurance or reimbursement, or indirectly, including items and services paid for as medical care, under any hospital or medical expense incurred policy or certificate; hospital, medical or health service corporation contract; health maintenance organization contract; or plan provided by a multiple-employer trust or a multiple-employer welfare arrangement. "Health benefit plan" does not include excepted benefits.(i) "Health insurer" means an entity licensed by the commissioner to transact accident and sickness in this state and subject to this chapter. "Health insurer" does not include a group health plan.(j) "Health status-related factor" means an individual's health status, medical condition (including both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence) or disability.(k) "Medical care" means amounts paid for, or paid for insurance covering, the diagnosis, cure, mitigation, treatment or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body, including amounts paid for transportation primarily for and essential to such care.(l) "Mental health benefits" means benefits with respect to mental health services, as defined under the terms of a group health plan or a health benefit plan offered in connection with the group health plan.(m) "Network plan" means a health benefit plan under which the financing and delivery of medical care are provided, in whole or in part, through a defined set of providers under contract with the health insurer.(n) "Preexisting condition exclusion" means, with respect to a health benefit plan, a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the enrollment date for such coverage, whether or not any medical advice, diagnosis, care or treatment was recommended or received before the enrollment date.
(a) The provisions of this article which generally require policies of group accident and sickness insurance to cover specific conditions or treatments, but which are not expressly made applicable to the following types of policies, do not apply to:(1) Coverage only for accident, or disability income insurance or any combination thereof;(2) Coverage issued as a supplement to liability insurance;(3) Liability insurance, including general liability insurance and automobile liability insurance;(4) Workers' Compensation or similar insurance;(5) Automobile medical payment insurance;(6) Credit-only insurance;(7) Coverage for on-site medical clinics; and(8) Other similar insurance coverage, which may be specified by rule, under which benefits for medical care are secondary or incidental to other insurance benefits.(b) The requirements of sections two-b, two-d, two-e and two-f, article fifteen of this chapter and the provisions of this article which generally require policies of group accident and sickness insurance to cover specific conditions or treatments, but which are not expressly made applicable to the following types of policies, do not apply to the following if provided under a separate policy, certificate, or contract of insurance:(1) Limited scope dental or vision benefits;(2) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof;(3) Coverage for only a specified disease or illness;(4) Hospital indemnity or other fixed indemnity insurance;(5) Medicare supplement insurance (as defined under section 1882(g)(1) of the Social Security Act), coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code, and similar supplemental coverage provided to coverage under group accident and sickness insurance; and(6) Any other benefits as may be specified by rule.
Any insurer licensed to transact accident and sickness insurance in this state may issue group accident and sickness policies coming within any of the following classifications:(1) A policy issued to an employer, who shall be considered the policyholder, insuring at least two employees of the employer, for the benefit of persons other than the employer, and conforming to the following requirements:(A) If the premium is paid by the employer the group shall comprise all employees or all of any class or classes thereof determined by conditions pertaining to the employment; or(B) If the premium is paid by the employer and the employees jointly, or by the employees, there shall be no employee participation requirement. The term "employee" as used herein is considered to include the officers, managers and employees of the employer, the partners, if the employer is a partnership, the officers, managers and employees of subsidiary or affiliated corporations of a corporate employer, and the individual proprietors, partners and employees of individuals and firms, the business of which is controlled by the insured employer through stock ownership, contract or otherwise. The term "employer" as used herein may include any municipal or governmental corporation, unit, agency or department and the proper officers of any unincorporated municipality or department, as well as private individuals, partnerships and corporations.(2) A policy issued to an association or to a trust or to the trustees of a fund established, created or maintained for the benefit of members of one or more associations. The association or associations shall have at the issuance of the policy a minimum of one hundred persons and have been organized and maintained in good faith for purposes other than that of obtaining insurance; shall have been in active existence for at least one year; and shall have a Constitution and bylaws that provide that: The association or associations hold regular meetings not less than annually to further the purposes of the members; except for credit unions, the association or associations collect dues or solicit contributions from members; and the members have voting privileges and representation on the governing board and committees. The policy is subject to the following requirements:(A) The policy may insure members of the association or associations, employees thereof or employees of members or one or more of the preceding or all of any class or classes for the benefit of persons other than the employee's employer.(B) The premium for the policy shall be paid from:(i) Funds contributed by the association or associations;(ii) Funds contributed by covered employer members;(iii) Funds contributed by both covered employer members and the association or associations;(iv) Funds contributed by the covered persons; or(v) Funds contributed by both the covered persons and the association, associations or employer members.(C) Except as provided in paragraph (D) of this subdivision, a policy on which no part of the premium is to be derived from funds contributed by the covered persons specifically for their insurance must insure all eligible persons, except those who reject coverage in writing.(D) An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.(E) A small employer, as defined in subdivision (r), section two, article sixteen-d of this chapter, insured under an eligible group policy provided in this subdivision shall also be subject to the marketing and rate practices provisions in article sixteen-d of this chapter.(3) A policy issued to a bona fide association;(4) A policy issued to a college, school or other institution of learning or to the head or principal thereof, insuring at least ten students, or students and employees, of the institution;(5) A policy issued to or in the name of any volunteer fire department, insuring all of the members of the department or all of any class or classes thereof against any one or more of the hazards to which they are exposed by reason of the membership but in each case not less than ten members;(6) A policy issued to any person or organization to which a policy of group life insurance may be issued or delivered in this state, to insure any class or classes of individuals that could be insured under the group life policy; and(7) A policy issued to cover any other substantially similar group which in the discretion of the commissioner may be subject to the issuance of a group accident and sickness policy or contract.
Each such policy hereafter delivered or issued for delivery in this state shall contain in substance the following provisions:(a) A provision that the policy, the application of the policyholder, a copy of which shall be attached to such policy, and the individual applications, if any, submitted in connection with such policy by the employees or members, shall constitute the entire contract between the parties, and that all statements made by any applicant or applicants shall be deemed representations and not warranties, and that no such statement shall void the insurance or reduce benefits thereunder unless contained in a written application.(b) A provision that the insurer will furnish to the policyholder, for delivery to each employee or member of the insured group, an individual certificate setting forth in substance the essential features of the insurance coverage of such employee or member and to whom benefits thereunder are payable. If dependents are included in the coverage, only one certificate need be issued for each family unit.(c) A provision that all new employees or members, as the case may be, in the groups or classes eligible for insurance, shall from time to time be added to such groups or classes eligible to obtain such insurance in accordance with the terms of the policy.(d) No provision relative to notice or proof of loss or the time for paying benefits or the time within which suit may be brought upon the policy shall be less favorable to the insured than would be permitted in the case of an individual policy by the provisions set forth in article fifteen of this chapter.(e) A provision that all members in groups or classes eligible for insurance provided through an employee's group plan shall be permitted to pay the premiums at the same group rate and receive the same coverages for a period not to exceed eighteen months when they are involuntarily laid off from work.(f) Such further provisions establishing group accident and sickness minimum policy coverage standards as the commissioner shall promulgate by rule pursuant to chapter twenty-nine-a of this code.
[Repealed.]
(a) As used in this article:(1) Health benefit plan means a policy, contract, certificate or agreement entered into, offered or issued by a health plan issuer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services.(2) Health plan issuer or issuer means an entity required to be licensed under this chapter that contracts, or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services under a health benefit plan, including accident and sickness insurers, nonprofit hospital service corporations, medical service corporations and dental service organizations, prepaid limited health service organizations, health maintenance organizations, preferred provider organizations, provider sponsored network, and any pharmacy benefit manager that administers a fully-funded or self-funded plan.(3) Step therapy protocol means a protocol or program that establishes the specific sequence in which prescription drugs for a specified medical condition, and medically appropriate for a particular patient, are covered by a health plan issuer or health benefit plan.(4) Step therapy override determination means a determination as to whether a step therapy protocol should apply in a particular situation, or whether the step therapy protocol should be overridden in favor of immediate coverage of the health care providers selected prescription drug. This determination is based on a review of the patients or prescribers request for an override, along with supporting rationale and documentation.(5) Utilization review organization means an entity that conducts utilization review, other than a health plan issuer performing utilization review for its own health benefit plan.(b) A health benefit plan that includes prescription drug benefits, and which utilizes step therapy protocols, and which is issued for delivery, delivered, renewed, or otherwise contracted in this state on or after January 1, 2018, shall comply with the provisions of this article.(c) Step therapy protocol exceptions include:(1) When coverage of a prescription drug for the treatment of any medical condition is restricted for use by health plan issuer or utilization review organization through the use of a step therapy protocol, the patient and prescribing practitioner shall have access to a clear and convenient process to request a step therapy exception determination. The process shall be made easily accessible on the health plan issuers or utilization review organizations website. The health plan issuer or utilization review organization must provide a prescription drug for treatment of the medical condition at least until the step therapy exception determination is made.(2) A step therapy override determination request shall be expeditiously granted if:(A) The required prescription drug is contraindicated or will likely cause an adverse reaction by or physical or mental harm to the patient.(B) The required prescription drug is expected to be ineffective based on the known relevant physical or mental characteristics of the patient and the known characteristics of the prescription drug regimen.(C) The patient has tried the required prescription drug while under their current or a previous health insurance or health benefit plan, or another prescription drug in the same pharmacologic class or with the same mechanism of action and such prescription drug was discontinued due to a lack of efficacy or effectiveness, diminished effect, or an adverse event.(D) The required prescription drug is not in the best interest of the patient, based upon medical appropriateness.(E) The patient is stable on a prescription drug selected by their health care provider for the medical condition under consideration.(3) Upon the granting of a step therapy override determination, the health plan issuer or utilization review organization shall authorize coverage for the prescription drug prescribed by the patients treating healthcare provider, provided such prescription drug is a covered prescription drug under such policy or contract.(4) This section shall not be construed to prevent:(A) A health plan issuer or utilization review organization from requiring a patient to try an AB-Rated generic equivalent prior to providing coverage for the equivalent branded prescription drug.(B) A health care provider from prescribing a prescription drug that is determined to be medically appropriate.
(a) Any insurer who, on or after January 1, 1981, delivers or issues for delivery in this state group basic hospital expense or major medical expense coverage under this article shall make available to the policyholder home health care coverage consistent with the provisions of this section. For purposes of this section, "home health care" means health services provided by a home health agency certified in the state in which the home health services are delivered or under Title XVIII of the Social Security Act.(b) Home health care coverage offered shall include:(1) Services provided by a registered nurse or a licensed practical nurse;(2) Health services provided by physical, occupational, respiratory and speech therapists;(3) Health services provided by a home health aide to the extent that such services would be covered if provided to the insured on an inpatient basis;(4) Medical supplies, drugs, medicines and laboratory services to the extent that they would be covered if provided to the insured on an inpatient basis; and(5) Services provided by a licensed midwife or a licensed nurse midwife as these occupations are defined in section one, article fifteen of the code.(c) Home health care coverage may be limited to:(1) Services provided on the written order of a licensed physician, provided such order is renewed at least every sixty days;(2) Services provided, directly or through contractual agreements, by a home health agency certified in the state in which the home health services are rendered or under Title XVIII of the Social Security Act; and(3) Services as set forth in subsection (b) of this section without which the insured would have to be hospitalized.(d) Coverage under this section shall be provided for at least one hundred home visits per insured per policy year, with each home visit by a member of a home health care team to be considered as one home health care visit including up to four hours of home health care services.(e) No such policy need provide such coverage to persons eligible for Medicare.
(a) A policy, plan, or contract that is issued or renewed on or after January 1, 2019, and that is subject to this article shall provide coverage, through the age of 20, for amino acid-based formula for the treatment of severe protein-allergic conditions or impaired absorption of nutrients caused by disorders affecting the absorptive surface, function, length, and motility of the gastrointestinal tract. This includes the following conditions, if diagnosed as related to the disorder by a physician licensed to practice in this state pursuant to either 30-3-1 et seq. or 30-14-1 et seq. of this code: (1) Immunoglobulin E and Nonimmunoglobulin E-medicated allergies to multiple food proteins; (2) Severe food protein-induced enterocolitis syndrome; (3) Eosinophilic disorders as evidenced by the results of a biopsy; and(4) Impaired absorption of nutrients caused by disorders affecting the absorptive surface, function, length, and motility of the gastrointestinal tract (short bowel).(b) The coverage required by 33-16-3bb(a) of this code shall include medical foods for home use for which a physician has issued a prescription and has declared them to be medically necessary, regardless of methodology of delivery.(c) For purposes of this section, medically necessary foods or medical foods shall mean prescription amino acid-based elemental formulas obtained through a pharmacy: Provided, That these foods are specifically designated and manufactured for the treatment of severe allergic conditions or short bowel. (d) The provisions of this section shall not apply to persons with an intolerance for lactose or soy.
If an insurer considers a loss ratio at the time of renewal of a policy, the insurer shall, upon request of an insured, provide the loss ratio and the components of the loss ratio calculation to the insured no more than 90 days but no less than 60 days before the renewal date of the policy. For purposes of this section, "loss ratio" means the total losses paid out in medical claims divided by the total earned premiums.Medical claims do not include dental only or vision only coverage.
(a) As used in this section, the following words have the following meanings:(1) Concurrent review means inpatient care is reviewed as it is provided. Medically qualified reviewers monitor appropriateness of the care, the setting, and patient progress, and, as appropriate, the discharge plans.(2) Covered person means an individual, other than a Medicaid recipient, for whom coverage has been provided pursuant to the provisions of this article. (3) Health insurer means the same as that term is defined in 33-16-1a of this code.(4) Insurance Commissioner means the person appointed pursuant to the provisions of 33-2-1 et seq. of this code. (5) Physician or psychiatrist means a person licensed pursuant to the provisions of either 30-3-1 et seq. or 30-14-1 et seq. of this code. (6) Psychologist means a person licensed pursuant to the provisions of 30-21-1 et seq. of this code. (7) Substance use disorder means the same as that term is defined by the American Psychiatric Association in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, and shall include substance use withdrawal. (b) A group accident and sickness policy that provides hospital or medical expense benefits and is delivered, issued, executed, or renewed in this state, or approved for issuance or renewal by the Insurance Commissioner, on or after January 1, 2019, shall provide benefits for inpatient and outpatient treatment of substance use disorder at in-network facilities at the same level as other medical services offered by the group accident and sickness policy. (c) The services for the treatment of substance use disorder shall be: (1) Prescribed by a physician or psychiatrist licensed pursuant to the provisions of 30-3-1 et seq. or 30-14-1 et seq. of this code or recommended by a psychologist licensed pursuant to the provisions of 30-21-1 et seq. of this code; and(2) Provided by licensed health care professionals or licensed or certified substance use disorder providers in licensed or otherwise state-approved facilities, as required by this code.(d) The inpatient and outpatient treatment of substance use disorders shall be provided when determined medically necessary by the covered persons physician, psychologist, or psychiatrist. The facility shall notify the health insurer of both the admission and the initial treatment plan within 48 hours of the admission or initiation of treatment. If there is no in-network facility immediately available for a covered person, a group accident and sickness policy shall provide necessary exceptions to its network to ensure admission in a treatment facility within 72 hours. If a covered person is being treated at an out-of-network facility and an in-network facility becomes available during the course of the treatment plan, an insurer may transfer the covered person to the in-network facility. (e) Providers of treatment for substance use disorders to persons covered under a covered contract shall not require prepayment of medical expenses during this 180 days in excess of applicable copayment, deductible, or coinsurance as provided in the contract.(f) The benefits for outpatient visits may be subject to concurrent or retrospective review of medical necessity or any other utilization management review.(g)(1) If a health insurer determines that continued inpatient care in a facility is no longer medically necessary, the health insurer shall within 72 hours provide written notice to the covered person and the covered persons physician of its decision and the right to file for an expedited review of an adverse decision. (2) The health insurer shall review and make a determination with respect to the internal appeal within 72 hours and communicate the determination to the covered person and the covered persons physician.(3) If the determination is to uphold the denial, the covered person and the covered persons physician have the right to file an expedited external appeal with an independent review organization. An independent utilization review organization shall make a determination within 72 hours.(4) If the health insurers determination is upheld and it is determined continued inpatient care is not medically necessary, the health insurer remains responsible to provide benefits for the inpatient care through the day following the date the determination is made and the covered person is only responsible for any applicable copayment, deductible, and coinsurance for the stay through that date as applicable under the contract. (5) The covered person shall not be discharged or released from the inpatient facility until all internal appeals and independent utilization review organization appeals are exhausted. For any costs incurred after the day following the date of determination until the day of discharge, the covered person is only responsible for any applicable cost-sharing, and any additional charges shall be paid by the facility or provider. (h) The Insurance Commissioner shall propose rules in accordance with the provisions of 29A-3-1 et seq. of this code to develop a procedure for an expedited review of an adverse decision as set forth in this section. The Legislature finds that for the purposes of 29A-3-15 of this code, an emergency exists requiring the promulgation of an emergency rule to respond to the growing need in our state for substance abuse treatment. (i)(1) The benefits for the first five days of intensive outpatient or partial hospitalization services shall be provided without any retrospective review of medical necessity, and medical necessity shall be determined by the covered persons physician. (2) The benefits beginning day six and every six days thereafter of intensive outpatient or partial hospitalization services are subject to a concurrent review of the medical necessity of the services.(j) Medical necessity review shall use an evidence-based and peer-reviewed clinical review tool. This tool shall be developed by the Insurance Commissioner. The Insurance Commissioner shall propose rules for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code to develop the tool.(k) The benefits for outpatient prescription drugs to treat substance use disorder shall be provided when determined medically necessary by the covered persons physician or psychiatrist without the imposition of any prior authorization or other prospective utilization management requirements. (l) The days per plan year of benefits shall be computed based on inpatient days. One or more unused inpatient days may be exchanged for two outpatient visits. All extended outpatient services such as partial hospitalization and intensive outpatient, shall be considered inpatient days for the purpose of the visit-to-day exchange provided in this subsection.(m) Except as provided in this section, the benefits and cost-sharing shall be provided to the same extent as for any other medical condition covered under the contract.(n) The benefits required by this section are to be provided to all covered persons with a diagnosis of substance use disorder. The presence of additional related or unrelated diagnoses shall not be a basis to reduce or deny the benefits required by this section.(o) The provisions of this section apply to all insurance contracts in which the health insurer has reserved the right to change the premium.
(a) Definitions. --(1) "Applicant" means, in the case of a group Medicare supplement policy or subscriber contract, the proposed certificate holder.(2) "Certificate" means, for the purposes of this section, any certificate issued under a group Medicare supplement policy, which policy has been delivered or issued for delivery in this state.(3) "Medicare supplement policy" means a group or individual policy of accident and sickness insurance or a subscriber contract of hospital and medical service corporations or health maintenance organizations, other than a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. 1395, et seq.) or an issued policy under a demonstration project specified pursuant to amendments to the federal Social Security Act in 42 U.S.C. 1395ss(g)(1), which is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expenses of persons eligible for Medicare. Such term does not include:(A) A policy or contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees, or combination thereof, or for members or former members, or combination thereof, of the labor organizations;(B) Medicare advantage plans established under Medicare Part C, outpatient prescription drug plans established under Medicare Part D, or any health care prepayment plan (HCPP) that provides benefits pursuant to an agreement under Section 1833(a)(1)(A) of the Social Security Act.(4) "Medicare" means the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as then constituted or later amended.(b) Standards for policy provisions. --(1) The commissioner shall issue reasonable rules to establish specific standards for policy provisions of Medicare supplement policies. Such standards shall be in addition to and in accordance with the applicable laws of this state and may cover, but shall not be limited to:(A) Terms of renewability;(B) Initial and subsequent conditions of eligibility;(C) Nonduplication of coverage;(D) Probationary period;(E) Benefit limitations, exceptions and reductions;(F) Elimination period;(G) Requirements for replacement;(H) Recurrent conditions; and(I) Definitions of terms.(2) The commissioner may issue reasonable rules that specify prohibited policy provisions not otherwise specifically authorized by statute which, in the opinion of the commissioner, are unjust, unfair or unfairly discriminatory to any person insured or proposed for coverage under a Medicare supplement policy.(3) Notwithstanding any other provisions of the law, a Medicare supplement policy may not deny a claim for losses incurred more than six months from the effective date of coverage for a preexisting condition. The policy may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.(c) Minimum standards for benefits. -- The commissioner shall issue reasonable rules to establish minimum standards for benefits under Medicare supplement policies.(d) Loss ratio standards. -- Medicare supplement policies shall be expected to return to policyholders benefits which are reasonable in relation to the premium charge. The commissioner shall issue reasonable rules to establish minimum standards for loss ratios and for Medicare supplement policies on the basis of incurred claims experience and earned premiums for the entire period for which rates are computed to provide coverage and in accordance with accepted actuarial principles and practices. For purposes of rules issued pursuant to this subsection, Medicare supplement policies issued as a result of solicitations of individuals through the mail or mass media advertising, including both print and broadcast advertising, shall be treated as individual policies.(e) Disclosure standards. --(1) In order to provide for full and fair disclosure in the sale of accident and sickness policies, to persons eligible for Medicare, the commissioner may require by rule that no policy of accident and sickness insurance may be issued for delivery in this state and no certificate may be delivered pursuant to such a policy unless an outline of coverage is delivered to the applicant at the time application is made.(2) The commissioner shall prescribe the format and content of the outline of coverage required by subdivision (1) above. For purposes of this subdivision, "format" means style, arrangements and overall appearance, including such items as size, color and prominence of type and the arrangement of text and captions. Such outline of coverage shall include:(A) A description of the principal benefits and coverage provided in the policy;(B) A statement of the exceptions, reductions and limitations contained in the policy;(C) A statement of the renewal provisions including any reservation by the insurer of the right to change premiums and disclosure of the existence of any automatic renewal premium increases based on the policyholder's age;(D) A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions.(3) The commissioner may prescribe by rule a standard form and the contents of an informational brochure for persons eligible for Medicare, which is intended to improve the buyer's ability to select the most appropriate coverage and improve the buyer's understanding of Medicare. Except in the case of direct response insurance policies, the commissioner may require by rule that the information brochure be provided to any prospective insureds eligible for Medicare concurrently with delivery of the outline of coverage. With respect to direct response insurance policies, the commissioner may require by rule that the prescribed brochure be provided upon request to any prospective insureds eligible for Medicare, but in no event later than the time of policy delivery.(4) The commissioner may further promulgate reasonable rules to govern the full and fair disclosure of the information in connection with the replacement of accident and sickness policies, subscriber contracts or certificates by persons eligible for Medicare.(f) Notice of free examination. -- Medicare supplement policies or certificates, other than those issued pursuant to direct response solicitation, shall have a notice prominently printed on the first page of the policy or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within thirty days from its delivery and have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Any refund made pursuant to this section shall be paid directly to the applicant by the issuer in a timely manner. Medicare supplement policies or certificates issued pursuant to a direct response solicitation to persons eligible for Medicare shall have a notice prominently printed on the first page or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within thirty days of its delivery and to have the premium refunded if, after examination, the applicant is not satisfied for any reason. Any refund made pursuant to this section shall be paid directly to the applicant by the issuer in a timely manner.(g) Administrative procedures. -- Rules promulgated pursuant to this section shall be subject to the provisions of chapter twenty-nine-a (the West Virginia Administrative Procedures Act) of this code.(h) Severability. -- If any provision of this section or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the section and the application of such provision to other persons or circumstances shall not be affected thereby.
(a) As used in this section, the following words and phrases have the meanings given to them in this section unless the context clearly indicates otherwise:"Episode of Care" means a specific medical problem, condition, or specific illness being managed including tests, procedures, and rehabilitation initially requested by the health care practitioner, to be performed at the site of service, excluding out of network care: Provided, That any additional testing or procedures related or unrelated to the specific medical problem, condition, or specific illness being managed may require a separate prior authorization."National Council for Prescription Drug Programs (NCPDP) SCRIPT Standard" means the NCPDP SCRIPT Standard Version 201310 or the most recent standard adopted by the United States Department of Health and Human Services. Subsequently released versions may be used provided that the new version is backward compatible with the current version approved by the United States Department of Health and Human Services;"Prior Authorization" means obtaining advance approval from a health insurer about the coverage of a service or medication.(b)The health insurer is required to develop prior authorization forms and portals and shall accept one prior authorization for an episode of care. These forms are required to be placed in an easily identifiable and accessible place on the health insurers webpage. The forms shall: (1) Include instructions for the submission of clinical documentation; (2) Provide an electronic notification confirming receipt of the prior authorization request if forms are submitted electronically; (3) Contain a comprehensive list of all procedures, services, drugs, devices, treatment, durable medical equipment, and anything else for which the health insurer requires a prior authorization. This list shall delineate those items which are bundled together as part of the episode of care. The standard for including any matter on this list shall be science-based using a nationally recognized standard. This list is required to be updated at least quarterly to ensure that the list remains current; (4) Inform the patient if the health insurer requires a plan member to use step therapy protocols. This must be conspicuous on the prior authorization form. If the patient has completed step therapy as required by the health insurer and the step therapy has been unsuccessful, this shall be clearly indicated on the form, including information regarding medication or therapies which were attempted and were unsuccessful; and (5) Be prepared by October 1, 2019. (c) The health insurer shall accept electronic prior authorization requests and respond to the request through electronic means by July 1, 2020. The health insurer is required to accept an electronically submitted prior authorization and may not require more than one prior authorization form for an episode of care. If the health insurer is currently accepting electronic prior authorization requests, the health insurer shall have until January 1, 2020, to implement the provisions of this section.(d) If the health care practitioner submits the request for prior authorization electronically, and all of the information as required is provided, the health insurer shall respond to the prior authorization request within seven days from the day on the electronic receipt of the prior authorization request, except that the health insurer shall respond to the prior authorization request within two days if the request is for medical care or other service for a condition where application of the time frame for making routine or non-life-threatening care determinations is either of the following:(1) Could seriously jeopardize the life, health, or safety of the patient or others due to the patients psychological state; or(2) In the opinion of a health care practitioner with knowledge of the patients medical condition, would subject the patient to adverse health consequences without the care or treatment that is the subject of the request. (e) If the information submitted is considered incomplete, the health insurer shall identify all deficiencies and within two business days from the day on the electronic receipt of the prior authorization request return the prior authorization to the health care practitioner. The health care practitioner shall provide the additional information requested within three business days from the time the return request is received by the health care practitioner or the prior authorization is deemed denied and a new request must be submitted.(f) If the health insurer wishes to audit the prior authorization or if the information regarding step therapy is incomplete, the prior authorization may be transferred to the peer review process. (g) A prior authorization approved by a managed care organization is carried over to health insurers, the public employees insurance agency and all other managed care organizations for three months if the services are provided within the state.(h) The health insurer shall use national best practice guidelines to evaluate a prior authorization.(i) If a prior authorization is rejected by the health insurer and the health care practitioner who submitted the prior authorization requests an appeal by peer review of the decision to reject, the peer review shall be with a health care practitioner similar in specialty, education, and background. The health insurers medical director has the ultimate decision regarding the appeal determination and the health care practitioner has the option to consult with the medical director after the peer-to-peer consultation. Time frames regarding this appeal process shall take no longer than 30 days. (j) (1) Any prescription written for an inpatient at the time of discharge requiring a prior authorization shall not be subject to prior authorization requirements and shall be immediately approved for not less than three days: Provided, That the cost of the medication does not exceed $5,000 per day and the physician shall note on the prescription or notify the pharmacy that the prescription is being provided at discharge. After the three-day time frame, a prior authorization must be obtained. (2) If the approval of a prior authorization requires a medication substitution, the substituted medication shall be as required under 30-5-1 et seq. (k) In the event a health care practitioner has performed an average of 30 procedures per year and in a six-month time period has received a 100 percent prior approval rating, the health insurer shall not require the health care practitioner to submit a prior authorization for that procedure for the next six months. At the end of the six-month time frame, the exemption shall be reviewed prior to renewal. This exemption is subject to internal auditing by the health insurer at any time and may be rescinded if the health insurer determines the health care practitioner is not performing the procedure in conformity with the health insurers benefit plan based upon the results of the health insurers internal audit. (l) The health insurer must accept and respond to electronically submitted prior authorization requests for pharmacy benefits by July 1, 2020, or if the health insurer is currently accepting electronic prior authorization requests, it shall have until January 1, 2020, to implement this provision. The health insurer shall accept and respond to prior authorizations through a secure electronic transmission using the NCPDP SCRIPT Standard ePA transactions.(m) This section is effective for policy, contract, plans, or agreements beginning on or after January 1, 2020. This section applies to all policies, contracts, plans, or agreements, subject to this article, that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section.(n) The timeframes in this section are not applicable to prior authorization requests submitted through telephone, mail, or fax.
(a) Any insurer who, on or after January 1, 1984, delivers or issues a policy of group accident and sickness insurance in this state under the provisions of this article shall make available as benefits to all subscribers and members coverage for primary health care nursing services as defined in section four-b, article fifteen of this chapter, if such services are currently being reimbursed when rendered by any other duly licensed health care practitioner. No insurer may be required to pay for duplicative health care services actually provided by both a registered professional nurse or licensed midwife and other health providers.(b) Nothing in this section may be construed to permit any registered professional nurse licensee or midwife licensee to perform professional services beyond such individual's areas of professional competence as established by education, training and experience.
(a) As used in this section:"Cost sharing" means any copayment, coinsurance, or deductible required by or on behalf of an insured in order to receive a specific health care item or service covered by a health plan."Drug" means the same as the term is defined in 30-5-4(19)."Person" means a natural person, corporation, mutual company, unincorporated association, partnership, joint venture, limited liability company, trust, estate, foundation, nonprofit corporation, unincorporated organization, or government or governmental subdivision or agency."Pharmacy benefits manager" means the same as that term is defined in 33-51-3 of this code.(b) When calculating an insureds contribution to any applicable cost sharing requirement, including, but not limited to, the annual limitation on cost sharing subject to 42 U.S.C. 18022(c) and 42 U.S.C. 300gg-6(b):(1) An insurer shall include any cost sharing amounts paid by the insured or on behalf of the insured by another person; and(2) A pharmacy benefits manger shall include any cost sharing amounts paid by the insured or on behalf of the insured by another person.(c) The commissioner is authorized to propose rules for legislative approval in accordance with 29A-3-1 et seq. of this code, to implement the provisions of this section.(d) This section is effective for policy, contract, plans, or agreements beginning on or after January 1, 2020. This section applies to all policies, contracts, plans, or agreements, subject to this article that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section. 
(a) The Legislature hereby finds that there is a need to provide guidelines regarding the coverage of temporomandibular joint disorder and craniomandibular disorder in policies issued pursuant to this article and article fifteen of this chapter, in order to provide for the health of our citizens. The purpose of this section is to require the Insurance Commissioner to develop standards regarding temporomandibular joint disorder and craniomandibular disorder and to require that all insurers writing accident and sickness policies which are covered by this article or article fifteen of this chapter, and the Public Employees Insurance Agency as set forth in article sixteen of chapter five make available this coverage to the policyholder or sponsor of each such policy. For purposes of this section, the Public Employees Insurance Agency is the policyholder.(b) The Insurance Commissioner shall promulgate rules and regulations regarding the diagnosis and treatment for temporomandibular joint disorder and craniomandibular disorder coverage in accident and sickness policies covered by this article and article fifteen of this chapter. Such regulations shall prescribe the manner by which such coverage shall be offered to the policyholder or sponsor; that benefits shall apply whether administered by a physician or dentist, and findings regarding the projected actuarial costs of implementing said regulations.(c) The regulations shall be developed by the Insurance Commissioner with the advice of a six-member panel to be appointed by the commissioner. Such panel shall consist of a general practicing dentist who shall be recommended by the West Virginia Dental Association, an oral and maxillofacial surgeon who shall be recommended by the West Virginia Society for Oral and Maxillofacial Dentists, a physician who shall be recommended by the West Virginia State Medical Association, a member from a Health Services Corporation who shall be recommended by the Health Services Corporation in this state, a member representing commercial health insurers who shall be recommended by the association representing accident and sickness insurance, and a representative of the Public Employees Insurance Association.The Insurance Commissioner shall make his appointments to the panel based solely upon said recommendations thirty days after this section takes effect.(d) This section shall only apply to policies of insurance which provide hospital, surgical or major medical expense insurance or any combination of these coverages.
(a) As used in this section, the following words and phrases have the meaning given them in this section unless the context clearly indicates otherwise:To the extent that coverage is provided "behavioral, mental health, and substance use disorder" means a condition or disorder, regardless of etiology, that may be the result of a combination of genetic and environmental factors and that falls under any of the diagnostic categories listed in the mental disorders section of the most recent version of:(1) The International Statistical Classification of Diseases and Related Health Problems;(2) The Diagnostic and Statistical Manual of Mental Disorders; or(3) The Diagnostic Classification of Mental Health and Developmental Disorders of Infancy and Early Childhood; and Includes autism spectrum disorder: Provided, That any service, even if it is related to the behavioral health, mental health, or substance use disorder diagnosis if medical in nature, shall be reviewed as a medical claim and undergo all utilization review as applicable.(b) The carrier is required to provide coverage for the prevention of, screening for, and treatment of behavioral health, mental health, and substance use disorders that is no less extensive than the coverage provided for any physical illness and that complies with the requirements of this section. This screening shall include but is not limited to unhealthy alcohol use for adults, substance use for adults and adolescents, and depression screening for adolescents and adults. (c) The carrier shall:(1) Include coverage and reimbursement for behavioral health screenings using a validated screening tool for behavioral health, which coverage and reimbursement is no less extensive than the coverage and reimbursement for the annual physical examination; (2) Comply with the nonquantitative treatment limitation requirements specified in 45 CFR 146.136(c)(4), or any successor regulation, regarding any limitations that are not expressed numerically but otherwise limit the scope or duration of benefits for treatment, which in addition to the limitations and examples listed in 45 CFR 146.136(c)(4)(ii) and (c)(4)(iii), or any successor regulation and 78 FR 68246, include the methods by which the carrier establishes and maintains its provider network and responds to deficiencies in the ability of its networks to provide timely access to care;(3) Comply with the financial requirements and quantitative treatment limitations specified in 45 CFR 146.136(c)(2) and (c)(3), or any successor regulation;(4) Not apply any nonquantitative treatment limitations to benefits for behavioral health, mental health, and substance use disorders that are not applied to medical and surgical benefits within the same classification of benefits;(5) Establish procedures to authorize treatment with a nonparticipating provider if a covered service is not available within established time and distance standards and within a reasonable period after service is requested, and with the same coinsurance, deductible, or copayment requirements as would apply if the service were provided at a participating provider, and at no greater cost to the covered person than if the services were obtained at, or from a participating provider; and(6) If a covered person obtains a covered service from a nonparticipating provider because the covered service is not available within the established time and distance standards, reimburse treatment or services for behavioral health, mental health, or substance use disorders required to be covered pursuant to this subsection that are provided by a nonparticipating provider using the same methodology that the carrier uses to reimburse covered medical services provided by nonparticipating providers and, upon request, provide evidence of the methodology to the person or provider. (d) If the carrier offers a plan that does not cover services provided by an out-of-network provider, it may provide the benefits required in subsection (c) of this section if the services are rendered by a provider who is designated by and affiliated with the carrier only if the same requirements apply for services for a physical illness.(e) In the event of a concurrent review for a claim for coverage of services for the prevention of, screening for, and treatment of behavioral health, mental health, and substance use disorders, the service continues to be a covered service until the carrier notifies the covered person of the determination of the claim. (f) Unless denied for nonpayment of premium, a denial of reimbursement for services for the prevention of, screening for, or treatment of behavioral health, mental health, and substance use disorders by the carrier must include the following language:(1) A statement explaining that covered persons are protected under this section, which provides that limitations placed on the access to mental health and substance use disorder benefits may be no greater than any limitations placed on access to medical and surgical benefits;(2) A statement providing information about the Consumer Services Division of the Office of the West Virginia Insurance Commissioner if the covered person believes his or her rights under this section have been violated; and(3) A statement specifying that covered persons are entitled, upon request to the carrier, to a copy of the medical necessity criteria for any behavioral health, mental health, and substance use disorder benefit.(g) On or after June 1, 2021, and annually thereafter, the Insurance Commissioner shall submit a written report to the Joint Committee on Government and Finance that contains the following information regarding plans offered pursuant to this section:(1) Data that demonstrates parity compliance for adverse determination regarding claims for behavioral health, mental health, or substance use disorder services and includes the total number of adverse determinations for such claims;(2) A description of the process used to develop and select:(A) The medical necessity criteria used in determining benefits for behavioral health, mental health, and substance use disorders; and(B) The medical necessity criteria used in determining medical and surgical benefits;(3) Identification of all nonquantitative treatment limitations that are applied to benefits for behavioral health, mental health, and substance use disorders and to medical and surgical benefits within each classification of benefits; and(4) The results of analyses demonstrating that, for medical necessity criteria described in subdivision (2) of this subsection and for each nonquantitative treatment limitation identified in subdivision (3) of this subsection, as written and in operation, the processes, strategies, evidentiary standards, or other factors used in applying the medical necessity criteria and each nonquantitative treatment limitation to benefits for behavioral health, mental health, and substance use disorders within each classification of benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the medical necessity criteria and each nonquantitative treatment limitation to medical and surgical benefits within the corresponding classification of benefits.(5) The Insurance Commissioners report of the analyses regarding nonquantitative treatment limitations shall include at a minimum: (A) Identifying factors used to determine whether a nonquantitative treatment limitation will apply to a benefit, including factors that were considered but rejected;(B) Identify and define the specific evidentiary standards used to define the factors and any other evidence relied on in designing each nonquantitative treatment limitation;(C) Provide the comparative analyses, including the results of the analyses, performed to determine that the processes and strategies used to design each nonquantitative treatment limitation, as written, and the written processes and strategies used to apply each nonquantitative treatment limitation for benefits for behavioral health, mental health, and substance use disorders are comparable to, and are applied no more stringently than, the processes and strategies used to design and apply each nonquantitative treatment limitation, as written, and the written processes and strategies used to apply each nonquantitative treatment limitation for medical and surgical benefits;(D) Provide the comparative analyses, including the results of the analyses, performed to determine that the processes and strategies used to apply each nonquantitative treatment limitation, in operation, for benefits for behavioral health, mental health, and substance use disorders are comparable to, and are applied no more stringently than, the processes and strategies used to apply each nonquantitative treatment limitation, in operation, for medical and surgical benefits; and(E) Disclose the specific findings and conclusions reached by the Insurance Commissioner that the results of the analyses indicate that each health benefit plan which falls under the provisions of this section complies with subsection (c) of this section.(h) The Insurance Commissioner shall adopt legislative rules to comply with the provisions of this section. These rules shall specify the information and analyses that carriers shall provide to the Insurance Commissioner necessary for the commissioner to complete the report described in subsection (g) of this section and shall delineate the format in which carriers shall submit such information and analyses. These rules or amendments to rules shall be proposed pursuant to the provisions of 29A-3-1 et seq. of this code within the applicable time limit to be considered by the Legislature during its regular session in the year 2021. The rules shall require that each carrier first submit the report to the Insurance Commissioner no earlier than one year after the rules are promulgated, and any year thereafter during which the carrier makes significant changes to how it designs and applies medical management protocols.(i) This section is effective for policies, contracts, plans or agreements, beginning on or after January 1, 2021. This section applies to all policies, contracts, plans, or agreements, subject to this article that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section.(j) The Insurance Commissioner shall enforce this section and may conduct a financial examination of the carrier to determine if it is in compliance with this section, including, but not limited to, a review of policies and procedures and a sample of mental health claims to determine these claims are treated in parity with medical and surgical benefits. The results of this examination shall be reported to the Legislature. If the Insurance Commissioner determines that the carrier is not in compliance with this section, the Insurance Commissioner may fine the carrier in conformity with the fines established in the legislative rule. 
Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, whenever reimbursement or indemnity for laboratory or X-ray services are covered, reimbursement or indemnification shall not be denied for any of the following when performed for cancer screening or diagnostic purposes, at the direction of a person licensed to practice medicine and surgery by the board of Medicine:(1) Mammograms when medically appropriate and consistent with the current guidelines from the United States Preventive Services Task Force.(2) A pap smear, either conventional or liquid-based cytology, whichever is medically appropriate and consistent with the current guidelines from the United States Preventive Services Task Force or The American College of Obstetricians and Gynecologists, for women age eighteen or over; and(3) A test for the human papilloma virus (HPV)for women age eighteen or over, when medically appropriate and consistent with the current guidelines from either the United States Preventive Services Task Force or The American College of Obstetricians and Gynecologists for women age eighteen and over.A policy, provision, contract, plan or agreement may apply to mammograms, pap smears or human papilloma virus (HPV) test the same deductibles, coinsurance and other limitations as apply to other covered services.
The provisions of the Health Benefit Plan Network Access and Adequacy Act codified at 33-55-1 et seq. of this code are made applicable to the provisions of this article.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall, on or after July 1, 1991, provide as benefits to all subscribers and members coverage for rehabilitation services as hereinafter set forth, unless rejected by the insured.(b) For purposes of this article and section, "rehabilitation services" includes those services which are designed to remediate patient's condition or restore patients to their optimal physical, medical, psychological, social, emotional, vocational and economic status. Rehabilitative services include by illustration and not limitation diagnostic testing, assessment, monitoring or treatment of the following conditions individually or in a combination:(1) Stroke;(2) Spinal cord injury;(3) Congenital deformity;(4) Amputation;(5) Major multiple trauma;(6) Fracture of femur;(7) Brain injury;(8) Polyarthritis, including rheumatoid arthritis;(9) Neurological disorders, including, but not limited to, multiple sclerosis, motor neuron diseases, polyneuropathy, muscular dystrophy and Parkinson's disease;(10) Cardiac disorders, including, but not limited to, acute myocardial infarction, angina pectoris, coronary arterial insufficiency, angioplasty, heart transplantation, chronic arrhythmias, congestive heart failure, valvular heart disease;(11) Burns.(c) Rehabilitative services includes care rendered by any of the following:(1) A hospital duly licensed by the State of West Virginia that meets the requirements for rehabilitation hospitals as described in Section 2803.2 of the Medicare Provider Reimbursement Manual, Part 1, as published by the U.S. Health Care Financing Administration;(2) A distinct part rehabilitation unit in a hospital duly licensed by the State of West Virginia. The distinct part unit must meet the requirements of Section 2803.61 of the Medicare Provider Reimbursement Manual, Part 1, as published by the U.S. Health Care Financing Administration;(3) A hospital duly licensed by the State of West Virginia which meets the requirements for cardiac rehabilitation as described in Section 35-25, Transmittal 41, dated August, 1989, as promulgated by the U.S. Health Care Financing Administration.(d) Rehabilitation services do not include services for mental health, chemical dependency, vocational rehabilitation, long-term maintenance or custodial services.(e) A policy, provision, contract, plan or agreement may apply to rehabilitation services the same deductibles, coinsurance and other limitations as apply to other covered services.
The provision requiring coverage for 12-month refill for contraceptive drugs codified at 33-58-1 of this code is made applicable to the provisions of this article.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall provide as benefits to all subscribers and members coverage for emergency services. A policy, provision, contract, plan or agreement may apply to emergency services the same deductibles, coinsurance and other limitations as apply to other covered services: Provided, That preauthorization or precertification shall not be required.(b) From July 1, 1998, the following provisions apply:(1) Every insurer shall provide coverage for emergency medical services, including prehospital services, to the extent necessary to screen and to stabilize an emergency medical condition. The insurer shall not require prior authorization of the screening services if a prudent layperson acting reasonably would have believed that an emergency medical condition existed. Prior authorization of coverage shall not be required for stabilization if an emergency medical condition exists. Payment of claims for emergency services shall be based on the retrospective review of the presenting history and symptoms of the covered person.(2) An insurer that has given prior authorization for emergency services shall cover the services and shall not retract the authorization after the services have been provided unless the authorization was based on a material misrepresentation about the covered person's health condition made by the referring provider, the provider of the emergency services or the covered person.(3) Coverage of emergency services shall be subject to coinsurance, copayments and deductibles applicable under the health benefit plan.(4) The emergency department and the insurer shall make a good faith effort to communicate with each other in a timely fashion to expedite postevaluation or poststabilization services in order to avoid material deterioration of the covered person's condition.(5) As used in this section:(A) "Emergency medical services" means those services required to screen for or treat an emergency medical condition until the condition is stabilized, including prehospital care;(B) "Prudent layperson" means a person who is without medical training and who draws on his or her practical experience when making a decision regarding whether an emergency medical condition exists for which emergency treatment should be sought;(C) "Emergency medical condition for the prudent layperson" means one that manifests itself by acute symptoms of sufficient severity, including severe pain, such that the person could reasonably expect the absence of immediate medical attention to result in serious jeopardy to the individual's health, or, with respect to a pregnant woman, the health of the unborn child; serious impairment to bodily functions; or serious dysfunction of any bodily organ or part;(D) "Stabilize" means with respect to an emergency medical condition, to provide medical treatment of the condition necessary to assure, with reasonable medical probability that no medical deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility: Provided, That this provision may not be construed to prohibit, limit or otherwise delay the transportation required for a higher level of care than that possible at the treating facility;(E) "Medical screening examination" means an appropriate examination within the capability of the hospital's emergency department, including ancillary services routinely available to the emergency department, to determine whether or not an emergency medical condition exists; and(F) "Emergency medical condition" means a condition that manifests itself by acute symptoms of sufficient severity including severe pain such that the absence of immediate medical attention could reasonably be expected to result in serious jeopardy to the individual's health or with respect to a pregnant woman the health of the unborn child, serious impairment to bodily functions or serious dysfunction of any bodily part or organ.
(a) Nothing in this section shall be construed to require a mother to give birth in a hospital or to stay in the hospital for a fixed period of time following the birth of her child, but if a health benefit plan, for plan years beginning on or after January 1, 1998, provides inpatient benefits in connection with childbirth for a mother or her newborn child:(1) The plan may not restrict benefits for any hospital stay following a normal vaginal delivery to less than forty-eight hours or following a cesarean section to less than ninety-six hours, or require a provider to obtain authorization for such length hospital stays;(2) The plan must cover maternity and pediatric care in accordance with guidelines established by the American College of Obstetricians and Gynecologists, the American Academy of Pediatrics or other established professional medical association; and(3) The mother and her newborn child may be discharged prior to the expiration of the minimum length of stay required under this section only in those cases in which the decision to discharge is made by an attending provider in consultation with the mother.(b) Benefits provided for under this section may be made subject to deductibles, coinsurance or other cost-sharing if such cost-sharing is no greater than cost-sharing for any preceding portion of the mother's or newborn child's hospital stay.(c) Nothing in this section shall be construed to prevent a health insurer from negotiating with a provider the level and type of reimbursement for inpatient maternity or newborn care provided under a health benefit plan.
(a) (1) For plan years beginning after June 30, 1997, a health benefit plan issued in connection with a group health plan may not impose a preexisting condition exclusion with respect to an employee or a dependent of an employee for losses incurred by the employee or dependent more than twelve months (or eighteen months for a late enrollee) after the earlier of the individual's date of enrollment in the health benefit plan or the first day of a waiting period for enrollment in the plan. Genetic information may not be treated as a condition for which a preexisting condition exclusion may be imposed absent a diagnosis of the condition related to the genetic information.(2) A health benefit plan may impose a preexisting condition exclusion only if such condition relates to a physical or mental condition, regardless of its cause, for which medical advice, diagnosis, care or treatment was recommended or received within the six-month period ending on the enrollee's enrollment date.(3) A health benefit plan may impose no preexisting condition exclusion relating to pregnancy or in the case of a newborn covered under creditable coverage within thirty days of birth or a child adopted before the age of eighteen and covered under creditable coverage within thirty days of adoption or placement for adoption.(b) A health maintenance organization that does not impose a preexisting condition exclusion allowed under subsection (a) of this section with respect to any particular coverage option may:(1) Impose an affiliation period for that coverage option if the affiliation period is applied uniformly without regard to any health status-related factors and does not exceed two months (three months for a late enrollee). For purposes of this article, "affiliation period" means a period that begins on an employee's or dependent's enrollment date, runs concurrently with any waiting period under the group health plan, must expire before coverage is effective and during which the health maintenance organization need not provide medical care and may not charge any premium to the employee or dependent; or(2) Use other alternatives approved by the commissioner to address adverse selection.(c) Any preexisting condition exclusion period, including any waiting period or affiliation period prior to the effective date of coverage, shall be reduced by the aggregate of the periods of creditable coverage applicable to the enrollee as of the enrollment date.
(a) A health insurer may refuse to renew a health benefit plan issued in connection with a group health plan after complying with all applicable provisions of this chapter and only for one of the following reasons:(1) The policyholder's failure to pay premiums or the carrier's failure to receive timely premium payments;(2) Fraud or intentional misrepresentation of material fact by the policyholder;(3) The policyholder's failure to comply with a material plan provision relating to contribution or group participation rules;(4) The health insurer elects to discontinue offering health benefit plans:(A) Of a particular type, if the health insurer gives notice to each policyholder of such plan and to all covered employees or members and dependents at least ninety days before the date such coverage is discontinued: Provided, That a health insurer electing to discontinue health benefit plans to small employers shall comply with the requirements of section seven, article sixteen-d of this chapter. The health insurer shall offer each such policyholder the option to purchase any other health benefit plan offered by the health insurer to employers. In electing to discontinue health benefit plans of a particular type and in offering coverage under the preceding sentence, the health insurer shall act uniformly without regard to policyholders' claims experience or any health status-related factor relating to any covered employee, member or dependent or new employees, members or dependents who may become eligible for coverage; or(B) Of all types, if the health insurer gives notice to the commissioner and to each policyholder and all covered employees or members and dependents at least one hundred eighty days before the date plans are discontinued: Provided, That a health insurer electing to discontinue health benefit plans to small employers shall comply with the requirements of section seven, article sixteen-d of this chapter. The health insurer shall discontinue all, and not renew any, health benefit plans issued pursuant to this article. The health insurer may not issue any health benefit plan pursuant to this article for a five-year period beginning on the date the last discontinued health benefit plan is not renewed;(5) For a health insurer offering coverage under a network plan, the health insurer no longer has any enrollees of the network plan who live, reside or work in the plan's service area; or(6) For health benefit plans offered only through a bona fide association, an employer ceases to be a member of the bona fide association, if coverage is terminated uniformly without respect to any health status-related factor relating to any covered employee, association member or dependent. With respect to coverage provided to an employer, a reference to "policyholder" or "plan sponsor" is deemed to include a reference to the employer.(b) Subject to other requirements of this chapter, a health insurer may modify a health benefit plan issued in connection with a group health plan when the health benefit plan is renewed.
(a)(1) A health insurer shall certify an enrollee's creditable coverage at the time an enrollee:(A) Ceases to be covered under a health benefit plan issued in connection with a group health plan, including coverage under a COBRA continuation provision. For purposes of this article, "COBRA continuation provision" means any of the following:(i) Section 4980B of the Internal Revenue Code of 1986, other than subsection (f)(1) of such section insofar as it relates to pediatric vaccines;(ii) Part 6 of subtitle B of Title I of the Employee Retirement Income Security Act of 1974, other than Section 609 of such act; or(iii) Title XXII of the Public Health Service Act;(B) Ceases to be covered under a COBRA continuation provision; and(C) Requests certification, but no later than twenty-four months after cessation of coverage under the health benefit plan.(2) The health insurer shall provide the enrollee a written certification of:(A) The period of creditable coverage under the health benefit plan, including coverage, if any, under a COBRA continuation provision; and(B) The waiting period, if any, and affiliation period, if applicable, for any coverage under the health benefit plan.(b) For purposes of reducing an enrollee's preexisting condition exclusion period, creditable coverage shall not be counted if, after such period and before an employee's or dependent's enrollment in a health benefit plan issued in connection with a group health plan, there was a period of sixty-three days or more during all of which the individual was not covered under any creditable coverage. For purposes of this subsection, a sixty-three-day period may not include any waiting period or affiliation period prior to the effective date of an individual's coverage.(c) For purposes of reducing an enrollee's preexisting condition exclusion period, a health insurer:(1) Shall count a period of creditable coverage without regard to specific benefits covered during the period; or(2) May elect to apply creditable coverage based upon each of several classes or categories of benefits in accordance with rules promulgated by the commissioner. A health insurer shall make such an election on a uniform basis for all enrollees and shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within such class or category.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, a health insurer offering coverage in connection with a group health plan may not, for plan years beginning after June 30, 1997, establish rules for eligibility, including continued eligibility, of any employee or dependent to enroll under a health benefit plan based on a health status-related factor.(b) For plan years beginning after June 30, 1997, a health benefit plan offered in connection with a group health plan shall provide that an employee or dependent of an employee who is eligible, but not enrolled, under terms of a health benefit plan may enroll under terms of the plan if the employee or dependent:(1) Was covered under other creditable coverage when coverage was previously offered to the employee or dependent and, if required by the insurer, the employee stated in writing that the existence of other creditable coverage was the reason for declining enrollment under the health benefit plan;(2) Lost coverage under the other creditable coverage because of legal separation, divorce, death, termination of employment, reduction in the number of hours of employment, exhaustion of COBRA continuation coverage or termination of the employer's contributions towards the other creditable coverage; and(3) The employee requests enrollment no more than thirty days after loss of the other creditable coverage.(c) For plan years beginning after June 30, 1997, if a health benefit plan makes coverage available to an employee's dependents, the plan shall provide that if an employee is enrolled under the plan or has met any waiting period requirement and is eligible for enrollment but for a failure to enroll during a previous enrollment period:(1) The employee or a person who becomes a dependent of the employee through marriage, birth, adoption or placement for adoption may be enrolled under the plan, and in the case of the birth or adoption of a child, the employee's spouse who is otherwise eligible for coverage may be enrolled as a dependent, during a period of at least thirty days beginning on the later of the date dependent coverage is made available or the date of the marriage, birth, adoption or placement for adoption; and(2) If the employee requests enrollment of a dependent during the first thirty days that dependent coverage is available, the dependent's coverage shall become effective:(A) In the case of marriage, no later than the first day of the first month after the date the completed enrollment request is received; or(B) In the case of a dependent's birth, adoption or placement for adoption, as of the date of birth, adoption or placement for adoption.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, reimbursement or indemnification for colorectal cancer examinations and laboratory testing may not be denied for any nonsymptomatic person fifty years of age or older, or a symptomatic person under fifty years of age, when reimbursement or indemnity for laboratory or X-ray services are covered under the policy and are performed for colorectal cancer screening or diagnostic purposes at the direction of a person licensed to practice medicine and surgery by the board of Medicine. The tests are as follows: An annual fecal occult blood test, a flexible sigmoidoscopy repeated every five years, a colonoscopy repeated every ten years and a double contrast barium enema repeated every five years.(b) A symptomatic person is defined as: (i) An individual who experiences a change in bowel habits, rectal bleeding or stomach cramps that are persistent; or (ii) an individual who poses a higher than average risk for colorectal cancer because he or she has had colorectal cancer or polyps, inflammatory bowel disease, or an immediate family history of such conditions.(c) The same deductibles, coinsurance, network restrictions and other limitations for covered services found in the policy, provision, contract, plan or agreement of the covered person may apply to colorectal cancer examinations and laboratory testing.
(a) Any policy of insurance described in this article which provides medical and surgical benefits with respect to a mastectomy shall provide, in a case of a participant or beneficiary who is receiving benefits in connection with a mastectomy and who elects breast reconstruction in connection with such mastectomy, coverage for:(1) All stages of reconstruction of the breast on which the mastectomy has been performed;(2) Surgery and reconstruction of the other breast to produce a symmetrical appearance; and(3) Prostheses and physical complications of mastectomy, including lymphedemas in a manner determined in consultation with the attending physician and the patient. Coverage shall be provided for a minimum stay in the hospital of not less than forty-eight hours for a patient following a radical or modified mastectomy and not less than twenty-four hours of inpatient care following a total mastectomy or partial mastectomy with lymph node dissection for the treatment of breast cancer. Nothing in this section shall be construed as requiring inpatient coverage where inpatient coverage is not medically necessary or where the attending physician in consultation with the patient determines that a shorter period of hospital stay is appropriate. Such coverage may be subject to annual deductibles and coinsurance provisions as may be deemed appropriate and as are consistent with those established for other benefits under the health benefit plan policy or coverage. Written notice of the availability of such coverage shall be delivered to the participant upon enrollment and annually thereafter.(b) A health benefit plan policy, and a health insurer providing health insurance coverage in connection with a health benefit plan policy, shall provide notice to each participant and beneficiary under such plan regarding the coverage required by this section. Such notice shall be in writing and prominently positioned in any literature or correspondence made available or distributed by the issuer of the health benefit plan policy.(c) A health benefit plan policy and a health insurer offering health insurance coverage in connection with a health benefit plan policy, may not:(1) Deny to a patient eligibility, or continued eligibility, to enroll or to renew coverage under the terms of the plan, solely for the purpose of avoiding the requirements of this section; and(2) Penalize or otherwise reduce or limit the reimbursement of an attending provider, or provide incentives (monetary or otherwise) to an attending provider, to induce such provider to provide care to an individual participant or beneficiary in a manner inconsistent with this section.(d) Nothing in this section shall be construed to prevent a health benefit plan policy or a health insurer offering health insurance coverage from negotiating the level and type of reimbursement with a provider for care provided in accordance with this section.(e) The provisions of this section shall be included under any policy, contract or plan delivered after July 1, 2002.
(a) An insurer issuing group accident and sickness policies in this state pursuant to the provisions of this article may not require any person covered under a contract which provides coverage for prescription drugs to obtain the prescription drugs from a mail-order pharmacy in order to obtain benefits for the drugs.(b) An insurer may not violate the provisions of subsection (a) of this section through the use of an agent or contractor or through the action of an administrator of prescription drug benefits.(c) The Insurance Commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to implement and enforce the provisions of this section.
The provisions relating to clinical trials established in article twenty-five-f of this chapter shall apply to the health benefit plans regulated by this article.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, reimbursement or indemnification for annual kidney disease screening and laboratory testing as recommended by the National Kidney Foundation may not be denied for any person when reimbursement or indemnity for laboratory or X-ray services are covered under the policy and are performed for kidney disease screening or diagnostic purposes at the direction of a person licensed to practice medicine and surgery by the board of Medicine. The tests are as follows: Any combination of blood pressure testing, urine albumin or urine protein testing and serum creatinine testing.(b) The same deductibles, coinsurance, network restrictions and other limitations for covered services found in the policy, provision, contract, plan or agreement of the covered person may apply to kidney disease screening and laboratory testing.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall, on or after July 1, 2009, provide as benefits to all subscribers and members coverage for dental anesthesia services as hereinafter set forth.(b) For purposes of this article and section, "dental anesthesia services" means general anesthesia for dental procedures and associated outpatient hospital or ambulatory facility charges provided by appropriately licensed health care individuals in conjunction with dental care provided to an enrollee or insured if the enrollee or insured is:(1) Seven years of age or younger or is developmentally disabled and is an individual for whom a successful result cannot be expected from dental care provided under local anesthesia because of a physical, intellectual or other medically compromising condition of the enrollee or insured and for whom a superior result can be expected from dental care provided under general anesthesia; or(2) A child who is twelve years of age or younger with documented phobias, or with documented mental illness, and with dental needs of such magnitude that treatment should not be delayed or deferred and for whom lack of treatment can be expected to result in infection, loss of teeth or other increased oral or dental morbidity and for whom a successful result cannot be expected from dental care provided under local anesthesia because of such condition and for whom a superior result can be expected from dental care provided under general anesthesia.(c) Prior authorization. -- An entity subject to this section may require prior authorization for general anesthesia and associated outpatient hospital or ambulatory facility charges for dental care in the same manner that prior authorization is required for these benefits in connection with other covered medical care.(d) An entity subject to this section may restrict coverage for general anesthesia and associated outpatient hospital or ambulatory facility charges unless the dental care is provided by:(1) A fully accredited specialist in pediatric dentistry;(2) A fully accredited specialist in oral and maxillofacial surgery; and(3) A dentist to whom hospital privileges have been granted.(e) Dental care coverage not required. -- The provisions of this section may not be construed to require coverage for the dental care for which the general anesthesia is provided.(f) Temporal mandibular joint disorders. -- The provisions of this section do not apply to dental care rendered for temporal mandibular joint disorders.(g) A policy, provision, contract, plan or agreement may apply to dental anesthesia services the same deductibles, coinsurance and other limitations as apply to other covered services.
(a) The Legislature finds that recent attempts to assist unemployed persons during the economic downturn beginning at the end of 2008 included a federal initiative to provide subsidies to certain persons who have lost their employer-sponsored health insurance coverage. As part of the American Recovery and Reinvestment Act of 2009, certain involuntarily terminated employees and their dependents were given an second opportunity to elect subsidized COBRA coverage. This federal initiative also included relief to certain persons not covered by the federal COBRA laws, but access to such relief was made dependent on the states acting to require that such persons be given notice of their right to elect such coverage. Therefore, the Legislature intends that this section be interpreted in such a manner as to maximize the opportunity of West Virginians to obtain these much needed subsidies.(b) Definitions. -- As used in this section:(1) "Assistance eligible individual" means any qualified beneficiary who was eligible for continuation coverage between September 1, 2008, and February 17, 2009, due to a covered employee's termination from employment during this period and who elected such coverage.(2) "Continuation coverage" means accident and sickness insurance coverage offered to persons pursuant to policy provisions required by subsection (e), section three of this article.(3) "Covered employee" means a person who was involuntarily terminated by a small employer between September 1, 2008, and February 16, 2009, and at the time of his or her termination either: (i) Was eligible for but did not elect to enroll in continuation coverage; or (ii) enrolled but subsequently discontinued enrollment in continuation coverage.(4) "Qualified beneficiary" has the same meaning as that term is defined in 607(3) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1167(3).(5) "Small employer" means any employer that had fewer than twenty (20) employees during fifty percent (50%) or more of its typical business days in the previous calendar year.(c) An individual who does not have an election of continuation coverage in effect on February 17, 2009, but who would be an assistance eligible individual if such election were in effect, may elect continuation coverage pursuant to this section. Such election shall be made no later than sixty days after the date the administrator of the group health plan (or other entity involved) provides the notice required by Section 3001(a)(7) of the American Recovery and Reinvestment Act of 2009. The administrator of the group health plan (or other entity involved) shall provide such individuals with additional notice of the right to elect coverage pursuant to this subsection prior to April 18, 2009.(d) Continuation coverage elected pursuant to subsection (c) of this section shall commence with the first period of coverage beginning on or after February 17, 2009: Provided, That continuation coverage elected pursuant to this subsection shall not extend beyond the maximum eighteen-month period provided for by subsection (e), section three of this article.(e) With respect to an individual who elects continuation coverage pursuant to subsection (b) of this section, the period beginning on the date of the involuntary termination and ending on the date of the first period of coverage on or after February 17, 2009, shall be disregarded for purposes of determining the sixty-three day period referred to in subsection (b), section three-m of this article.
(a) Any insurer who, on or after January 1, 2012, delivers, renews or issues a policy of group accident and sickness insurance in this state under the provisions of this article shall include coverage for diagnosis, evaluation and treatment of autism spectrum disorder in individuals ages eighteen months to eighteen years. To be eligible for coverage and benefits under this section, the individual must be diagnosed with autism spectrum disorder at age eight or younger. Such policy shall provide coverage for treatments that are medically necessary and ordered or prescribed by a licensed physician or licensed psychologist and in accordance with a treatment plan developed from a comprehensive evaluation by a certified behavior analyst for an individual diagnosed with autism spectrum disorder.(b) Coverage shall include, but not be limited to, applied behavior analysis. Applied behavior analysis shall be provided or supervised by a certified behavior analyst. The annual maximum benefit for applied behavior analysis required by this subsection shall be in an amount not to exceed $30,000 per individual, for three consecutive years from the date treatment commences. At the conclusion of the third year, required coverage shall be in an amount not to exceed $2,000 per month, until the individual reaches eighteen years of age, as long as the treatment is medically necessary and in accordance with a treatment plan developed by a certified behavior analyst pursuant to a comprehensive evaluation or reevaluation of the individual. This section shall not be construed as limiting, replacing or affecting any obligation to provide services to an individual under the Individuals with Disabilities Education Act, 20 U.S.C. 1400 et seq., as amended from time to time or other publicly funded programs. Nothing in this section shall be construed as requiring reimbursement for services provided by public school personnel.(c) The certified behavior analyst shall file progress reports with the insurer semiannually. In order for treatment to continue, the insurer must receive objective evidence or a clinically supportable statement of expectation that:(1) The individual's condition is improving in response to treatment; and(2) A maximum improvement is yet to be attained; and(3) There is an expectation that the anticipated improvement is attainable in a reasonable and generally predictable period of time.(d) For purposes of this section, the term:(1) "Applied Behavior Analysis" means the design, implementation, and evaluation of environmental modifications using behavioral stimuli and consequences, to produce socially significant improvement in human behavior, including the use of direct observation, measurement, and functional analysis of the relationship between environment and behavior.(2) "Autism spectrum disorder" means any pervasive developmental disorder, including autistic disorder, Asperger's Syndrome, Rett syndrome, childhood disintegrative disorder, or Pervasive Development Disorder as defined in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders of the American Psychiatric Association.(3) "Certified behavior analyst" means an individual who is certified by the Behavior Analyst Certification Board or certified by a similar nationally recognized organization.(4) "Objective evidence" means standardized patient assessment instruments, outcome measurements tools or measurable assessments of functional outcome. Use of objective measures at the beginning of treatment, during and after treatment is recommended to quantify progress and support justifications for continued treatment. The tools are not required, but their use will enhance the justification for continued treatment.(e) The provisions of this section do not apply to small employers. For purposes of this section a small employer means any person, firm, corporation, partnership or association actively engaged in business in the State of West Virginia who, during the preceding calendar year, employed an average of no more than twenty-five eligible employees.(f) To the extent that the application of this section for autism spectrum disorder causes an increase of at least one percent of actual total costs of coverage for the plan year the insurer may apply additional cost containment measures.(g) To the extent that the provisions of this section require benefits that exceed the essential health benefits specified under section 1302(b) of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, as amended, the specific benefits that exceed the specified essential health benefits shall not be required of a health benefit plan when the plan is offered by a health care insurer in this state.
Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, any health insurance policy subject to this article, issued or renewed on or after January 1, 2014, which provides health insurance coverage for maternity services, shall provide coverage for maternity services for all persons participating in, or receiving coverage under the policy. To the extent that the provisions of this section require benefits that exceed the essential health benefits specified under section 1302(b) of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, as amended, the specific benefits that exceed the specified essential health benefits are not required of a health benefit plan when the plan is offered by a health care insurer in this state. Coverage required under this section may not be subject to exclusions or limitations which are not applied to other maternity coverage under the policy.
(a) Any group accident and sickness insurance policy issued by an insurer pursuant to this article that covers anti-cancer medications that are injected or intravenously administered by a health care provider and patient administered anti-cancer medications, including, but not limited to, those medications orally administered or self-injected, may not require a less favorable basis for a copayment, deductible or coinsurance amount for patient administered anti-cancer medications than it requires for injected or intravenously administered anti-cancer medications, regardless of the formulation or benefit category determination by the policy or plan.(b) A group accident and sickness insurance policy may not comply with subsection (a) of this section by:(1) Increasing the copayment, deductible or coinsurance amount required for injected or intravenously administered anti-cancer medications that are covered under the policy or plan; or(2) Reclassifying benefits with respect to anti-cancer medications.(c) As used in this section, "anti-cancer medication" means a FDA approved medication prescribed by a treating physician who determines that the medication is medically necessary to kill or slow the growth of cancerous cells in a manner consistent with nationally accepted standards of practice.(d) This section is effective for policy and plan years beginning on or after January 1, 2016. This section applies to all group accident and sickness insurance policies and plans subject to this article that are delivered, executed, issued, amended, adjusted or renewed in this state, on and after the effective date of this section.(e) Notwithstanding any other provision in this section to the contrary, in the event that an insurer can demonstrate actuarially to the Insurance Commissioner that its total anticipated costs for any plan to comply with this section will exceed or have exceeded two percent of the total costs for such plan in any experience period, then the insurer may apply whatever cost containment measures may be necessary to maintain costs below two percent of the total costs for the plan: Provided, That such cost containment measures implemented are applicable only for the plan year following approval of the request to implement cost containment measures.(f) For any enrollee that is enrolled in a catastrophic plan as defined in Section 1302(e) of the Affordable Care Act or in a plan that, but for this requirement, would be a High Deductible Health Plan as defined in section 223(c)(2)(A) of the Internal Revenue Code of 1986, and that, in connection with every enrollment, opens and maintains for each enrollee a Health Savings Account as that term is defined in section 223(d) of the Internal Revenue Code of 1986, the cost-sharing limit outlined in subsection (a) of this section shall be applicable only after the minimum annual deductible specified in section 223(c)(2)(A) of the Internal Revenue Code of 1986 is reached. In all other cases, this limit shall be applicable at any point in the benefit design, including before and after any applicable deductible is reached.
An insurance policy issued by an insurer pursuant to this article for prescription topical eye medication may not deny coverage for the refilling of a prescription for topical eye medication when:(1) The medication is to treat a chronic condition of the eye;(2) The refill is requested by the insured prior to the last day of the prescribed dosage period and after at least 70% of the predicted days of use; and(3) A person licensed under chapter thirty and authorized to prescribe topical eye medication indicates on the original prescription that refills are permitted and that the early refills requested by the insured do not exceed the total number of refills prescribed.
(a) As used in this section:(1) Abuse-deterrent opioid analgesic drug product means a brand name or generic opioid analgesic drug product approved by the United States Food and Drug Administration with abuse-deterrent labeling that indicates its abuse-deterrent properties are expected to deter or reduce its abuse;(2) Cost-sharing means any coverage limit, copayment, coinsurance, deductible or other out-of-pocket expense requirements;(3) Opioid analgesic drug product means a drug product that contains an opioid agonist and is indicated by the United States Food and Drug Administration for the treatment of pain, regardless of whether the drug product:(A) Is in immediate release or extended release form; or(B) Contains other drug substances.(b) Notwithstanding any provision of any group accident and sickness insurance policy issued by an insurer pursuant to this article, on or after January 1, 2017:(1) Coverage shall be provided for at least one abuse-deterrent opioid analgesic drug product for each active opioid analgesic ingredient;(2) Cost-sharing for brand name abuse-deterrent opioid analgesic drug products shall not exceed the lowest tier for brand name prescription drugs on the entitys formulary for prescription drug coverage;(3) Cost-sharing for generic abuse-deterrent opioid analgesic drug products covered pursuant to this section shall not exceed the lowest cost-sharing level applied to generic prescription drugs covered under the applicable health plan or policy; and(4) An entity subject to this section may not require an insured or enrollee to first use an opioid analgesic drug product without abuse-deterrent labeling before providing coverage for an abuse-deterrent opioid analgesic drug product covered on the entity's formulary for prescription drug coverage.(c) Notwithstanding subdivision (3), subsection (b) of this section, an entity subject to this section may undertake utilization review, including preauthorization, for an abuse-deterrent opioid analgesic drug product covered by the entity, if the same utilization review requirements are applied to nonabuse-deterrent opioid analgesic drug products and with the same type of drug release, immediate or extended.(d) For purposes of subsection (b) of this section, the lowest tier and the lowest cost-sharing level shall not mean the cost-sharing tier applicable to preventive care services which are required to be provided at no cost-sharing under the Patient Protection and Affordable Care Act.
Any insurer who, on or after January 1, 2019, delivers or issues a policy of group accident and sickness insurance in this state under the provisions of this article shall make available as benefits to all subscribers and members coverage on an expense-incurred basis and individual and group service or indemnity type contracts issued by a nonprofit corporation shall provide coverage for long-term antibiotic therapy for a patient with Lyme disease when determined to be medically necessary and ordered by a licensed physician after making a thorough evaluation of the patients symptoms, diagnostic test results, or response to treatment. 
Every printed portion of every such policy shall be plainly printed in type of which the face shall be not smaller than ten-point, and the exceptions shall be printed with the same prominence as the benefits to which they apply.
Any such policy may provide, in addition to such other indemnities, if any, as are provided in the policy on account of sickness or bodily injury or death of insured employees or members by accident, for the payment of benefits or reimbursement for expenses with respect to any one or more of the following contingencies: Hospitalization, nursing care, medical or surgical examination or treatment, or ambulance transportation, of insured employees or members, or of their spouses or children, or of dependents living with them.
No endorsement or rider shall hereafter be used in this state to transform an individual policy issued under article fifteen of this chapter into a group policy.
No policy providing hospital indemnity coverage may exclude coverage because of confinement in a hospital operated by the federal or state government.
Any insurer which, on or after July 1, 1986, delivers or issues for delivery in this state any policy of group accident and sickness insurance under the provisions of this article, shall make available for purchase, at a reasonable rate, supplemental insurance coverage for continuum of care services pursuant to article five-d, chapter sixteen of this code: Provided, That any insurance carrier required to provide supplemental insurance coverage for continuum of care services hereunder shall not be required to expend funds for underwriting such supplemental coverage until the continuum of care board, in cooperation with the West Virginia state Insurance Commissioner, shall have completed a written master plan related to insurance coverage as set forth in section five, article five-d, chapter sixteen of the Code of West Virginia, 1931, as amended, including, but not limited to, the specific standards and coverages to be provided in such supplemental coverage: Provided, however, That a public hearing shall be held pursuant to the provisions of chapter twenty-nine-a of this code applicable to such proceedings prior to the considerations of the aforesaid plan by said board. The rates for continuum of care coverage shall accurately reflect the cost of such coverage and shall not be subsidized by the rate structure for any other coverage.
No insurer may cancel or nonrenew the accident and sickness insurance policy of any insured because of diagnosis or treatment of acquired immune deficiency syndrome.
A group policy or group subscriber contract which provides hospital, surgical or major medical expense insurance, or any combination of these coverages, on an expense incurred basis, but not a policy which provides benefits for specific diseases or for accidental injuries only, shall provide that an employee or member whose insurance under the group policy or contract has been terminated for any reason, including discontinuance of the group policy in its entirety or of an insured class, who has been continuously insured under the group policy, or under any group policy providing similar benefits which it replaces, for at least three months immediately prior to termination, shall be entitled to have issued to him by the insurer a converted policy of health insurance. An employee or member shall not be entitled to have a converted policy issued to him if termination of his insurance under the group policy occurred because he failed to pay any required contribution, or the discontinued group coverage was replaced by similar group coverage within thirty-one days.
If the group insurance policy from which conversion is made insures the employee or member for major medical expense insurance, the employee or member shall be entitled to obtain a converted policy providing catastrophic or major medical coverage under a plan meeting the following requirements:(a) A maximum benefit at least equal to either, at the option of the insurer, (1) or (2) below:(1) The smaller of the following amounts:(A) The maximum benefit provided under the group policy.(B) A maximum payment of $250,00 per covered person for all covered medical expenses incurred during the covered person's lifetime.(2) The smaller of the following amounts:(A) The maximum benefit provided under the group policy.(B) A maximum payment of $250,000 for each unrelated injury or sickness.(b) Payment of benefits at the rate of eighty percent of covered medical expenses which are in excess of the deductible, until twenty percent of such expenses in a benefit period reaches $1,000, after which benefits will be paid at the rate of one hundred percent during the remainder of such benefit period. Payment of benefits for outpatient treatment of mental illness, if provided in the converted policy, may be at a lesser rate but not less than fifty percent.(c) A deductible for each benefit period which, at the option of the insurer, shall be (1) the sum of the benefits deductible and $100, or (2) the corresponding deductible in the group policy. The term "benefits deductible," as used herein, means the value of any benefits provided on an expense incurred basis which are provided with respect to covered medical expenses by any other hospital, surgical, or medical insurance policy or hospital or medical service subscriber contract or medical practice or other prepayment plan, or any other plan or program whether on an insured or uninsured basis, or in accordance with the requirements of any state or federal law and, if pursuant to section eleven of this article, the converted policy provides both basic hospital or surgical coverage and major medical coverage, the value of such basic benefits.If the maximum benefit is determined by (a) (2) above, the insurer may require that the deductible be satisfied during a period of not less than three months if the deductible is $100 or less, and not less than six months if the deductible exceeds $100.(d) The benefit period shall be each calendar year when the maximum benefit is determined by (a) (1) above or twenty-four months when the maximum benefit is determined by (a) (2) above.(e) The term "covered medical expenses," as used above, shall include at least, in the case of hospital room and board charges, the lesser of the dollar amount in Plan A and the average semiprivate room and board rate for the hospital in which the individual is confined and twice such amount for charges in an intensive care unit. Any surgical schedule shall be consistent with those customarily offered by the insurer under group or individual health insurance policies and must provide at least a $1,200 maximum benefit.
If the group insurance policy from which conversion is made insures the employee or member for continuum of care services pursuant to article five-d, chapter sixteen of this code, the employee or member shall be entitled to obtain a converted policy providing benefits for continuum of care services to the same extent such benefits are provided in the group insurance policy: Provided, That any insurance carrier required to provide supplemental insurance coverage for continuum of care services hereunder shall not be required to expend funds for underwriting such supplemental coverage until the continuum of care board, in cooperation with the West Virginia state Insurance Commissioner, shall have completed a written master plan related to insurance coverage as set forth in section five, article five-d, chapter sixteen of the Code of West Virginia, 1931, as amended, including, but not limited to, the specific standards and coverages to be provided in such supplemental coverage: Provided, however, That a public hearing shall be held pursuant to the provisions of chapter twenty-nine-a of this code applicable to such proceedings prior to the considerations of the aforesaid plan by said board. The rates for continuum of care coverage shall accurately reflect the cost of such coverage and shall not be subsidized by the rate structure for any other coverage.
The conversion privilege required by this article shall, if the group insurance policy insures the employee or member for basic hospital or surgical expense insurance as well as major medical expense insurance, make available the plans of benefits set forth in sections nine and ten of this article. At the option of the insurer, such plans or benefits may be provided under one policy.The insurer may also, in lieu of the plans of benefits set forth in sections nine and ten of this article, provide a policy of comprehensive medical expense benefits without first dollar coverage. Said policy shall conform to the requirements of section ten of this article: Provided, That an insurer electing to provide such a policy shall make available a low deductible option, not to exceed $100, a high deductible option between 500 and $1,000, and a third deductible option midway between the high and low deductible options.The insurer may, at its option, also offer alternative plans for group health conversion in addition to those required by this article.
In the event coverage would be continued under the group policy on an employee following his retirement, but prior to the time he is or could be covered by Medicare, he may elect, in lieu of such continuation of group insurance, to have the same conversion rights as would apply had his insurance terminated at retirement by reason of termination of employment or membership.The converted policy may provide for reduction of coverage on any person upon his eligibility for coverage under Medicare or under any other state or federal law providing for benefits similar to those provided by the converted policy.
Subject to the conditions set forth in the previous sections of this article, the conversion privilege shall also be available (a) to the surviving spouse, if any, at the death of the employee or member, with respect to the spouse and such children whose coverage under the group policy terminates by reason of such death, otherwise to each surviving child whose coverage under the group policy terminates by reason of such death, or, if the group policy provides for continuation of dependents coverage following the employee's or member's death, at the end of such continuation, (b) to the spouse of the employee or member upon termination of coverage of the spouse, while the employee or member remains insured under the group policy, by reason of ceasing to be a qualified family member under the group policy, with respect to the spouse and such children whose coverage under the group policy terminates at the same time, or (c) to a child solely with respect to himself upon termination of his coverage by reason of ceasing to be a qualified family member under the group policy, if a conversion privilege is not otherwise provided above with respect to such termination.
(a) If the benefit levels required in section nine of this article exceed the benefit levels provided under the group policy, the conversion policy may offer benefits which are substantially similar to those provided under the group policy in lieu of those required in section nine.(b) The insurer may elect to provide group insurance coverage in lieu of the issuance of a converted individual policy.(c) The insurer, prior to terminating the policy for any reason, shall notify each employee or member, or such employee's or member's spouse, child or dependent entitled to the conversion privilege under this article, at least sixty days in advance of the termination, in writing, of the pending termination. The notice shall inform the employee or member of the conversion privilege provided in this article.(d) A notification of the conversion privilege shall also be included in each certificate of coverage.(e) A converted policy which is delivered outside this state must be on a form which could be delivered in such other jurisdiction as a converted policy had the group policy been issued in that jurisdiction.
All policies issued pursuant to this article shall cover the cost of child immunization services as described in section five, article three, chapter sixteen of this code, including the cost of the vaccine, if incurred by the health care provider, and all costs of vaccine administration. These services shall be exempt from any deductible, per-visit charge and/or copayment provisions which may be in force in these policies or contracts. This section does not require that other health care services provided at the time of immunization be exempt from any deductible and/or copayment provisions.
Issuance of a converted policy shall be subject to the following conditions:(a) Written application for the converted policy shall be made and the first premium paid to the insurer not later than thirty-one days after termination of the group policy or contract.(b) The converted policy shall be issued without evidence of insurability.(c) The initial premium for the converted policy for the first twelve months and subsequent renewal premiums shall be determined in accordance with premium rates applicable to individually underwritten standard risks, to the age and class of risk of each person to be covered under the converted policy and to the type and amount of insurance provided. The experience under converted policies shall not be an acceptable basis for establishing rates for converted policies.If an insurer experiences or incurs losses for a period of two years on conversion policies which exceed earned premiums by more than twenty percent, the insurer may file with the commissioner amended renewal rates for the subsequent year, which will produce a loss ratio of not less than one hundred twenty percent.Conditions pertaining to health shall not be an acceptable basis for classification for the purposes of this section. The frequency of premium payment shall be the frequency customarily required by the insurer for the policy form and plan selected: Provided, That the insurer shall not require premium payments less frequently than quarterly.
The effective date of the converted policy shall be the day following the termination of insurance under the group policy.
The converted policy shall cover the employee or member and his dependents who were covered by the group policy on the date of termination of insurance. At the option of the insurer, a separate converted policy may be issued to cover any dependent.
The insurer shall not be required to issue a converted policy covering any person if such person is or could be covered by Medicare (Title XVIII of the United State Social Security Act as supplemented by the Social Security Amendments of 1965 or as later amended or superseded). Furthermore, the insurer shall not be required to issue a converted policy covering any person if:(a) (1) Such person is covered for similar benefits by another hospital, surgical, medical or major medical expense insurance policy or hospital or medical service subscriber contract or medical practice or other prepayment plan or by any other plan or program; or(2) Similar benefits are provided to such person, pursuant to or in accordance with the requirements of any state or federal law; and(b) The benefits provided under the sources referred to in (1) above for such person or benefits provided under the sources referred to in (2) above for such person, together with the benefits provided by the converted policy, would result in overinsurance according to the insurer's standards. The insurer's standards must bear some reasonable relationship to actual health care costs in the area in which the insured lives at the time of conversion and must be filed with the commissioner prior to their use in denying coverage.
A converted policy may include a provision whereby the insurer may request information in advance of any premium due date of such policy of any person covered thereunder as to whether (i) he is covered for similar benefits by another hospital, surgical, medical or major medical expense insurance policy or hospital or medical service subscriber contract or medical practice or other prepayment plan or by any other plan or program, (ii) he is covered for similar benefits under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis, or (iii) similar benefits are provided for or available to such person, pursuant to or in accordance with the requirements of any state or federal law. The converted policy may provide that the insurer may refuse to renew the policy or the coverage of any person insured thereunder for the following reasons only:(a) Either the benefits provided under the sources referred to in (i) and (ii) above for such person or benefits provided or available under the sources referred to in (iii) above for such person, together with the benefits provided by the converted policy, would result in overinsurance according to the insurer's standards on file with the commissioner or the converted policyholder fails to provide the requested information;(b) Fraud or material misrepresentation in applying for any benefits under the converted policy;(c) Eligibility of the insured person for coverage under Medicare (Title XVIII of the United States Social Security Act as supplemented by the Social Security Amendments of 1965 or as later amended or superseded) or under any other state or federal law providing for benefits similar to those provided by the converted policy;(d) Other reasons approved by the commissioner.
An insurer shall not be required to issue a converted policy which provides benefits in excess of those provided under the group policy from which conversion is made.
The converted policy shall not exclude a preexisting condition not excluded by the group policy. However, the converted policy may provide that any hospital, surgical or medical benefits payable thereunder may be reduced by the amount of any such benefits payable under the group policy after the termination of the individual's insurance thereunder. The converted policy may also include provisions so that during the first policy year the benefits payable under the converted policy, together with the benefits payable under the group policy, shall not exceed those that would have been payable had the individual's insurance under the group policy remained in force and effect.
If the group insurance policy from which conversion is made insures the employee or member for basic hospital or surgical expense insurance, the employee or member shall be entitled to obtain a converted policy providing, at his option, coverage on an expense incurred basis under any one of the plans meeting the following requirements:Plan A(a) Hospital room and board daily expense benefits in a maximum dollar amount approximating the average semiprivate rate charged in metropolitan areas of this state, for a maximum duration of seventy days;(b) Miscellaneous hospital expense benefits of a maximum amount of ten times the hospital room and board daily expense benefits; and(c) Surgical operation expense benefits according to a surgical schedule consistent with those customarily offered by the insurer under group or individual health insurance policies and providing a maximum benefit of $800; orPlan B(a) Hospital room and board daily expense benefits in a maximum dollar amount equal to seventy-five percent of the maximum dollar amount determined for Plan A, for a maximum duration of seventy days;(b) Miscellaneous hospital expense benefits of a maximum amount of ten times the hospital room and board daily expense benefits; and(c) Surgical operation expense benefits according to a surgical schedule consistent with those customarily offered by the insurer under group or individual health insurance policies and providing a maximum benefit of $600; orPlan C(a) Hospital room and board daily expense benefits in a maximum dollar amount equal to fifty percent of the maximum dollar amount determined for Plan A, for a maximum duration of seventy days;(b) Miscellaneous hospital benefits of a maximum amount of ten times the hospital room and board daily expense benefits; and(c) Surgical operation expense benefits according to a surgical schedule consistent with those customarily offered by the insurer under group or individual health insurance policies and providing a maximum benefit of $400.The maximum dollar amounts in Plan A shall be determined by the commissioner and may be redetermined by him from time to time as to converted policies issued subsequent to such redetermination. Such redetermination shall not be made more often than once in three years. The maximum dollar amounts in Plans A, B and C shall be rounded to the nearest multiple of $10.
Premium rate charges for any individual or group accident and sickness insurance policy, certificate or other evidence of insurance issued, endorsed or delivered in this state shall be filed with the Commissioner for a waiting period of sixty days before the charges become effective. At the expiration of sixty days the premium rate charges filed are deemed approved unless prior thereto the charges have been affirmatively approved or disapproved by the Commissioner.The Commissioner shall disapprove accident and health insurance premium rates which are not in compliance with the requirements of this chapter or any rule promulgated by the Commissioner pursuant to section two of this article. The Commissioner shall send written notice of the disapproval to the insurer. The Commissioner may approve the premium rates before the sixty-day period expires by giving written notice of approval.
Premium rates charged for any individual accident and health insurance policy or for any group accident and health insurance policy issued pursuant to this chapter shall be reasonable in relation to the benefits available under the policy. The commissioner shall promulgate rules pursuant to chapter twenty-nine-a to establish minimum ratemaking standards in accordance with accepted actuarial principles and practices.
This article does not apply to policies issued to group accident and health insurance plans upon which premiums are negotiated with the group policyholder and are experienced rated.
The commissioner may as he deems necessary after notice and hearing promulgate rules and regulations in accordance with chapter twenty-nine-a of this code to define the commissioner's authority to consider the operating results of an insurer's affiliates and subsidiaries in the rate making and solvency determination of that insurer.
Repealed.Acts, 1997 Reg. Sess., Ch. 109.
The purpose of this article is to promote the availability of health insurance coverage to small employers, to prevent abusive rating practices, to require disclosure of rating practices to purchasers, to establish rules for continuity of coverage for employers and covered individuals, and to improve the efficiency and fairness of the small group health insurance marketplace.
The commissioner may suspend all or part of the requirements of this article, other than sections four, seven, eight and twelve, applicable to one or more health benefit plans for one or more rating periods upon a filing by the small employer carrier and a finding by the commissioner that either the suspension is reasonable in light of the financial condition of the carrier or that the suspension would enhance the efficiency and fairness of the marketplace for small employer health insurance.
Except as otherwise provided, the provisions of this article shall apply to each health benefit plan for a small employer situate in the State of West Virginia that is delivered, issued for delivery, renewed or continued after the effective date of this article. For purposes of this section, the date a plan is continued is the first rating period which commences after the effective date of this article.
Health benefit plans and, to the extent permitted by the federal Employee Retirement Income Security Act (ERISA), other benefit arrangements covering small employers shall be subject to the following provisions:(a) Preexisting conditions provisions may not exclude coverage for a period beyond twelve months following an individual's effective date of coverage and may only relate to conditions which had, during the twelve months immediately preceding the effective date of coverage, manifested themselves in such a manner as would cause an ordinarily prudent person to seek medical advice, diagnosis, care or treatment or for which medical advice, diagnosis, care or treatment was recommended or received, or as to a pregnancy existing on the effective day of coverage. For plan years beginning after June 30, 1997, in which the plan has, on the first day of the plan year, at least two enrollees who are current employees, a health benefit plan shall meet all requirements set forth in section three-k, article sixteen of this chapter (preexisting condition exclusions).(b) In determining whether a preexisting condition limitation provision applies to an eligible employee or dependent, all health benefit plans shall credit the time such person was covered under a previous employer-based health benefit plan, a comparable individual health benefit plan, or a self-insured plan if the previous coverage was continuous to a date not more than thirty days prior to the effective date of the new coverage, exclusive of any applicable waiting period under such plan. For plan years beginning after June 30, 1997, in which the plan has, on the first day of the plan year, at least two enrollees who are current employees, a health benefit plan shall meet all requirements set forth in section three-m, article sixteen of this chapter (creditable coverage).(c) Subject to subsections (a) and (b) of this section, when a small group employer converts its health benefit plan from one health benefit plan to another health benefit plan or from one carrier to another carrier, all eligible employees who at the time of conversion are covered by the health benefit plan shall be offered health benefits coverage under the subsequent plan, and no employee who at the time of conversion is covered by a health benefit plan offered by said employer may be treated any differently relative to other covered employees under the new health benefit plan than he or she is treated under the current health benefit plan.(d) For plan years beginning after June 30, 1997, in which the plan has, on the first day of the plan year, at least two enrollees who are current employees, no carrier may condition eligibility or continued eligibility of any employee or dependent on a health status-related factor, and a health benefit plan shall meet all requirements set forth in section three-n, article sixteen of this chapter (eligibility for enrollment).
Any employer subscribing to a health care benefit plan for or on behalf of its employees pursuant to this chapter shall not discriminate against any eligible employee on the basis of such employee's status with the employer by paying for all or part of the health care benefit plan premiums in a manner different from that provided any other eligible employee: Provided, That any participating small employer must pay at least twenty-five percent of each eligible employee's health care benefit plan premiums.
All policies issued pursuant to this article shall cover the cost of child immunization services as described in section five, article three, chapter sixteen of this code, including the cost of the vaccine, if incurred by the health care provider, and all costs of vaccine administration. These services shall be exempt from any deductible, per-visit charge and/or copayment provisions which may be in force in these policies or contracts. This section does not require that other health care services provided at the time of immunization be exempt from any deductible and/or copayment provisions.
The Legislature finds that the provisions of this article do not address continuing coverage under a health benefit plan. Therefore, the commissioner is to perform or have performed a study to determine the feasibility and advisability of implementing continuation of coverage under health benefit plans issued to small employers with fewer than twenty employees. The commissioner shall make a report of findings, conclusions and recommendations to the Legislature during its regular session in the year one thousand nine hundred ninety-eight.
(a) Upon filing with and approval by the commissioner, any carrier licensed pursuant to this chapter which accesses a health care provider network to deliver services may offer a health benefit plan and rates associated with the plan to a small employer subject to the conditions of this section and subject to the provisions of this article. The health benefit plan is subject to the following conditions:(1) The health benefit plan may be offered by the carrier only to small employers which have not had a health benefit plan covering their employees for at least six consecutive months before the effective date of this section. After the passage of six months from the effective date of this section, the health benefit plan under this section may be offered by carriers only to small employers which have not had a health benefit plan covering their employees for twelve consecutive months;(2) If a small employer covered by a health benefit plan offered pursuant to this section no longer meets the definition of a small employer as a result of an increase in eligible employees, that employer shall remain covered by the health benefit plan until the next annual renewal date;(3) The small employer shall pay at least fifty percent of its employees premium amount for individual employee coverage;(4) The commissioner shall promulgate emergency rules under the provisions of article three, chapter twenty-nine-a of this code on or before September 1, 2004, to place additional restrictions upon the eligibility requirements for health benefit plans authorized by this section in order to prevent manipulation of eligibility criteria by small employers and otherwise implement the provisions of this section;(5) Carriers must offer the health benefit plans issued pursuant to this section through one of their existing networks of health care providers;(A) The Insurance Commission shall, on or before May 1, 2004, and each year thereafter, by regular mail, provide a written notice to all known in-state health care providers that:(i) Informs the health care provider regarding the provisions of this section; and(ii) Notifies the health care provider that if the health care provider does not give written refusal to the Insurance Commission within thirty days from receipt of the notice or the health care provider has not previously filed a written notice of refusal to participate, the health care provider must participate with and accept the products and provider reimbursements authorized pursuant to this section;(B) The carriers network of health care providers, as well as any health care provider which provides health care goods or services to beneficiaries of any departments or divisions of the state, as identified in article twenty-nine-d, chapter sixteen of this code, shall accept the health care provider reimbursement rates set pursuant to this section unless the health care provider gives written refusal to the Insurance Commission between May 1 and June 1 that the provider will not participate in this program for the next calendar year. Notwithstanding any provision of this code to the contrary, health care providers may not be mandated to participate in this program except under the opt-out provisions of subdivision (5), subsection (a) of this section and therefore the health care provider shall annually have the ability to file with the Insurance Commission written notice that the health care provider will not participate with products issued pursuant to this section. Once a health care provider has filed a notice of refusal with the Insurance Commission, the notice shall remain effective until rescinded by the provider and the provider shall not be required to renew the notice each year;(C) Insurance Commission is responsible for receiving the responses, if any, from the health care providers that have elected not to participate and for providing a list to the commissioner of those health care providers that have elected not to participate;(D) Those health care providers that do not file a notice of refusal shall be considered to have accepted participation in this program and to accept Public Employees Insurance Agency health care provider reimbursement rates for their services as set by this section;(E) Health care provider reimbursement rates used by the carrier for a health benefit plan offered pursuant to this section shall have no effect on provider rates for other products offered by the carrier and most-favored-nation clauses do not apply to the rates;(6) With respect to the health benefit plans authorized by this section, the carrier shall reimburse network health care providers at the same health care provider reimbursement rates in effect for the managed care and health maintenance organization plans offered by the West Virginia Public Employees Insurance Agency. Beginning in the year 2004, and in each year thereafter, the health care provider reimbursement rates set under this section may not be lowered from the level of the rates in effect on July 1 of that year for the managed care and health maintenance plans offered by the Public Employees Insurance Agency. While it is the intent of this paragraph to govern rates for plans offered pursuant to this section for annual periods, this subdivision in no way prevents the Public Employees Insurance Agency from making provider reimbursement rate adjustments to Public Employees Insurance Agency plans during the course of each year. If there is a dispute regarding the determination of appropriate rates pursuant to this section, the Director of the Public Employees Insurance Agency shall, in his or her sole discretion, specify the appropriate rate to be applied;(A) The health care provider reimbursement rates as authorized by this section shall be accepted by the health care provider as payment in full for services or products provided to a person covered by a product authorized by this section;(B) Except for the health care provider rates authorized under this section, a carriers payment methodology, including copayments and deductibles and other conditions of coverage, remains unaffected by this section;(C) The provisions of this section do not require the Public Employees Insurance Agency to give carriers access to the purchasing networks of the Public Employees Insurance Agency. The Public Employees Insurance Agency may enter into agreements with carriers offering health benefit plans under this section to permit the carrier, at its election, to participate in drug purchasing arrangements pursuant to article sixteen-c, chapter five of this code, including the multistate drug purchasing program. This paragraph provides authorization of the agreements pursuant to section four of said article;(7) Carriers may not underwrite products authorized by this section more strictly than other small group policies governed by this article;(8) With respect to health benefit plans authorized by this section, a carrier shall have a minimum anticipated loss ratio of seventy-seven percent to be eligible to make a rate increase request after the first year of providing a health benefit plan under this section;(9) Products authorized under this section are exempt from the premium taxes assessed under sections fourteen and fourteen-a, article three of this chapter;(10) A carrier may elect to nonrenew any health benefit plan to an eligible employer if, at any time, the carrier determines, by applying the same network criteria which it applies to other small employer health benefit plans, that it no longer has an adequate network of health care providers accessible for that eligible small employer. If the carrier makes a determination that an adequate network does not exist, the carrier has no obligation to obtain additional health care providers to establish an adequate network;(11) Upon thirty days advance notice to the commissioner, a carrier may, at any time, elect to nonrenew all health benefit plans issued pursuant to this section. If a carrier nonrenews all its business issued pursuant to this section for any reason other than the adequacy of the provider network, the carrier may not offer this health benefit plan to any eligible small employer for a period of at least two years after the last eligible small employer is nonrenewed; and(12) The Insurance Commissioner may not approve any health benefit plan issued pursuant to this section until it has obtained any necessary federal governmental authorizations or waivers. The Insurance Commissioner shall apply for and obtain all necessary federal authorizations or waivers.(b) Health benefit plans authorized by this section are not intended to violate the prohibition set out in subsection (a), section four of this article.(c) Carriers offering health benefit plans pursuant to this section shall annually or before December 1 of each year report in a form acceptable to the commissioner the number of health benefit plans written by the carrier and the number of individuals covered under the health benefit plans.(d) To the extent that provisions of this section differ from those contained elsewhere in this chapter, the provisions of this section control.
As used in this article:(a) "Actuarial certification" means a written statement by an actuary, or other individual acceptable to the commissioner, that a small employer carrier is in compliance with the provisions of section five of this article, based upon that person's examination, including a review of the appropriate records and of the actuarial assumptions and methods utilized by the carrier in establishing premium rates for applicable health benefit plans.(b) "Base premium rate" means, for each class of business as to a rating period, the lowest premium rate charged or which could have been charged under a rating system for that class of business by the small employer carrier to small employers with similar case characteristics for health benefit plans with the same or similar coverage.(c) "Bona fide association" has the meaning set forth in section one-a, article sixteen of this chapter.(d) "Case characteristics" mean demographic or other relevant characteristics of a small employer, as determined by a small employer carrier, which are considered by the carrier in the determination of premium rates for the small employer. Claim experience, health status and duration of coverage since issue are not case characteristics for the purposes of this article.(e) "Class of business" means all or any distinct grouping of small employers as shown on the records of the small employer carrier, which shall be subject to the following requirements:(1) A distinct grouping may only be established by the small employer carrier on the basis that the applicable health benefit plans:(A) Are marketed and sold through individuals and organizations which are not participating in the marketing or sale of other distinct groupings of small employers for such small employer carrier;(B) Have been acquired from another small employer carrier as a distinct grouping of plans;(C) Are provided through a bona fide association; or(D) Are in a class of business that meets the requirements for exception to the restrictions related to premium rates provided in paragraph (A), subdivision (1), subsection (a), section five of this article.(2) A small employer carrier may establish no more than twoadditional groupings under subdivision (1) of this subsection on the basis of underwriting criteria which are expected to produce substantial variation in the health care costs.(3) The commissioner may approve the establishment of additional distinct groupings upon application to the commissioner and a finding by the commissioner that such action would enhance the efficiency and fairness of the small employer insurance marketplace.(f) "Commissioner" means the Insurance Commissioner of West Virginia.(g) "Creditable coverage" has the meaning set forth in section one-a, article sixteen of this chapter.(h) "Dependent" has the meaning set forth in section one-a, article sixteen of this chapter.(i) "Group health plan" has the meaning set forth in section one-a, article sixteen of this chapter.(j) "Health benefit plan" has the meaning set forth in section one-a, article sixteen of this chapter.(k) "Health status-related factor" has the meaning set forth in section one-a, article sixteen of this chapter.(l) "Index rate" means for each class of business for small employers with similar case characteristics the arithmetic average of the applicable base premium rate and the corresponding highest premium rate.(m) "Medical care" has the meaning set forth in section one-a, article sixteen of this chapter.(n) "Network plan" has the meaning set forth in section one-a, article sixteen of this chapter.(o) "New business premium rate" means, for each class of business as to a rating period, the premium rate charged or offered by the small employer carrier to small employers with similar case characteristics for newly issued health benefit plans with the same or similar coverage.(p) "Preexisting condition exclusion" has the meaning set forth in section one-a, article sixteen of this chapter.(q) "Rating period" means the calendar period of at least twelve months for which premium rates established by a small employer carrier are assumed to be in effect, as determined by the small employer carrier.(r) "Small employer" means any person, firm, corporation, partnership or association actively engaged in business in the State of West Virginia who, during the preceding calendar year, employed an average of no more than fifty but not fewer than two eligible employees and employs at least two employees on the first day of its group health plan year. A new employer, not in existence for all of the preceding calendar year, shall be considered a small employer if it is reasonably expected to employ an average of no more than fifty but not fewer than two eligible employees on business days in the current calendar year. Companies which are affiliated companies or which are eligible to file a combined tax return for state tax purposes shall be considered one employer.(s) "Small employer carrier" or "carrier" means any health insurer, as defined in section one-a, article sixteen of this chapter, which offers health benefit plans covering the employees of a small employer situate within the State of West Virginia.
The provisions of this article apply to any health benefit plan which provides coverage to one or more eligible employees of a small employer situate in the State of West Virginia: Provided, That the provisions of this article shall not apply to individual health insurance policies which are subject to policy form and premium rate approval as required by article sixteen-b of this chapter.
(a) All carriers subject to this article are strictly prohibited from marketing their product to a specific group, legal occupation, locale, zip code, neighborhood, race, religion, or any discriminatory group.(b) For plan years beginning after June 30, 1997, in which the plan has, on the first day of the plan year, at least two enrollees who are current employees, each carrier shall accept every small employer that applies for coverage under a health benefit plan, unless such health benefit plan is made available only through a bona fide association, and consistent with public law 104-191 (Public Health Service Act section 2711 (a) (1) (B)), shall accept for enrollment in the plan every employee of the small employer, including dependents, when an employee or dependent first becomes eligible to enroll under terms of the plan and under the rules of the carrier that are uniformly applicable to small employers. This subsection shall not apply to:(1) A network plan if the carrier:(A) Limits coverage to a small employer's employees and dependents who reside, live or work in the carrier's service area; or(B) Obtains the commissioner's approval to deny coverage in its service area due to the carrier's lack of capacity for additional enrollees, but only if the carrier denies coverage uniformly to all small employers without regard to their claims experience or that of their employees and dependents or to any health status-related factor relating to employees and their dependents. A carrier may not offer small group coverage in the same service area for one hundred eighty days after the date coverage is denied under this paragraph; or(2) A carrier that obtains the commissioner's approval to deny coverage due to the carrier's insufficient financial reserves for additional coverage, but only if the carrier denies coverage uniformly to all small employers, consistent with all requirements of this chapter and without regard to the claims experience of the small employers and their employees and dependents or to any health status-related factor relating to employees and their dependents. A carrier may not offer small group coverage for one hundred eighty days after the date coverage is denied under this subdivision or until the carrier has obtained the commissioner's approval of the level of its reserves for additional coverage, whichever is later.(c) All carriers subject to this article shall file any marketing information upon request of the commissioner. The commissioner shall review said information and shall have the authority to take appropriate action to eliminate discriminatory marketing practices, including imposing fines on violators of this section of not more than $10,000. Upon a second violation of this section, the commissioner shall have the authority to revoke the violator's license to transact insurance.
(a) Premium rates for health benefit plans subject to this article shall be subject to the following provisions:(1) The index rate for a rating period for any class of business shall not exceed the index rate for any other class of business by more than twenty percent: Provided, That this subdivision shall not apply to a class of business if all of the following apply:(A) The class of business is one for which the carrier does not reject, and never has rejected, small employers included within the definition of employers eligible for the class of business or otherwise eligible employees and dependents who enroll on a timely basis, based upon their claim experience or health status;(B) The carrier does not involuntarily transfer, and never has involuntarily transferred, a health benefit plan into or out of the class of business; and(C) The class of business is currently available for purchase.(2) For a class of business, the premium rates charged during a rating period to small employers with similar case characteristics for the same or similar coverage, or the rates which could be charged to such employers under the rating system for that class of business, shall not vary from the index rate by more than thirty percent of the index rate.(3) The percentage increase in the premium rate charged to a small employer for a new rating period may not exceed the sum of the following:(A) The percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period. In the case of a class of business for which the small employer carrier is not issuing new policies, the carrier shall use the percentage change in the base premium rate;(B) An adjustment, not to exceed fifteen percent annually and adjusted pro rata for rating periods of less than one year, due to the claim experience, health status or duration of coverage of the employees or dependents of the small employer as determined from the carrier's rate manual for the class of business; and(C) Any adjustment due to change in coverage or change in the case characteristics of the small employer as determined from the carrier's rate manual for the class of business.(4) In the case of health benefit plans issued prior to the effective date of this article, a premium rate for a rating period may exceed the ranges described in subdivision (1) or (2) of this subsection for a period of five years following the effective date of this article. In that case, the percentage increase in the premium rate charged to a small employer in such a class of business for a new rating period may not exceed the sum of the following:(A) The percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period. In the case of a class of business for which the small employer carrier is not issuing new policies, the carrier shall use the percentage change in the base premium rate; and(B) Any adjustment due to change in coverage or change in the case characteristics of the small employer as determined from the carrier's rate manual for the class of business.(b) Nothing in this section is intended to affect the use by a small employer carrier of legitimate rating factors other than claim experience, health status or duration of coverage in the determination of premium rates. Small employer carriers shall apply rating factors, including case characteristics, consistently with respect to all small employers in a class of business.(c) Adjustments in rates for claim experience, health status and duration of coverage may not be charged to individual employees or dependents. Any such adjustment shall be applied uniformly to the rates charged for all employees and dependents of the small employer.(d) A small employer carrier shall utilize industry as a case characteristic in establishing premium rates: Provided, That the highest rate factor associated with any industry classification shall not exceed the lowest rate factor associated with any industry classification by more than fifteen percent.(e) Small employer carriers shall apply rating factors, including case characteristics, consistently with respect to all small employers in a class of business. Rating factors shall produce premiums for identical groups which differ only by amounts attributable to plan design and do not reflect differences due to the nature of the groups assumed to select particular health benefit plans.(f) A small employer carrier may not involuntarily transfer a small employer into or out of a class of business. A small employer carrier may not offer to transfer a small employer into or out of a class of business unless such offer is made to transfer all small employers in the class of business without regard to case characteristics, claim experience, health status or duration since issue.(g) To be eligible to make a rate increase request after July 1, 1993, a carrier shall have a minimum anticipated loss ratio of seventy-three percent. In calculating its minimum anticipated loss ratio, an insurer shall include in its actual incurred claims the amount of premium taxes for the same experience period which are attributable to the policy forms or certificates affected by this section and which were paid to the State of West Virginia pursuant to the provisions of article three of this chapter.(h) All insurance carriers subject to this article, effective July 1, 1993, shall be prohibited from distinguishing more than four classes of business within its small group insurance coverage.(i) If any health benefit plan is provided by a carrier through a bona fide association of small employers not in the business of selling insurance and with not fewer than two hundred cumulative employees, and if such association is rated on the basis of the number of employees and not on the basis of the individual small employers, such association or group is exempt from the provisions of this article.
Pursuant to chapter twenty-nine-a of this code, the Insurance Commissioner may promulgate rules necessary to implement the provisions of this article.
(a) A health benefit plan subject to this article shall be renewable to all eligible employees at the option of the small employer: Provided, That a carrier may refuse to renew a health benefit plan for plan years beginning on or before June 30, 1997, for any of the following reasons:(1) Nonpayment of required premiums;(2) Fraud or misrepresentation by the small employer or by the insured individual;(3) Noncompliance with plan provisions;(4) The number of individuals covered under the plan is fewer than the number or less than the percentage of eligible individuals necessary pursuant to the percentage requirements under the plan; or(5) The small employer is no longer actively engaged in the business in which it was engaged on the effective date of the plan.(b) For plan years beginning after June 30, 1997, in which the plan has, on the first day of the plan year, at least two enrollees who are current employees, a health benefit plan shall be renewable to all eligible employees at the option of the small employer, and a carrier may refuse to renew a health benefit plan only for one of the following reasons:(1) Nonpayment of required premiums;(2) Fraud or misrepresentation of material fact by the small employer;(3) The number of individuals covered under the plan is fewer than the number or less than the percentage of eligible individuals necessary pursuant to the percentage requirements under the plan;(4) The carrier ceases to offer health benefit plans to small employers as provided in subsection (d) of this section;(5) For coverage offered under a network plan, a carrier no longer has any enrollees of the network plan who live or work in the plan's service area, and the carrier would deny coverage under the network plan to a small employer with no eligible employees or dependents in its service area; or(6) For health benefit plans offered only through a bona fide association, the small employer ceases to be a member of the association, if plans are terminated uniformly without respect to any health status-related factor relating to any covered employee, association member or dependent. With respect to coverage provided to a small employer only through a bona fide association, a reference to "policyholder" or "plan sponsor" is deemed to include a reference to the small employer.(c)(1) For plan years beginning on or before June 30, 1997, a small employer carrier may cease to renew all plans under a class of business. Upon the small employer's election of nonrenewal, the carrier shall provide notice of such election not to renew to all affected health benefit plans and to the commissioner in each state in which an affected insured individual is known to reside at least ninety days prior to termination of coverage.(2)A carrier which exercises its right to cease to renew all plans in a class of business pursuant to this subsection may not:(A) Establish a new class of business for a period of five years after the nonrenewal of the plans without prior approval of the commissioner; or(B) Transfer or otherwise provide coverage to any of the employers from the nonrenewed class of business unless the carrier offers to transfer or provide coverage to all affected employers and eligible employees without regard to case characteristics, claim experience, health status or duration of coverage.(d) For plan years beginning after June 30, 1997, in which the plan has, on the first day of the plan year, at least two enrollees who are current employees, a carrier may elect to discontinue offering health benefit plans:(1) Of a particular type, if the carrier gives notice to each small employer affected and to all covered employees and dependents at least ninety days before the date coverage is discontinued. The carrier shall offer each such small employer the option to purchase all other health benefit plans offered by the carrier to small employers. In electing to discontinue health benefit plans of a particular type and in offering coverage under the preceding sentence, the carrier shall act uniformly without regard to small employers' claims experience or any health status-related factor relating to any covered employee or dependent or new employees or dependents who may become eligible for coverage; or(2) Of all types if the carrier gives notice to the commissioner, to each small employer affected and to all covered employees or members and dependents at least one hundred eighty days before the date such plans are discontinued. The carrier shall discontinue all, and not renew any, health benefit plans in the small group market. The carrier may not issue any health benefit plan to a small employer in this state for a five-year period beginning on the date the last discontinued health benefit plan is not renewed.(e) For plan years beginning after June 30, 1997, in which the plan has, on the first day of the plan year, at least two enrollees who are current employees, a carrier may modify a health benefit plan upon its renewal only if the modification is consistent with the provisions of this article and effective on a uniform basis among all individuals with that policy form. Except for coverage available only through an association, any modification shall be made effective on a uniform basis among all small employers with that product.
(a) Each small employer carrier shall make reasonable disclosure in solicitation and sales materials provided to small employers of the following:(1) The extent to which premium rates for a specific small employer are established or adjusted due to the claim experience, health status or duration of coverage of the employees of the small employer;(2) The provisions concerning the carrier's right to change premium rates and the factors, including case characteristics, which affect changes in premium rates;(3) A description of the class of business in which the small employer is or will be included, including the applicable grouping of plans and the benefits and premiums available under all health benefit plans for which the small employer is qualified;(4) The provisions relating to renewability of coverage;(5) The provisions relating to any preexisting conditions limitations; and(6) An explanation, if applicable, that the small employer is purchasing a minimum benefits plan issued pursuant to article sixteen-c of this chapter.(b) All disclosure statements shall be presented in clear and understandable form and format and shall be separate from any policy, certificate or evidence of coverage otherwise provided. No carrier may be required under this section to disclose proprietary or trade secret information to a small employer.
(a) Each small employer carrier shall maintain at its principal place of business a complete and detailed description of its rating practices and renewal underwriting practices, including information and documentation which demonstrate that its rating methods and practices are based upon commonly accepted actuarial principles.(b) Each small employer carrier shall file each first day of March with the commissioner an actuarial certification that the carrier is in compliance with the provisions of section five of this article and that the rating methods of the carrier are actuarially sound. A copy of such certification shall be retained by the carrier at its principal place of business.(c) A small employer carrier shall make the information and documentation described in subsection (a) of this section available to the commissioner upon request.
(a) This article may be referred to as the "Prescription Fairness Act of 2005."(b) The Legislature hereby finds and declares that:(1) Contraceptives prevent unintended pregnancy;(2) Planned pregnancies lead to healthier pregnancies, children and families; and(3) Contraceptive coverage provides West Virginians with critical access to birth control.(4) Therefore, the Legislature finds that prescription contraceptives are basic health-care for West Virginia's women and families and that health insurance plans which include a prescription drug plan should be required to cover contraceptives.
For the purposes of this article, these definitions are applicable unless a different meaning clearly appears from the context.(1) "Contraceptives" means drugs or devices approved by the food and drug administration to prevent pregnancy.(2) "Covered person" means the policyholder, subscriber, certificate holder, enrollee or other individual who is participating in, or receiving coverage under a health insurance plan. For the purposes of this article, covered person does not include a dependent child.(3) "Health insurance plan" means benefits consisting of medical care provided directly, through insurance or reimbursement, or indirectly, including items and services paid for as medical care, under any hospital or medical expense incurred policy or certificate; hospital, medical or health service corporation contract; health maintenance organization contract; fraternal benefit society contract; plan provided by a multiple-employer trust or a multiple-employer welfare arrangement; or plan provided by the West Virginia Public Employees Insurance Agency pursuant to article sixteen, chapter five of this code.(4) "Outpatient contraceptive services" means consultations, examinations, procedures and medical services, provided on an outpatient basis and related to the use of prescription contraceptive drugs and devices to prevent pregnancy issued under a health insurance plan that provides benefits for prescription drugs or prescription devices in a prescription drug plan.(5) "Religious employer" is an entity whose sincerely held religious beliefs or sincerely held moral convictions are central to the employer's operating principles, and the entity is an organization listed under 26 U.S.C. 501 (c)(3), 26 U.S.C. 3121, or listed in the Official Catholic Directory published by P.J. Kennedy and Sons.
(a) The provisions of this article apply to individual and group health insurance plans issued by accident and sickness insurers; health maintenance organizations; fraternal benefit societies; hospital service corporations; the West Virginia Public Employees Insurance Agency; health-care service corporations; health service corporations; multiple employee trusts; and multiple employer welfare arrangements. The provisions of this section shall not apply to persons eligible for coverage under Title XIX of the Social Security Act, known as Medicaid (42 U.S.C. 1396a et seq.), or for any other similar coverage under state or federal governmental plans.(b) The provisions of this article do not apply to:(1) Any policy of liability insurance or contract supplemental thereto; coverage only for accident or disability income insurance or any combination thereof; automobile medical payment insurance; credit-only insurance; coverage for on-site medical clinics; workers' compensation insurance; or other similar insurance under which benefits for medical care are secondary or incidental to other insurance benefits;(2) If offered separately, a policy providing benefits for long-term care, nursing home care, home health care, community-based care or any combination thereof, dental or vision benefits, or other similar, limited benefits;(3) If offered as independent, noncoordinated benefits under separate policies or certificates, specified disease or illness coverage, hospital indemnity or other fixed indemnity insurance, or coverage, such as Medicare supplement insurance, supplemental to a group health plan; or(4) A policy of accident and sickness insurance covering a period of less than one year.
(a) Health insurance plans that provide benefits for prescription drugs or prescription devices in prescription drug plans may not exclude or restrict benefits to covered persons for any prescription contraceptive drug or prescription contraceptive device approved by the federal Food and Drug Administration. All customary benefit management rules, including, but not limited to, drug formularies and coverage criteria may be applied by the health insurance plan.(b) Health insurance plans that provide benefits for prescription drugs or prescription devices in a prescription drug plan and that provide benefits for outpatient services provided by a health care professional may not exclude or restrict outpatient contraceptive services for covered persons for prescription contraceptives or prescription devices.
A health insurance plan is prohibited from:(1) Imposing deductibles, copayments, other cost-sharing mechanisms, or waiting periods for prescription contraceptive drugs or devices greater than deductibles, copayments, other cost-sharing mechanisms or waiting periods for other covered prescription drugs or devices.(2) Imposing deductibles, copayments, other cost-sharing mechanisms or waiting periods for outpatient contraceptive services greater than such deductibles, copayments, other cost-sharing mechanisms or waiting periods for other covered outpatient services.
A health insurance plan is prohibited from:(1) Denying eligibility, enrollment or renewal of coverage to any individual because of their use or potential use of contraceptives.(2) Providing monetary payments or rebates to covered persons to encourage them to accept less than the minimum protections available under this section.(3) Penalizing, or otherwise reducing or limiting the reimbursement of a health care professional because such professional prescribed contraceptive drugs or devices, or provided contraceptive services.(4) Providing incentives, monetary or otherwise, to a health-care professional to induce such professional to withhold contraceptive drugs, devices or services from covered persons.
(a) Notwithstanding any other provision of this article, a religious employer may exclude or restrict from any health-care insurance plan contract benefits for any prescription contraceptive drugs and devices that are contrary to the religious employer's religious tenets.(b) Nothing in this article shall be construed to exclude coverage for prescription contraceptive supplies ordered by a health-care provider with prescriptive authority for reasons other than contraceptive purposes, such as decreasing the risk of ovarian cancer or eliminating symptoms of menopause, or for prescription contraception that is necessary to preserve the life or health of an enrollee.(c) The health insurer for every religious employer that invokes the exemption provided under this section shall provide written notice to prospective enrollees prior to enrollment with the plan, listing the contraceptive health-care services the employer refuses to cover for religious reasons. The health insurer shall make available for purchase at the prevailing group rate a rider that provides prescription contraceptive drugs and devices.
The Legislature finds that the inability of a significant number of state residents to obtain affordable health insurance coverage adversely affects everyone in our state. Therefore, it is the intent of the Legislature to expand the availability of health care options for uninsured residents by developing affordable health care products that emphasize coverage for basic and preventive health care services, provide inpatient hospital and emergency care services and offer optional catastrophic coverage.
The commissioner may promulgate emergency and legislative rules under the provisions of article three, chapter twenty-nine-a of this code, to prescribe requirements regarding rate making, which may include rules establishing loss ratio standards for the plans; to place limitations on eligibility for coverage under the approved plans; to establish standards to determine whether a plan qualifies as creditable coverage; to determine what medical treatments, procedures and related health services benefits must be included in the plans; and to provide for any other matters deemed necessary to further the intent of this article.
As used in this article:"West Virginia affordable health care plan" means a health insurance plan approved under this article."West Virginia affordable health care plan entity" or "plan entity" means an entity licensed under this chapter that develops and proposes a West Virginia affordable health care plan and, if the plan is approved, is responsible for administering the plan and paying claims of plan enrollees."Enrollee" means an individual who has been determined to be eligible for and is receiving health insurance coverage under a West Virginia affordable health care plan.
(a) The commissioner shall announce, no later than July 1, 2009, an invitation to prospective West Virginia affordable health care plan entities to submit West Virginia affordable health care plan proposals. The invitation shall include guidelines for the review of West Virginia affordable health care plan applications, policies and associated rates.(b) In reviewing proposals under this article, the commissioner shall consider the proposed plans' effectiveness in improving the health status of individuals, their impact on maintaining and improving health and their potential to reduce the unnecessary consumption of health care services.
(a) To be approved, plan entities must assure that each proposed plan will provide cost containment through the use of plan design features such as limits on the number of services, caps on benefit payments or copayments for services.(b) To provide consumer choice, plan entities must develop and submit two alternative benefit option plans having different cost and benefit levels, including at least one plan that provides catastrophic coverage. Plans providing catastrophic coverage must, at a minimum, provide coverage for preventive health services and inpatient hospital stays and may also include coverage of one or more of the following: Hospital emergency care services and outpatient facility services; outpatient surgery; or outpatient diagnostic services.(c) All plans must offer prescription drug benefit coverage.(d) Plan enrollment materials must provide information in plain language on policy benefit coverage, benefit limits, cost-sharing requirements, exclusions and a clear representation of what is not covered in the plan. The enrollment materials must include a standard disclosure form developed by the commissioner that must be reviewed and executed by all consumers purchasing West Virginia affordable health care plan coverage.(e) The commissioner shall disapprove any plan that:(1) Contains any ambiguous, inconsistent or misleading provisions or any exceptions or conditions that deceptively affect or limit the benefits purported to be assumed in the general coverage provided by the plan;(2) Provides benefits that are unreasonable in relation to the premium charged; or(3) Contains provisions that are unfair or inequitable, contrary to the public policy of this state, encourage misrepresentation or result in unfair discrimination in sales practices.
(a) Individuals. - Eligibility to enroll in an individual West Virginia affordable health care plan is limited to any resident of this state who:(1) Is not covered by a private insurance policy and is not eligible for coverage under an employer-sponsored group plan or through a public health insurance program, such as Medicare, Medicaid or the state Children's Health Insurance Program; and(2) Has not been covered by any health insurance program at any time during the past six months, unless coverage under a health insurance program was terminated within the previous six months due to loss of a job that provided an employer-sponsored health benefit plan or death of, or divorce from, a spouse who was provided an employer-sponsored health benefit plan or, with respect to a public health insurance program, eligibility for such program was lost due to an inability to meet income or categorical requirements: Provided, That an individual may not be excluded from enrollment in a West Virginia affordable health care plan on the ground that he or she is eligible for or is enrolled in a COBRA plan.(b) Group. - An otherwise eligible group may not obtain coverage under a West Virginia affordable health care plan unless the group has not had coverage under any health insurance plan at any time during the previous six months.
(a) The commissioner shall issue guidelines to ensure that West Virginia affordable health care plans meet minimum standards for quality of and access to care.(b) Initial filings and changes in West Virginia affordable health care plan benefits, premiums and policy forms are subject to regulatory oversight by the commissioner.(c) The commissioner shall develop a public awareness program to be implemented throughout the state for the promotion of the plans approved under this article, which may include assistance from state health insurance benefits advisors.(d) Each West Virginia affordable health care plan must maintain enrollment data and provide network data and reasonable records to enable the commissioner to assess the plans.
(a) Individual plans. -- Only the following provisions of article fifteen of this chapter apply to West Virginia entities offering individual plans pursuant to this article: Sections two-a, two-d, two-e, three, four, four-c, four-e, four-f, four-g, five, six, seven, eight, nine, thirteen, fourteen, sixteen, seventeen, eighteen, nineteen and twenty. Notwithstanding any other provision of this code, the provisions of article twenty-eight of this chapter and legislative rules regulating individual accident and sickness policies, including the rule contained in series 12, title 114 of the West Virginia Code of State Rules, do not apply to individual plans issued pursuant to this article unless and to the extent specifically incorporated in rules promulgated pursuant to the authority conferred by section eleven of this article.(b) Group plans. - Only the following provisions of article sixteen of this chapter apply to insurers offering group plans pursuant to this article: Sections one-a, three, three-g, three-j, three-k, three-l, three-m, three-n, three-o, three-p, four, five, six, seven, nine, ten, eleven, twelve, thirteen, fourteen and fifteen; all other provisions of article sixteen do not apply to group plans approved pursuant to this article unless and to the extent the provisions are specifically incorporated in rules promulgated by the commissioner. Notwithstanding any other provision of this code or of the code of state rules, the provisions of article sixteen-e of this chapter and of legislative rules regulating group accident and sickness policies, including the rule set forth in series 39, title 114 of the West Virginia Code of State Rules, do not apply to group plans approved pursuant to this article unless and to the extent specifically incorporated in rules promulgated by the commissioner pursuant to the authority conferred by section eleven of this article.(c) Small group plans. -- With respect to any group plan approved under this article and offered to any "small employer", as that term is defined in section two, article sixteen-d of this chapter, the following provisions of article sixteen-d apply: Sections two, four, seven, eight, twelve, thirteen and fourteen: Provided, That only the sentence preceding the proviso in section thirteen, article sixteen-d of this chapter applies to small employer plans approved pursuant to this article. Notwithstanding any other provision of this code, all other provisions of article sixteen-d of this chapter do not apply to small employer plans approved pursuant to this article unless and to the extent such provisions are specifically incorporated in rules promulgated by the commissioner.(d) Forbearance by the commissioner. - The commissioner may forbear from applying any other statutory or regulatory requirements to an insurer offering an individual or group plan approved pursuant to this article, including any requirements in articles twenty-four and twenty-five-a of this chapter, if he or she determines that such forbearance serves the principles set forth in section one of this article.(e) Existing limited benefit plans. - Plans approved pursuant to the provisions of article fifteen-d of this chapter, as that article existed prior to its repeal during the 2009 regular legislative session, and this article, as that it existed prior to its amendment and reenactment during the 2009 regular legislative session, remain in effect and are subject to those provisions.
The commissioner shall:(1) Provide an assessment of the West Virginia affordable health care plans and their potential applicability in other settings;(2) Use West Virginia affordable health care plans to gather more information to evaluate low-income, consumer-driven benefit packages; and(3) Submit by March 1, 2011, and annually thereafter, a report to the Governor, the President of the Senate and the Speaker of the House of Delegates that provides the information specified in this section and recommendations relating to the successful implementation and administration of the program.
Coverage under a West Virginia affordable health care plan is not an entitlement and a cause of action does not arise against the state, a local government entity, any other political subdivision of the state or any agency for failure to make coverage available to eligible persons under this article.
As used in this article:(1) "Adverse determination" means a determination by a health carrier or its designee utilization review organization that an admission, availability of care, continued stay or other healthcare service that is a covered benefit has been reviewed and, based upon the information provided, does not meet the health carrier's requirements for medical necessity, appropriateness, health care setting, level of care or effectiveness, and the requested service or payment for the service is therefore denied, reduced or terminated.(2) "External review" means a review of a final adverse determination by an independent review organization.(3) "Final adverse determination" means an adverse determination that has been upheld by the issuer at the completion of the internal grievance procedures or an adverse determination with respect to which the internal grievance procedures have been deemed exhausted.(4) "Health benefit plan" means a policy, contract, certificate or agreement entered into, offered or issued by an issuer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including short-term and catastrophic health insurance policies and policies that pay on a cost-incurred basis, but excludes the excepted benefits defined in 42 U. S. C. 300gg-91 and policies, contracts, certificates or agreements excluded by rules promulgated pursuant to section four of this article.(5) "Health plan issuer" or "issuer" means an entity required to be licensed under this chapter that contracts, or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services under a health benefit plan, including an accident and sickness insurance company, a health maintenance corporation, a health care corporation, a health or hospital service corporation, and a fraternal benefit society.(6) "Independent review organization" means an entity approved by the commissioner to conduct external reviews of final adverse determinations.(7) "Utilization review" means a system for the evaluation of the necessity, appropriateness and efficiency of the use of health care services, procedure and facilities.
An issuer shall, in accordance with rules promulgated pursuant to section four of this article, develop processes for utilization review and internal grievance procedures and shall make external review available with respect to all adverse determinations.
(a) An individual or issuer may seek judicial review of a final decision rendered by an independent review organization by filing a petition in the circuit court within sixty days after receipt of notice of such decision.(1) Venue for a petition filed pursuant to this section is the county in which the individual resides or, if the individual is a non-resident, the county in which he or she works or, if he or she does not work in this state, the county in which his or her employer is located, or if none of these counties are applicable, in Kanawha County.(2) The issuer shall provide benefits pursuant to the final external review decision, including by making payment on a disputed claim, unless or until there is a judicial decision otherwise.(3) If the issuer files a petition pursuant to this section and the individual substantially prevails, the issuer shall be responsible for the reasonable attorney's fees of the individual.(b) A decision issued by an independent review organization pursuant to this article may be enforced in the same manner as an order of the commissioner.(c) This article does not create any new cause of action or eliminate any presently existing cause of action.
(a) The commissioner shall propose legislative rules for approval by the Legislature in accordance with the provisions of article three, chapter twenty-nine-a of this code to implement the provisions of this article, including, but not limited to, rules to:(1) Define the scope of the applicability of this article;(2) Establish requirements for all issuers with regard to utilization review and for internal grievance procedures and external review of adverse determinations, which rules shall be based on the corresponding model acts adopted by the National Association of Insurance Commissioners and, with respect to external review, shall meet or exceed the minimum consumer protections established by the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152); and(3) Provide for judicial review pursuant to subsection (a), section three of this article, which rules shall be based on the provisions of this code and rules governing judicial review of contested cases under the State Administrative Procedures Act.(b) Notwithstanding the provisions of section one, article twenty-three of this chapter; section four, article twenty-four of this chapter; section six, article twenty-five of this chapter; and section twenty-four, article twenty-five-a of this chapter, this article and the rules promulgated under this article are applicable to all health benefits plans and supersede any provisions to the contrary in this chapter or in any rules promulgated under this chapter.
This article shall apply to fire insurance and marine insurance, except that it shall not apply to reinsurance.
Insurers issuing the standard policy pursuant to section two or any permissible variation thereof are authorized to affix thereto or include therein a written statement that the policy does not cover loss or damage caused by nuclear reaction, nuclear radiation or radioactive contamination, or any combination or all of said causes, whether directly or indirectly resulting from an insured peril under said policy: Provided, however, That nothing therein contained shall be construed to prohibit the attachment to any such policy of an endorsement or endorsements specifically assuming coverage for loss or damage caused by nuclear reaction, nuclear radiation or radioactive contamination.
Whenever the proceeds of or payment under a policy of fire insurance covering property located in West Virginia heretofore or hereafter issued becomes payable, and the insurer makes payment thereof to the person or persons designated in the policy or contract or if the proceeds have been assigned and written notice of such assignment given to the insurer, to the person or persons being entitled thereto by virtue of such assignment, such payment shall fully discharge the insurer from all claims under the policy or contract. This section is declared to be applicable to all insurers, including farmers' mutual fire insurance companies.
No policy of fire insurance covering property located in West Virginia shall be made, issued or delivered unless it conforms as to all provisions and the sequence thereof with the basic policy commonly known as the New York standard fire policy, edition of one thousand nine hundred forty-three, which is designated as the West Virginia standard fire policy; except that with regard to multiple line coverages providing casualty insurance combined with fire insurance this section shall not apply if the policy contains, with respect to the fire portion thereof, language at least as favorable to the insured as the applicable portions of the standard fire policy and such multiple line policy has been approved by the commissioner. As of the effective date of this chapter, the commissioner shall file in his office, and thereafter maintain on file in his office, a true copy of such West Virginia standard fire policy, designated as such and bearing the commissioner's authenticating certificate and signature and the date of filing. Provisions to be contained on the first page of the policy may be rewritten, and rearranged to facilitate policy issuance and to include matter which may otherwise properly be added by endorsement. The standard fire insurance policy shall not be required for casualty insurance, marine insurance nor insurance on growing crops.
The pages of the standard fire insurance policy may be renumbered and the format rearranged for convenience in the preparation of individual contracts, and to provide space for the listing of rates and premiums for coverages insured thereunder or under endorsements attached or printed thereon, and such other data as may be conveniently included for duplication on daily reports for office records.
There shall be printed on such standard fire insurance policy the name of the insurer or insurers issuing the policy, the location of the home office or United States office of the insurer or insurers, a statement whether such insurer or insurers be stock corporations, mutual corporations, reciprocal insurers, or otherwise, and there may be added thereto such device or emblem as the insurer or insurers issuing such policy may desire. If the policy is issued by a mutual or reciprocal insurer having special regulations with respect to the payment of assessments by the policyholder or subscriber, such regulations shall be printed on the policy, and any such insurer may print upon the policy such regulations as may be appropriate to or required by its form of organization. Any insurer organized under special charter provisions may so indicate upon its policy, and may add a statement of the plan under which it operates in this state. There may be substituted for the word "company" a more accurate descriptive term for the type of insurer. There may also be added a statement of the group of insurers with which the insurer is financially affiliated. In lieu of the facsimile signatures of the president and secretary of the insurer there may be used the name or names of such officers or managers as are authorized to execute the contract.
A domestic insurer may print in the standard fire policy any provisions which it is authorized or required by law to insert therein; a foreign or alien insurer may print in the policy any provision required by its charter or deed of settlement, or by the laws of its own state or country, not contrary to the laws of this state.
Appropriate forms of additional contracts, riders or endorsements, insuring against indirect or consequential loss or damage, or against any one or more perils other than those of fire and lightning, or providing coverage which the insurer issuing the policy is authorized by the laws of this state and by its license to assume or issue, may be used in connection with the standard fire policy. Such other perils or coverages may include those excluded in the standard fire insurance policy, and may include any of the perils or coverages permitted to be insured against or issued by fire, marine and casualty insurers. Such forms of contracts, riders and endorsements may contain provisions and stipulations inconsistent with such standard fire insurance policy, if such provisions and stipulations are applicable only to such additional coverage or to the additional peril or perils insured against.
Every insurer issuing or renewing a policy that provides fire insurance, as that term is defined in subsection (c), section ten, article one of this chapter, but which does not cover damages from flood, shall provide to the policyholder of every policy delivered in this state a notice that provides as follows: THIS POLICY DOES NOT COVER DAMAGE FROM FLOOD. FOR INFORMATION ABOUT FLOOD INSURANCE, CONTACT THE NATIONAL FLOOD INSURANCE PROGRAM OR YOUR INSURANCE AGENT.
There may be printed upon the standard fire policy the words, "Standard Fire Insurance Policy for West Virginia," and there may be inserted before and after the words "West Virginia" a designation of any state or states in which such form of policy is standard. There may be endorsed on any such policy the name, with the word "agent" or "agents" and place of business, of any insurance agent or agents, either by writing, printing, stamping or otherwise.
(a) No fire or marine policy, rider or endorsement to be attached to any policy covering any risk located or to be performed in West Virginia shall be delivered or issued for delivery in this state unless that form is: (1) Filed with and approved by the Commissioner; (2) conforms to applicable legislative rules of the Commissioner; (3) is identical as to language to a policy, rider or endorsement approved by the Commissioner; or (4) qualifies under subsection (c) of this section. If the use of any form under the provisions of subdivision (2) of this section by any insurer or by the members and subscribers of any rating organization is so extensive that in the opinion of the Commissioner the public interest requires, the Commissioner may require that the form be filed with him or her by the insurer or by the rating organization on behalf of its members and subscribers.(b) The procedure for filing and approval or disapproval of forms under this section is provided in section eight, article six of this chapter. Grounds for disapproval are those set forth in section nine of said article. Filings may be made on behalf of any insurer by a rating organization licensed under the provisions of article twenty of this chapter. This section does not apply to ocean marine policies, riders or endorsements, or to forms on specially rated inland marine risks.(c) For commercial lines risks, a fire or marine policy, rider or endorsement is subject to the provisions of section six, article eight of this chapter governing other commercial lines form filings as defined in section eight, article six of this chapter.
All insurers providing fire insurance on real property in West Virginia shall be liable, in case of total loss by fire or otherwise, as stated in the policy, for the whole amount of insurance stated in the policy, upon such real property; and in case of partial loss by fire or otherwise, as aforesaid, of the real property insured, the liability shall be for the total amount of the partial loss, not to exceed the whole amount of insurance upon the real property as stated in the policy. This section does not apply where such insurance has been procured from two or more insurers covering the same interest in such real property.
(a) No proceeds shall be paid by an insurance company that has issued a policy which provides coverage for debris removal for cleanup, removal of refuse, debris, remnants, or remains of a dwelling or structure upon a claim of total loss unless and until the insurance company receives certification that the refuse, debris, remnants, or remains of the dwelling or structure have been cleaned up, removed or otherwise disposed of. In the event the insurance company receives, within six months of the date of loss, certification that such cleanup, removal or disposal costs have been incurred by a municipality, county or other governmental entity, rather than the policyholder, such debris removal and cleanup proceeds shall be paid to the municipality, county or other government entity which has incurred such costs: Provided, That any company that has issued a policy that provides coverage for damage to real property as a result of fire or explosion, regardless of whether such policy includes coverage for debris removal, shall comply with the provisions of section one, article ten-e, chapter thirty-eight of this code.No insurance company subject to this section which complies with this section may be held liable for any claim that may arise out of the cleanup, removal or disposal of debris pursuant to this section.(b) An insurance company subject to this section that complies with this section and with section one, article ten-e, chapter thirty-eight of this code shall be deemed to have fully satisfied all contractual obligations to the policyholder regarding debris removal; in no event shall an insurance company be required to pay moneys in excess of policy limits.(c) Compliance with this section and section one, article ten-e, chapter thirty-eight of the code may not be deemed a violation of section nine of this article.
The purpose of this article is to regulate declinations, cancellations and refusals to renew certain policies of property insurance and to provide for disclosure of the reasons for these actions.
(a) There is no liability on the part of and no cause of action shall arise against the commissioner, any insurer or its authorized representative, or any licensed insurance agent or broker for furnishing information to an insurer as to reasons for a termination or declination, or for any communication giving notice of, or specifying the reasons for, a declination or termination.(b) Subsection (a) above does not apply to statements made in bad faith with malice in fact.
If any provisions of this article or the application thereof to any person or circumstances is for any reason held to be invalid, the remainder of the article and the application of such provision to other persons or circumstances shall not be affected thereby.
This article applies to policies of property insurance, other than policies of inland marine insurance and policies of property insurance issued through a residual market mechanism, covering risks to property located in this state which take effect or are renewed after the effective date of this article and which insure any of the following contingencies:(a) Loss of or damage to real property which is used predominantly for the residential purposes of the named insured and which consists of not more than four dwelling units; or(b) Loss of or damage to personal property in which the named insured has an insurable interest where:(1) The personal property is used for personal, family or household purposes; and(2) The personal property is within a residential dwelling.
(a) "Declination" is the refusal of an insurer to issue a property insurance policy on a written application or written request for coverage. For the purposes of this article, the offering of insurance coverage with a company within an insurance group which is different from the company requested on the application or written request for coverage, or the offering of insurance upon different terms than requested in the application or written request for coverage, is not considered a declination if such offering of such insurance is based upon any valid underwriting reason which involves a substantial increase in the risk. Each company or groups of companies instituting such transfer shall give notice in the manner provided in 33-17A-4(c) of this code to the insured as to the reasons for such transfer.(b) "Nonpayment of premium" means the failure of the named insured to discharge any obligation in connection with the payment of premiums on policies of property insurance, subject to this article, whether the payments are directly payable to the insurer or its agent or indirectly payable to the insurer or its agent or indirectly payable under a premium finance plan or extension of credit. "Nonpayment of premium" includes the failure to pay dues or fees where payment of dues or fees is a prerequisite to obtaining or continuing property insurance coverage.(c) "Renewal" or "to renew" means the issuance and delivery by an insurer at the end of a policy period of a policy superseding a policy previously issued and delivered by the same insurer, or the issuance and delivery of a certificate or notice extending the term of an existing policy beyond its policy period or term. For the purpose of this article, any policy period or term of less than six months is considered a policy period or term of six months, and any policy period or term of more than one year or any policy with no fixed expiration date is considered a policy period or term of one year.(d) "Termination" means either a cancellation or nonrenewal of property insurance coverage in whole or in part. A cancellation occurs during the policy term. A nonrenewal occurs at the end of the policy term as set forth in 33-17A-3(c) of this code. (1) For purposes of this article, the transfer of a policyholder between companies within the same insurance group is not considered a termination, if such transfer is based upon any valid underwriting reason which involves a substantial increase in the risk. (2) Requiring a reasonable deductible, reasonable changes in the amount of insurance, or reasonable reductions in policy limits or coverage is not considered a termination if the requirements are directly related to the hazard involved and are made on the renewal date of the policy.
(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 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 30 days before the end of a policy period, as described in 33-17A-3(c) of this code, 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. (1) 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 33-17A-5 of this code, 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:(A) A single first party property damage claim within the previous 36 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(B) Two first party property damage claims within the previous 12 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 15-5-6 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.(2) Notice of an intention to transfer a policyholder between companies within the same insurance group as provided in 33-17A-3(d)(1) of this code shall be given by each company or group of companies instituting such transfer and shall be accompanied by an explanation of the reasons for such transfer.(3) Notice of an intention to renew a property insurance policy with a new policy that includes changes made by the insurer, which result in a removal of coverage, diminution in the scope or reduction in coverage, change in deductible, or addition of an exclusion, shall be accompanied by an explanation of the changes made by the insurer. This subdivision does not apply to any change, reduction, or elimination of coverage made at the request of the insured, any correction of typographical or scriveners errors, or the application of mandated legislative changes.
(a) On or after July 1, 2005, an insurer may nonrenew a property insurance policy for any reason that is consistent with its underwriting standards.(b) Notwithstanding any other provisions in this section, race, religion, nationality, ethnic group, age, sex, marital status or other reason prohibited by the provisions of this chapter may not be considered as a reason for nonrenewal.(c) Notwithstanding the provisions of subsection (c), section four of this article, a nonrenewal may only be issued pursuant to the provisions of this section upon notice to the named insured at least thirty days before the end of the policy period of the insurer's election not to renew the policy.(d) Commencing July 1, 2005, the total number of nonrenewal notices issued by the insurer each year pursuant to this section that result in nonrenewals may not exceed one percent per year of the total number of the policies of the insurer in force at the end of the previous calendar year in this state: Provided, That the total number of such nonrenewal notices issued each year to insureds within any given county in this state that result in nonrenewals may not exceed one percent per year of the total number of policies in force in that county at the end of the previous calendar year: Provided, however, That an insurer may nonrenew one policy per year in any county if the applicable percentage limitation results in less than one policy.(e) 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 the policy for any reason is subject to a hearing and review as provided in section seven of this article: Provided, That the hearing shall relate to whether the nonrenewal of the policy was issued for a discriminatory reason, was based upon inadequate notice, was based on an underwriting standard found by the Commissioner to be in violation of this chapter or causes the insurer to exceed the percentage limitations, or percentage limitations by county, of nonrenewal notices set forth in this section. The notice shall also advise the insured of possible eligibility for coverage through the West Virginia Essential Property Insurance Association.(f) Each insurer licensed to write property 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 that they are consistent with generally accepted underwriting principles. The underwriting standards filed with the Commissioner shall be considered confidential by law and privileged, are exempt from disclosure pursuant to chapter twenty-nine-b of this code, are not open to public inspection, are not subject to subpoena, are not subject to discovery or admissible in evidence in any criminal, civil or administrative action and are not subject to production pursuant to court order. The Commissioner may promulgate legislative rules pursuant to chapter twenty-nine-a of this code to implement the provisions of this section.(g) Each insurer that has elected to issue nonrenewal notices pursuant to the percentage limitations provided in this section shall report to the Commissioner, on or before September 30, of each year, the total number of nonrenewal notices issued in this state and in each county of this state for the preceding year and the specific reason or reasons for the nonrenewals by county.
(a) Each insurer licensed to write property insurance policies in this state as of July 1, 2005, may elect to issue all nonrenewal notices either pursuant to subsection (c), section four of this article or section four-a of this article. Each insurer must notify the Commissioner of its election on or before July 1, 2005, 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 subsection (c), section four of this article or section four-a of this article. The failure of an insurer to notify the Commissioner of its election by July 1, 2005, will be considered to be an election by the insurer to issue all nonrenewal notices pursuant to subsection (c), section four of this article and the insurer will be bound by the election for a period of five years.(b) An insurer that is not licensed to write property insurance policies in this state as of July 1, 2005, but which becomes licensed to write property insurance policies after that date shall, no later than four years after the date the insurer becomes licensed to write the policies, make an election to issue all nonrenewal notices either pursuant to subsection (c), section four of this article 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 nonrenewals may not exceed the percentage limitations set forth in that section. An insurer first becoming licensed to issue property insurance policies in this state after July 1, 2005, 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 subsection (c), section four of this article or section four-a of this article.(c) An insurer that elects to issue nonrenewals pursuant to subsection (c), section four of this article may include as a permitted reason for nonrenewal of a policy, in addition to the reasons enumerated in section five of this article, two or more paid claims under a policy within a period of thirty-six months, each of which occurs after July 1, 2005.
By January 1, 2010, the Commissioner shall submit a report to the Legislature. The report shall contain the following:(1) An analysis of the impact of legislation enacted during the 2005 legislative session upon rates and insurance availability in the state; and(2) Statistics reflecting the rate history of insurers conducting business in West Virginia from July 1, 2005, until July 1, 2009.
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 throughout the state or should such insurer discontinue operations within the state; or(j) Substantial breach of the provisions of the policy.
No insurer may decline to issue or terminate a policy of insurance subject to this article if the declination or termination is:(a) Based upon the race, religion, nationality, ethnic group, age, sex or marital status of the applicant or named insured;(b) Based solely upon the lawful occupation or profession of the applicant or named insured, unless the decision is for a business purpose that is not a mere pretext for unfair discrimination: Provided, That this provision does not apply to any insurer, agent or broker that limits its market to one lawful occupation or profession or to several related lawful occupations or professions;(c) Based upon the age or location of the residence of the applicant or named insured unless the decision is for a business purpose that is not a mere pretext for unfair discrimination or unless the age or location materially affects the risk;(d) Based upon the fact that another insurer previously declined to insure the applicant or terminated an existing policy in which the applicant was the named insured;(e) Based upon the fact that the applicant or named insured previously obtained insurance coverage through a residual market insurance mechanism;(f) Based upon the fact that the applicant has not previously been insured;(g) Based upon the fact that the applicant did not have insurance coverage for a period of time prior to the application; or(h) Based solely upon an adverse credit report or adverse credit scoring.
Hearings for the violation of any provision of this article, and the administrative procedure prior to, during and following these hearings, shall be conducted in accordance with the provisions of article two of this chapter.
If the commissioner determines in a final order that:(a) An insurer has violated section five or six of this article, he may require the insurer to:(1) Accept the application or written request for insurance coverage at a rate and on the same terms and conditions as are available to other risks similarly situated;(2) Reinstate insurance coverage to the end of the policy period; or(3) Continue insurance coverage at a rate and on the same terms and conditions as are available to other risks similarly situated.(b) Any person has violated any provision of this article, he may:(1) Issue a cease and desist order to restrain the person from engaging in practices which violate this article; and(2) Assess a penalty against the person of up to $5,000 for each willful and knowing violation of this article.
(a) If the commissioner determines in a final order that an insurer has violated section five or six of this article, the applicant or named insured aggrieved by the violation may bring an action in a court of competent jurisdiction in this state to recover from the insurer any loss, not otherwise recovered through insurance, which would have been paid under the insurance coverage that was declined or terminated in violation of this article.(b) Any amount recovered under subsection (a) of this section may not be duplicative of any recovery obtained through the exercise of any other statutory or common law cause of action arising out of the same occurrence. No action under this section may be brought two years after the date of a final order of the commissioner finding a violation of section five or six of this article.
Any state volunteer fire department may join with other volunteer fire departments in this state in order to obtain casualty insurance coverage as defined in subdivision (e), section ten, article one of this chapter and the state Insurance Commissioner and his staff may assist any such volunteer fire departments in negotiating for, securing and adopting a policy or policies of insurance written by a carrier or carriers chartered under the laws of any state and duly licensed to do business in this state.
When surety insurance, as defined in section ten, article one of this chapter, is required of any person by a court or governmental body of the State of West Virginia, such insurance shall be provided only by persons licensed in West Virginia to transact surety insurance.
There is hereby continued in effect the state agency heretofore created and known as the "Insurance Commissioner of West Virginia" which agency shall consist of an Insurance Commissioner and such employees as may be authorized by law. The term of the present commissioner shall continue until July 1, 1959. All appointments to said office made thereafter shall be for a period of six years, except that in case of a vacancy the appointment shall be made to fill the unexpired term. The commissioner shall be a citizen and resident of this state and shall be appointed by the Governor, by and with the advice and consent of the Senate. Before taking the oath of office the commissioner shall sever all connections either direct or indirect with any and all insurers subject to his supervision and with any person representing any such insurer, except as a policyholder or claimant.
(a) The commissioner is authorized to promulgate and adopt rules relating to insurance as are necessary to discharge his or her duties and exercise his or her powers and to effectuate the provisions of this chapter, protect and safeguard the interests of policyholders and the public of this state.(b) The commissioner is authorized to promulgate rules necessary to discharge his or her duties relating to workers' compensation insurance as set forth in chapter twenty-three of this code, which shall be exempt from the provisions of chapter twenty-nine-a, article three of this code, except that these rules shall be filed with the Secretary of State's Office.(c) Prior to assuming regulatory authority over workers' compensation insurance pursuant to article two-c, chapter twenty-three of this code, the commissioner shall review and revise all applicable rules to reflect the assumption of this new regulatory authority: Provided, That all such revisions shall be exempt from the provisions of chapter twenty-nine-a, article three, except that the amended rules shall be filed with the Secretary of State's Office.
Upon finding that an insurance emergency has occurred, the commissioner, by order, may suspend any deadlines established by rule that apply to actions taken in the course of evaluating or settling claims and, may establish new deadlines in place of those that have been suspended. For purposes of this section, "insurance emergency" means an event, either natural or man-made, which in the opinion of the commissioner is reasonably likely to produce a volume of claims, for a particular place and time, that significantly exceeds the number of claims normally arising in that place and for that time. The commissioner shall limit the order to accommodate the anticipated increase in claims by specifying the geographic area in which claims to which the new deadlines apply arise, the time period during which the claims arise, the cause or nature of the claims, the relative priority of the claims or other characteristics of the claims that the commissioner considers appropriate.
In addition to examinations and investigations expressly authorized by this chapter, the commissioner may conduct examinations and investigation of insurance matters he or she considers proper to determine whether any person has violated any provision of this chapter or to secure information useful in the lawful administration of his or her duties. If the commissioner determines, after notice and hearing, that any person is transacting insurance in an illegal, improper or unjust manner or is failing to pay losses and obligations when they become due, excepting claims to which there is a substantial defense, he or she may order the person to discontinue the illegal, improper or unjust manner of transacting insurance, to adjust and pay his or her obligations as they become due: Provided, That in any order issued pursuant to subsection (j), section nine of this article or entered as a result of a regulatory enforcement action initiated and prosecuted by the commissioner pursuant to this section or section eleven, article three of this chapter, the commissioner may, in addition to or in lieu of any other penalties or remedies provided therein, order an insurer to pay restitution to affected persons. If a person fails or refuses within twenty days after notice to obey the order, the commissioner may revoke any license issued by the commissioner and held by the person. In addition, the commissioner may apply to the circuit court, or the judge in vacation, having jurisdiction for an injunction or the appointment of a receiver, or for both. The court or judge may enforce the order of the commissioner by injunction or by appointment of a receiver to take charge of the affairs and property of the person, or both, and may make further orders as may be necessary and proper to effectuate the injunction or receivership.
Whenever under the provisions of this chapter the commissioner is required to give notice to any person the service of such notice shall be deemed proper and effective with regard to any licensee of the commissioner (including insurers, agents, brokers and solicitors) or any employee of such licensee when such notice directed to such person to be notified shall have been deposited in the United States mail, postage prepaid, addressed to the principal place of business or residence of such licensee as last of record in the commissioner's office. The verified return of the person depositing such notice in the mails as to the fact of such mailing shall be proof of service. With the exception of notice for public hearing as is stated in subsection (g), section five, article twenty of this chapter, notice to a person other than a licensee or employee of a licensee shall be served in the manner provided by law for service of process in civil actions, and such manner of service may also be used and shall constitute effective notice to a licensee or employee of a licensee.
The commissioner may call and hold hearings for any purpose deemed necessary by him for the performance of his duties. He shall hold hearings when required by the provisions of this chapter or upon a written demand therefor by a person aggrieved by any act or failure to act by the commissioner or by any rule, regulation or order of the commissioner. Such demand shall specify the grounds to be relied upon as a basis for the relief to be requested at such hearing and such hearing shall be held within forty-five days of receipt by the commissioner of written demand therefor, unless postponed to a later date by mutual agreement. The commissioner may in his discretion stay the effect of any order, rule or regulation pending hearing. The commissioner shall give at least fifteen days' notice of the time, place and matters to be considered at a hearing to all persons directly affected by such hearing. The commissioner shall allow any person directly affected by the hearing to appear in person and by counsel, to be present during the giving of all evidence, to have a reasonable opportunity to inspect all documentary evidence, to examine witnesses and present relevant evidence, and to have subpoenas issued by the commissioner to compel attendance of witnesses and production of evidence in his behalf. Formal rules of pleading or evidence need not be observed at any hearing. Upon written request seasonably made by a person directly affected by a hearing, and at such person's expense, or upon his own motion and expense, the commissioner shall cause a full stenographic record of the hearing to be made by a competent reporter. If further requested in writing by a person directly affected by such hearing, the commissioner shall cause such record to be transcribed and made a part of the official record of the hearing, at the expense of such person or may do so at his own motion and expense, and shall furnish a copy thereof to any party directly affected by such hearing at the request and expense of such party. Within forty-five days after completion of a hearing, unless the time be extended by mutual consent, the commissioner shall enter an order containing his findings of fact and conclusions upon the subject matter of such hearing. Such order may affirm, modify or nullify action theretofore taken or may prescribe new action within the scope of the notice of hearing, and a copy thereof shall be mailed to all persons directly affected by such hearing. In the discretion of the commissioner a rehearing may be granted to any party to a hearing upon written request filed with the commissioner within thirty days of the mailing of such order. Costs of any hearing or rehearing for the attendance of witnesses, service of subpoenas, and stenographic record and transcript may be taxed by the commissioner to any party or parties against whom he shall find and may be recovered in a civil action.
An appeal from the commissioner shall be taken only from an order entered after hearing or an order refusing a hearing. Any person aggrieved by any such order may, within thirty days after the order has been mailed or delivered to the persons entitled to receive the same, or within thirty days after an order denying rehearing has been so mailed or delivered, appeal to the circuit court of Kanawha county, or the judge thereof in vacation, by presenting a written petition to such court or judge and mailing a copy thereof to the commissioner. Upon the receipt of such copy the commissioner shall forthwith transmit to the clerk of such court the record of the proceedings before him The court or judge shall fix a time for hearing upon said petition at his earliest convenience. Notice in writing of the time and place of said hearing shall be given by petitioner to the commissioner at least fifteen days prior thereto. The court or judge shall, without a jury, hear and determine the matter upon the record of proceedings before the commissioner, except that for good cause shown the court may permit the introduction of additional evidence, and may enter an order revising or reversing the order of the commissioner, or may affirm such order, or remand the action to the commissioner for further proceedings. Pending such appeal the order of the commissioner shall be in full force and effect until final determination, unless the commissioner shall in his discretion have stayed the effect of his order pending final determination of the appeal or unless the court or judge thereof before whom the appeal is pending shall enter an order staying the commissioner's order until final determination. The judgment of the circuit court may be reviewed upon appeal by the Supreme Court of Appeals in the same manner as other civil cases to which the state is a party.
The commissioner shall annually, on or before November 1, submit to the Governor a report for the previous calendar year of his or her official acts, and of the condition of insurers doing business in this state, with a condensed statement of their reports to him or her, abstracts of all accounts rendered to any court by receivers of insolvent insurers, abstracts or reports to the commissioner by the receivers, together with a statement of all assessments, fees, taxes and related charges received from insurers and other licensees and paid by him or her into the state Treasury.
(a) The commissioner shall annually issue a communication to West Virginia state and local governmental entities and nonprofit organizations which shall have the following objectives:(1) To make state and local governmental entities and nonprofit organizations aware of the 1988 amendments to the federal Robert T. Stafford Emergency Assistance and Disaster Relief Act which impose penalties in the form of reductions in Federal Emergency Management Agency (FEMA) disaster relief funds on public entities who fail to purchase adequate flood insurance on all property located in identified flood hazard areas; (2) To make state and local governmental entities and nonprofit organizations generally aware of the magnitude of risk exposure and potential financial loss that may result from these penalties; and(3) To make state and local governmental entities and nonprofit organizations aware that low-cost, federally subsidized flood insurance may be available through the National Flood Insurance Program (NFIP).(b) The commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to effectuate the provisions of this section.
(a) By February 1, 2005, the commissioner shall submit to the Legislature a report on third party causes of action;(b) The report shall contain the following information:(1) The legal history of the creation of a third party causes of action brought pursuant to Unfair Trade Practices Act as codified in article eleven of this chapter;(2) An analysis of the impact of third party causes of action upon insurance rates and the availability of insurance in this state;(3) A summary of the types of data which the commissioner utilized in preparing the analysis: Provided, That the commissioner will not disclose information which is otherwise confidential: Provided, however, That if the commissioner is unable to obtain data which he or she considers necessary to preparing a full analysis, the commissioner shall state in the report:(A) The reasons that he or she was not able to obtain the data;(B) Recommendations or proposed legislation for facilitating the collection of necessary data and protecting proprietary information;(4) Information on what other states have this cause of action;(5) Based upon the findings of the commissioner, and if the findings so suggest, proposed legislation to address any reforms needed for third party claims under the Unfair Trade Practices Act;(c) For purpose of preparing the report, the commissioner may request from companies authorized to conduct business in this state any information that he or she believes is necessary to determine the economic effect of third-party lawsuits on insurance premiums. The companies shall not be required to provide the information. Any information which the company agrees to provide, shall be considered confidential by law and privileged, is exempt from disclosure pursuant to chapter twenty-nine-b of this code, is not open to public inspection, is not subject to subpoena, and is not subject to discovery or admissible in evidence in any criminal, private civil or administrative action and is not subject to production pursuant to court order. Notwithstanding any other provisions in this section, while the commissioner is to provide his or her general conclusions based upon the review of the data, the commissioner is not to disclose the information in a manner so as to violate the confidentiality provisions of this section.
(a) By February 1, 2005, the commissioner shall submit to the Legislature a report relating to the office of the consumer advocate.(b) The report shall contain the following information:(1) An overview of the function of the office of the consumer advocacy and how the office addresses consumer complaints;(2) The number of staff in the office of the consumer advocate and the structure of the existing office;(3) Statistics reflecting the number of consumer complaints and types handled by the office from January 1, 2001, until January 1, 2004;(4) The number of states which have consumer advocates and the lines of insurance for which the advocates are authorized to act on behalf of consumers;(5) The recommendation of the commissioner in regard to whether this state would benefit by having the role of the consumer advocate expanded to other lines of insurance;(6) Based upon the findings and recommendations, of the commissioner, and if the findings so suggest, proposed legislation for expanding the office of the consumer advocate to other lines of insurance.
(a) By January 1, 2007, the Commissioner shall submit a report to the Legislature. The report shall contain analysis of the impact of legislation enacted during the 2005 regular legislative session upon rates and insurance availability in the state.(b) The Insurance Commissioner shall by proposal of legislative or procedural rules, pursuant to article three, chapter twenty-nine-a of this code, put forth analytical criteria and methodology of all factors to be considered in the report. This purpose of this section is to assure that all relevant factors of concern to the Legislature regarding the effect of the reforms enacted in this article, any savings to consumers, the promotion of insurance availability and impacts on insurance industry services and performance are fully reviewed and addressed.
(a) There is hereby created within the agency of the Insurance Commissioner the Office of Consumer Advocacy. The position of Director of the Office of Consumer Advocacy is a full-time position. The Director shall be an attorney licensed in the State of West Virginia. The Director shall be appointed by the Governor for a term of four years to coincide with the term of the Governor and may be discharged only for failure to carry out the duties of the office or for other good and sufficient cause: Provided, That the current Director of the Office of Consumer Advocacy or other appointee of the Commissioner shall continue in the position until the Governor appoints a new Director.(b) The Insurance Commissioner shall provide office space, equipment and supplies for the office.(c) The Director may promulgate rules pursuant to article three, chapter twenty-nine-a of this code in order to effect the purposes of this section and sections seventeen and eighteen of this article.(d) On or before the first day of each regular session of the Legislature, the Director shall file with the Governor, the Clerk of the Senate and the Clerk of the House of Delegates a report detailing the actions taken by the division in the preceding calendar year.
(a) In addition to the authority established under the rules promulgated by the Director, the Office of Consumer Advocacy is authorized to:(1) Institute, intervene in, or otherwise participate in, as an advocate for the public interest and the interests of insurance consumers, proceedings in state and federal courts, before administrative agencies or before the Health Care Authority, concerning applications or proceedings before the Health Care Authority or the review of any act, failure to act or order of the Health Care Authority;(2) At the request of one or more policyholders, or whenever the public interest is served, to advocate the interests of those policyholders in proceedings arising out of any filing made with the Insurance Commissioner by any insurance company or relating to any complaint alleging an unfair or deceptive act or practice in the business of insurance;(3) At the request of one or more third-party claimant who does not have legal representation at a hearing on his or her claim, or whenever the public interest is served, to advocate the interests of those third-party claimants in proceedings arising out of any filing made with the Insurance Commissioner by any insurance company or relating to any third-party complaint alleging an unfair claims settlement practice;(4) Institute, intervene in or otherwise participate in, as an advocate for the public interest and the interests of insurance consumers, proceedings in state and federal courts, before administrative agencies, or before the Insurance Commissioner, concerning applications or proceedings before the Commissioner or the review of any act, failure to act or order of the Insurance Commissioner;(5) Review and compile information, data and studies of the reasonable and customary rate schedules of health care providers and health insurers for the purposes of reviewing, establishing, investigating, or supporting any policy regarding health care insurance rates;(6) Exercise all the same rights and powers regarding examination and cross-examination of witnesses, presentation of evidence, rights of appeal and other matters as any party in interest appearing before the Insurance Commissioner or the Health Care Authority;(7) Hire consultants, experts, lawyers, actuaries, economists, statisticians, accountants, clerks, stenographers, support staff, assistants and other personnel necessary to carry out the provisions of this section and sections sixteen and eighteen of this article, which personnel shall be paid from special revenue funds appropriated for the use of the office;(8) Contract for the services of technically qualified persons in the area of insurance matters to assist in the preparation and presentation of matters before the courts, the Insurance Commissioner, administrative agencies or the Health Care Authority, which persons shall be paid from special revenue funds appropriated for the use of the office;(9) Make recommendations to the Legislature concerning legislation to assist the Office in the performance of its duties;(10) Communicate and exchange data and information with other federal or state agencies, divisions, departments or officers and with other interested parties, including, but not limited to, health care providers, insurance companies, consumers or other interested parties; and(11) Perform other duties to effect the purposes of the Office.(b) The provisions of this section do not apply to any filing made by an insurance company, or act or order performed or issued by the Commissioner, or complaint filed by a policyholder with the Commissioner prior to June 30, 1991. All proceedings and orders in connection with these prior matters shall be governed by the law in effect at the time of the filing, or performance or issuance of the act or order.(c) Nothing in this section may be construed to authorize the Director to participate in the review and consideration of any rate filing made pursuant to this chapter.
The office of consumer advocacy shall be funded in an amount to be appropriated by the Legislature from special revenue funds.
(a) Documents, materials or other information in the possession or control of the commissioner that are obtained in an investigation of any suspected violation of any provision of this chapter or chapter twenty-three of this code are confidential by law and privileged, are not subject to the provisions of chapter twenty-nine-b of this code and are not open to public inspection. The commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties. The commissioner may use the documents, materials or other information if they are required for evidence in criminal proceedings or for other action by the state or federal government and in such context may be discoverable only as ordered by a court of competent jurisdiction exercising its discretion.(b) Neither the commissioner nor any person who receives documents, materials or other information while acting under the authority of the commissioner may be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (a) of this section except as ordered by a court of competent jurisdiction.(c) In order to assist in the performance of the commissioner's duties, the commissioner may:(1) Share documents, materials, communications or information, including otherwise confidential and privileged documents, materials or information, with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, and with regulatory and law-enforcement officials of other foreign or domestic jurisdictions: Provided, That the recipient agrees to maintain the confidentiality and privileged status of the document, material, communication or other information;(2) Receive documents, materials, communications or information, including otherwise confidential and privileged documents, materials or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries and from regulatory and law-enforcement officials of other foreign or domestic jurisdictions and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and(3) Enter into agreements governing sharing and use of information consistent with this subsection.
The commissioner shall receive an annual salary as provided in section two-a, article seven, chapter six of this code and actual expenses incurred in the performance of official business, which compensation shall be in full for all services. The office of the commissioner shall be maintained in the Capitol or other suitable place in Charleston. The commissioner may employ such persons and incur such expenses as may be necessary in the discharge of his or her duties and shall fix the compensation of such employees, but such compensation shall not exceed the appropriation therefor. The commissioner may reimburse employees for reasonable expenses incurred for job-related training and educational seminars and courses. All compensation for salaries and expenses of the commissioner and his or her employees shall be paid at least twice per month out of the State Treasury by requisition upon the Auditor, properly certified by the commissioner.
(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 automobile liability insurance for personal, private passenger automobiles covered by article six-a of this chapter or 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 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: Provided, That the procedural rules previously promulgated setting forth the criteria for withdrawal plans, which rules were made effective September 25, 2004, shall continue in effect in the same manner as if this section had not been amended during the first extraordinary session of the 2005 Legislature.
(a) Upon the termination of the Workers' Compensation Commission pursuant to chapter twenty-three of this code, the powers and duties heretofore imposed upon the Workers' Compensation Commission as they relate to general administration of the provisions of said chapter are hereby transferred to and imposed upon the Insurance Commissioner.(b) Unless otherwise specified in chapter twenty-three of this code, upon termination of the Workers' Compensation Commission, the duties imposed upon the Workers' Compensation Commission as they relate to the award and payment of disability and death benefits and the review of claims in articles four and five of said chapter will be imposed upon the Employers Mutual Insurance Company established pursuant to article two-c of said chapter, a private carrier offering Workers' Compensation insurance in this state and self-insured employers. Whenever reference is made to the Workers' Compensation Commissioner in those articles, the duty prescribed shall apply to the Employers Mutual Insurance Company, a private carrier or self-insured employer, as applicable.(c) From the effective date of this enactment, the Insurance Commissioner shall regulate all insurers licensed to transact Workers' Compensation insurance in this state and all of the provisions of this chapter shall apply to such insurers, unless otherwise exempted by statute.
(a) The intent of this section is to provide a means of managing workers' compensation coverage for persons directly employed by the State of West Virginia. For the purposes of this section:(1) "Discretionary participant" means the Parkways Authority, offices of the State Auditor, the State Treasurer, the Secretary of State, the Attorney General, the Department of Agriculture, the State Senate and House of Delegates or their related entities, the Supreme Court of Appeals, the State Police and any other spending unit of the state that is required by section twelve, article two, chapter eleven-b of this code to provide a detailed expenditure schedule to the Secretary of Revenue in his or her capacity as Director of the Budget: Provided, That the term "discretionary participant" does not include any executive state entity other than the State Police and the Parkways Authority, any county board of education, any other county entity or its instrumentality or any municipality or its instrumentality.(2) "Executive state entity" means the Governor's Office and its affiliated entities, Bureau of Senior Services, or any state department, division, fund, office, position, system, survey or other entity of state government, however designated, transferred to and incorporated in one of the executive departments created in section two, article one, chapter five-f of this code, except the State Police, and that is required by section twelve, article two, chapter eleven-b of this code to provide a detailed expenditure schedule to the Secretary of Revenue in his or her capacity as Director of the Budget.(b) Notwithstanding any provision of this code to the contrary, the commissioner has sole responsibility for managing the workers' compensation risks of all executive state entities and for supervising and controlling the workers' compensation programs for such entities: Provided, That any discretionary participant may participate in the program upon application to the commissioner under the same terms and conditions as are applicable to executive state entities: Provided further, That a discretionary participant is, in accordance with rules governing the program, permitted to withdraw from continued participation in the program.(c) The commissioner may assess such fees or surcharges on participants in the program necessary to manage the workers' compensation risks of those participants. All premiums, fees and surcharges shall be established in accordance with generally acceptable actuarial standards applicable to workers compensation coverage as to each participant and as to all participants in the aggregate. The commissioner shall establish criteria for assessments of premiums, fees and surcharges designed to provide the most cost efficient coverage for all participants.(d) The provisions of article three, chapter five-a of this code relating to the Purchasing Division of the Department of Administration do not apply to any contract entered into by the commissioner in furtherance of the requirements of this section: Provided, That those contracts shall be awarded on a competitive basis.(e) (1) There is hereby established the "State Entities Workers' Compensation Program Fund." All premiums, surcharges, assessments, deposits or any other moneys or funds deposited or otherwise designated or accruing to the fund as well as all earnings payable to it, shall be deposited in the State Treasury to the credit of the fund. Expenditures from the fund shall be for the purposes set forth in this section, are authorized from collections, and shall not revert to the General Fund. The fund shall be a separate and distinct fund upon the books and records of the Auditor and Treasurer, and disbursements therefrom shall be made upon requisitions signed by the Insurance Commissioner.(2) Any premiums, assessments or deposits or any other moneys or funds received for the purposes of this section shall be invested by the State Treasurer at the request of the commissioner.(3) The Insurance Commissioner may borrow funds as is determined necessary from the Insurance Commission Fund, created in section thirteen-b, article three, chapter thirty-three of this code, for the initial operations of the workers' compensation program for state entities: Provided, That any borrowed funds shall be deposited to the credit of the State Entities Workers' Compensation Program Fund: Provided, however, That these borrowed funds shall be repaid, without interest, and redeposited to the credit of the Insurance Commission Fund as determined by the Insurance Commissioner.(f) The commissioner may promulgate emergency rules and shall propose for legislative approval legislative rules, in accordance with the provisions of article three, chapter twenty-nine-a of this code, as are necessary to provide for implementation and enforcement of the provisions of this section.(g) The commissioner shall submit reports on the status and progress of the program established in this section to the joint committee on government and finance monthly and upon request, together with any other specific information on the program requested by the committee.(h) The commissioner shall consult with the State Board of Risk and Insurance Management to solicit any applicable experience and expertise in establishing and managing a program to provide insurance coverage to state agencies.
(a) Upon termination of the Workers' Compensation Commission, all of the powers and authority previously conferred upon the Workers' Compensation Commission pursuant to article two, chapter twenty-three of this code, relating to employers in default to the Workers' Compensation Fund, are hereby transferred to the Insurance Commissioner and shall be applied by the commissioner to those employers in default to the Old Fund or having liability to the Uninsured Employer Fund or who are in policy default or fail to maintain mandatory workers' compensation coverage, all as defined in article two-c, chapter twenty-three of this code.(b) In any case in which an employer is in default to the Old Fund or has liability to the Uninsured Employer Fund or who is in default on a policy or otherwise fails to maintain mandatory workers' compensation coverage, all as defined in article two-c, chapter twenty-three of this code, the commission may bring an action in the circuit court of Kanawha County to enjoin the employer from continuing to operate the employer's business: Provided, That the commissioner may, in his or her sole discretion, and as an alternative to this action pursuant to this subsection, require the employer to file a bond, in the form prescribed by the commissioner, with satisfactory surety in an amount not less than one hundred fifty percent of the total payments, interest and penalties due.(c) In any action instituted pursuant to subsection (b) of this section, the circuit court shall issue an injunction prohibiting the employer from operating the employer's business if the Insurance Commissioner proves by a preponderance of the evidence, that the employer is in default to the Old Fund or has liability to the uninsured fund or is in policy default or has otherwise failed to maintain mandatory workers' compensation coverage.(d) Notwithstanding any provision of this code to the contrary, the commissioner shall have the authority to waive penalty and interest accrued on moneys due the Old Fund. The enactment of the provisions of this subsection shall be applied retrospectively to January 1, 2006, and may not be construed to require the commissioner to adjust or otherwise modify any agreements reached with regard to the payment of penalty or interest since that date.(e) Notwithstanding any provision of this code to the contrary, the Insurance Commissioner may compromise and settle any claims for moneys due to the Old Fund or the Uninsured Employer Fund. Information regarding settlements is subject to chapter twenty-nine-b of this code. The commissioner shall submit to the President of the Senate, the Speaker of the House of Delegates and the Legislative Auditor an annual report summarizing the settlements into which he or she has entered pursuant to this subsection. The summary shall describe the parties involved, the total amount owed and portions paid, and the terms of the settlement.
Effective July 1, 2022, the assets of the State Office of the National Flood Insurance Program, which Office has been transferred to the Division of Emergency Management pursuant to 15-5-20b of this code, are hereby assigned and transferred to the Division of Emergency Management. The Director of the Division of Emergency Management may decline certain assets from being transferred pursuant to this section if he or she believes the assets are unnecessary for the proper operation of the State Office of the National Flood Insurance Program. 
(a) The Insurance Commissioner shall enforce the applicable provisions of the No Surprises Act (H.R. 133, Public Law 116-260) against health insurers, medical providers, and health care facilities. (b) Whenever the Insurance Commissioner believes, from evidence satisfactory to him or her, that any insurer, medical provider, or health care facility is violating the applicable provisions of the No Surprises Act, the Commissioner may assess a fine, not to exceed $10,000 per violation, after notice and hearing pursuant to 33-2-13 of this code. In addition to the administrative penalty available in this subsection, the Insurance Commissioner may cause a complaint to be filed in the appropriate court of this state seeking to enjoin and restrain the insurer, medical provider, or health care facility from continuing the violation or engaging therein or doing any act in furtherance thereof.(c) The Insurance Commissioner may, at his or her discretion, seek assistance from any other state government agency regarding regulatory enforcement of this section against medical providers or health care facilities. The Insurance Commissioner may also call upon the Attorney General for legal assistance and representation as provided by law. (d) The Insurance Commissioner may propose rules for legislative approval in accordance with 29A-3-1 et seq. of this code to effectuate the provisions of this section. (e) The provisions of this section shall become effective January 1, 2022.
(a) The commissioner shall enforce the provisions of this chapter and section fifteen-a, article two of chapter forty-eight and perform the duties required thereunder; shall affix the commissioner's official seal to all documents and papers required to be filed in other states by domestic insurers and to other papers when an official seal is required; and shall, on or before the tenth day of each month, pay into the state Treasury all fees and moneys which he or she has received during the preceding calendar month.(b) Notwithstanding any provisions of this code to the contrary, the commissioner may acquire such legal services as are deemed necessary, including representation of the commissioner before any court or administrative body. Such counsel may be employed either on a salaried basis or on a reasonable fee basis. In addition, the commissioner may call upon the Attorney General for legal assistance and representation as provided by law.
(a) In addition to the authority granted to the fraud unit created in article forty-one of this chapter and to the workers' compensation fraud and abuse unit previously transferred to the commissioner pursuant to section one-b, article one, chapter twenty-three of this code, the commissioner has the authority to conduct investigations whenever he or she has cause to believe that a violation of any provision of this chapter or of chapter twenty-three of this code has been or is being committed.(b) Employees designated by the commissioner are permitted to operate vehicles owned or leased by the state displaying Class A registration plates when engaged in carrying out the investigative duties assigned to the commissioner by this chapter.
(a) For the purpose of any investigation or proceeding under this chapter, the commissioner or any officer designated by him or her may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production of any books, papers, correspondences, memoranda, agreements or other documents or records which the commissioner considers relevant or material to the inquiry. The commissioner's authority to subpoena witnesses and documents outside the state shall exist to the maximum extent permissible under federal Constitutional law.(b) Subpoenas may be issued to any person and may require that person, among other things, to:(1) Testify under oath;(2) Answer written interrogatories under oath;(3) Produce documents and tangible things; and(4) Permit inspection and copying of documents.(c) Content of subpoena. A subpoena shall:(1) Describe generally the nature of the investigation;(2) If the subpoena requires testimony under oath, specify the date, time and place for the taking of testimony;(3) If the subpoena requires answers to written interrogatories, contain a copy of the written interrogatories;(4) If the subpoena requires the production of tangible things or documents:(A) Describe the things and documents to be produced with reasonable specificity; and(B) Specify a date, time, and place at which the things and documents are to be produced;(5) Notify the person to whom the subpoena is directed of the obligation to supplement responses;(6) Advise the person to whom the subpoena is directed that the person may be represented by counsel; and(7) Identify a member of the office of the Insurance Commissioner who may be contacted in reference to the subpoena.(d) For subpoenas to corporations and other entities, the following apply:(1) A subpoena directed to a corporation, partnership or other business entity that requires testimony under oath shall describe with reasonable particularity the subject matter of the testimony;(2) An entity that receives a subpoena to answer written interrogatories or to testify under oath shall designate one or more of its officers, agents, employees or other authorized persons familiar with the subject matter specified in the subpoena to respond to the subpoena on its behalf;(3) The persons designated by an entity to respond to a subpoena on its behalf shall answer the interrogatories or testify as to all matters known or reasonably available to the entity; and(4) A subpoena directed to an entity that requires testimony under oath or answers to written interrogatories shall advise the entity of its obligations under this section.(e) Effect of other proceedings. The institution or pendency of administrative or judicial proceedings against a person by the commissioner does not relieve the person of his or her obligation to respond to a subpoena issued under this section.(f) Subpoenas for interrogatories and answers and requests for production of documents or tangible things and answers propounded and obtained under this section pursuant to an investigation are exempted from disclosure under the provisions of article one, chapter twenty-nine-b of this code, and are not open to public inspection. The commissioner may not disclose facts or information obtained from the investigation except as the official duty of the commissioner requires.(g) Nothing in this section prohibits the commissioner from providing information or receiving information from any local, state, federal or international law-enforcement authorities, including any prosecuting authority; from complying with subpoenas or other lawful process in criminal proceedings or other action by the state; or from taking action as may otherwise be provided in this article.
No person shall be excused from attending and testifying in obedience to a subpoena issued hereunder on the ground of failure of tender or payment of a witness fee or mileage fee unless the witness makes demand for such payment as a condition precedent to the giving of testimony or the production of documents required by the subpoena, and unless such payment is not thereupon made. No insurer, agent, broker, solicitor or other person subject to the provisions of this chapter whose conduct, condition or practices are being investigated, and no officer, director or employee of any such person, shall be entitled to witness or mileage fees. In the event that witness or mileage fees are demanded and paid, the amount of same shall be determined as $10 for each day of attendance and 10 per mile for each mile necessarily traveled to the place of attendance, and the same for returning. The sum to which a witness is entitled shall be paid out of the treasury in any case in which the attendance is for the commissioner. In all other cases, it shall be paid by the person at whose instance the summons is issued.
The subpoena shall be served in the manner as if issued from a circuit court unless otherwise provided. In case a person refuses to obey any subpoena issued hereunder or to testify with respect to any matter concerning which he may be lawfully interrogated, the commissioner or his representative may invoke the aid of any circuit court in order that the testimony or evidence be produced. Upon proper showing, such court shall issue a subpoena or order requiring such person to appear before the commissioner or his representative and produce all evidence and give all testimony touching the matter in question. A person failing to obey such order may be punished by such court as for contempt.
If any person shall ask to be excused from attending and testifying or from producing any books, papers, records, correspondence or other documents at any hearing conducted pursuant to this chapter or chapter twenty-three of this code or in any cause or proceeding instituted by the commissioner pursuant to this chapter or chapter twenty-three of this code on the ground that the testimony or evidence required of him may tend to incriminate him or subject him to a criminal penalty and shall notwithstanding be directed by the commissioner to give such testimony or produce such evidence, he must nonetheless comply with such direction, but he shall not thereafter be prosecuted or subjected to any criminal penalty for or on account of any matter or thing concerning which he may testify or produce evidence, pursuant thereto, and no testimony so given or evidence produced shall be received against him upon any criminal action, investigation or proceeding: Provided, That no such individual so testifying shall be exempt from prosecution or punishment for any perjury or false swearing, committed by him while so testifying and the testimony or evidence so given or produced is admissible against him upon any criminal action, investigation or proceeding concerning such perjury or false swearing, nor is he exempt from the refusal, revocation or suspension of any license, permission or authority conferred, or to be conferred, pursuant to this chapter. Any such individual may execute, acknowledge and file in the office of the commissioner a statement expressly waiving such immunity or privilege in respect to any transaction, matter or thing specified in such statement and thereupon the testimony of such person or such evidence in relation to such transaction, matter or thing may be received or produced before any judge or justice, court, tribunal, grand jury or otherwise, and if so received or produced such individual is not entitled to any immunity or privilege on account of any testimony he may so give or evidence so produced.
Upon request of the commissioner any person in West Virginia who is the insured under any policy issued by an insurer upon a subject of insurance resident, located or to be performed in West Virginia, shall produce for examination all policies and other documents evidencing and relating to such insurance, and shall disclose the amount of the gross premiums paid or agreed to be paid for the insurance, all persons through whom such insurance was procured or who participated in the transaction in any manner, and such other information relative to the placing of such insurance as may reasonably be required.
(a) The purpose of this section is to provide an effective and efficient system for examining the activities, operations, financial condition and affairs of all persons transacting the business of insurance in this state and all persons otherwise subject to the jurisdiction of the commissioner. The provisions of this section are intended to enable the commissioner to adopt a flexible system of examinations which directs resources as may be considered appropriate and necessary for the administration of the insurance and insurance-related laws of this state.(b) For purposes of this section, the following definitions shall apply:(1) "Commissioner" means the Commissioner of Insurance of this state;(2) "Company" or "insurance company" means any person engaging in or proposing or attempting to engage in any transaction or kind of insurance or surety business and any person or group of persons who may otherwise be subject to the administrative, regulatory or taxing authority of the commissioner, including, but not limited to, any domestic or foreign stock company, mutual company, mutual protective association, farmers mutual fire companies, fraternal benefit society, reciprocal or interinsurance exchange, nonprofit medical care corporation, nonprofit health care corporation, nonprofit hospital service association, nonprofit dental care corporation, health maintenance organization, captive insurance company, risk retention group or other insurer regardless of the type of coverage written, benefits provided or guarantees made by each;(3) "Department" means the Department of Insurance of this state; and(4) "Examiners" means the Commissioner of Insurance or any individual or firm having been authorized by the commissioner to conduct an examination pursuant to this section, including, but not limited to, the commissioner's deputies, other employees, appointed examiners or other appointed individuals or firms who are not employees of the Department of Insurance.(c) The commissioner or his or her examiners may conduct an examination under this section of any company as often as the commissioner in his or her discretion considers appropriate. The commissioner or his or her examiners shall at least once every five years visit each domestic insurer and thoroughly examine its financial condition and methods of doing business and ascertain whether it has complied with all the laws and regulations of this state. The commissioner may also examine the affairs of any insurer applying for a license to transact any insurance business in this state.(d) The commissioner or his or her examiners shall, at a minimum, conduct an examination of every foreign or alien insurer licensed in this state not less frequently than once every five years. The examination of an alien insurer may be limited to its United States business: Provided, That in lieu of an examination under this section of any foreign or alien insurer licensed in this state, the commissioner may accept an examination report on the company as prepared by the insurance department for the company's state of domicile or port-of-entry state until January 1, 1994. Thereafter, the reports may only be accepted if:(1) The insurance department was at the time of the examination accredited under the National Association of Insurance Commissioners' Financial Regulation Standards and Accreditation Program; or(2) The examination is performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.(e) In scheduling and determining the nature, scope and frequency of examinations conducted pursuant to this section, the commissioner may consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants and other criteria as set forth in the examiners' handbook adopted by the National Association of Insurance Commissioners and in effect when the commissioner exercises discretion under this section.(f) For purposes of completing an examination of any company under this section, the commissioner may examine or investigate any person, or the business of any person, insofar as the examination or investigation is, in the sole discretion of the commissioner, necessary or material to the examination of the company.(g) The commissioner may also cause to be examined, at the times as he or she considers necessary, the books, records, papers, documents, correspondence and methods of doing business of any agent, broker, excess lines broker or solicitor licensed by this state. For these purposes, the commissioner or his or her examiners shall have free access to all books, records, papers, documents and correspondence of all the agents, brokers, excess lines brokers and solicitors wherever the books, records, papers, documents and records are situate. The commissioner may revoke the license of any agent, broker, excess lines broker or solicitor who refuses to submit to the examination.(h) In addition to conducting an examination, the commissioner or his or her examiners may, as the commissioner considers necessary, analyze or review any phase of the operations or methods of doing business of an insurer, agent, broker, excess lines broker, solicitor or other individual or corporation transacting or attempting to transact an insurance business in the State of West Virginia. The commissioner may use the full resources provided by this section in carrying out these responsibilities, including any personnel and equipment provided by this section as the commissioner considers necessary.(i) Examinations made pursuant to this section shall be conducted in the following manner:(1) Upon determining that an examination should be conducted, the commissioner or his or her designee shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. The appointment of any examiners pursuant to this section by the commissioner shall not be subject to the requirements of article three, chapter five-a of this code, except that the contracts and agreements shall be approved as to form and conformity with applicable law by the Attorney General. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the examiners' handbook adopted by the National Association of Insurance Commissioners. The commissioner may also employ any other guidelines or procedures as the commissioner may consider appropriate;(2) Every company or person from whom information is sought, its officers, directors and agents shall provide to the examiners appointed under subdivision (1) of this subsection timely, convenient and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents and any or all computer or other recordings relating to the property, assets, business and affairs of the company being examined. The officers, directors, employees and agents of the company or person shall facilitate the examination and aid in the examination so far as it is in their power to do so;(3) The refusal of any company, by its officers, directors, employees or agents, to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension, revocation, refusal or nonrenewal of any license or authority held by the company to engage in an insurance or other business subject to the commissioner's jurisdiction. Any proceedings for suspension, revocation, refusal or nonrenewal of any license or authority shall be conducted pursuant to section eleven of this article;(4) The commissioner or his or her examiners shall have the power to issue subpoenas, to administer oaths and to examine under oath any person as to any matter pertinent to the examination, analysis or review. The subpoenas shall be enforced pursuant to the provisions of section six of this article;(5) When making an examination, analysis or review under this section, the commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants, professionals or specialists with training or experience in reinsurance, investments or information systems or other professionals and specialists as examiners, the cost of which shall be borne by the company which is the subject of the examination, analysis or review or, in the commissioner's discretion, paid from the Commissioner's Examination Revolving Fund. The commissioner may recover costs paid from the Commissioner's Examination Revolving Fund pursuant to this subdivision from the company upon which the examination, analysis or review is conducted unless the subject of the examination, analysis or review is an individual described in subdivision (2), subsection (q) of this section;(6) Nothing contained in this section may be construed to limit the commissioner's authority to terminate or suspend any examination, analysis or review in order to pursue other legal or regulatory action pursuant to the insurance laws of this state. The commissioner or his or her examiners may at any time testify and offer other proper evidence as to information secured during the course of an examination, analysis or review whether or not a written report of the examination has at that time either been made, served or filed in the commissioner's office;(7) Nothing contained in this section may be construed to limit the commissioner's authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company workpapers or other documents or any other information discovered or developed during the course of any examination, analysis or review in the furtherance of any legal or regulatory action which the commissioner may, in his or her sole discretion, consider appropriate. An examination report, when filed, shall be admissible in evidence in any action or proceeding brought by the commissioner against an insurance company, its officers or agents and shall be prima facie evidence of the facts stated therein.(j) Examination reports prepared pursuant to the provisions of this section shall comply with the following requirements:(1) All examination reports shall be comprised of only facts appearing upon the books, records or other documents of the company, its agents or other persons examined or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs and any conclusions and recommendations the examiners find reasonably warranted from the facts;(2) No later than sixty days following completion of the examination the examiner in charge shall file with the commissioner a verified written report of examination under oath. Upon receipt of the verified report, the commissioner shall transmit the report to the company examined, together with a notice which shall afford the company examined a reasonable opportunity of not more than thirty days to make a written submission or rebuttal with respect to any matters contained in the examination report;(3) Within thirty days of the end of the period allowed for the receipt of written submissions or rebuttals the commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner's workpapers and enter an order:(A) Adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, rule or prior order of the commissioner, the commissioner may order the company to take any action the commissioner considers necessary and appropriate to cure the violation; or(B) Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation or information and refiling pursuant to subdivision (2) of this subsection; or(C) Calling for an investigatory hearing with no less than twenty days' notice to the company for purposes of obtaining additional documentation, data, information and testimony;(4) All orders entered pursuant to this subsection shall be accompanied by findings and conclusions resulting from the commissioner's consideration and review of the examination report, relevant examiner workpapers and any written submissions or rebuttals. Any order issued pursuant to paragraph (A), subdivision (3) of this subsection shall be considered a final administrative decision and may be appealed pursuant to section fourteen of this article and shall be served upon the company by certified mail, together with a copy of the adopted examination report. Within thirty days of the issuance of the adopted report the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders.(k) Hearings conducted pursuant to this section shall be subject to the following requirements:(1) Any hearing conducted pursuant to this section by the commissioner or the commissioner's authorized representative shall be conducted as a nonadversarial, confidential investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the commissioner's review of relevant workpapers or by the written submission or rebuttal of the company. Within twenty days of the conclusion of any hearing, the commissioner shall enter an order pursuant to paragraph (A), subdivision (3), subsection (j) of this section;(2) The commissioner may not appoint an examiner as an authorized representative to conduct the hearing. The hearing shall proceed expeditiously with discovery by the company limited to the examiner's workpapers which tend to substantiate any assertions set forth in any written submission or rebuttal. The commissioner or the commissioner's representative may issue subpoenas for the attendance of any witnesses or the production of any documents considered relevant to the investigation whether under the control of the commissioner, the company or other persons. The documents produced shall be included in the record and testimony taken by the commissioner or the commissioner's representative shall be under oath and preserved for the record. Nothing contained in this section shall require the commissioner to disclose any information or records which would indicate or show the existence or content of any investigation or activity of a criminal justice agency;(3) The hearing shall proceed with the commissioner or the commissioner's representative posing questions to the persons subpoenaed. Thereafter, the company and the department may present testimony relevant to the investigation. Cross-examination may be conducted only by the commissioner or the commissioner's representative. The company and the commissioner shall be permitted to make closing statements and may be represented by counsel of their choice.(l) Adoption of the examination report shall be subject to the following requirements:(1) Upon the adoption of the examination report under paragraph (A), subdivision (3), subsection (j) of this section, the commissioner may continue to hold the content of the examination report as private and confidential information for a period of ninety days except to the extent provided in subdivision (6), subsection (i) of this section. Thereafter, the commissioner may open the report for public inspection so long as no court of competent jurisdiction has stayed its publication;(2) Nothing contained in this section may prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results or any matter relating thereto or the results of any analysis or review to the insurance department of this or any other state or country or to law-enforcement officials of this or any other state or agency of the federal government at any time, so long as the agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this section;(3) In the event the commissioner determines that regulatory action is appropriate as a result of any examination, analysis or review, he or she may initiate any proceedings or actions as provided by law;(4) All working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination, analysis or review made under this section must be given confidential treatment and are not subject to subpoena and may not be made public by the commissioner or any other person, except to the extent provided in subdivision (5), subsection (i) of this section. Access may also be granted in accordance with section nineteen of this article. The parties must agree in writing prior to receiving the information to provide to it the same confidential treatment as required by this section unless the prior written consent of the company to which it pertains has been obtained.(m) The commissioner may require any examiner to furnish a bond in such amount as commissioner may determine to be appropriate and the bond shall be approved, filed and premium paid, with suitable proof submitted to the commissioner, prior to commencement of employment by the commissioner. No examiner may be appointed by the commissioner if the examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under this section. This section shall not be construed to automatically preclude an examiner from being:(1) A policyholder or claimant under an insurance policy;(2) A grantor of a mortgage or similar instrument on the examiner's residence to a regulated entity if done under customary terms and in the ordinary course of business;(3) An investment owner in shares of regulated diversified investment companies; or(4) A settlor or beneficiary of a "blind trust" into which any otherwise impermissible holdings have been placed;(5) Notwithstanding the requirements of this subsection, the commissioner may retain, from time to time, on an individual basis qualified actuaries, certified public accountants or other similar individuals who are independently practicing their professions even though these persons may, from time to time, be similarly employed or retained by persons subject to examination under this section.(n) Personnel conducting examinations, analyses or reviews of either a domestic, foreign or alien insurer shall be compensated for each day worked at a rate set by the commissioner. The personnel shall also be reimbursed for their travel and living expenses at the rate set by the commissioner. Other individuals who are not employees of the Department of Insurance shall all be compensated for their work, travel and living expenses at rates approved by the commissioner or as otherwise provided by law. As used in this section, the costs of an examination, analysis or review means:(1) The entire compensation for each day worked by all personnel, including those who are not employees of the Department of Insurance, the conduct of the examination, analysis or review calculated as hereinbefore provided;(2) Travel and living expenses of all personnel, including those who are not employees of the Department of Insurance, directly engaged in the conduct of the examination, analysis or review calculated at the rates as hereinbefore provided for;(3) All other incidental expenses incurred by or on behalf of the personnel in the conduct of any authorized examination, analysis or review.(o) (1) All property and casualty insurers subject to the provisions of this section shall annually pay to the commissioner on or before July 1, 1991, and every July 1 thereafter an examination assessment fee of up to $5,000. $450 of this fee shall be paid to the Treasurer of the state to the credit of a special revolving fund to be known as the Commissioner's Examination Revolving Fund which is hereby established; up to $4,200 shall be paid to the Treasurer of the state to the credit of the Unfair Claims Settlement Practice Trust Fund established in section four-b, article eleven of this chapter and $350 shall be paid to the Treasurer of the state. If the trust fund has moneys in excess of $1,000,000, the examination assessment fee shall be $800 and the $5,000 fee shall only be reinstated at whatever amount the commissioner deems necessary to maintain the fund, if the fund value goes below $1,000,000. The commissioner may at his or her discretion, upon notice to the insurers subject to this subsection, increase this examination assessment fee or levy an additional examination assessment fee of $250. In no event may the total examination assessment fee, including any additional examination assessment fee levied, exceed $5,250 per insurer in any calendar year.(2) All insurers other than property and casualty insurers subject to the provisions of this section shall annually pay to the commissioner on or before July 1, 1991, and every July 1 thereafter an examination assessment fee of$800. $450 of this fee shall be paid to the Treasurer of the state to the credit the Commissioner's Examination Revolving Fund and $350 shall be paid to the Treasurer of the state. The commissioner may at his or her discretion, upon notice to the insurers subject to this subsection, increase this examination assessment fee or levy an additional examination assessment fee of $250. In no event may the total examination assessment fee, including any additional examination assessment fee levied, exceed $1,500 per insurer in any calendar year.(p) The moneys collected by the commissioner from an increase or additional examination assessment fee shall be paid to the Treasurer of the state to be credited to the commissioner's Examination Revolving Fund. Any funds expended or obligated by the commissioner from the Commissioner's Examination Revolving Fund may be expended or obligated solely for defrayment of the costs of examinations, analyses or reviews of the financial affairs and business practices of insurance companies, agents, brokers, excess lines brokers, solicitors or other individuals or corporations transacting or attempting to transact an insurance business in this state made by the commissioner pursuant to this section or for the purchase of equipment and supplies, travel, education and training for the commissioner's deputies, other employees and appointed examiners necessary for the commissioner to fulfill the statutory obligations created by this section.(q) The commissioner may require other individuals who are not employees of the Department of Insurance who have been appointed by the commissioner to conduct or participate in the examination, analysis or review of insurers, agents, brokers, excess lines brokers, solicitors or other individuals or corporations transacting or attempting to transact an insurance business in this state to:(1) Bill and receive payments directly from the insurance company being examined, analyzed or reviewed for their work, travel and living expenses as previously provided in this section; or(2) If an individual agent, broker or solicitor is being examined, analyzed or reviewed, bill and receive payments directly from the Commissioner's Examination Revolving Fund for their work, travel and living expenses as previously provided in this section. The commissioner may recover costs paid from the Commissioner's Examination Revolving Fund pursuant to this subdivision from the person upon whom the examination, analysis or review is conducted.(r) The commissioner and his or her examiners shall be entitled to immunity to the following extent:(1) No cause of action shall arise nor shall any liability be imposed against the commissioner or his or her examiners for any statements made or conduct performed in good faith while carrying out the provisions of this section;(2) No cause of action shall arise, nor shall any liability be imposed, against any person for the act of communicating or delivering information or data to the commissioner or his or her examiners pursuant to an examination, analysis or review made under this section if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive;(3) The commissioner or any examiner shall be entitled to an award of attorney's fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out the provisions of this section and the party bringing the action was not substantially justified in doing so. For purposes of this section, a proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time that it was initiated;(4) This subsection does not abrogate or modify in any way any Constitutional immunity or common law or statutory privilege or immunity heretofore enjoyed by any person identified in subdivision (1) of this subsection.
For the purpose of completely novating the physician liability currently borne by the state under the West Virginia health care provider professional liability insurance availability act found in article twelve-b, chapter twenty-nine of this code, and to help capitalize the physicians' mutual insurance company created pursuant to article twenty-f of this chapter, and for all the reasons set forth in section two of said article, the Insurance Commissioner shall impose a special one-time assessment of $2,500 on all insurers licensed under this chapter for the privilege of writing insurance in the State of West Virginia, except risk retention groups defined in subsection (f), section four, article thirty-two of this chapter and risk purchasing groups defined in subsection (e), section seventeen of said article. The assessment is due and payable on July 1, 2003. The commissioner shall transfer funds collected pursuant to this section to the physicians' mutual insurance company.
The purpose of this article is to promote the public welfare by regulating insurance rates to the end that they shall not be excessive, inadequate or unfairly discriminatory, and to authorize and regulate cooperative action among insurers in rate making and in other matters within the scope of this article. Nothing in this article is intended (1) to prohibit or discourage reasonable competition, or (2) to prohibit, or encourage, except to the extent necessary to accomplish the aforementioned purpose, uniformity in insurance rates, rating systems, rating plans or practices. This article shall be liberally interpreted to carry into effect the provisions of this section.
(a) Every group, association or other organization of insurers, whether located within or outside this state, which assists insurers which make their own filings or rating organizations in rate making, by the collection and furnishing of loss or expense statistics, or by the submission of recommendations, but which does not make filings under this article, shall be known as an advisory organization.(b) Every advisory organization shall file with the commissioner (1) a copy of its Constitution, its articles of agreement or association or its certificate of incorporation and its bylaws, rules and regulations governing its activities, (2) a list of its members, (3) the name and address of a resident of this state as its attorney-in-fact upon whom notices or orders of the commissioner or process may be served, and (4) an agreement that the commissioner may examine such advisory organization in accordance with the provisions of section twelve of this article.(c) If after notice and hearing the commissioner finds that the furnishing of such information or assistance involves any act or practice which is unfair or unreasonable or otherwise inconsistent with the provisions of this article, he may issue a written order specifying in what respects such act or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this article, and requiring the discontinuance of such act or practice.(d) No insurer which makes its own filings nor any rating organization shall support its filings by statistics or adopt rate-making recommendations, furnished to it by an advisory organization which has not complied with this section or with an order of the commissioner involving such statistics or recommendations issued under paragraph (c) of this section. If the commissioner finds such insurer or rating organization to be in violation of this paragraph he may issue an order requiring the discontinuance of such violation.
(a) Every group, association or other organization of insurers which engages in joint underwriting or joint reinsurance, shall be subject to regulation with respect thereto as herein provided, subject, however, with respect to joint underwriting, to all other provisions of this article and, with respect to joint reinsurance, to section twelve of this article.(b) If after notice and hearing the commissioner finds that any activity or practice of any such group, association or other organization is unfair or unreasonable or otherwise inconsistent with the provisions of this article, he may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this article, and requiring the discontinuance of such activity or practice.
(a) The commissioner shall, at least once in five years, make or cause to be made an examination of each rating organization licensed under the provisions of section six of this article and he or she may, as often as he or she may deem it expedient, make or cause to be made an examination of each advisory organization referred to in section ten of this article and of each group, association or other organization referred to in section eleven of this article. The reasonable costs of any such examination shall be paid by the rating organization, advisory organization, or group, association or other organization examined upon presentation to it of a detailed account of such costs. The officers, managers, agents and employees of such rating organization, advisory organization, or group, association or other organization may be examined at any time under oath and shall exhibit all books, records, accounts, documents or agreements governing its method of operation. The commissioner shall furnish two copies of the examination report to the organization, group or association examined not less than thirty days prior to filing same in his or her office. If such organization, group or association so requests in writing, within such thirty-day period, the commissioner shall consider the objections, if any, to such report as proposed and shall not file such report until such modifications, if any, have been made therein as the commissioner deems proper. The report when so filed shall be admissible in any action or proceeding brought by the commissioner against the organization, group or association examined, or its officers or agents, and shall be prima facie evidence of the facts stated therein. The commissioner may withhold the report of any such examination for such time as he or she may deem proper.(b) In lieu of any such examination the commissioner may accept the report of an examination made by the insurance supervisory official of another state, pursuant to the laws of such state.
 (a) Recording the reporting of loss and expense experience. -- The commissioner shall promulgate reasonable rules and statistical plans, reasonably adapted to each of the rating systems on file with him which may be modified from time to time and which shall be used thereafter by each insurer in the recording and reporting of its loss and countrywide expense experience, in order that the experience of all insurers may be made available at least annually in such form and detail as may be necessary to aid him in determining whether rating systems comply with the standards set forth in section three of this article. Such rules and plans may also provide for the recording and reporting of loss and expense experience items which are specially applicable to this state and are not susceptible of determination by a prorating of countrywide experience. In promulgating such rules and plans, the commissioner shall give due consideration to the rating systems on file with him and in order that such rules and plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for such rating systems in other states. No insurer shall be required to record or report its loss experience on a classification basis that is inconsistent with the rating system filed by it. The commissioner may designate one or more rating organizations or other agencies to assist him in gathering such experience and making compilations thereof, and such compilations shall be made available, subject to reasonable rules promulgated by the commissioner, to insurers and rating organizations. (b) Interchange of rating plan data. -- Reasonable rules and plans may be promulgated by the commissioner for the interchange of data necessary for the application of rating plans. (c) Consultation with other states. -- In order to further uniform administration of rate regulatory laws, the commissioner and every insurer and rating organization may exchange information and experience data with insurance supervisory officials, insurers and rating organizations in other states and may consult with them with respect to rate making and the application of rating systems.
No person or organization shall wilfully withhold information from, or knowingly give false or misleading information to, the commissioner, any statistical agency designated by the commissioner, any rating organization, or any insurer, which will affect the rates or premiums chargeable under this article.
With respect to casualty insurance to which this article applies, agreements may be made among insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure such insurance through ordinary methods and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance, such agreements and rate modifications to be subject to the approval of the commissioner.
(a) The commissioner may suspend, revoke or refuse to renew the license of any rating organization which violates any provision of this article or chapter or which fails to comply with an order of the commissioner issued pursuant to this chapter, within the time limited by such order, or any extension thereof which the commissioner may grant. The commissioner may determine when a suspension of license shall become effective and it shall remain in effect for the period fixed by him unless he modifies or rescinds such suspension, or until the order upon which such suspension is based is modified, rescinded or reversed.(b) No license shall be suspended or revoked except upon a written order of the commissioner made after notice and hearing. The commissioner shall not suspend or revoke the license of any rating organization for failure to comply with an order of the commissioner until the time prescribed for an appeal therefrom has expired or, if an appeal has been taken, until such order has been affirmed.
For the purpose of determining the proper premium to be charged for coverage issued upon a dwelling situated in the state, commercial activities conducted by the insured shall not be taken into consideration by the insurer unless conducted within the dwelling.
(a) Any rates, rating schedules or rating manuals for the liability, personal injury protection and collision coverages of a motor vehicle insurance policy submitted to or filed with the Insurance Commissioner shall provide for an appropriate reduction in premium charges as to such coverages when the principal operator and spouse on the covered vehicle is an insured who is fifty-five years of age or older and who has successfully completed a motor vehicle accident prevention course approved by the Division of Motor Vehicles. Such reductions of premium rates shall be made in compliance with the provisions of subsections (a) and (b), section three of this article. Any discount used by an insurer shall be presumed appropriate unless credible data demonstrates otherwise.(b) The premium reduction required by this section shall be effective for an insured and spouse for a three-year period after successful completion of the approved course, except that the insurer may require, as a condition of maintaining the discount, that the insured and spouse:(1) Not be involved in an accident for which the insured or spouse is at fault;(2) Not be convicted, plead guilty or nolo contendere to a moving traffic violation, or to a traffic related alcohol or narcotics offense; and(3) Have maintained a driving record free of violations and liability for accidents for a three-year period prior to course completion.(c) Upon successfully completing the approved course, each person shall be issued a certificate by the organization offering the course which shall be used to qualify for the premium discount required by this section.(d) This section shall not apply in the event the approved course is taken as punishment specified by a court or other governmental entity resulting from a moving traffic violation.(e) An insured shall only be entitled to a discount equal to the greater of the premium reduction required by this section or any discretionary discount offered by insurers to persons fifty-five years of age or older who have not completed the approved motor vehicle accident course and specifically shall not be entitled to more than one discount.(f) Each participant shall take an approved course every three years to continue to be eligible for the reduction in premiums.
Annually, during the first quarter of each year, the commissioner shall publish a list of the current premium rates for minimum automobile liability insurance as required under the provisions of section two, article four, chapter seventeen-d of this code. The list shall contain the names of all insurers that are licensed by the commissioner to sell such insurance in this state and shall be presented in such a manner so as to demonstrate to the public an accurate comparison of the rates charged by each company for the same insurance coverage.This list shall be made available to the public through the Tax Division of the sheriff's department and public libraries in each of the fifty-five counties.
(a) This article applies to fire, marine, casualty and surety insurance on risks or operations in this state.(b) This article does not apply:(1) To reinsurance, other than joint reinsurance to the extent stated in section eleven of this article;(2) To life or accident and sickness insurance;(3) To insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity or other risks commonly insured under marine, as distinguished from inland marine, insurance policies;(4) To insurance against loss of or damage to aircraft, including their accessories and equipment, or against liability, other than workers' compensation and employer's liability, arising out of the ownership, maintenance or use of aircraft;(5) To malpractice insurance insofar as the provisions of this article directly conflict and thereby are supplanted by article twenty-b of this chapter.(c) If any kind of insurance, subdivision or combination thereof, or type of coverage, is subject to both the provisions of this article expressly applicable to casualty and surety insurance and to those expressly applicable to fire and marine insurance, the commissioner may apply to filings made for such kind of insurance the provisions of this article which are in his or her judgment most suitable.
The commissioner may as he deems necessary after notice and hearing promulgate rules and regulations in accordance with chapter twenty-nine-a of this code to define the commissioner's authority to consider the operating results of an insurer's affiliates and subsidiaries in the rate making and solvency determination of that insurer.
All rates shall be made in accordance with the following provisions:(a) Due consideration shall be given to past and prospective loss experience within and outside this state, to catastrophe hazards, if any, to a reasonable margin for underwriting profit and contingencies, to dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers, to past and prospective expenses both countrywide and those specially applicable to this state and to all other relevant factors within and outside this state.(b) Rates may not be excessive, inadequate or unfairly discriminatory.(c) Rates for casualty and surety insurance to which this article applies shall also be subject to the following provisions:(1) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.(2) Risks shall be grouped by classifications and by territorial areas for the establishment of rates and minimum premiums. Classification of rates shall be modified to produce rates for individual risks in a territorial area in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses: Provided, That such standards shall include the establishment of at least seven territorial rate areas within the state: Provided, however, That such territorial rate established by any insurer or group of insurers may differ from those of other insurers or group of insurers.(3) Due consideration shall be given to such factors as expense, management, individual experience, underwriting judgment, degree or nature of hazard or any other reasonable considerations, provided such factors apply to all risks under the same or substantially the same circumstances or conditions.(d) Rates for fire and marine insurance to which this article applies shall also be subject to the following provisions:(1) Manual, minimum, class rates, rating schedules or rating plans shall be made and adopted, except in the case of specific inland marine rates on risks specially rated.(2) Due consideration shall be given to the conflagration hazard and in the case of fire insurance rates, consideration shall be given to the experience of the fire insurance business during a period of not less than the most recent five-year period for which such experience is available.(e) Rates for title insurance to which this article applies shall also be subject to the following provisions:(1) Title insurance rates shall be reasonable and adequate for the class of risks to which they apply. Rates may not be unfairly discriminatory between risks involving essentially the same hazards and expense elements. The rates may be fixed in an amount sufficient to furnish a reasonable margin for profit after provisions to account for: (i) Probable losses as indicated by experience within and without this state; (ii) exposure to loss under policies; (iii) allocations to reserves; (iv) costs participating insurance; (v) operating costs; and (vi) other items of expense fairly attributable to the operation of a title insurance business.(2) (A) Policies may be grouped into classes for the establishment of rates. A title insurance policy that is unusually hazardous to the title insurance company because of an alleged defect or irregularity in the title insured or because of uncertainty regarding the proper interpretation or application of the law involved may be classified separately according to the facts of each case.(B) Title insurance companies shall file separate rate schedules for commercial and noncommercial risks. The Insurance Commissioner shall promulgate rules regarding the requirements of this subsection which shall give due consideration to the nature of commercial transactions and the need for greater protections for consumers in noncommercial transactions.(3) Title insurance rates may not include charges for abstracting, record searching, certificates regarding the record title, escrow services, closing services and other related services that may be offered or furnished or the cost and expenses of examinations of titles.(f) Except to the extent necessary to meet the provisions of subdivisions (b) and (c) of this section, uniformity among insurers in any matters within the scope of this section is neither required nor prohibited.(g) Rates made in accordance with this section may be used subject to the provisions of this article.
(a) (1) Every insurer shall file with the commissioner every manual of classifications, territorial rate areas established pursuant to 33-20-3(c)(2) of this code, rules, and rates, every rating plan, and every modification of any of the foregoing which it proposes to use for casualty insurance to which this article applies.(2) Every insurer shall file with the commissioner, except as to inland marine risks which, by general custom of the business, are not written according to manual rates or rating plans, every manual, minimum, class rate, rating schedule, or rating plan and every other rating rule and every modification of any of the foregoing which it proposes to use for fire and marine insurance to which this article applies. Specific inland marine rates on risks specially rated, made by a rating organization, shall be filed with the commissioner.(3) Subject to 33-20-4(a)(4) and 33-20-4(a)(5) of this code and the requirements for ratemaking in 33-20-3 of this code, the following commercial lines insurance coverages are exempt from rate-filing requirements under this article with respect to every manual, minimum, class rate, rating schedule, or rating plans, and every other rating rule and modification of any of the foregoing, whether the insurance coverage is endorsed to, or otherwise made part of, another kind of insurance policy or sold as a stand-alone policy:(A) Surety and fidelity;(B) Commercial inland marine;(C) Boiler and machinery;(D) Environmental impairment or pollution liability;(E) Kidnap and ransom;(F) Political risk or expropriation;(G) Excess and umbrella liability;(H) Directors and officers liability; (I) Fiduciary liability;(J) Employment practices liability;(K) Errors and omission other than medical malpractice;(L) Professional liability other than medical malpractice;(M) Media liability;(N) Commercial lines travel risk, including accidental death and dismemberment;(O) Product liability, product recall, and completed operations;(P) Cybersecurity, including first and third-party commercial lines coverage for losses arising out of or relating to data privacy breach, network security, computer viruses, and similar exposures;(Q) Highly protected commercial property;(R) All commercial lines insurance coverages not excluded under 33-20-4(a)(4) of this code when purchased by a commercial policyholder with aggregate annual commercial insurance premiums of $25,000 or more excluding premiums for the types of insurance excluded under 33-20-4(a)(4) of this code; and(S) Any other commercial lines insurance coverage or risk that the commissioner may, by order, exempt from rate filing and approval requirements in order to promote enhanced competition or to more effectively use the resources of the department that might otherwise be used to review commercial lines filings or because the commissioner does not consider the filing and approval requirements to be necessary or desirable for the protection of the public.(4) The exemptions from rate filing requirements in 33-20-4(a)(3) of this code are not applicable to the following kinds of commercial insurance:(A) Workers compensation; (B) Medical malpractice liability; (C) Nonfleet commercial automobile liability policies covering four or fewer vehicles; (D) Any coverage issued by an assigned risk or residual market plan pursuant to 33-20-15 of this code, 33-20A-1 et seq. of this code, or the Mine Subsidence Insurance Fund created pursuant to 33-30-1 et seq. of this code.(5) The commissioner may temporarily reinstate, for a period of no longer than one year, the requirement for rate filings for a specific insurance coverage set forth in 33-20-4(a)(3) of this code if, after a hearing, the commissioner makes a finding of fact that a reasonable degree of competition does not exist for that specific type of insurance coverage. The finding of fact by the commissioner must specify the relevant tests used to determine whether a lack of a reasonable degree of competition exists and the results thereof. In the absence of such findings of fact by the commissioner, a competitive market is presumed to exist.(b) Every filing shall state the proposed effective date and shall indicate the character and extent of the coverage contemplated. When a filing is not accompanied by the information upon which the insurer supports the filing and the commissioner does not have sufficient information to determine whether the filing meets the requirements of this article, he or she shall require the insurer to furnish the information upon which it supports the filing and in that event the waiting period shall commence as of the date the information is furnished. The information furnished in support of a filing may include: (1) The experience or judgment of the insurer or rating organization making the filing; (2) the experience or judgment of the insurer or rating organization in the territorial rate areas established by 33-20-3(c)(2) of this code; (3) its interpretation of any statistical data it relies upon; (4) the experience of other insurers or rating organizations; or (5) any other relevant factors. A filing and any supporting information is open to public inspection as soon as the filing is received by the commissioner. Any interested party may file a brief with the commissioner supporting his or her position concerning the filing. Any person or organization may file with the commissioner a signed statement declaring and supporting his or her or its position concerning the filing. Upon receipt of the statement prior to the effective date of the filing, the commissioner shall mail or deliver a copy of the statement to the filer, which may file a reply as it may desire to make. This section is not applicable to any memorandum or statement of any kind by any employee of the commissioner.(c) An insurer may satisfy its obligation to make a filing by becoming a member of, or a subscriber to, a licensed rating organization which makes filings and by authorizing the commissioner to accept filings on its behalf: Provided, That nothing contained in this article shall be construed as requiring any insurer to become a member of or a subscriber to any rating organization.(d) The commissioner shall review filings as soon as reasonably possible after they have been made in order to determine whether they meet the requirements of this article.(e) Subject to the exceptions specified in 33-20-4(f), 33-20-4(g) and 33-20-4(h) of this code, each filing shall be on file for a waiting period of 60 days before it becomes effective. Upon written application by an insurer or rating organization, the commissioner may authorize a filing which he or she has reviewed to become effective before the expiration of the waiting period. A filing shall be deemed to meet the requirements of this article unless disapproved by the commissioner within the waiting period. (f) Any special filing with respect to a surety bond required by law or by court or executive order or by order, rule, or regulation of a public body, not covered by a previous filing, shall become effective when filed and shall be deemed to meet the requirements of this article until the commissioner reviews the filing and so long thereafter as the filing remains in effect.(g) Specific inland marine rates on risks specially rated by a rating organization shall become effective when filed and shall be deemed to meet the requirements of this article until the commissioner reviews the filing and so long thereafter as the filing remains in effect.(h) Except as provided in 33-20-4(a)(3) of this code, rates for commercial lines property and casualty risks must be filed with the commissioner and the filings need not be approved by the commissioner. The commissioner may request additional information to ensure compliance with applicable statutory standards, but if the commissioner does not disapprove the filing within the initial 30-day period after receipt, the rate filing will become effective upon first usage after filing: Provided, That the commissioner may at any time thereafter, after notice and for cause shown, disapprove any rate filing.(i) Under legislative rules, the commissioner may, by written order, suspend or modify the requirement of filing as to any kind of insurance, subdivision, or combination thereof, or as to classes of risks, the rates for which cannot practicably be filed before they are used. These orders and rules shall be made known to insurers and rating organizations affected thereby. The commissioner may make any examination he or she may consider advisable to ascertain whether any rates affected by an order meet the standards set forth in 33-20-3(b) of this code.(j) Upon the written application of the insured, stating his or her reasons therefor, filed with and approved by the commissioner, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risks.(k) No insurer shall make or issue a contract or policy except in accordance with the filings which are in effect for that insurer as provided in this article. This subsection does not apply to contracts or policies for risks as to which filings are not required.(l) In instances when an insurer files a request for an increase of automobile liability insurance rates in the amount of 15 percent or more, the Insurance Commissioner shall provide notice of the increase with the Office of the Secretary of State to be filed in the State Register and shall provide interested persons the opportunity to comment on the request up to the time the commissioner approves or disapproves the rate increase.(m) For purposes of this section, commercial means commercial lines as defined in 33-6-8(e)(2) of this code.
On or before July 1, 2005, the Commissioner shall promulgate legislative rules pursuant to article three, chapter twenty-nine-a of this code establishing procedures whereby each insurer providing five percent or more of insurance coverage in this state for private passenger automobile insurance and property insurance obtained for personal or family needs shall biannually submit rate filings required under this section: Provided, That the requirements under this subsection shall terminate on July 1, 2009.
(a) If within the waiting period or any extension thereof as provided in subsection (e) of section four of this article, the commissioner finds that a filing does not meet the requirements of this article, he shall send to the insurer or rating organization which made such filing, written notice of disapproval of such filing specifying therein in what respects he finds such filing fails to meet the requirements of this article and stating that such filing shall not become effective.(b) If within thirty days after a special surety filing subject to subsection (f) of section four of this article or if within thirty days after a specific inland marine rate on a risk specially rated by a rating organization subject to subsection (g) of section four of this article has become effective, the commissioner finds that such filing does not meet the requirements of this article, he shall send to the rating organization which made such filing written notice of disapproval of such filing specifying therein in what respects he finds that such filing fails to meet the requirements of this article and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. Said disapproval shall not affect any contract made or issued prior to the expiration of the period set forth in said notice.(c) If at any time subsequent to the applicable review period provided for in subsection (a) or (b) of this section, the commissioner finds that a filing does not meet the requirements of this article, he shall, after notice and hearing to every insurer and rating organization which made such filing, issue an order specifying in what respects he finds that such filing fails to meet the requirements of this article, and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. Copies of said order shall be sent to every such insurer and rating organization. Said order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in said order.(d) Any person or organization aggrieved with respect to any filing which is in effect may demand a hearing thereon. If, after such hearing, the commissioner finds that the filing does not meet the requirements of this article, he shall issue an order specifying in what respects he finds that such filing fails to meet the requirements of this article, and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. Said order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in said order.(e) Any insurer or rating organization, in respect to any filing made by it which is not approved by the commissioner, may demand a hearing thereon.(f) No manual of classifications, rules, rating plans, or any modification of any of the foregoing which establishes standards for measuring variations in hazards or expense provisions, or both, in the case of casualty insurance to which this article applies and no manual, minimum, class rate, rating schedule, rating plan, rating rule, or any modification of any of the foregoing, in the case of fire insurance to which this article applies, and which has been filed pursuant to the requirements of section four of this article, shall be disapproved if the rates thereby produced meet the requirements of this article.(g) If, in the opinion of the commissioner, the rate or form filing made by an insurer is of such import that it will affect the public he may, at his discretion, issue notice to such insurer of a public hearing. The notice of public hearing to the insurer making such form or rate filing shall be made by United States mail at least fifteen days prior to hearing date. Notice to the public shall be given by appropriate publication in a newspaper in the form and manner prescribed by chapter twenty- nine-a of this code. The holding of a public hearing as outlined in this subsection shall have the effect of eliminating the right of the party making such filing to demand a hearing as stated in subsections (d) and (e) of this section.
(a) A corporation, an unincorporated association, a partnership or an individual, whether located within or outside this state, may make application to the commissioner for license as a rating organization for such kinds of casualty insurance or subdivisions thereof, or for such kinds of fire and marine insurance or subdivision or class of risk or a part or combination thereof as are specified in its application and shall file therewith (1) a copy of its Constitution, its articles of agreement or association or its certificates of incorporation, and of its bylaws, rules governing the conduct of its business, (2) a list of its members and subscribers, (3) the name and address of a resident of this state as attorney-in-fact upon whom notices or orders of the commissioner or process affecting such rating organization may be served and (4) a statement of its qualifications as a rating organization. If the commissioner finds that the applicant is competent, trustworthy and otherwise qualified to act as a rating organization and that its Constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules governing the conduct of its business conform to the requirements of law, he shall issue a license specifying the kinds of insurance or subdivisions thereof for which the applicant is authorized to act as a rating organization. Every application shall be granted or denied in whole or in part by the commissioner within sixty days of the date of its filing with him Licenses issued pursuant to this section shall remain in effect for three years unless sooner suspended or revoked by the commissioner. The fee for the license shall be $100, and the fee shall be in lieu of all other fees, licenses or taxes to which a rating organization might otherwise be subject, all fees so collected to be used for the purposes specified in section thirteen, article three of this chapter. Licenses issued pursuant to this section may be suspended or revoked by the commissioner, after notice and hearing, in the event the rating organization ceases to meet the requirements of this article. Every rating organization shall notify the commissioner promptly of every change in (1) its Constitution, its articles of agreement or association or its certificate of incorporation, and its bylaws, rules governing the conduct of its business, (2) its list of members and subscribers and (3) the name and address of the resident of this state designated as attorney-in-fact by it upon whom notices or orders of the commissioner or process affecting such rating organization may be served.(b) Subject to rules which have been approved by the commissioner as reasonable, each rating organization shall permit any insurer, not a member, to be a subscriber to its rating services for any kind of casualty insurance or subdivision thereof, or for any kind of fire and marine insurance or subdivision or class of risk or a part or combination thereof, or any kind of surety insurance or subdivision thereof, for which it is authorized to act as a rating organization. Notice of proposed changes in such rules shall be given to subscribers. Each rating organization shall furnish its rating services without discrimination to its members and subscribers. The reasonableness of any rule or regulation in its application to subscribers, or the refusal of any rating organization to admit an insurer as a subscriber, shall, at the request of any subscriber or any such insurer, be reviewed by the commissioner. If, after notice and hearing, the commissioner finds that the rule or regulation is unreasonable in its application to subscribers, he shall order that such rule or regulation shall not be applicable to subscribers. If the rating organization fails to grant or reject an insurer's application for subscribership within thirty days after it was made, the insurer may request a review by the commissioner as if the application had been rejected. If, after notice and hearing, the commissioner finds that the insurer has been refused admittance to the rating organization as a subscriber without justification, he shall order the rating organization to admit the insurer as a subscriber. If he finds that the action of the rating organization was justified, he shall make an order affirming its action.(c) No rating organization shall adopt any rule the effect of which would be to prohibit or regulate the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers.(d) Cooperation among rating organizations or among rating organizations and insurers in rate making or in other matters within the scope of this article is hereby authorized, provided the filings resulting from such cooperation are subject to all the provisions of this article which are applicable to filings generally. The commissioner may review such cooperative activities and practices, and if after a hearing he finds that any such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this article, he may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this article, and requiring the discontinuance of such activity or practice.(e) Any rating organization for casualty, marine or surety insurance may provide for the examination of policies, daily reports, binders, renewal certificates, endorsements or other evidences of insurance, or the cancellation thereof, and may make reasonable rules governing their submission. The rules shall contain a provision that in the event any insurer does not within sixty days furnish satisfactory evidence to the rating organization of the correction of any error or omission previously called to its attention by the rating organization, it shall be the duty of the rating organization to notify the commissioner thereof. All information so submitted for examination shall be confidential.(f) Any rating organization may subscribe for or purchase actuarial, technical or other services, and these services shall be available to all members and subscribers without discrimination.(g) Any rating organization responsible for establishing fire rate classifications for West Virginia cities, towns, and fire districts shall:(1) Review a request for classification revision within ninety days after receiving said request in writing from an entity for which the rating organization provides a public fire protection classification. Such written requests for classification revision must be made by the chief official of the city, town or fire district and must outline the specific changes in conditions in the entity that would warrant a classification revision.(A) If the changed conditions in the entity do not warrant a revision to the applicable classification, the rating organization must provide the entity with a written response outlining the reasons why such changes in condition will not impact the classification.(B) If the changed conditions in the entity indicate a potential revision to the applicable classification, the rating organization may request reasonable additional information from the entity. Upon receipt of such information, and upon determination that a classification revision may be indicated, the rating organization must schedule a survey of the entity.(2) Complete any required survey, analysis, and written evaluation of the entity and develop any applicable classification revision within sixty days after all necessary information about changed conditions has been received in writing by the rating organization from the entity.(3) Advise its participating insurers within sixty days after the revised public fire protection classification has been developed reflecting the changed conditions in the entity.(4) Have the option to request a reasonable extension of the above described time frames from the Insurance Commissioner if unusual conditions exist including, but not limited to, unusual weather conditions or difficulty in scheduling a mutually convenient survey time. (5) File the following with the Insurance Commissioner:(A) Within thirty days of its publication:(i) A copy of a current list of all classifications established in West Virginia. Such list shall be published on at least a quarterly basis and;(ii) All changes in established classifications during the previous month. Such list shall be published on a monthly basis.(B) Within thirty days after being requested by the Insurance Commissioner pursuant to this paragraph, a copy of guidelines used to establish classifications, stating the minimum qualifications, standards and requirements for each classification (classes one through ten).
(a) Every member of or subscriber to a rating organization shall adhere to the filings made on its behalf by such organization except that:(1) In the case of casualty and surety insurance to which this article applies any such insurer may make written application to the commissioner for permission to file a uniform percentage decrease or increase to be applied to the premiums produced by the rating system so filed for a kind of insurance, or for a class of insurance which is found by the commissioner to be a proper rating unit for the application of such uniform percentage decrease or increase, or for a subdivision of a kind of insurance (a) comprised of a group of manual classifications which is treated as a separate unit for rate-making purposes, or (b) for which separate expense provisions are included in the filings of the rating organization. Such application shall specify the basis for the modification and shall be accompanied by the data upon which the applicant relies. A copy of the application and data shall be sent simultaneously to such rating organization; and(2) In the case of fire and marine insurance to which this article applies any such insurer may make written application to the commissioner for permission to file a deviation from the class rates, schedules, rating plans or rules respecting any kind of insurance, or class of risk within a kind of insurance or combination thereof. Such application shall specify the basis for the modification and a copy thereof shall also be sent simultaneously to such rating organization. In considering the application for permission to file such deviation the commissioner shall give consideration to the available statistics and the applicable principles for rate making as provided in section three of this article.(b) The commissioner shall, after notice to such insurer and rating organization, and hearing, unless hearing is waived by such insurer and rating organization, issue an order permitting the modification for such insurer to be filed if he finds it to be justified and it shall thereupon become effective or issue an order denying such application if he finds that the modification is not justified or that the resulting premiums would be excessive, inadequate or unfairly discriminatory. Each deviation permitted to be filed shall be effective for a period of one year from the date of such permission unless terminated sooner with the approval of the commissioner.
(a) Any member of or subscriber to a rating organization may appeal to the commissioner from the action or decision of such rating organization in approving or rejecting any proposed change in or addition to the filings of such rating organization and the commissioner shall, after notice and hearing, issue an order approving the action or decision of such rating organization or directing it to give further consideration to such proposal, or, if such appeal is from the action or decision of the rating organization in rejecting a proposed addition to its filings, he may, in the event he finds that such action or decision was unreasonable, issue an order directing the rating organization to make an addition to its filings, on behalf of its members and subscribers, in a manner consistent with his findings, within a reasonable time after the issuance of such order.(b) In the case of casualty and surety insurance to which this article applies, if such appeal is based upon the failure of the rating organization to make a filing on behalf of such member or subscriber which is based on a system of expense provisions which differs, in accordance with the right granted in subdivision (1) of paragraph (c) of section three of this article, from the system of expense provisions included in a filing made by the rating organization, the commissioner shall, if he grants the appeal, order the rating organization to make the requested filing for use by the appellant. In deciding such appeal the commissioner shall apply the standards set forth in section three of this article.
(a) Every rating organization and every insurer which makes its own rates shall, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, furnish to any insured affected by a rate made by it, or to the authorized representative of such insured, all pertinent information as to such rate.(b) Every rating organization and every insurer which makes its own rates shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard in person or by his authorized representative, on his written request to review the manner in which such rating system has been applied in connection with the insurance afforded him If the rating organization or insurer fails to grant or reject such request within thirty days after it is made, the applicant may proceed in the same manner as if his application had been rejected. Any party affected by the action of such rating organization or such insurer on such request may, within thirty days after written notice of such action, appeal to the commissioner, who, after notice and hearing, may affirm or reverse such action.
This article shall be known and may be cited as the "West Virginia Essential Insurance Coverage Act."
To provide for a mechanism whereby the commissioner may establish insurance plans to make available insurance coverages to persons who do not have coverages available to them in the voluntary insurance market.
(a) The commissioner shall establish a nonprofit unincorporated legal entity to be known as the West Virginia essential insurance association to make fire and extended coverage insurance available to any person having an insurable interest in habitational or commercial property situated in this state who is equitably entitled to but unable to secure such insurance in the voluntary insurance market. Participation shall be required of all insurers doing any insurance business in this state of the kinds covered by the association as a condition of their authority to transact insurance in this state.(b) The association shall perform its functions under a plan of operation established by regulation promulgated by the commissioner pursuant to chapter twenty-nine-a, article three of this code.(c) If the commissioner finds after a public hearing that in any part of this state any other kind of essential insurance coverage is not readily available in the voluntary insurance market and that the public interest requires such availability, he may by regulation promulgate plans to provide such coverage through the association for any risks in this state which are equitably entitled to but unable to secure such insurance in the voluntary insurance market. Participation shall be required of all insurers doing any insurance business in this state of the kinds covered by the association as a condition of their authority to transact insurance in this state.
(a) The administrative powers of the association shall be vested in a board of directors consisting of not less than five nor more than nine members serving terms as established in the plan of operation. The members of the board shall be appointed by the commissioner with due consideration given to the composition of the membership of the association and to the interests of the insured who are provided essential insurance coverage by the association.(b) Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors and for reasonable and equitable compensation as may be prescribed by the terms of the plan of organization.(c) The board of directors of the association shall submit to the commissioner a plan of organization for the association and make suitable or necessary amendments thereto to assure the fair, reasonable, and equitable administration of the association. The plan of organization shall become effective upon approval in writing by the commissioner.(d) If the association fails to submit a suitable plan of organization within a reasonable period of time, or if at any time thereafter the association fails to submit suitable amendments to the plan, the commissioner shall promulgate a plan as necessary or advisable to effectuate the provisions of this article.
(a) The association has, for purposes of this article and to the extent approved by the commissioner, the general powers and authority granted under the laws of this state to insurers licensed to transact the kinds of insurance as defined in chapter thirty-three, article one of this code.(b) The association may take any necessary action to make available necessary insurance including, but not limited to, the following:(1) Assess participating insurers amounts necessary to pay the obligations of the association, administration expenses, the cost of examinations and other expenses authorized under this article. The assessment of each member insurer for the kind or kinds of insurance designated in the plan shall be in the proportion that the net direct written premiums of the member insurer for the preceding calendar year bear to the net direct written premiums of all members for the preceding calendar year. A member insurer may not be assessed in any year an amount greater than five percent of his net direct written premiums for the preceding calendar year. Each member insurer shall be allowed a premium tax credit at the rate of twenty percent per year for five successive years following termination of the association. Each member insurer shall be allowed a premium tax credit at the rate of twenty percent per year for five successive years following payment of the assessment by the member insurer for any deficit in the plan.(2) Enter into such contracts as are necessary or proper to carry out the provisions and purposes of the provisions of this article.(3) Sue or be sued, including taking legal action necessary to recover any assessments for, on behalf of, or against participant insurers.(4) Investigate claims brought against the fund and adjust, compromise, settle, and pay covered claims to the extent of the association's obligation and deny all other claims. Claims may be processed through the association's employees or through one or more member insurers or other persons designated as servicing facilities. Designation of a service facility is subject to the approval of the commissioner, but such designation may be declined by a member insurer.(5) Classify risks as may be applicable and equitable.(6) Establish appropriate rates, rate classifications and rating adjustments, and file such rates with the commissioner as may be required. Rates, rating plans and any provision for recoupment shall be based upon the association's loss and expense experience and investment income from unearned premium and loss reserves. Premium rates, including initial premiums, shall be on an actuarially sound basis and shall be calculated to be self-supporting.(7) Administer any type of reinsurance program for or on behalf of the association or any participating carriers.(8) Pool risks among participating carriers.(9) Issue and market through agents, policies of insurance providing coverage required by this article in its own name or on behalf of participating carriers.(10) Administer separate pools, separate accounts, or other plans as may be deemed appropriate for separate carriers or groups of carriers.(11) Invest, reinvest and administer all funds and moneys held by the association.(12) Borrow funds needed by the association to effect the purposes of this section.(13) Develop, effectuate and promulgate any loss prevention programs aimed at the best interests of the association and the insured public.(14) Operate and administer any combination of plans, pools, reinsurance arrangements or other mechanisms as deemed appropriate to best accomplish the fair and equitable operation of the association for the purposes of making available essential insurance coverage.(15) Provide for the method of recoupment of deficits that may be incurred by any plan pursuant to the plan of operation. In no event shall a deficit incurred by the association be charged directly or indirectly to any person other than insurers under its fire and extended coverage or essential insurance policy. The provisions of article seventeen, section nine of this chapter shall not apply to this article.
The commissioner and the association may:(a) Give consideration to the need for adequate and readily accessible coverage, to alternative methods of improving the market affected, to the preferences of the insurers and agents, to the inherent limitations of the insurance mechanism to the need for reasonable underwriting standards, and to the requirement of reasonable loss prevention measures.(b) Establish procedures that will create minimum interference with the voluntary market.(c) Spread the burden imposed by the facility equitably and efficiently.(d) Establish procedures for applicants and participants to have grievances reviewed.(e) Take all reasonable and necessary steps to dissolve the association at the earliest date when essential insurance becomes readily available in the private market. The dissolution of the association, including its assets and liabilities, shall be accomplished under the supervision of the commissioner in an equitable and reasonable manner.
There is no liability on the part of, and no cause of action of any nature against, the association or its agents or employees, members of the board, or the commissioner or his representatives for any good faith performance of their powers and duties under this article.
This article applies to medical malpractice insurance policies only. Nothing in this article shall be construed to supplant any provision of article twenty of this chapter which does not directly conflict with the provisions herein.
Any and all modifications of rates shall be made in accordance with the following provisions:(a) Due consideration shall be given to the past and prospective loss experience within and outside this state.(b) Due consideration shall be given to catastrophe hazards, if any, to a reasonable margin for underwriting profit and contingencies, to dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers and actual past expenses and demonstrable prospective or projected expenses applicable to this state.(c) Rates shall not be excessive, inadequate, predatory or unfairly discriminatory.(d) Risks may not be grouped by territorial areas for the establishment of rates and minimum premiums.(e) An insurer may use guide "A" rates and other nonapproved rates, also known as "consent to rates": Provided, That the insurer shall, prior to entering into an agreement with an individual provider or any health care entity, submit guide "A" rates and other nonapproved rates to the commissioner for review and approval: Provided, however, That the commissioner shall propose legislative rules for promulgation in accordance with the provisions of article three, chapter twenty-nine-a of this code, which set forth the standards and procedure for reviewing and approving guide "A" rates and other nonapproved rates. No insurer may require execution of a consent to rate endorsement for the purpose of offering to issue or issuing a contract or coverage to an insured or continuing an existing contract or coverage at a rate in excess of that provided by a filing otherwise applicable.(f) Except to the extent necessary to meet the provisions of subdivision (c) of this section, uniformity among insurers, in any matters within the scope of this section, is neither required nor prohibited.(g) Rates made in accordance with this section may be used subject to the provisions of this article.
(a) On or before July 1, 2004 and on July 1, each year thereafter, or at such other time specified by the commissioner, every insurer offering malpractice insurance in this state shall make a rate filing, in accordance with the provisions of section four, article twenty of this chapter, regardless of whether any increase or decrease is indicated, pursuant to subsection (a), section four, article twenty of this chapter. The information furnished in support of a filing shall include: (i) The experience or judgment of the insurer or rating organization making the filing; (ii) its interpretation of any statistical data the filing relies upon; (iii) the experience of other insurers or rating organizations; (iv) the character and extent of the coverage contemplated; (v) the proposed effective date of any requested change and (vi) any other relevant factors required by the commissioner. When a filing is not accompanied by the information required by this section upon which the insurer supports the filing, the commissioner shall require the insurer to furnish the information and, in that event, the waiting period prescribed by subsection (b) of this section shall commence as of the date the information is furnished.A filing and any supporting information shall be open to public inspection as soon as the filing is received by the commissioner. Any interested party may file a brief with the commissioner supporting his or her position concerning the filing. Any person or organization may file with the commissioner a signed statement declaring and supporting his or her or its position concerning the filing. Upon receipt of any such statement prior to the effective date of the filing, the commissioner shall mail or deliver a copy of the statement to the filer, which may file a reply. This section is not applicable to any memorandum or statement of any kind by any employee of the commissioner.(b) Every filing shall be on file for a waiting period of ninety days before it becomes effective. The commissioner may extend the waiting period for an additional period not to exceed thirty days if he or she gives written notice within the waiting period to the insurer or rating organization which made the filing that he or she needs the additional time for the consideration of the filing. Upon written application by the insurer or rating organization, the commissioner may authorize a filing which he or she has reviewed to become effective before the expiration of the waiting period or any extension of the waiting period. A filing shall be deemed to meet the requirements of this article unless disapproved by the commissioner within the waiting period or any extension thereof.(c) No insurer shall make or issue a contract or policy of malpractice insurance except in accordance with the filings which are in effect for the insurer as provided in this article.
Reduced rates charged for certain specialties or risks found by the commissioner to be predatory, designed to gain market share or otherwise inadequate are prohibited.
(a) If within the waiting period or any extension thereof as provided in subsection (b), section three of this article, the commissioner finds that a filing does not meet the requirements of this article, he or she shall send to the insurer or rating organization which made the filing written notice of disapproval of the filing specifying therein in what respects he or she finds the filing fails to meet the requirements of this article and stating that the filing shall not be effective. Within thirty days from the issuance of written notice of disapproval, any insurer or rating organization aggrieved by the disapproval of any filing may request a hearing pursuant to section thirteen, article two of this chapter.(b) If at any time subsequent to the waiting period or any extension thereof as provided in subsection (b), section three of this article, the commissioner finds that a filing does not meet the requirements of this article, he or she shall send to the insurer or rating organization which made the filing a written order specifying in what respect he or she finds that such filing fails to meet the requirements of this article and a date, not less than thirty days from the issuance of the order, when the filing shall be considered no longer effective. Within thirty days from the issuance of the order, any insurer or rating organization aggrieved by the order may request a hearing thereon pursuant to section thirteen, article two of this chapter. Any such order shall not affect any contract or policy made or issued prior to the expiration date set forth in the order.(c) Any person or organization aggrieved by any filing which is in effect or the application thereof may request a hearing thereon pursuant to section thirteen, article two of this chapter. The insurer or rating organization which made the filing shall be notified in writing upon receipt of any request for hearing and thereby made a party to the hearing. Upon hearing, if the commissioner finds that the filing fails to meet the requirements of this article, he or she shall issue an order specifying in what respects he or she so finds and a date, not less than thirty days from the issuance of the order, when the filings shall be considered no longer effective.(d) Within the initial ninety-day waiting period, the commissioner shall hold a public hearing upon every filing which requests an increase in general rates of ten percent or more and upon every filing which, in the opinion of the commissioner, is of such import that it will affect the public. The insurer or rating organization which made the filing shall be notified in writing not less than fifteen days prior to the hearing date. Notice of the time, place and filing to be considered shall be published as a Class II legal advertisement in every county in the state in accordance with article three, chapter fifty-nine of this code.
(a) A corporation, an unincorporated association, a partnership or an individual, whether located within or outside this state, may make application to the commissioner for license as a rating organization for such kinds of malpractice insurance as are specified in its application and shall file therewith: (1) a copy of its Constitution, its articles of agreement or association or its certificates of incorporation, and of its bylaws, rules and regulations governing the conduct of its business; (2) a list of its members and subscribers; (3) the name and address of a resident of this state as attorney-in-fact upon whom notices or orders of the commissioner or process affecting such rating organization may be served; and (4) a statement of its qualifications as a rating organization. If the commissioner finds that the applicant is competent, trustworthy and otherwise qualified to act as a rating organization and that its Constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business conform to the requirements of law, he shall issue a license specifying the kinds of insurance or subdivisions thereof for which the applicant is authorized to act as a rating organization. Every such application shall be granted or denied in whole or in part by the commissioner within sixty days of the date of its filing with him. Licenses issued pursuant to this section shall remain in effect for three years unless sooner suspended or revoked by the commissioner. The fee for said license shall be $25, which fee shall be in addition to all other fees, licenses or taxes to which a rating organization might otherwise be subject, and all fees so collected shall be paid to the state Treasury pursuant to subsection (b), section thirteen, article three of this chapter. In the event the rating organization ceases to meet the requirements of this article, the license issued pursuant to this section may be suspended or revoked by the commissioner upon notice and hearing pursuant to article five, chapter twenty-nine-a of this code. Every rating organization shall notify the commissioner promptly of every change in: (1) its Constitution, its articles of agreement or association or its certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business; (2) its list of members and subscribers; and (3) the name and address of the resident of this state designated as attorney-in-fact by it upon whom notices or orders of the commissioner or process affecting such rating organization may be served.(b) The commissioner shall promulgate legislative rules pursuant to article three, chapter twenty-nine-a of this code prescribing procedures for rating organizations to permit any insurer not a member to become a subscriber to its rating services for any kind of insurance for which it is authorized to act as a rating organization pursuant to this section. Each rating organization shall furnish its rating services without discrimination to its members and subscribers. The reasonableness of any legislative rule in its application to subscribers shall be reviewed by the commissioner upon request of any such subscriber. If the commissioner finds, upon notice and hearing provided pursuant to article five, chapter twenty-nine-a of this code, that such rule or regulation is unreasonable in its application to subscribers, he shall order that such rule is not to be applicable to subscribers and promulgate a revised rule. The denial of any insurer's application for subscribership in contravention of a legislative rule or the failure to approve or deny such an application within thirty days after submission to the rating organization shall be reviewed by the commissioner upon request of the aggrieved insurer. If the commissioner finds, upon notice and hearing provided pursuant to article five, chapter twenty-nine-a of this code, that the insurer has been wrongfully denied subscribership, he shall order the rating organization to admit the insurer as a subscriber.(c) No rating organization shall adopt any policy or rule the effect of which would be to prohibit or regulate the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policy holders, members or subscribers.(d) Cooperation among rating organizations or among rating organizations and insurers in rate making or in other matters within the scope of this article or article twenty of this chapter is hereby authorized, provided the filings resulting from such cooperation are subject to all the provisions of this article and article twenty which are applicable to filings generally.The commissioner may review such cooperative activities and practices. If the commissioner finds, upon notice and hearing provided pursuant to article five, chapter twenty-nine-a of this code, that any such activity or practice is unfair, unreasonable or otherwise inconsistent with the provisions of this article, he shall issue a written order specifying in what respects such activity or practice is unfair, unreasonable or otherwise inconsistent with the provisions of this article, and requiring that such activity or practice be discontinued immediately.(e) Any rating organization may subscribe for or purchase actuarial, technical or other services, and such services shall be available to all members and subscribers without discrimination.
(a) The commissioner shall review annually the rules, rates and rating plans filed and in effect for each insurer providing five percent or more of the malpractice insurance coverage in this state in the preceding calendar year to determine whether the filings continue to meet the requirements of this article and whether the filings are unfair or inappropriate given the loss experience in this state in the preceding year.The commissioner shall promulgate legislative rules pursuant to article three, chapter twenty-nine-a of this code establishing procedures for the fair and appropriate evaluation and determination of the past loss experience and prospective or projected loss experience of insurers within and outside this state, actual past expenses incurred in this state and demonstrable prospective or projected expenses applicable to this state.(b) The commissioner shall promulgate legislative rules pursuant to article three, chapter twenty-nine-a of this code establishing procedures whereby each insurer providing five percent or more of the malpractice insurance coverage in this state annually shall submit to the commissioner the following information:(1) The number of claims filed per category;(2) The number of civil actions filed;(3) The number of civil actions compromised or settled;(4) The number of verdicts in civil actions;(5) The number of civil actions appealed;(6) The number of civil actions dismissed;(7) The total dollar amount paid in claims compromised or settled;(8) The total dollar amount paid pursuant to verdicts in civil actions;(9) The number of claims closed without payment and the amount held in reserve for all such claims;(10) The total dollar amount expended for loss adjustment expenses, commissions and brokerage expenses;(11) The total dollar amount expended in defense and litigation of claims;(12) The total dollar amount held in reserve for anticipated claims;(13) Net profit or loss;(14) Investment and other income on net realized capital gains and loss reserves and unearned premiums; and(15) The number of malpractice insurance policies canceled for reasons other than nonpayment of premiums.The commissioner shall establish, in the rules, methods of allocating investment and other income among capital gains, loss reserves, unearned premiums and other assets if an insurer does not separately account for and allocate that income. Any insurer who fails to submit any information to the commissioner, as required by this subsection, in accordance with the rules promulgated under this subsection, shall be fined $10,000 for each of the first five failures and shall be fined $100,000 for the sixth and each subsequent failure.(c) The commissioner shall report annually, during the month of November, to the joint standing committee on the judiciary the following information pertaining to each insurer providing five percent or more of the malpractice insurance coverage in this state:(1) The loss experience within the state during the preceding calendar year;(2) The rules, rates and rating plans in effect on the date of the report;(3) The investment portfolio, including reserves, and the annual rate of return on the investment portfolio; and(4) The information submitted to the commissioner pursuant to the rules promulgated by authority of subsection (b) of this section.
The commissioner is hereby directed to study the feasibility and desirability of creating joint underwriting associations or alternative pooling agreements to facilitate the issuance and underwriting of malpractice insurance policies in this state. The commissioner is further directed to identify and study the policies and practices of all insurers in settling dollar amounts to be held in reserve for anticipated claims and claims filed against malpractice insurance policies in this state.Beginning in the year one thousand nine hundred eighty-six, the commissioner shall report periodically the results of the studies required by this section to the joint standing committee of the judiciary. Beginning in the year one thousand nine hundred eighty-seven, the commissioner shall file an annual report of the results of such studies with the Legislature on the first day of its regular session.
(a) Every insurer issuing, or issuing for delivery in this state, a professional liability policy or providing professional liability insurance to health care providers, including, but not limited to, physicians, osteopathic physicians or surgeons, podiatrists or chiropractors, hospitals, medical clinics, professional limited liability companies, medical corporations or partnerships in this state shall submit to the commissioner, within sixty days from the date of entry of any judgment or dismissal without payment, the date a release is executed in connection with a settlement or the date a file is closed on any claim in which a law suit has not been filed involving the insured, the following information:(1) The date of any judgment, dismissal or settlement;(2) Whether any appeal has been taken on the judgment and, if so, by which party;(3) The amount of any settlement or judgment against the insured;(4) Whether the claim was the subject of mediation;(5) Whether any settlement of a claim was made in a lump sum payment, a structured settlement or a combination of the two; and(6) Any other information required by the commissioner.For purposes of this section, "claim" means a third-party request for indemnification.(b) If there is any additional resolution, including appellate decision or other subsequent action, the insurer shall file a supplemental report to the commissioner.(c) The West Virginia insurance guaranty association created pursuant to article twenty-six of this chapter and the state Board of Risk and Insurance Management created pursuant to article twelve, chapter twenty-nine of this code are subject to the reporting requirements of subsection (a) of this section.(d) Any insurer or entity that fails to report any information required to be reported under this section is subject to a civil money penalty to be imposed by the Insurance Commissioner. Upon a determination of the commissioner that there is probable cause to believe that any insurer or entity has failed or refused to make a report required by this section, the commissioner shall provide written notice to the alleged violator stating the nature of the alleged violation. Upon written request of the alleged violator within thirty days of the date of the commissioner's written notice, the commissioner shall notify the alleged violator of the time and place of a hearing at which the alleged violator may appear to show good cause why a civil penalty should not be imposed. The hearing shall be conducted in accordance with the provisions of article five, chapter twenty-nine-a of this code. (e) If the commissioner determines that a violation of this section has occurred, the commissioner shall assess a civil penalty of not less than $1,000 nor more than $10,000 per violation. Anyone so assessed shall be notified of the assessment in writing and the notice shall specify the reasons for the assessment. If the alleged violator requests a hearing, as provided in subsection (d) of this section, the commissioner may not make his or her determination of violation and assessment until the conclusion of the hearing. The amount of penalty collected shall be deposited in the General Revenue Fund. (f) If any violator fails to pay the amount of the penalty assessment to the commissioner within thirty days after issuance of notice of the penalty assessment, the commissioner may institute a civil action in the circuit court of Kanawha County to recover the amount of the assessment. In any civil action, the court's review of the commissioner's action shall be conducted in accordance with the provisions of section four, article five, chapter twenty-nine-a of this code. (g) No person or entity may be held liable in any civil action with respect to any report made pursuant to this section if the report was made without knowledge of any falsity of the information contained in the report.
The commissioner may as he deems necessary after notice and hearing promulgate rules and regulations in accordance with chapter twenty-nine-a of this code to define the commissioner's authority to consider the operating results of an insurer's affiliates and subsidiaries in the rate making and solvency determination of that insurer.
This article applies to malpractice insurance as defined in subdivision (9), subsection (e), section ten, article one of this chapter. This article applies to malpractice insurance policies which have been in effect for at least sixty days or have been renewed at least once.
No insurer once having issued or delivered a policy providing malpractice insurance in this state may cancel the policy, except for one or more of the following reasons:(a) The named insured fails to discharge any of his or her obligations to pay premiums for the policy or any installment of the policy within a reasonable time of the due date;(b) The policy was obtained through material misrepresentation;(c) The insured violates any of the material terms and conditions of the policy; or(d) Reinsurance is unavailable. The insurer shall supply sufficient proof of the unavailability to the commissioner.(e) Any purported cancellation of a policy providing malpractice insurance attempted in contravention of this section is void.
In every instance in which a policy or contract of malpractice insurance is canceled by the insurer, the insurer or its duly authorized agent shall cite within the written notice of the action the allowable reason in section two of this article for which the action was taken and shall state with specificity the circumstances giving rise to the allowable reason cited. The notice of the action shall further state that the insured has a right to request a hearing, pursuant to section five of this article, within thirty days.
(a) No insurer shall fail to renew a policy or contract providing malpractice insurance unless written notice of the nonrenewal is forwarded to the insured by certified mail, return receipt requested, not less than ninety days prior to the expiration date of the policy.(b) No insurer shall cancel a policy or contract providing malpractice insurance during the term of the policy unless written notice of the cancellation is forwarded to the insured by certified mail, return receipt requested, not more than thirty days after the reason for the cancellation, as provided in section two of this article, arose or occurred or the insurer learned that it arose or occurred and not less than thirty days prior to the effective cancellation date.
Any insured aggrieved by the cancellation of a policy or contract providing malpractice insurance may request a hearing before the commissioner or his designee within thirty days of the receipt of any such notice. The hearing shall be conducted pursuant to section thirteen, article two of this chapter. The policy shall remain in effect until entry of the commissioner's order. Any party aggrieved by an order of the commissioner may seek judicial review in the circuit court of the county in which the insured resides in accordance with section fourteen, article two of this chapter.
This article applies to malpractice insurance as defined in subdivision (9), subsection (e), section ten, article one of this chapter insuring a medical physician, osteopathic physician, podiatric physician, chiropractic physician, dentist, midwife, nurse practitioner or hospital which has been in effect for at least sixty days.
As used in this article:(a) "Tail insurance" means insurance which covers a professional insured once a claims made malpractice insurance policy is cancelled, not renewed or terminated and covers claims made after such cancellation or termination for acts occurring during the period the prior malpractice insurance was in effect.(b) "Claims made malpractice insurance policy" means a policy which covers claims which are reported during the policy period, meet the provisions specified by the policy, and are for an incident which occurred during the policy period, or occurred prior to the policy period, as is specified by the policy.
(a) Upon cancellation, nonrenewal or termination of any claims made professional malpractice insurance policy, the insurer shall offer to the insured tail insurance coverage.(b) Upon cancellation, nonrenewal or termination of any claims made professional malpractice insurance policy, the insurer shall offer to any professional licensed and practicing in the State of West Virginia, or who, upon retirement, last practiced in the State of West Virginia, the opportunity to amortize the payment of premiums for tail insurance over a period of not more than thirty-six months, in quarterly payments, at a rate to be established by the Insurance Commissioner: Provided, That quarterly premiums paid pursuant to this subsection shall not be less than $750.(c) The first quarterly payment shall be payable contemporaneous with the issuance of the tail coverage policy. Subsequent payments shall be due and payable quarterly thereafter. Each licensed malpractice insurer shall submit for approval, by the commissioner, a plan for determination of partial limits in the event of default on amortized payment.(d) Any insurer who fails to offer tail insurance or in any other way violates the provisions of this article shall be assessed a penalty equal to the amount of the premium due.(e) The offer of tail insurance coverage required by this section shall expire forty-five days after the cancellation, termination or other expiration of the claims made professional malpractice insurance policy, unless sooner accepted, in writing, by the insured.
(a) Pursuant to article three, chapter twenty-nine-a of this code, the Insurance Commissioner shall promulgate legislative rules establishing procedures necessary to effectuate the provisions of this article. The first set of rules shall be promulgated as emergency rules within forty-five days of the effective date of this article.(b) The Insurance Commissioner shall promulgate rules and regulations providing for the amortization of premium payments for tail insurance, which rules shall include, but not be limited to:(1) Amortization schedules for various periods, but not to exceed a period of thirty-six months;(2) Reasonable annual amortization rates;(3) Reasonable annual interest rates;(4) Such other schedules and rates as the commissioner deems necessary to effect the provisions of this article.
This article may be cited as the "West Virginia Medical Professional Liability Insurance Joint Underwriting Association Act."
(a) The commissioner shall, upon request of the board, provide the association with a statement of the net direct written premiums of each member insurer.(b) The commissioner may suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any member insurer which fails to comply with the plan of operation or fails to pay an assessment when due. (c) Any final order of the commissioner under this article shall be subject to judicial review as provided by section fourteen, article two of this chapter.
(a) Only those health care providers who are unable to obtain medical professional liability insurance because it is not available through the voluntary insurance market from insurers licensed to transact insurance in West Virginia at rates approved by the commissioner are eligible to obtain coverage through the association: Provided, That any health care provider who can obtain medical professional liability insurance only pursuant to a "consent to" or "guide A" rate agreement will remain eligible to obtain coverage through the association. Any health care provider who has medical professional liability insurance pursuant to article twelve of chapter twenty-nine of this code is not eligible to obtain insurance through the association.(b) The commissioner shall designate, based upon market conditions, the categories of health care providers who are eligible to obtain coverage from the association.
(a) If an eligible applicant meets the underwriting standards and other requirements and conditions of the association as set forth in the approved plan of operation and there is no unpaid, uncontested premium, charge or assessment due from the applicant for any prior insurance of the same kind, the association, upon receipt of the premium, charge or assessment or a portion thereof as prescribed by the plan of operation, shall cause to be issued a policy of medical professional liability insurance. (b) The policy may not require as a condition precedent to settlement or compromise of any claim the consent or acquiescence of the policyholder.
(a) The rates, rating plans, rating rules and rating classifications applicable to insurance written by the association are subject to the provisions of article twenty-b of this chapter. Policy forms applicable to insurance written by the association must conform to the requirements of the provisions of section eight, article six of this chapter.(b) Within such time as the commissioner shall direct, the association shall submit an initial filing, in proper form, of policy forms, classifications, rates, rating plans, and rating rules applicable to medical professional liability insurance. Rates approved by the state board pursuant to section eight of this article shall remain in effect until the association's initial filing is approved.(c) In the event the commissioner disapproves the initial filing, in whole or in part, the association shall amend the filing, in whole or in part, in accordance with the direction of the commissioner.(d) Initial rates and premiums are to be set in consideration of the past and prospective loss and expense experience for insurers writing medical professional liability insurance within this state.(e) After the initial year of operation, the board shall obtain and implement, at least annually, from an independent outside source, such as a medical liability actuary or a rating organization experienced with the medical liability line of insurance, written rating plans upon which premiums shall be based. The resultant premium rates must be arrived at on an actuarially sound basis and must be calculated to be self-supporting.(f) The rates and premiums charged for insurance policies issued pursuant to this article shall not be deemed excessive because they contain an amount reasonably calculated to recoup a deficit of the association pursuant to section sixteen of this article.
(a) There is hereby established a special revenue fund, to be known as the "medical professional liability insurance fund," into which any initial capital, surplus or premiums or assessments charged and collected by the state board under the provisions of the interim plan shall be deposited.(b) A portion of the association's initial capital and surplus may be provided by the Legislature, in an amount, upon terms and conditions, and from sources as may be determined by the Legislature in its sole discretion.(c) Upon approval of the final plan of operation by the commissioner, the state board shall transfer the assets and liabilities of the association to the board of directors.
(a) The board shall deposit all sums transferred from the state board into an account of the association as specified in the final plan of operation.(b) The board may invest sums from the association's account. Any interest earned on investments or any profit generated by collection of premiums or other means shall be returned to the association's account for the purpose of implementing this article.(c) The association is liable for premium taxes to the same extent and in the same manner as a licensed insurer engaged in transacting insurance in this state.(d) The state is not responsible for any costs, expenses, liabilities, judgments, or other obligations of the association.
(a) A deficit sustained by the association in any one calendar year may be recouped, pursuant to the plan of operation then in effect, by one or more of the following procedures:(1) A contribution from a reserve fund, if any, until the same is exhausted;(2) An assessment upon the member insurers;(3) A prospective rate increase.(b) In the event the board opts to assess the member insurers, each member shall be responsible for the proportion of the deficit its net direct written premiums for the preceding year bear to the aggregate net direct premiums written by all members in the preceding calendar year. Net direct written premiums subject to the provisions of article twenty-a of this chapter shall not be considered in determining a member insurer's proportional share of the deficit. A member insurer may not be assessed in any year an amount greater than two percent of its net direct written premiums for the preceding calendar year.(c) The assessment of a member insurer may be ordered deferred, in whole or in part, upon application by the insurer if the commissioner determines that payment of the assessment may render the insurer insolvent or in danger of insolvency or otherwise seriously impair the financial stability of the member insurer.(d) After the deficit which necessitated the assessment has been recouped, each member insurer shall be entitled to reimbursement of any assessment through a credit against the premium taxes imposed by sections fourteen and fourteen-a, article three of this chapter, in equal amounts per year for three successive years following the assessment. At the option of the member insurer, the premium tax credit may be taken over an additional number of years. The tax credit established under this subsection shall be applicable only to General Revenue Funds.(e) A member insurer may not impose a policy surcharge on any policyholder of the member insurer for any assessment paid by the member insurer pursuant to subsection (b) of this section or otherwise refer to the assessment paid by the member insurer in any billing statement or notice provided to any policyholder of the member insurer. Nothing in this section shall prohibit a member insurer from treating any assessment payments as an expense of the member insurer for all purposes.
If the authority of a member to transact insurance in this state terminates for any reason, the commissioner shall notify the board.
The association shall be subject to examination and regulation by the commissioner.
The association shall file in the office of the commissioner, on or before March 30 of each year, a statement containing information with respect to its transactions, condition, operations, and affairs during the preceding calendar year. The commissioner shall prescribe the matters and information to be contained in and the form of the annual statement. The commissioner may, at any time, require the association to furnish additional information with respect to its transactions, condition, or any matter connected therewith considered to be material and of assistance in evaluating the scope, operation, and experience of the association.
The Legislature finds and declares:(a) That recent developments in the voluntary insurance market have made it impossible for certain West Virginia health care providers to obtain professional liability insurance coverage from insurers licensed to transact insurance in this state;(b) That the unavailability of such insurance will have a deleterious effect on the quality and availability of public health programs and services to the citizens of this state;(c) That it is in the best interests of the citizens of this state to preserve the quality and availability of public health programs and services; and,(d) That the establishment and funding of a joint underwriting association will make available medical professional liability insurance to health care providers, thus preserving public health programs and services for the citizens of this state.
There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer, the association, the board, the commissioner or their agents or employees for any action taken by them in the exercise and performance of their powers and duties under this article or for any statements made in good faith by them in any reports or communications, concerning risks insured or to be insured by the association, or at any administrative hearings conducted in connection therewith.
The provisions of this article may only become operable upon the passage of a resolution by the Legislature. Any policies written under this article may have an effective date retroactive to the operative date.
The purpose of this article is to create a mechanism to provide medical professional liability insurance to health care providers who are unable to secure such coverage at approved rates through the voluntary market, in order to preserve public health programs and services for the citizens of this state.
As used in this article, the following terms have the meanings set forth below:(a) "Association" means the joint underwriting association created by this article.(b) "Board" means the board of directors established pursuant to section six of this article.(c) "Commissioner" means the Insurance Commissioner of West Virginia.(d) "Health care provider" means a person, partnership, corporation, facility or institution licensed by, or certified in, this state or another state, to provide health care or professional health care services, including, but not limited to, a physician, osteopathic physician, hospital, dentist, registered or licensed practical nurse, optometrist, podiatrist, chiropractor, physical therapist, or psychologist.(e) "Medical professional liability insurance", commonly known as "medical malpractice insurance", means insurance coverage for any claim for damage or loss against a health care provider arising out of the death or injury of any person proximately caused by negligence in the rendering, or the failure to render, professional services by a health care provider.(f) "Member insurer" means every insurer authorized to write and engaged in writing, within this state, casualty insurance, as defined in section ten, article one of this chapter.(g) "Net direct written premiums" means, for purposes of this article, direct gross premiums written in this state on casualty insurance policies, less return premiums thereon, but does not include premiums on contracts between insurers or reinsurers.(h) "State board" means the state Board of Risk and Insurance Management.
(a) There is hereby created a nonprofit unincorporated legal entity to be known as the West Virginia medical professional liability insurance joint underwriting association composed of member insurers. Every insurer authorized to write and engaged in writing, within this state, casualty insurance, on a direct basis, is and shall remain a member insurer, as a condition of its authority to transact insurance in this state.(b) Each member insurer shall participate in the association in the proportion that its net direct written premiums during the preceding calendar year, as reported in the annual statements and other reports filed by the member with the commissioner, bear to the aggregate net direct premiums written in this state by all members of the association.(c) The association shall perform its functions under a plan of operation approved by the commissioner under section nine of this article.
(a) The administrative powers of the association shall be vested in a board of directors, which shall consist of nine persons serving terms established in the plan of operation. Seven of the board members shall be representatives of the member insurers and shall be appointed by the commissioner, with consideration given to whether all member insurers are fairly represented. One member shall be a health care provider, and another shall be a citizen, both appointed by the Governor with the advice and consent of the Senate.(b) The citizen and health care provider members of the board shall receive the same compensation authorized by law for members of the Legislature for their interim duties for each day, or portion thereof, the member is engaged in the discharge of official duties. All board members shall be reimbursed for their actual and necessary expenses incurred in the discharge of official duties, except that mileage shall be reimbursed at the same rate as that authorized for members of the Legislature. All payments for compensation and expenses shall be made from the assets of the association.
(a) The association has, for purposes of this article and to the extent approved by the commissioner, the general powers and authority granted under the laws of this state to insurers licensed to transact insurance as defined in article one, chapter thirty-three of this code.(b) The association may take any necessary action to make medical professional liability insurance available including, but not limited to:(1) Assessing member insurers amounts necessary to pay the obligations of the association, administration expenses, the cost of examinations and other expenses authorized under this article. (2) Establishing underwriting standards and criteria.(3) Requiring an eligible health care provider to purchase an extended reporting endorsement, if available, from his or her previous primary medical professional liability carrier with respect to claims arising during previous policy periods.(4) Entering into such contracts as are necessary or proper to carry out the provisions and purposes of this article, including contracts authorizing competent third parties with experience with joint underwriting associations or the medical professional liability line of insurance to administer the plan of operation, issue policies, oversee risk management, oversee investment management, set rates, underwrite risk or process claims or any combination thereof. Any such third-party contract must be approved by the commissioner. The provisions of article three, chapter five-a of this code, relating to purchasing procedures, do not apply to any contracts or agreements executed by or on behalf of the association under this subsection.(5) Suing, including taking legal action necessary to recover any assessments for, on behalf of, or against member insurers.(6) Investigating claims brought against the association and adjusting, compromising, defending, settling, and paying covered claims, to the extent of the association's obligation, and denying all other claims.(7) Classifying risks as may be applicable and equitable.(8) Establishing actuarially sound rates, rate classifications and rating adjustments, subject to approval by the commissioner.(9) Purchasing reinsurance in an amount as it may from time to time consider appropriate.(10) Issuing and marketing policies of insurance providing coverage required by this article in its own name.(11) Investing, reinvesting and administering all funds and moneys held by the association.(12) Establishing accounts and funds, including a reserve fund, to effectuate the purposes of this article.(13) Developing, effectuating and promulgating any loss prevention programs aimed at the best interests of the association and the insured public.
(a) Prior to the commissioner's approval of the final plan of operation in accordance with section nine of this article, the administrative powers of the association will be exercised by the state Board of Risk and Insurance Management. (b) The state board shall submit to the commissioner an interim plan of operation consistent with the provisions of this article, to become effective and operative upon approval in writing by the commissioner.(c) If the state board fails to submit a suitable interim plan of operation within thirty days, the commissioner shall adopt an interim plan which shall continue in force until superceded by a final plan of operation, submitted by the board and approved by the commissioner in accordance with section nine of this article.(d) The interim plan of operation shall provide for economic, fair, and nondiscriminatory administration and for the prompt and efficient provision of professional liability insurance, and shall:(1) Establish actuarially sound rates and premiums;(2) Establish procedures for handling assets of the association;(3) Establish procedures by which claims may be filed with the association and acceptable forms for filing claims;(4) Establish procedures for records to be kept of all financial transactions of the association;(5) Establish a procedure by which any member insurer or policyholder aggrieved by a final action or decision of the state board or the board of directors may appeal to the commissioner within thirty days after the action or decision; and,(6) Contain additional provisions necessary or proper for the execution of the powers and duties of the association.(e) The interim plan may also provide for:(1) Assessments of members to defray losses and expenses;(2) Creation and administration of a reserve fund;(3) Commission arrangements;(4) Reasonable and objective underwriting standards; and (5) Purchase and cession of reinsurance.(f) A health care provider is not eligible to obtain coverage under the interim plan if he or she refuses, on a regular basis, to accept patients solely because their health care coverage is provided pursuant to the West Virginia public employees insurance act, the West Virginia children's health program, West Virginia Medicaid, or the West Virginia workers' compensation fund.(g) All member insurers shall comply with the interim plan of operation.
(a) Once the commissioner has approved the selection of the initial board members, the board shall, within thirty days, submit to the commissioner a final plan of operation consistent with the provisions of this article.(b) If the board fails to submit a suitable final plan of operation within the time provided in subsection (a) of this section, the commissioner shall adopt a final plan of operation as necessary or advisable to effectuate the provisions of this article.(c) The board shall not assume administrative control of the association until the commissioner approves the final plan of operation.(d) In addition to the matters specified in subsection (d) of section eight of this article to be included in the interim plan of operation, the final plan of operation shall:(1) Establish procedures for the transfer of all assets and liabilities of the association from the state board to the board of directors created by section six of this article.(2) Establish the terms of office of the board of directors.(3) Establish regular places and times for meetings of the board of directors.(4) Establish procedures for records to be kept of all financial transactions of the association, its agents, and the board.(5) Establish procedures for assessments of member insurers to defray losses and expenses; (6) Establish reasonable and objective underwriting standards; (7) Establish actuarially sound rates and premiums;(8) Contain such additional provisions as are necessary or proper for the execution of the powers and duties of the association.(d) All member insurers shall comply with the final plan of operation.(e) Amendments to the plan of operation may be made by the commissioner or by the board of directors with the approval of the commissioner.
This article applies to reciprocal insurers and reciprocal insurance. Foreign and alien reciprocal insurers shall be governed by all provisions of this article not expressly made applicable only to domestic reciprocal insurers, and domestic reciprocal insurers shall be governed by all the provisions of this article.
(a) Concurrently with the filing of the application provided for in section six of this article, the attorney of a domestic reciprocal insurer shall file with the commissioner a bond in favor of the State of West Virginia for the benefit of all persons damaged as a result of breach by the attorney of the conditions of his bond as set forth in paragraph (b) of this section. The bond shall be executed by the attorney and by an authorized corporate surety, and shall be subject to the commissioner's approval.(b) The bond shall be in the penal sum of $25,000, aggregate in form, conditioned that the attorney will faithfully account for all moneys and other property of the insurer coming into his hands, and that he will not withdraw or appropriate to his own use from the funds of the insurer, any moneys or property to which he is not entitled under the power of attorney.(c) The bond shall provide that it is not subject to cancellation unless thirty days' advance notice in writing of cancellation is given both the attorney and the commissioner.(d) In lieu of such bond, the attorney may maintain on deposit with the State Treasurer through the office of the commissioner a like amount in cash or in value of securities qualified under this chapter as insurers' deposit investments, and subject to the same conditions as the bond.(e) Action on the attorney's bond or to recover against any such deposit made in lieu thereof may be brought at any time by one or more subscribers suffering loss through a violation of its conditions, or by a receiver or liquidator of the insurer. Amounts recovered on the bond shall be deposited in and become part of the insurer's funds. The total aggregate liability of the surety shall be limited to the amount of the penalty of such bond.
(a) The annual report of a reciprocal insurer shall be made and filed by its attorney.(b) The report shall be supplemented by such information as may be required by the commissioner relative to the affairs and transactions of the attorney insofar as they pertain to the reciprocal insurer.
(a) Concurrently with the filing of the application provided for by the terms of section six of this article, the attorney shall file with the commissioner an instrument in writing, executed by him for said subscribers, conditioned that upon the issuance of the license provided for in section seven of this article any action, suit or other proceeding arising out of any insurance contract or policy issued under such license, may be brought in the county of this state wherein the property insured was situated either at the date of the policy or at the time when the right of action accrued, or in the county of this state wherein the person insured had a legal residence at the date of his death or at the time the right of action accrued, and that service of any process or notice may be had upon the Secretary of State in all actions, suits or other proceedings in this state arising out of such policies, contracts, agreements or other business of insurance transacted under such license, and that said Secretary of State may accept service of any such process or notice.(b) Such service or acceptance of service shall be valid and binding upon the attorney and upon all subscribers exchanging at any time reciprocal or interinsurance contracts through the attorney. Two copies of such process or notice, in addition to the original, shall be furnished the Secretary of State, and he shall file one copy, forward one copy to the attorney and return the original with his acceptance of service or for return of service. But no process or notice shall be served on the Secretary of State or accepted by him less than ten days before the return day thereof. Where the principal office of the attorney is located in this state, service of process may be had upon all subscribers by serving same upon the attorney at said office. Service of process shall not be had upon said subscribers or any of them in any suit or other proceeding in this state except in the manner provided in this section, and any action, suit, or other proceeding may be begun and prosecuted against or defended by them under the name or designation adopted by them.(c) The attorney shall pay to the Secretary of State an annual fee of $20.
(a) The attorney for each reciprocal insurer shall pay on behalf of such insurer all fees and taxes prescribed by this chapter for other insurers transacting like kinds of insurance, except that the amount of the premium tax shall be computed upon the gross premiums on business transacted in this state less premiums returnable because of cancellation and less amounts returned to subscribers or credited to their accounts as savings.(b) In addition such attorney shall pay annually on behalf of such reciprocal insurer the fire marshal's tax provided by section twenty-four, article three, chapter twenty-nine of this code, to the extent such tax is applicable to the kinds of insurance transacted in this state by such reciprocal insurer.(c) No reciprocal insurer shall be liable for any taxes except those described in this section and property taxes upon real and personal property, unless reciprocal insurers be specifically mentioned in the law imposing such taxes.
Individuals, partnerships, and corporations of this state may make application, enter into agreement for and hold policies or contracts in or with and be a subscriber of any domestic, foreign, or alien reciprocal insurer. Any public or private corporation now or hereafter created by or organized under the laws of this state shall, in addition to the rights, powers, and franchises specified in its articles of incorporation, have full power and authority as a subscriber to exchange insurance contracts through such reciprocal insurance. The right to exchange such contracts is hereby declared to be incidental to the purposes for which such corporations are organized and to be as fully granted as the rights and powers expressly conferred upon such corporations. Any officer, representative, trustee, receiver, or legal representative of any such subscriber shall be recognized as acting for or on its behalf for the purpose of such contract but shall not be personally liable upon such contract by reason of acting in such representative capacity.
(a) The advisory committee of a domestic reciprocal insurer exercising the subscribers' rights shall be selected under such rules as the subscribers adopt.(b) Not less than two thirds of such committee shall be subscribers other than the attorney, or any person employed by, representing, or having a financial interest in the attorney.(c) The committee shall:(1) Supervise the finances of the insurer;(2) Supervise the insurer's operations to such extent as to assure conformity with the subscribers' agreement and power of attorney;(3) Procure the audit of the accounts and records of the insurer and of the attorney at the expense of the insurer;(4) Have such additional powers and functions as may be conferred by the subscribers' agreement.
(a) The liability of each subscriber, other than as to a nonassessable policy, for the obligations of the reciprocal insurer shall be an individual, several, and proportionate liability, and not joint.(b) Except as to a nonassessable policy each subscriber shall have a contingent assessment liability, in the amount provided for in the power of attorney or in the subscribers' agreement, for payment of actual losses and expenses incurred while his policy was in force. Such contingent liability may be at the rate of not less than one nor more than ten times the premium or premium deposit stated in the policy, and the maximum aggregate thereof shall be computed in the manner set forth in section twenty of this article.(c) Each assessable policy issued by the insurer shall contain a statement of the contingent liability, set in type of the same prominence as the insuring clause.
(a) No action shall lie against any subscriber upon any obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for thirty days.(b) Any such judgment shall be binding upon each subscriber only in such proportion as his interests may appear and in amount not exceeding his contingent liability, if any.
(a) Assessments may from time to time be levied upon subscribers of a domestic reciprocal insurer liable therefor under the terms of their policies by the attorney upon approval in advance by the subscribers' advisory committee; or by the receiver, conservator, rehabilitator or liquidator, in liquidation proceedings of the insurer.(b) Each such subscriber's share of a deficiency for which an assessment is made, but not exceeding in any event his aggregate contingent liability as computed in accordance with section twenty of this article, shall be computed by applying to the premium earned on the subscriber's policy or policies during the period to be covered by the assessment, the ratio of the total deficiency to the total premiums earned during such period upon all policies subject to the assessment.(c) In computing the earned premiums for the purposes of this section, the gross premium received by the insurer for the policy shall be used as a base, deducting therefrom only charges not recurring upon the renewal or extension of the policy.(d) No such subscriber shall have an offset against any assessment for which he is liable, on account of any claim for unearned premium or losses payable.
Every subscriber of a domestic reciprocal insurer having contingent liability shall be liable for, and shall pay his share of any assessment, as computed and limited in accordance with this article, if,(a) While his policy is in force or within one year after its termination, he is notified by either the attorney or the receiver, conservator, rehabilitator or liquidator of his intentions to levy such assessment, or(b) If an order to show cause why a receiver, conservator, rehabilitator, or liquidator of the insurer should not be appointed is issued while his policy is in force or within one year after its termination.
Except as otherwise provided, and except where the context clearly requires otherwise, all the provisions of this chapter relating to insurers generally, and all the provisions of this chapter relating to insurers transacting the same kinds of insurance which reciprocal insurers are permitted to transact, are applicable to reciprocal insurers, except that article twelve of this chapter shall not apply to reciprocal insurers.
In the case of a domestic reciprocal insurer no one policy or subscriber as to such policy shall be assessed or charged with an aggregate of contingent liability as to obligations incurred by a reciprocal insurer in any one calendar year, in excess of the amount provided for in the power of attorney or in the subscribers' agreement, computed solely upon premium earned on such policy during that year.
(a) If a reciprocal insurer has a surplus of assets over all liabilities in an amount equal to the minimum capital stock generally required of a domestic stock insurer authorized to transact like kinds of insurance, upon application of the attorney and as approved by the subscribers' advisory committee, the commissioner may issue his certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this state, and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this state for so long as such surplus funds remain unimpaired.(b) Upon impairment of such surplus, the commissioner may revoke such certificate. Such revocation shall not render subject to contingent liability any policy then in force and for the remainder of the period for which the premium has theretofore been paid; but after such revocation no policy shall be issued or renewed without providing for contingent assessment liability of the subscriber.(c) The commissioner shall not authorize a reciprocal insurer so to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued, unless it qualifies to and does extinguish such liability of all its subscribers and in all such policies for all kinds of insurance transacted by it. Except, that if required by the laws of another state in which the insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of such of its subscribers as may acquire such policies in such state, and need not extinguish the contingent liability applicable to policies theretofore in force in such state.(d) No reciprocal insurer shall deliver or issue for delivery in this state assessable policies imposing a contingent liability upon subscribers, if such reciprocal insurer is issuing for delivery to subscribers in this or any other state nonassessable policies insuring risks of substantially the same hazard and class.
A reciprocal insurer may from time to time return to its subscribers any unused premiums, savings, or credits accruing to their accounts. Any such distribution shall not unfairly discriminate between classes of risks, or policies, or between subscribers, but such distribution may vary as to classes of subscribers based upon the experience of such subscribers.
The attorney or other parties may advance to a reciprocal insurer upon reasonable terms such funds as it may require from time to time in its operations. Sums so advanced shall not be treated as a liability of the insurer, and, except upon liquidation of the insurer, shall not be withdrawn or repaid except out of the insurer's realized earned surplus in excess of its minimum required surplus.
In determining the financial condition of a reciprocal insurer the commissioner shall apply the following rules:(a) He shall charge as liabilities the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis.(b) The surplus deposits of subscribers shall be allowed as assets, except that any premium deposit delinquent for ninety days shall first be charged against such surplus deposit.(c) The surplus deposits of subscribers shall not be charged as a liability.(d) All premium deposits delinquent less than ninety days shall be allowed as assets.(e) An assessment levied upon subscribers, and not collected, shall not be allowed as an asset.(f) The contingent liability of subscribers shall not be allowed as an asset.(g) The computation of reserves shall be based upon premium deposits other than membership fees and without any deduction for the compensation of the attorney.
Upon the liquidation of a domestic reciprocal insurer, its assets remaining after discharge of its indebtedness and policy obligations, the return of any contributions of the attorney or other persons to its surplus made as provided in section twenty- three of this article, and the return of any unused premium, savings, or credits then standing on subscribers' accounts, shall be distributed to its subscribers who were such within the twelve months prior to the last termination of its license, according to such reasonable formula as the commissioner may approve.
(a) A domestic reciprocal insurer upon affirmative vote of not less than two thirds of its subscribers who vote on such merger pursuant to due notice and the approval of the commissioner of the terms therefor, may merge with another reciprocal insurer or be converted to a stock or mutual insurer.(b) Such a stock or mutual insurer shall be subject to the same capital requirements and shall have the same rights as a like domestic insurer transacting like kinds of insurance.(c) The commissioner shall not approve any plan for such merger or conversion which is inequitable to subscribers, or which, if for conversion to a stock insurer, does not give each subscriber preferential right to acquire stock of the proposed insurer proportionate to his interest in the reciprocal insurer as determined in accordance with section twenty-five of this article and a reasonable length of time within which to exercise such right.
A reciprocal insurer, upon being licensed therefor as provided in this article, when possessed of and maintaining on deposit surplus funds equal to the minimum capital required of a stock insurer to transact like kinds of insurance, may transact fire, marine, casualty or surety insurance, and may purchase reinsurance upon the risk of any subscriber, and may grant reinsurance as to any kind of insurance it is licensed to transact direct. No reciprocal insurer shall be licensed to transact, nor shall any reciprocal insurer transact, life or accident and sickness insurance.
A reciprocal insurer shall have and use a business name, which shall include the word "reciprocal," or "interinsurer," or "interinsurance," or "exchange," or "underwriters," or "underwriting," in which name such insurer may sue and be sued.
"Attorney," as used in this article, refers to the attorney- in-fact of a reciprocal insurer, and such attorney may be an individual, firm or corporation.
A reciprocal insurer desiring to transact insurance may apply to the commissioner for a license. The attorney shall execute under his oath and file with the commissioner such application setting forth:(a) The name of the insurer;(b) The location of the insurer's principal office, which shall be the same as that of the attorney, and in the case of a domestic reciprocal insurer shall be maintained within this state;(c) The kinds of insurance proposed to be transacted;(d) The designation and appointment of the proposed attorney and a copy of the power of attorney;(e) The names and addresses of the officers and directors of the attorney, if a corporation, or its members, if a firm;(f) In the case of a domestic reciprocal insurer, the powers of the subscribers' advisory committee, and in the case of domestic, foreign or alien reciprocal insurers, the names and terms of office of the members thereof;(g) In the case of a domestic reciprocal insurer that all moneys paid to the reciprocal shall, after deducting therefrom any sum payable to the attorney, be held in the name of the insurer and for the purposes specified in the subscribers' agreement;(h) A copy of the subscribers' agreement;(i) A statement of the financial condition of the insurer, a schedule of its assets, and a statement that the surplus as required by section three of this article is on hand;(j) A copy of each policy, endorsement, and application form it then proposes to issue or use;(k) In the case of a foreign or alien reciprocal insurer a statement from the insurance supervisory official of its state of domicile or entry that it is licensed in such state to transact the kinds of insurance it proposes to transact in West Virginia;(l) In the case of a domestic reciprocal insurer, the names and addresses of the original subscribers who must number at least twenty-five;(m) In the case of a domestic reciprocal insurer, a statement that each of the original subscribers has in good faith applied for insurance of a kind proposed to be transacted, and that the insurer has received from each such subscriber the full premium or premium deposit required for the policy applied for, for a term of not less than six months at an adequate rate theretofore filed with and approved by the commissioner;(n) Such other information as the commissioner deems necessary.
The license of a reciprocal insurer shall be issued to its attorney in the name of the insurer and may be suspended, revoked or renewal refused in the same manner and upon the same grounds as other insurers.
(a) The rights and powers of the attorney of a reciprocal insurer shall be as provided in the power of attorney given it by the subscribers, which power of attorney must set forth:(1) The powers of the attorney;(2) That the attorney is empowered to accept service of process on behalf of the insurer;(3) The general services to be performed by the attorney;(4) The maximum amount to be deducted from advance premiums or deposits to be paid to the attorney and the general items of expense in addition to losses, to be paid by the insurer;(5) Except as to nonassessable policies, a provision for a contingent several liability of each subscriber in a specified amount, which amount shall be not less than one nor more than ten times the annual premium or premium deposit stated in the policy.(b) The power of attorney may:(1) Provide for the right of substitution of the attorney and revocation of the power of attorney and rights thereunder;(2) Impose such restrictions upon the exercise of the power as are agreed upon by the subscribers;(3) Provide for the exercise of any right reserved to the subscribers directly or through their advisory committee;(4) Contain other lawful provisions deemed advisable.(c) The terms of any power of attorney or agreement collateral thereto shall be reasonable and equitable.
Modification of the terms of the subscribers' agreement or of the power of attorney of a domestic reciprocal insurer shall be made jointly by the attorney and the subscribers' advisory committee. No modification of a domestic, foreign or alien reciprocal insurer's power of attorney or subscribers' agreement shall be effective retroactively, nor as to any insurance contract issued prior thereto, and such modification shall be reasonable and equitable, and shall be filed with the commissioner.
Every farmers' mutual fire insurance company, hereinafter called "company," organized under the laws of this state shall be governed by the provisions of this article and by no other provisions of this chapter except such provisions as are specifically made applicable and referred to in this article. No law hereafter enacted shall apply to such companies unless such law shall declare that it is specifically applicable to farmers' mutual fire insurance companies.
The contingent liability of a member of such company may, with the approval of the commissioner, be limited to one or more times the annual premium as computed for the policy and the company may issue a policy without contingent liability to the member if at the time of issuance the net premium written to surplus as to policyholders does not exceed four to one and the company maintains unearned premium and other reserves on the same basis as that required of domestic insurers transacting like kinds of insurance. In the absence of such limitation of contingent liability each member shall be liable for his or her pro rata share of losses and expenses of the company, including a reasonable contribution to a surplus fund.
(a) Each company may accumulate a surplus or emergency fund in an amount determined advisable by its board of directors.(b) The first $25,000 of the accumulated surplus shall be in cash or invested in government securities described in subdivision (1) or (2), subsection (a), section twenty-four, article eight of this chapter or subdivision (1), (2) or (3), subsection (c) of said section, and the balance of the surplus may be invested in any of the other classes of investments described in article eight of this chapter subject to the limitations as to each class provided therein.(c) All assets of the company other than the accumulated surplus shall be in cash or invested in the government securities described in subdivision (1) or (2), subsection (a), section twenty-four, article eight of this chapter or subdivision (1), (2) or (3), subsection (c) of said section: Provided, That any company having received an extension of its license to permit it to issue policies of insurance pursuant to subsection (c), section eight, article twenty-two of this chapter shall with the prior approval of the commissioner be permitted to invest all assets of the company other than the accumulated surplus in the investments that are authorized by sections twenty-three through thirty-two, inclusive, of said article.
No such company shall insure any single risk comprising a building and contents or other property so located as to be subject to destruction by a single fire for a greater amount than $1,000 until its insurance in force shall be as much as $500,000, nor shall it then insure any such risks for an amount greater than one fifth of one percent of the net insurance in force under its policies or ten percent of its surplus, whichever is greater, unless the risks insured by the company in excess of the amounts above stipulated are simultaneously covered by reinsurance.Any company having received an extension of its license to permit it to issue policies of insurance pursuant to subsection (c), section eight of this article shall be subject to the provisions of section sixteen, article four of this chapter.
(a) Such company may procure reinsurance or issue policies of reinsurance to other licensed insurers transacting like kinds of insurance, subject to the provisions of section fifteen, article four of this chapter.(b) Two or more such companies may issue policies jointly.
All notices of cancellation of policies or reduction thereof and all other notices to members required by this article shall be delivered personally or mailed in a sealed envelope addressed to the last-known address of the member and when so given they shall be deemed sufficient and binding upon the member so notified.
(a) Any member of a company may withdraw therefrom upon written notice to the company. Every member so withdrawing shall immediately surrender his policy and pay to the extent of his liability as stated in the policy, all of his indebtedness legally due the company.(b) No member shall be liable for losses or expenses occurring subsequent to the time of termination of his membership.(c) The company may cancel any policy upon at least five days' written notice to the holder.(d) A company may, in its bylaws, provide for the suspension of its liability for loss upon any policy from the date when an unpaid assessment becomes due if notice is given to the member five days before the suspension is to become effective, and the payment of such assessment shall only reinstate such policy from the date of such payment, but no allowance shall be made in any assessment because of such suspension.
Such company at the time of making its annual report shall pay to the commissioner a filing fee of $25, all fees so collected to be used for the purposes specified in section thirteen, article three of this chapter. No other fees or taxes shall be levied against such companies except the agent's license fee, the form filing fee required by the provisions of section thirty-four, article six of this chapter and the expenses of examination thereof by the commissioner.
Upon the liquidation of any such company, the share of each member in the assets shall be computed and distributed in the manner provided in section twenty-nine of article five of this chapter for computing and distributing the share of members of other types of domestic mutual insurers.
(a) A farmers' mutual fire insurance company may not merge or consolidate with any stock insurer.(b) A farmers' mutual fire insurance company may merge or consolidate with another farmers' mutual fire insurance company or merge with a domestic mutual insurer in the manner provided in section twenty-eight, article five of this chapter for the merger or consolidation of other types of domestic mutual insurers.
(a) A farmers' mutual fire insurance company may become a stock insurer in the manner provided in section twenty-four of article five of this chapter for converting other types of domestic mutual insurers to domestic stock insurers, or(b) A farmers' mutual fire insurance company may become a domestic mutual insurer pursuant to such plan and procedure as may be approved in advance by the commissioner, subject to approval by vote of not less than three fourths of the company's current members voting thereon in person, by proxy, or by mail at a meeting of members called for that purpose pursuant to such notice and procedure as may be approved by the commissioner, and subject to such company as reorganized complying with all requirements of this chapter relating to the initial organization and licensing of a domestic mutual insurer transacting like kinds of insurance as those proposed to be transacted by the reorganized company.
Each company to the same extent that provisions are applicable to domestic mutual insurers shall be governed by and be subject to the following provisions of this chapter, but only to the extent these provisions are not inconsistent with this article: Article one (definitions); article two (Insurance Commissioner); article four (general provisions), except that section sixteen, article four, may not be applicable; article seven (assets and liabilities); article eight-a (use of clearing corporations and federal reserve book-entry system); article ten (rehabilitation and liquidation), except that under section thirty-two, article ten, assessments may not be levied against any former member of a farmers' mutual fire insurance company who is no longer a member of the company at the time the order to show cause was issued; article eleven (unfair trade practices); article twelve (insurance producers and solicitors), except that the agent's license fee shall be $5; section six-a, article seventeen (notice of noncoverage of flood damages and the availability of flood insurance); section nine-b, article seventeen (claims for total loss; debris removal proceeds); article twenty-six (West Virginia Insurance Guaranty Association Act); article twenty-seven (insurance holding company systems); article thirty (mine subsidence insurance), except that under section six, article thirty, a farmers' mutual insurance company shall have the option of offering mine subsidence coverage to all of its policyholders, but may not be required to do so; article thirty-three (annual audited financial report); article thirty-four (administrative supervision); article thirty-five (criminal sanctions for failure to report impairment); article thirty-six (business transacted with Producer-Controlled Property-Casualty Insurer Act); article thirty-seven (managing general agents); article thirty-nine (disclosure of material transactions); article forty (risk-based capital for insurers); and article forty-one (Insurance Fraud Prevention Act).
Such company may be organized and incorporated without capital stock for the purpose of insuring property against loss or damage as hereinafter authorized, in the same manner as nonstock companies generally are organized and incorporated, except that the Secretary of State of this state shall not issue a certificate of incorporation until the commissioner shall have examined the charter and approved same in writing upon being satisfied that the company is in a position to comply with the provisions of this article.
No such company shall transact insurance in West Virginia except as authorized by a license issued by the commissioner. Such company shall apply to the commissioner for such license and shall file with such application a certified copy of its charter and bylaws, together with applications from residents of this state for not less than $100,000 of insurance of the type such companies are permitted to transact on property located in this state. The term of such license, renewal, refusal to license, revocation, suspension or penalty in lieu thereof, and reissuance, shall be governed by the provisions of sections eight, nine, ten, and eleven, of article three of this chapter, in the same manner that such sections are applicable to insurers generally, to the extent such provisions are not inconsistent with the provisions of this article.
(a) The number of directors of any such company shall not be less than six nor more than fifteen, a majority of whom shall constitute a quorum to do business, to be elected from the incorporators by ballot, of whom one third shall be elected for one year, one third for two years and one third for three years, until their successors are elected and qualified. At all subsequent elections, except to fill vacancies, one third of such board of directors shall be elected for three years, such election to be held at the annual meeting of the company. In the election of the first board of directors each incorporator shall be entitled to one vote. At every subsequent election every member shall be entitled to one vote and may cast the same in person or by proxy. Regular meetings of the board of directors shall be held as often as the bylaws may provide, and special meetings may be held at the call of the president, secretary, or a majority of the board of directors.(b) The directors shall elect from their number a president and a treasurer, and shall also employ a secretary, who may or may not be a member of the company, all of whom shall hold their office for one year and until their successors are elected and qualified. Any two of the above-named offices except the office of president may be held by the same person. The directors shall also prescribe the duties of the officers and fix their compensation, not inconsistent with the charter and bylaws.(c) The treasurer and secretary shall give bonds to the company for the faithful performance of their duties in such amounts as shall be prescribed by the board of directors, only one bond being required where the Office of Treasurer and secretary is held by the same person. Bonds may be required of other employees and agents of the company at the discretion of the board of directors.(d) The board of directors shall notify all members of the time and place of the annual meeting of such members, either by printing the same on their policies or by written notice.(e) Each such company when so licensed to transact insurance shall possess all the powers necessary to carry out its corporate purposes and not inconsistent with this article or the laws of this state. Amendments to the charter or bylaws may be offered by the board or any member at any regular or special meeting of the members upon written notice to all members of the intention to propose such amendments not less than thirty days prior to such meeting, and such amendments may be adopted by the approval of a majority of the members present and voting in person or by proxy. No such amendment shall be effective unless and until approved by the commissioner.(f) The president or vice-president, and secretary or assistant secretary of every such company shall prepare annually, under oath, a full, true and complete statement of the condition of such company as of December 31, and present the same to the annual meeting.
(a) Each policyholder of such company is a member thereof and is entitled to all the rights and privileges and subject to all liabilities connected with such membership.(b) Whenever any public or private corporation, board or association in this state holds a policy in any such company, any officer, stockholder or trustee of any such corporation, board or association may be recognized as acting for or on its behalf for the purpose of such membership, but shall not be personally liable upon such contract of insurance by reason of acting in such representative capacity. The right of any corporation organized under the laws of this state to participate as a member of such company is hereby declared to be incidental to the purpose for which such corporation is organized and as much granted as the rights and powers expressly conferred.
(a) No policy form shall be issued or used by any such company unless such form has been filed with and approved by the commissioner. The filing, approval and disapproval of such forms shall be governed by the provisions of sections eight and nine, article six of this chapter and section eight, article seventeen of this chapter in the same manner as form filings of other insurers.(b) All terms and conditions of such policies shall be set forth in full in the policy or endorsements attached thereto including the contingent liability, if any, of the policyholder and no provision purporting to make any portion of the charter, bylaws or other documents a part of the policy shall be valid unless such portion is set forth in full in the policy.(c) Policies may limit the liability of the company to a fixed percent of the value of the property insured.(d) Whenever the commissioner believes the public interest requires a standard form for a particular kind of coverage, the commissioner may prescribe a standard form of policy for such companies, or a standard specific provision to be inserted in such policies, and all policies thereafter issued by such companies shall conform to such standard forms or provisions.
(a) Any company subject to the provisions of this article may issue the following types of policies of insurance:(1) Fire insurance, which is insurance on real or personal property of every kind and interest therein, against loss or damage from any or all hazard or cause and against loss consequential upon such loss or damage, other than noncontractual liability for the loss or damage;(2) Loss or damage by insects or disease to farm crops or products and loss of rental value of land used in producing those crops or products;(3) Loss or damage to domestic farm animals by dogs or wild animals;(4) Loss or damage to property by burglary, theft, larceny, robbery, vandalism, malicious mischief or wrongful conversion, or any attempt at any of the foregoing;(5) Personal property floater insurance, which is insurance upon personal effects against loss or damage from any cause; and(6) Glass insurance, which is insurance against loss or damage to glass, including its ornamentation and fittings.(b) In addition to the policies of insurance permitted by subsection (a) of this section, a company may apply to the commissioner for an extension of its license and upon complying with reasonable standards established by the commissioner to assure the solvency of the company and the protection of its policyholders, may, in the discretion of the commissioner, be granted an extension of its license upon such conditions and for such period as the commissioner may prescribe to permit the company to issue policies of insurance on risks insuring against one or more of the following:Legal liability for the death, injury or disability of any human being, or for damage to property, excluding liability resulting from the ownership, maintenance or use of vehicles or aircraft; and provisions for medical, hospital, surgical and disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to the liability coverage. For the purposes of this subsection, the term "vehicle" does not include a "farm tractor", "implement of husbandry", as defined in section one, article one, chapter seventeen-a of this code; a "wheelchair", as defined in section sixty-five, article one, chapter seventeen-c of this code and any similar vehicle used by persons with disabilities; a "golf cart" while used for golfing; or other motorized vehicle used to service the premises.(c) The commissioner may, for good cause shown or on application of the company, limit the license of a company to make insurance to any one or more of the perils or coverages set forth in subsection (a) or (b) of this section.(d) A farm mutual insurance company insuring property located outside this state must meet the capital and surplus requirements of section five-b, article three of this chapter.(e) On and after January 1, 2007, any company subject to the provisions of this article must have a majority of its book of business, as determined by either gross direct premiums or policy count, in underserved areas of the insurance market in the State of West Virginia. For purposes of this article, "underserved areas of the insurance market in the State of West Virginia" means any of the following or any combination thereof: Persons or property insured that have a public fire protection classification of five or higher, or the equivalent thereof, according to a rating organization licensed pursuant to section six, article twenty of this chapter; residential structures or dwellings insured on an actual cash-value basis; residential structures or dwellings over forty years of age; vacant or seasonally occupied residential structures or dwellings; property or persons who have had insurance canceled or declined by any insurance company licensed to do business in this state; and farm property or structures. Upon determination, after notice and hearing, that any farm mutual fire insurance company has failed to comply with this subsection, the commissioner may require the company to pay all taxes, additional taxes, surcharges and fees pursuant to article three of this chapter, require conversion under section nineteen of this article, or revoke its license under section four of this article, or any combination thereof.
(a) Such company shall collect from its members such initial fees or charges as its bylaws provide.(b) Any such company may levy assessments or collect premiums for the purpose of paying losses and expenses already incurred, or for estimated future losses and expenses, and for reserve or surplus fund purposes. The secretary of any such company shall notify every member of the company of the amount due by a written or printed notice, mailed to the last-known address of each member, stating the amount due the company from the member and the time and place and to whom it shall be paid. Such payment shall be made by the member within sixty days from date of mailing such notice, or within a lesser period, as the bylaws may provide. The company may maintain an action against any member thereof to recover all such assessments which he may neglect or refuse to pay when legally due and payable.(c) Any such company issuing policies at rates other than uniform or class rates or levying assessments on other than a uniform or class basis shall as to such policies be a subscriber to a rating organization licensed under the provisions of article twenty of this chapter.(d) Such company may return to its members in the form of dividends or otherwise savings or earnings of such company.
Every fraternal benefit society shall be governed by the provisions of this article and by no other provisions of this chapter except such provisions as are specifically made applicable and referred to in this article.
(a) A domestic society may make application to consolidate or merge with any other society by filing with the commissioner:(1) A certified copy of the written contract containing in full the terms and conditions of the consolidation or merger;(2) A sworn statement by the president and secretary or corresponding officers of each society showing the financial condition thereof on a date fixed by the commissioner but not earlier than December thirty-first, next preceding the date of the contract;(3) A certificate of such officers, duly verified by their respective oaths, that the consolidation or merger has been approved by a two-thirds vote of the supreme legislative or governing body of each society; and(4) Evidence that at least sixty days prior to the action of the supreme legislative or governing body of each society, the text of the contract has been furnished to all members of each society either by mail or by publication in full in the official organ of each society.(b) If the commissioner finds that the contract is in conformity with the provisions of this section, that the financial statements are correct and that the consolidation or merger is just and equitable to the members of each society, he shall approve the contract and issue his certificate to such effect. Upon such approval, the contract shall be in full force and effect unless any society which is a party to the contract is incorporated under the laws of any other state or territory. In such event the consolidation or merger shall not become effective unless and until it has been approved as provided by the laws of such state or territory and a certificate of such approval filed with the commissioner or, if the laws of such state or territory contain no such provision, then the consolidation or merger shall not become effective unless and until it has been approved by the insurance supervisory official of such state or territory and a certificate of such approval filed with the commissioner.(c) Upon the consolidation or merger becoming effective as herein provided, all the rights, franchises and interests of the consolidated or merged societies in and to every species of property, real, personal or mixed, and things in action thereunto belonging shall be vested in the society resulting from or remaining after the consolidation or merger without any other instrument, except that conveyances of real property may be evidenced by proper deeds, and the title to any real estate or interest therein, vested under the laws of this state in any of the societies consolidated or merged, shall not revert or be in any way impaired by reason of the consolidation or merger, but shall vest absolutely in the society resulting from or remaining after such consolidation or merger.(d) The affidavit of any officer of the society or of anyone authorized by it to mail any notice or document, stating that such notice or document has been duly addressed and mailed, shall be prima facie evidence that such notice or document has been furnished the addressees.
Any domestic fraternal benefit society may be converted and licensed as a mutual life insurance company by compliance with all the requirements of this chapter for the initial licensing of a domestic mutual life insurer, if such plan of conversion has been approved by the commissioner. Such plan shall be prepared in writing setting forth in full the terms and conditions thereof. The board of directors shall submit such plan to the supreme legislative or governing body of such society at any regular or special meeting thereof, by giving a full, true and complete copy of such plan with the notice of such meeting. Such notice shall be given as provided in the laws of the society for the convocation of a regular or special meeting of such body, as the case may be. The affirmative vote of two thirds of all members of such body shall be necessary for the approval of such agreement. No such conversion shall take effect unless and until approved by the commissioner who may give such approval if he finds that the proposed change is in conformity with the requirements of law and not prejudicial to the certificate holders of the society.
(a) A society may admit to benefit membership any person not less than fifteen years of age, nearest birthday, who has furnished evidence of insurability acceptable to the society. Any such member who shall apply for additional benefits more than six months after becoming a benefit member shall pass an additional medical examination, or make an additional declaration of insurability, as required by the society.(b) Any person admitted prior to attaining the full age of twenty-one years shall be bound by the terms of the application and certificate and by all the laws and rules of the society and shall be entitled to all the rights and privileges of membership therein to the same extent as though the age of majority had been attained at the time of application. A society may also admit general or social members who shall have no voice or vote in the management of its insurance affairs.
(a) A domestic society may amend its articles of incorporation, Constitution or laws in accordance with the provisions thereof by action of its supreme legislative or governing body at any regular or special meeting thereof or, if its articles of incorporation, Constitution or laws so provide, by referendum. Such referendum may be held in accordance with the provisions of its articles of incorporation, Constitution or laws by the vote of the voting members of the society, by the vote of delegates or representatives of voting members or by the vote of local lodges or branches. No amendment submitted for adoption by referendum shall be adopted unless, within six months from the date of submission thereof, a majority of all of the voting members of the society shall have signified their consent to such amendment by one of the methods herein specified.(b) No amendment to the articles of incorporation, Constitution or laws of any domestic society shall take effect unless approved by the commissioner who shall approve such amendment if he finds that it has been duly adopted and is not inconsistent with any requirement of the laws of this state or with the character, objects and purposes of the society. Unless the commissioner shall disapprove any such amendment within sixty days after the filing of same, such amendment shall be considered approved. The approval or disapproval of the commissioner shall be in writing and mailed to the secretary or corresponding officer of the society at its principal office. In case he disapproves such amendment, the reasons therefor shall be stated in such written notice.(c) Within ninety days from the approval thereof by the commissioner, all such amendments, or a synopsis thereof, shall be furnished to all members of the society either by mail or by publication in full in the official organ of the society. The affidavit of any officer of the society or of anyone authorized by it to mail any amendments or synopsis thereof, stating facts which show that same have been duly addressed and mailed, shall be prima facie evidence that such amendments or synopsis thereof, have been furnished the addressee.(d) Every foreign or alien society authorized to do business in this state shall file with the commissioner a duly certified copy of all amendments of, or additions to, its articles of incorporation, Constitution or laws within ninety days after the enactment of same.(e) Printed copies of the Constitution or laws as amended, certified by the secretary or corresponding officer of the society shall be prima facie evidence of the legal adoption thereof.
(a) It shall be lawful for a society to create, maintain and operate charitable, benevolent or educational institutions for the benefit of its members and their families and dependents and for the benefit of children insured by the society. For such purpose it may own, hold or lease personal property or real property located within or without this state, with necessary buildings thereon. Such property shall be reported in every annual statement but shall not be allowed as an admitted asset of such society.(b) Maintenance, treatment and proper attendance in any such institution may be furnished free or a reasonable charge may be made therefor, but no such institution shall be operated for profit. The society shall maintain a separate accounting of any income and disbursements under this section and report them in its annual statement. No society shall own or operate funeral homes or undertaking establishments.
(a) A society may pay benefits, other than insurance benefits to its members from any special account or fund maintained for such purpose; provided that if such benefits are of such a nature that they could constitute benefits within the classes of insurance set forth in section seventeen of this article, a society making such payments may not:(1) Make any separate charge therefor;(2) Issue any certificate, policy or other document promising such payments;(3) Provide in its Constitution, laws or any other document that such payments may be received by the member as a matter of right; or(4) Advertise such payments as insurance or as payments to which the member has any right.(b) The society shall maintain a separate accounting of all disbursements made under this section and report them in its annual statement.
The officers and members of the supreme, grand or any subordinate body of a society shall not be personally liable for payment of any benefits provided by a society.
(1) A society licensed in this state may provide for the payment of:(a) Death benefits in any form;(b) Endowment benefits;(c) Annuity benefits;(d) Temporary or permanent disability benefits as a result of disease or accident;(e) Hospital, medical or nursing benefits due to sickness or bodily infirmity or accident;(f) Monument or tombstone benefits to the memory of deceased members not exceeding in any case the sum of $300.(2) Such benefits may be provided on the lives of members or, upon application of a member, on the lives of the member's family, including the member, the member's spouse and minor children, in the same or separate certificates.
(a) A society may provide for benefits on the lives of children under the minimum age for adult membership but not greater than twenty-one years of age at time of application therefor, upon the application of some adult person, as its laws or rules may provide, which benefits shall be in accordance with the provisions of paragraph (1) of section seventeen of this article. A society may, at its option, organize and operate branches for such children. Membership and initiation in local lodges shall not be required of such children, nor shall they have a voice in the management of the society.(b) A society shall have power to provide for the designation and changing of designation of beneficiaries in the certificates providing for such benefits and to provide in all other respects for the regulation, government and control of such certificates and all rights, obligations and liabilities incident thereto and connected therewith.
(a) A society may grant paid-up nonforfeiture benefits, cash surrender values, certificate loans and such other options as its laws may permit. As to certificates issued on and after the effective date of this article, a society shall grant at least one paid-up nonforfeiture benefit.(b) In the case of certificates other than those for which reserves are computed on the Commissioners 1941 Standard Ordinary Mortality Table or the 1941 Standard Industrial Table, or any more recent table made applicable to life insurance companies and duly approved by the commissioner, the value of every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan or other option granted shall not be less than the excess, if any, of (1) over (2) as follows:(1) The reserve under the certificate determined on the basis specified in the certificate; and(2) The sum of any indebtedness to the society on the certificate, including interest due and accrued, and a surrender charge equal to two and one-half percent of the face amount of the certificate, which, in the case of insurance on the lives of children, shall be the ultimate face amount of the certificate, if death benefits provided therein are graded.(c) However, in the case of certificates issued on a substandard basis or in the case of certificates, the reserves for which are computed upon the American Men Ultimate Table of Mortality, the term of any extended insurance benefit granted including accompanying pure endowment, if any, may be computed upon the rates of mortality not greater than one hundred thirty percent of those shown by the mortality table specified in the certificate for the computation of the reserve.(d) In the case of certificates for which reserves are computed on the Commissioners 1941 Standard Ordinary Mortality Table or the 1941 Standard Industrial Table, or any more recent table made applicable to life insurance companies and duly approved by the commissioner, every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan or other option granted shall not be less than the corresponding amount ascertained in accordance with the provisions of the laws of this state applicable to life insurance companies issuing policies containing like insurance benefits based upon such tables.
Every fraternal benefit society shall be governed and be subject to the same extent as other insurers transacting like kinds of insurance, to the following articles of this chapter: Article one (definitions); article two (Insurance Commissioner); article four (general provisions); section thirty, article six (fee for form and rate filing); article seven (assets and liabilities); article ten (rehabilitation and liquidation); article eleven (unfair trade practices); article twelve (agents, brokers, solicitors and excess lines); article thirteen (life insurance); article thirteen-a (variable contracts); article fifteen-a (long-term care insurance); article twenty-seven (insurance holding company systems); article thirty-three (annual audited financial report); article thirty-four (administrative supervision); article thirty-four-a (standards and commissioner's authority for companies considered to be in hazardous financial condition); article thirty-five(criminal sanctions for failure to report impairment); article thirty-seven(managing general agents); and article thirty-nine (disclosure of material transactions).
(a) The member shall have the right at all times to change the beneficiary or beneficiaries in accordance with the Constitution, laws or rules of the society. Every society by its Constitution, laws or rules may limit the scope of beneficiaries and shall provide that no beneficiary shall have or obtain any vested interest in the proceeds of any certificate until the certificate has become due and payable in conformity with the provisions of the insurance contract.(b) A society may make provision for the payment of funeral benefits to the extent of such portion of any payment under a certificate as might reasonably appear to be due to any person equitably entitled thereto by reason of having incurred expense occasioned by the burial of the member, provided the portion so paid shall not exceed the sum of $500.(c) If, at the death of any member, there is no lawful beneficiary to whom the insurance benefits shall be payable, the amount of such benefits, except to the extent that funeral benefits may be paid as hereinbefore provided, shall be payable to the personal representative of the deceased member.
No money or other benefit, charity, relief or aid to be paid, provided or rendered by any society, shall be liable to attachment, garnishment or other process, or to be seized, taken, appropriated or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society.
(a) Every society licensed in this state shall issue to each benefit member a certificate specifying the amount of benefits provided thereby. The certificate, together with any riders or endorsements attached thereto, the charter or articles of incorporation, the Constitution and laws of the society, the application for membership, and declaration of insurability, if any, signed by the applicant, and all amendments to each thereof, shall constitute the agreement, as of the date of issuance, between the society and the member, and the certificate shall so state. A copy of the application for membership and of the declaration of insurability, if any, shall be endorsed upon or attached to the certificate.(b) All statements purporting to be made by the member shall be representations and not warranties. Any waiver of this provision shall be void.(c) Any changes, additions or amendments to the charter or articles of incorporation, Constitution or laws duly made or enacted subsequent to the issuance of the certificate, shall bind the member and the beneficiaries, and shall govern and control the agreement in all respects the same as though such changes, additions or amendments had been made prior to and were in force at the time of the application for membership, except that no change, addition, or amendment shall destroy or diminish benefits which the society contracted to give the member as of the date of issuance.(d) Copies of any of the documents mentioned in this section, certified by the secretary or corresponding officer of the society, shall be received as evidence of the terms and conditions thereof.(e) A society shall provide in its Constitution or laws and in its certificates that if its reserves as to all or any class of certificates become impaired its board of directors or corresponding body may require that there shall be paid by the member to the society the amount of the member's equitable proportion of such deficiency as ascertained by its board, and that if the payment be not made it shall stand as an indebtedness against the certificate and draw interest not to exceed five percent per annum compounded annually.
(a) No life benefit certificate shall be delivered or issued for delivery in this state unless a copy of the form shall have been filed with the commissioner and approved by him as conforming to the requirements of this section and not inconsistent with any other provisions of law applicable thereto. A certificate shall be deemed approved unless disapproved by the commissioner within sixty days of the date of such filing.(b) The certificate shall contain in substance the following standard provisions or, in lieu thereof, provisions which are more favorable to the member:(1) Title on the face and filing page of the certificate clearly and correctly describing its form;(2) A provision stating the amount of rates, premiums or other required contributions, by whatever name known, which are payable by the insured under the certificate;(3) A provision that the member is entitled to a grace period of not less than a full month (or thirty days at the option of the society) in which the payment of any premium after the first, may be made. During such grace period the certificate shall continue in full force, but in case the certificate becomes a claim during the grace period before the overdue payment is made, the amount of such overdue payment or payments may be deducted in any settlement under the certificate;(4) A provision that the member shall be entitled to have the certificate reinstated at any time within three years from the due date of the premium in default, unless the certificate has been completely terminated through the application of a nonforfeiture benefit, cash surrender value or certificate loan, upon the production of evidence of insurability satisfactory to the society and the payment of all overdue premiums and any other indebtedness to the society upon the certificate, together with interest on such premiums and such indebtedness, if any, at a rate not exceeding six percent per annum compounded annually;(5) Except in the case of pure endowment, annuity or reversionary annuity contracts, reducing term insurance contracts, or contracts of term insurance of uniform amount of fifteen years or less expiring before age sixty-six, a provision that, in the event of default in payment of any premium after three full years' premiums have been paid or after premiums for a lesser period have been paid if the contract so provides, the society will grant, upon proper request not later than sixty days after the due date of the premium in default, a paid-up nonforfeiture benefit on the plan stipulated in the certificate, effective as of such due date, of such value as specified in this article. The certificate may provide, if the society's laws so specify or if the member shall so elect prior to the expiration of the grace period of any overdue premium, that default shall not occur so long as premiums can be paid under the provisions of an arrangement for automatic premium loan as may be set forth in the certificate;(6) A provision that one paid-up nonforfeiture benefit as specified in the certificate shall become effective automatically unless the member elects another available paid-up nonforfeiture benefit, not later than sixty days after the due date of the premium in default;(7) A statement of the mortality table and rate of interest used in determining all paid-up nonforfeiture benefits and cash surrender options available under the certificate, and a brief general statement of the method used in calculating such benefits;(8) A table showing in figures the value of every paid-up nonforfeiture benefit and cash surrender option available under the certificate for each certificate anniversary either during the first twenty certificate years or during the term of the certificate whichever is shorter;(9) A provision that the certificate shall be incontestable after it has been in force during the lifetime of the member for a period of two years from its date of issue except for nonpayment of premiums, violation of the provisions of the certificate relating to military, aviation, or naval service and violation of the provisions relating to suspension or expulsion as substantially set forth in the certificate. At the option of the society, supplemental provisions relating to benefits in the event of temporary or permanent disability or hospitalization and provisions which grant additional insurance specifically against death by accident or accidental means, may also be excepted. The certificate shall be incontestable on the ground of suicide after it has been in force during the lifetime of the member for a period of two years from date of issue. The certificate may provide, as to statements made to procure reinstatement, that the society shall have the right to contest a reinstated certificate within a period of two years from date of reinstatement with the same exceptions as herein provided;(10) A provision that in case the age of the member or of the beneficiary is considered in determining the premium and it is found at any time before final settlement under the certificate that the age has been misstated, and the discrepancy and premium involved have not been adjusted, the amount payable shall be such as the premium would have purchased at the correct age; but if the correct age was not an insurable age under the society's charter or laws, only the premium paid to the society, less any payments previously made to the member, shall be returned or, at the option of the society, the amount payable under the certificate shall be such as the premium would have purchased at the correct age according to the society's promulgated rates and any extension thereof based on actuarial principles;(11) A provision or provisions which recite fully, or which set forth the substance of, all sections of the charter, Constitution, laws, rules or regulations of the society, in force at the time of issuance of the certificate, the violation of which will result in the termination of, or in the reduction of, the benefit or benefits payable under the certificate;(12) If the Constitution or laws of the society provide for expulsion or suspension of a member, any member so expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentations in such member's application for membership shall have the privilege of maintaining his insurance in force by continuing payment of the required premium; and(13) In the case of a certificate issued by a foreign or alien society, a provision that the rights or obligations of the member or of any person rightfully claiming under the certificate shall be governed by the laws of this state.(c) Any of the foregoing provisions set forth in paragraph (b) of this section, or portions thereof, not applicable by reason of the plan of insurance or because the certificate is an annuity certificate may, to the extent inapplicable, be omitted from the certificate.(d) No life benefit certificate shall be delivered or issued for delivery in this state containing in substance any of the following provisions:(1) Any provision limiting the time within which any action at law or in equity may be commenced to less than two years after the cause of action shall accrue;(2) Any provision by which the certificate shall purport to be issued or to take effect more than six months before the original application for the certificate was made, except in case of transfer from one form of certificate to another in connection with which the member is to receive credit for any reserve accumulation under the form of certificate from which the transfer is made; or(3) Any provision for forfeiture of the certificate for failure to repay any loan thereon or to pay interest on such loan while the total indebtedness, including interest, is less than the loan value of the certificate.(e) The word "premiums" as used in this article means premiums, rates, or other required contributions by whatever name known.
(a) No domestic, foreign or alien society licensed in this state shall issue or deliver in this state any certificate or other evidence of any contract of accident and sickness insurance unless and until the form thereof, together with the form of application and all riders or endorsements for use in connection therewith, shall have been filed with the commissioner and approved by him or her as conforming to reasonable rules from time to time in effect and as not inconsistent with any other provisions of law applicable thereto. The commissioner shall, within a reasonable time after the filing of any form, notify the society filing the form of the approval or disapproval of the form. The commissioner may in his or her discretion approve any form which contains provisions more favorable to the members than the ones required.(b) Pursuant to chapter twenty-nine-a of this code, the commissioner may promulgate rules necessary to implement the provisions of this section, and such rules shall conform, as far as practicable, to the provisions of article fifteen (Accident and Sickness Insurance) and article sixteen (Group Accident and Sickness Insurance) of this chapter.(1) For any certificate or other evidence of coverage issued before July 1, 1997, and for any certificate or other evidence of coverage under a health benefit plan issued on or after July 1, 1997, other than in connection with a group health plan, where the commissioner deems inapplicable, either in part or in their entirety, the provisions of articles fifteen or sixteen of this chapter, the commissioner may prescribe the portions or summary thereof of the contract to be printed on the certificate issued to the member. For purposes of this subsection, the terms "group health plan" and "health benefit plan" have the meanings set forth in section one-a, article sixteen of this chapter.(2) For any certificate or other evidence of individual coverage issued or renewed on or after July 1, 1997, the society shall comply with all provisions of article fifteen of this chapter. For any certificate or other evidence of coverage under a health benefit plan issued in connection with a group health plan on or after July 1, 1997, the society shall comply with all provisions of article sixteen of this chapter, and for a health benefit plan issued to a small employer, as defined in section two, article sixteen-d of this chapter, with all provisions of article sixteen-d of this chapter.(c) Any filing made hereunder shall be deemed approved unless disapproved within sixty days from the date of such filing.
The Constitution and laws of the society may provide that no subordinate body, nor any of its subordinate officers or members shall have the power or authority to waive any of the provisions of the laws and Constitution of the society. Such provision shall be binding on the society and every member and beneficiary of a member.
A domestic society may, by an authorized reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer (other than another fraternal benefit society) having the power to make such reinsurance; but no such society may reinsure substantially all of its insurance in force without the written permission of the commissioner.
(a) No foreign or alien society shall transact business in this state without a license issued by the commissioner. Any such society may be licensed to transact business in this state upon filing with the commissioner:(1) A duly certified copy of its charter or articles of incorporation;(2) A copy of its Constitution and laws, certified by its secretary or corresponding officer;(3) A statement of its business under oath of its president and secretary or corresponding officers in a form prescribed by the commissioner, duly verified by an examination made by the supervising insurance official of its home state or other state, territory, province or country, satisfactory to the commissioner; (4) A certificate from the proper official of its home state, territory, province or country that the society is legally incorporated and licensed to transact business therein;(5) Copies of its certificate forms; and(6) Such other information as he may deem necessary; and upon a showing that its assets are invested in accordance with the provisions of this article.(b) No license shall be issued to a foreign or alien society desiring admission to this state unless such society has the qualifications required of domestic societies organized under this article.
The term of license, renewal thereof, refusal to license, revocation or suspension of license or penalty in lieu thereof, and reissuance of license of all societies shall be governed by the provisions of sections eight, nine, ten, and eleven of article three of this chapter, to the same extent that such sections are applicable to other insurers.
(a) Each society shall pay to the commissioner an annual license fee of $50 and a fee of $25 for filing the annual statement of the society, all fees so collected to be used for the purposes specified in section thirteen, article three of this chapter.(b) Every society licensed under this article is hereby declared to be a charitable and benevolent institution, and all of its funds and assets shall be exempt from all state, county, district and municipal taxes except taxes on real property and office equipment.
Notwithstanding any provision of this code to the contrary, article forty-one of this chapter is applicable to fraternal benefit societies.
Any incorporated society, order or supreme lodge, without capital stock, including one exempted under the provisions of subparagraph (2) of paragraph (a) of section thirty-four of this article whether incorporated or not, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and which makes provision for the payment of benefits in accordance with this article, is hereby declared to be a fraternal benefit society. When used in this article the word "society," unless otherwise indicated, shall mean fraternal benefit society.
(a) All assets shall be held, invested and disbursed for the use and benefit of the society and no member or beneficiary shall have or acquire individual rights therein or become entitled to any apportionment or the surrender of any part thereof, except as provided in the contract.(b) A society may create, maintain, invest, disburse and apply any special funds or funds necessary to carry out any purpose permitted by the laws of such society.(c) Every society, the admitted assets of which are less than the sum of its accrued liabilities and reserves under all of its certificates when valued according to standards required for certificates issued after one year from the effective date of this article, shall, in every provision of the laws of the society for payments by members of such society, in whatever form made, distinctly state the purpose of the same and the proportion thereof which may be used for expenses, and no part of the money collected for mortuary or disability purposes or the net accretions thereto shall be used for expenses.
(a) A domestic society shall invest its funds only in the investments that are authorized by sections ten through twenty, inclusive, article eight of this chapter for the investment of the assets of domestic insurers.(b) Foreign and alien societies shall have investments of the same general quality as required of domestic societies, except that other investments authorized by the laws of the foreign or alien society's state or country of domicile may be recognized as assets in the discretion of the commissioner.
In addition to the annual statement required by section fourteen, article four of this chapter, reports shall be filed and synopses of annual statements shall be published in accordance with the provisions of this section as follows:(a) A synopsis of its annual statement providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society not later than June 1 of each year, or, in lieu thereof, such synopsis may be published in the society's official publication.(b) As a part of the annual statement required of each society, it shall, on or before March 1, file with the commissioner a valuation of its certificates in force on December thirty-first last preceding: Provided, That the commissioner may, in his discretion for cause shown, extend the time for filing such valuation for not more than two calendar months. Such report of valuation shall show, as reserve liabilities, the differences between the present midyear value of the promised benefits provided in the certificates of such society in force and the present midyear value of the future net premiums as the same are in practice actually collected, not including therein any value for the right to make extra assessments and not including any amount by which the present midyear value of future net premiums exceeds the present midyear value of promised benefits on individual certificates. At the option of any society, in lieu of the above, the valuation may show the net tabular value. Such net tabular value as to certificates issued prior to one year after the effective date of this article shall be determined in accordance with the provisions of law applicable prior to the effective date of this article and as to certificates issued on or after one year from the effective date of this article shall not be less than the reserves determined according to the commissioner's reserve valuation method as hereinafter defined. If the premium charged is less than the tabular net premium according to the basis of valuation used, an additional reserve equal to the present value of the deficiency in such premiums shall be set up and maintained as a liability. The reserve liabilities shall be properly adjusted in the event that the midyear or tabular values are not appropriate.(c) Reserves according to the commissioner's reserve valuation method for the life insurance and endowment benefits of certificates providing for a uniform amount of insurance and requiring the payment of uniform premiums shall be the excess, if any, of the present value, at the date of valuation, of such future guaranteed benefits provided for by such certificates, over the then present value of any future modified net premiums therefor. The modified net premiums for any such certificate shall be such uniform percentage of the respective contract premiums for such benefits that the present value, at the date of issue of the certificate, of all such modified net premiums shall be equal to the sum of the then present value of such benefits provided for by the certificate and the excess of (1) over (2), as follows:(1) A net level premium equal to the present value, at the date of issue, of such benefits provided for after the first certificate year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of such certificate on which a premium falls due: Provided, however, That such net level annual premium shall not exceed the net level annual premium on the nineteen-year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of such certificate; and(2) A net one-year term premium for such benefits provided for in the first certificate year.(d) Reserves according to the commissioner's reserve valuation method for (1) life insurance benefits for varying amounts of benefits or requiring the payment of varying premiums, (2) annuity and pure endowment benefits, (3) disability and accidental death benefits in all certificates and contracts, and (4) all other benefits except life insurance and endowment benefits, shall be calculated by a method consistent with the principles of subdivision (c) of this section.(e) The present value of deferred payments due under incurred claims or matured certificates shall be deemed a liability of the society and shall be computed upon mortality and interest standards prescribed in the following subdivision.(f) Such valuation and underlying data shall be certified by a competent actuary or, at the expense of the society, verified by the actuary of the department of insurance of the state of domicile of the society.(g) The minimum standards of valuation for certificates issued prior to one year from the effective date of this article shall be those provided by the law applicable immediately prior to the effective date of this article but not lower than the standards used in the calculating of rates for such certificates.(h) The minimum standard of valuation for certificates issued after one year from the effective date of this article shall be three and one-half percent interest and the following tables:(1) For certificates of life insurance -- American Men Ultimate Table of Mortality, with Bowerman's or Davis' Extension thereof or with the consent of the commissioner, the Commissioners 1941 Standard Ordinary Mortality Table or the Commissioners 1941 Standard Industrial Table of Mortality;(2) For annuity certificates, including life annuities provided or available under optional modes of settlement in such certificates -- the 1937 Standard Annuity Table;(3) For disability benefits issued in connection with life benefit certificates -- Hunter's Disability Table, which for active lives shall be combined with a mortality table permitted for calculating the reserves on life insurance certificates, except that the table known as Class III Disability Table (1926), modified to conform to the contractual waiting period, shall be used in computing reserves for disability benefits under a contract which presumes that total disability shall be considered to be permanent after a specified period;(4) For accidental death benefits issued in connection with life benefit certificates -- the Inter-Company Double Indemnity Mortality Table combined with a mortality table permitted for calculating the reserves for life insurance certificates; and(5) For noncancelable accident and sickness benefits -- the Class III Disability Table (1926) with conference modifications or, with the consent of the commissioner, tables based upon the society's own experience: Provided, That any society may value its certificates in accordance with valuation standards authorized by the laws of this state for the valuation of policies issued by life insurance companies.(i) The commissioner may, in his discretion, accept other standards for valuation if he finds that the reserves produced thereby will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard herein prescribed. The commissioner may, in his discretion, vary the standards of mortality applicable to all certificates of insurance on substandard lives or other extra hazardous lives by any society authorized to do business in this state. Whenever the mortality experience under all certificates valued on the same mortality table is in excess of the expected mortality according to such table for a period of three consecutive years, the commissioner may require additional reserves when deemed necessary in his judgment on account of such certificates.(j) Any society, with the consent of the insurance supervisory official of the state of domicile of the society and under such conditions, if any, which he may impose, may establish and maintain reserves on its certificates in excess of the reserves required thereunder, but the contractual rights of any insured member shall not be affected thereby.
Commencing on June 1, 1989, agents for fraternal benefit societies shall be required to be licensed pursuant to chapter thirty-three of the Code of West Virginia, 1931, as amended: Provided, That any person who was acting as or serving in the role of an agent for a fraternal benefit society on or before July 1, 1989, shall be exempt from the examination requirement of subsection (e), section two, article twelve of this chapter: Provided, however, That any person who is a salaried officer, employee or member of a fraternal benefit society and who as an occasional and incidental duty of such position may solicit a fraternal insurance contract from a member of such fraternal benefit society such person shall be exempt from the continuing education requirements otherwise made subject to insurance agents by this chapter and the examination requirements of subsection (e), section two, article twelve of this chapter if such person receives no commission or other compensation based directly on such solicitation of fraternal insurance contracts and if such person makes no solicitation of insurance of any kind to or from persons who are not members of such fraternal benefit society. For the purpose of this article the solicitation of a fraternal insurance contract by such salaried officer, employee, or member from a new member of such society simultaneously with such new member's joining such society shall be deemed the solicitation of a member.
(a) Nothing contained in this article shall be so construed as to affect or apply to:(1) Grand or subordinate lodges of societies, orders or associations now doing business in this state which provide benefits exclusively through local or subordinate lodges;(2) Orders, societies or associations which admit to membership only persons engaged in one or more crafts or hazardous occupations, in the same or similar lines of business insuring only their own members, their families and descendants of members and the ladies' societies or ladies' auxiliaries to such orders, societies or associations;(3) Domestic societies which limit their membership to employees of a particular city or town, designated firm, business house or corporation which provide for a death benefit of not more than $400,000 or disability benefits of not more than $350,000 to any person in any one year, or both; or(4) Domestic societies or associations of a purely religious, charitable or benevolent description, which provide for a death benefit of not more than $2,000 or for disability benefits of not more than $350 to any one person in any one year, or both.(b) Any such society or association described in subdivision (3) or (4), subsection (a) of this section, which provides for death or disability benefits for which benefit certificates are issued, and any such society or association included in subdivision (4) which has more than one thousand members, shall not be exempted from the provisions of this article but shall comply with all requirements thereof.(c) No society which, by the provisions of this section, is exempt from the requirements of this article, except any society described in subdivision (2), subsection (a) of this section, shall give or allow, or promise to give or allow to any person any compensation for procuring new members.(d) Every society which provides for benefits in case of death or disability resulting solely from accident, and which does not obligate itself to pay natural death or sick benefits shall have all of the privileges and be subject to all the applicable provisions and rules of this article except that the provisions thereof relating to medical examination, valuations of benefit certificates, and incontestability, shall not apply to such society.(e) The commissioner may require from any society or association, by examination or otherwise, such information as will enable him to determine whether such society or association is exempt from the provisions of this article.(f) Societies, exempted under the provisions of this section, shall also be exempt from all other provisions of this chapter.
Any society which, on or after July 1, 1986, delivers or issues for delivery in this state any policy under the provisions of subdivision (e), subsection (1), section seventeen of this article, shall make available for purchase, at a reasonable rate, supplemental insurance coverage for continuum of care services pursuant to article five-d, chapter sixteen of this code: Provided, That any insurance carrier required to provide supplemental insurance coverage for continuum of care services hereunder shall not be required to expend funds for underwriting such supplemental coverage until the continuum of care board, in cooperation with the West Virginia state Insurance Commissioner, shall have completed a written master plan related to insurance coverage as set forth in section five, article five-d, chapter sixteen of the Code of West Virginia, 1931, as amended, including, but not limited to, the specific standards and coverages to be provided in such supplemental coverage: Provided, however, That a public hearing shall be held pursuant to the provisions of chapter twenty-nine-a of this code applicable to such proceedings prior to the considerations of the aforesaid plan by said board. The rates for continuum of care coverage shall accurately reflect the cost of such coverage and shall not be subsidized by the rate structure for any other coverage.
A society having a supreme legislative or governing body and subordinate lodges or branches by whatever name known, into which members are elected, initiated or admitted in accordance with its Constitution, laws, ritual and rules, which subordinate lodges or branches shall be required by the laws of the society to hold regular meetings at least once in each month, shall be deemed to be operating on the lodge system.
A society shall be deemed to have a representative form of government when:(a) It provides in its Constitution or laws for a supreme legislative or governing body, composed of representatives elected either by the members or by delegates elected directly or indirectly by the members, together with such other members of such body as may be prescribed by the society's Constitution and laws;(b) The representatives elected constitute a majority in number and have not less than two thirds of the votes nor less than the votes required to amend its Constitution and laws;(c) The meetings of the supreme legislative or governing body and the election of officers, representatives or delegates are held as often as once in four calendar years;(d) Each insured member shall be eligible for election to act or serve as a delegate to such meeting;(e) The society has a board of directors charged with the responsibility for managing its affairs in the interim between meetings of its supreme legislative or governing body, subject to control by such body and having powers and duties delegated to it in the Constitution or laws of the society;(f) Such board of directors is elected by the supreme legislative or governing body, except in case of filling a vacancy in the interim between meetings of such body;(g) The officers are elected either by the supreme legislative or governing body or by the board of directors; and(h) The members, officers, representatives or delegates shall not vote by proxy.
The organization of a domestic society shall be governed as follows:(a) Seven or more citizens of the United States, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, may make, sign and acknowledge before some officer, competent to take acknowledgment of deeds, articles of incorporation, in which shall be stated:(1) The proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company as to be misleading or confusing;(2) The purposes for which it is being formed and the mode in which its corporate powers are to be exercised. Such purposes shall not include more liberal powers than are granted by this article: Provided, That any lawful, social, intellectual, educational, charitable, benevolent, moral, fraternal or religious advantages may be set forth among the purposes of the society; and(3) The names and residences of the incorporators and the names, residences and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year or until the ensuing election at which all such officers shall be elected by the supreme legislative or governing body, which election shall be held not later than one year from the date of the issuance of the permanent certificate.(b) Such articles of incorporation, duly certified copies of the Constitution, laws and rules, copies of all proposed forms of certificates, applications therefor, and circulars to be issued by the society and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year, such bond to be in an amount to be determined by the commissioner not to exceed the sum of $25,000 with sureties approved by the commissioner, shall be filed with the commissioner, who may require such further information as he deems necessary. All documents filed are to be in the English language. If the purposes of the society conform to the requirements of this article and all provisions of law have been complied with, the commissioner shall approve same in writing, whereupon the incorporators may file such approved articles with the Secretary of State of this state and receive a certificate of incorporation in the same manner as such certificates are issued to other nonstock corporations.(c) No certificate granted under the provisions of this section shall be valid after one year from its date or after such further period, not exceeding one year, as may be authorized by the commissioner upon cause shown, unless the five hundred applicants hereinafter required have been secured and the organization has been completed as herein provided. The articles of incorporation and all other proceedings thereunder shall become null and void in one year from the date of the certificate, or at the expiration of the extended period, unless the society shall have completed its organization and received a license as hereinafter provided.(d) Upon receipt of the certificate of incorporation, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates as provided by its Constitution and laws, and shall issue to each such applicant a receipt for the amount so collected. No society shall incur any liability other than for the return of such advance premium, nor issue any certificate, nor pay, allow, or offer or promise to pay or allow, any death or disability benefit to any person until:(1) Actual bona fide applications for death benefits have been secured aggregating at least $500,000 on not less than five hundred lives;(2) All such applicants for death benefits shall have furnished evidence of insurability satisfactory to the society;(3) Certificates of examinations or acceptable declarations of insurability have been duly filed and approved by the chief medical examiner of the society;(4) Ten subordinate lodges or branches have been established into which the five hundred applicants have been admitted;(5) There has been submitted to the commissioner, under oath of the president or secretary, or corresponding officer of the society, a list of such applicants, giving their names, addresses, date each was admitted, name and number of the subordinate branch of which each applicant is a member, amount of benefits to be granted and premiums therefor; and(6) It shall have been shown to the commissioner, by sworn statement of the treasurer, or corresponding officer of such society, that at least five hundred applicants have each paid in cash at least one regular monthly premium as herein provided, which premiums in the aggregate shall amount to at least $2,500, all of which shall be credited to the fund or funds from which benefits are to be paid and no part of which may be used for expenses. Said advance premiums shall be held in trust during the period of organization and if the society has not qualified for a certificate of authority within one year, as herein provided, such premiums shall be returned to said applicants.(e) The commissioner may make such examination and require such further information as he deems advisable. Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, he shall issue to the society a license to transact insurance pursuant to the provisions of this article. The license shall be prima facie evidence of the existence of the society at the date of such license. The commissioner shall cause a record of such license to be made. A certified copy of such record may be given in evidence with like effect as the original license.(f) Every society shall have the power to adopt a Constitution and laws for the government of the society, the admission of its members, the management of its affairs and the fixing and readjusting of the rates of its members from time to time. It shall have the power to change, alter, add to or amend such Constitution and laws and shall have such other powers as are necessary and incidental to carrying into effect the objects and purposes of the society.
Any incorporated society licensed to transact insurance in this state at the time this article becomes effective may thereafter exercise all the rights, powers and privileges prescribed in this article and in its charter, articles of incorporation and license as far as consistent with this article. A domestic incorporated society shall not be required to reincorporate.
(a) After one year from the effective date of this article, no unincorporated or voluntary association shall be permitted to transact business in this state.(b) Any domestic voluntary association now licensed to transact insurance in this state may incorporate and shall receive from the commissioner a license as a fraternal benefit society when:(1) It shall have completed its conversion to an incorporated society not later than one year from the effective date of this article;(2) It has filed its articles of incorporation and has satisfied the other requirements described in section six of this article; and(3) The commissioner shall have made such examination and procured whatever additional information he shall deem advisable.(c) Every voluntary association so incorporated shall incur the obligations and enjoy the benefits thereof the same as though originally incorporated, and such corporation shall be deemed a continuation of the original voluntary association. The officers thereof shall serve through their respective terms as provided in its original articles of association, but their successors shall be elected and serve as provided in its articles of incorporation. Incorporation of a voluntary association shall not affect existing suits, claims or contracts.
The principal office of any domestic society shall be located in this state. The meetings of its supreme legislative or governing body may be held in any state, district, province or territory wherein such society has at least five subordinate branches and all business transacted at such meetings shall be as valid in all respects as if such meetings were held in this state.
In view of the desirability of making available to the people of this state increased hospital, medical, dental services and other health services, the declared policy of the Legislature in the enactment of this article is to encourage the organization, promotion and expansion of hospital service corporations, medical service corporations, dental service corporations and health service corporations by exempting them from the payment of all taxes and from the operation of the general insurance laws of this state, but at the same time subjecting them to such regulation as may be necessary for the adequate protection of those members of the public who subscribe for the services offered by such corporation.
(a) The funds of any corporation shall be invested only as follows:(1) The first $2 million of the funds shall be in cash or government securities of the type described in paragraph (A) or (B), subdivision (1), subsection (a), section eleven, article eight of this chapter or paragraph (A), (B) or (C), subdivision (3) of said subsection.(2) The balance of the funds may be in cash, invested in the classes of investments described in subdivision (1), subsection (a), section eleven, article eight of this chapter or invested in the classes of investments described in the following sections of article eight of this chapter: Subdivision (4), subsection (a) and section eleven (preferred stock), section twelve (investment pools), section thirteen (equity interests), section fourteen (tangible personal property under lease), section fifteen (mortgage loans and real estate), section sixteen (securities lending, repurchase, reverse repurchase and dollar roll transactions), section seventeen (foreign investments) and section eighteen (derivative transactions). All investments are subject to all the restrictions and conditions contained in said article eight as applying to similar investments of insurers generally.(b) Every officer or employee of any corporation, who is entrusted with the handling of its funds, shall furnish, in an amount fixed by the board of directors of the corporation, with the approval of the commissioner, a bond with corporate surety, conditioned upon the faithful performance of all his or her duties.(c) A corporation shall have and maintain statutory surplus funds of at least $2 million: Provided, That any corporation duly licensed under this article in West Virginia prior to the effective date of this section whose surplus requirements are increased by virtue of this section shall maintain statutory surplus funds of at least $500,000 after the effective date of this section, and any corporation is then subject to the full $2 million statutory surplus requirement.
Hospital, medical, dental and health service corporations licensed and operating under provisions of this article are hereby authorized to promote and encourage reciprocity with other licensed hospitals, medical, dental and health plans, both within and without the state, in expanding their services to subscribers. In the event that a subscriber to a plan requires emergency hospital, medical, dental or health service, or, in the event that the particular services that he receives are not available through the plan to which he subscribes, such plan is hereby authorized to make payment on behalf of such subscribed for such service on a basis not to exceed its schedule of fees to be paid hospitals, physicians or dentists previously approved by the commissioner and on file in his office.
In addition to the other rights given a corporation under the provisions of this article, a health service corporation may, subject to prior approval of the commissioner, create a subsidiary corporation or corporations, either nonprofit corporation or a corporation organized for pecuniary profit, for any lawful business purpose which is related to and promotes the purposes for which hospital, medical, dental and health service corporations are organized: Provided, That no subsidiary corporation created pursuant to the provisions of this section shall be entitled to the exemptions established by the provisions of this article and all such subsidiary corporations shall be governed by and subject to all other applicable provisions of this code: Provided, however, That no such subsidiary corporation shall be entitled to the exemptions provided under section seven of this article.
Any hospital service corporation, medical service corporation or health service corporation which, on or after July 1, 1986, delivers or issues for delivery in this state any subscriber contract under the provisions of this article, shall make available for purchase, at a reasonable rate, supplemental insurance coverage for continuum of care services pursuant to article five-d, chapter sixteen of this code: Provided, That any insurance carrier required to provide supplemental insurance coverage for continuum of care services hereunder shall not be required to expend funds for underwriting such supplemental coverage until the continuum of care board, in cooperation with the West Virginia state Insurance Commissioner, shall have completed a written master plan related to insurance coverage as set forth in section five, article five-d, chapter sixteen of the Code of West Virginia, 1931, as amended, including, but not limited to, the specific standards and coverages to be provided in such supplemental coverage: Provided, however, That a public hearing shall be held pursuant to the provisions of chapter twenty-nine-a of this code applicable to such proceedings prior to the considerations of the aforesaid plan by said board. The rates for continuum of care coverage shall accurately reflect the cost of such coverage and shall not be subsidized by the rate structure for any other coverage.
From and after July 1, 2004, any delinquency proceeding commenced against a corporation subject to this article for the purpose of liquidating, rehabilitating, reorganizing or conserving the corporation shall be considered to be a delinquency proceeding against an insurance company and shall be undertaken pursuant to the provisions of article ten of this chapter. Any delinquency proceeding pending against a corporation subject to this article prior to July 1, 2004, will be administered and concluded under the law in effect at the time the delinquency proceeding was commenced.
For the purpose of this article:(a) "Corporation" means either a hospital service corporation, a medical service corporation, a dental service corporation or a health service corporation.(b) "Hospital service corporation" means a nonprofit, nonstock corporation, organized in accordance with the provisions of article one, chapter thirty-one of this code, for the sole purpose of contracting with the public and with hospitals and other health agencies for hospital or other health services to be furnished to subscribers under terms of their contract with the corporation, and controlled by a board of directors, not more than twenty percent of whom, or whose spouse, parent, child, brother or sister by blood or marriage, are engaged in the providing of health care and at least eighty percent of whom shall be chosen as representatives of the interests of consumers, elderly persons, organized labor and business subscribers.(c) "Hospital service" means only such hospital or other health care, to be provided by hospitals or other health agencies, or such payment therefor, as may be specified in the contract made by the subscriber with the corporation.(d) "Medical service corporation" means a nonprofit, nonstock corporation, organized in accordance with the provisions of article one, chapter thirty-one of this code, for the sole purpose of contracting with the public and with duly licensed physicians, duly licensed dentists and duly licensed podiatrists for medical or surgical services and with duly licensed chiropractors and other health agencies for other health services to be furnished to subscribers under terms of their contract with the corporation, and controlled by a board of directors, not more than twenty percent of whom, or whose spouse, parent, child, brother or sister by blood or marriage, are engaged in the providing of health care and at least eighty percent of whom shall be chosen as representatives of the interests of consumers, elderly persons, organized labor and business subscribers.(e) "Medical service" means only such medical, surgical, or other health care, to be provided by duly licensed physicians, duly licensed dentists, duly licensed podiatrists or other health agencies and only such health care, to be provided by duly licensed chiropractors, or such payment therefor, as may be specified in the contract made by the subscribed with the corporation.(f) "Dental service corporation" means a nonprofit, nonstock corporation, organized in accordance with the provisions of article one, chapter thirty-one of this code, for the sole purpose of contracting with the public and with duly licensed dentists for dental services to be furnished to subscribers under terms of their contracts with the corporations, and controlled by a board of directors, not more than twenty percent of whom or whose spouse, parent, child, brother or sister by blood or marriage, are engaged in the providing of health care and at least eighty percent of whom shall be chosen as representatives of the interests of consumers, elderly persons, organized labor and business subscribers.(g) "Dental service" means only such dental care, to be provided by duly licensed dentists, duly licensed physicians, or such payment therefor, as may be specified in the contract made by the subscriber with the corporation.(h) "Health service corporation" means a nonprofit, nonstock corporation, organized in accordance with the provisions of article one, chapter thirty-one of this code, for the purpose of contracting with the public and with hospitals and other health agencies for hospital or other health services to be furnished to subscribers or for the purpose of contracting with the public and with duly licensed physicians, duly licensed dentists and duly licensed chiropodists-podiatrists for medical or surgical services and with duly licensed chiropractors and other health agencies for other health services or for the purpose of contracting with the public and with duly licensed dentists for dental services to be furnished to subscribers, all under terms of their contract or contracts with the corporation, and controlled by a board of directors, not more than twenty percent of whom, or whose spouse, parent, child, brother or sister by blood or marriage, are engaged in the providing of health care and at least eighty percent of whom shall be chosen as representatives of the interests of consumers, elderly persons, organized labor and business subscribers. A hospital service corporation, or hospital service corporations, a medical service corporation, or medical service corporations, or a dental service corporation, or dental service corporations, licensed in accordance with the provisions of this article shall be authorized and permitted to merge into or consolidate with other such corporations in accordance with the merger or consolidation provisions of sections one hundred fifty and one hundred fifty-one, article one, chapter thirty-one of the code, to form a health service corporation: Provided, That no such merger or consolidation shall be effectuated unless in advance thereof the plan, agreement and other supporting documents have been filed with and approved in writing by the commissioner. The commissioner shall give such approval within a reasonable time after such filing unless he finds such plan or agreement:(1) Is contrary to law; or(2) Hazardous to the interests of the subscribers of any corporations involved; or(3) Would substantially reduce the security of and service to be rendered to the subscribers of any corporation involved.If the commissioner does not approve any such plan or agreement he shall so notify the corporation or corporations in writing specifying his reasons therefor.(i) "Health service" means such hospital, medical, surgical, dental care or other health care to be provided by hospitals or other health agencies, duly licensed physicians, duly licensed dentists, duly licensed podiatrists or other health care, to be provided by duly licensed chiropractors, as the case may be, or such payment therefor, as may be specified in the contract made by the subscriber with the corporation.(j) "Service" means such hospital, medical, dental and other health service as shall be provided under the terms of the contracts issued by the corporation to subscribers.(k) "Commissioner" means the Insurance Commissioner of West Virginia.
(a) Every such corporation operating within this state shall be subject to the provisions of this article.(b) Every hospital or other health agency in this state meeting the standards prescribed by the board of directors of each such corporation shall be eligible for participation in any hospital service plan, or health service plan, operating in this state. Every duly licensed physician, duly licensed dentist, duly licensed chiropodist-podiatrist, duly licensed chiropractor or other health agency in this state meeting the standards prescribed by the board of directors of each such corporation shall be eligible for participation in any medical service plan, or health service plan, operating in this state. Every duly licensed dentist or duly licensed physician in this state meeting the standards prescribed by the board of directors of each such corporation shall be eligible for participation in any dental service plan, or health service plan, operating in this state. The board of directors of every such corporation may also prescribe standards for hospitals, physicians, dentists, chiropodists- podiatrists, chiropractors and other health agencies located in states adjoining this state, and all such hospitals, physicians, dentists, chiropodists-podiatrists, chiropractors and other health agencies meeting such standards shall be eligible for participation in such plans.
(a) Every corporation defined in 33-24-2 of this code is hereby declared to be a scientific, nonprofit institution and exempt from the payment of all property and other taxes. Every corporation, to the same extent the provisions are applicable to insurers transacting similar kinds of insurance and not inconsistent with the provisions of this article, shall be governed by and be subject to the provisions as herein below indicated, of the following articles of this chapter: 33-2-1 et seq. of this code (Insurance Commissioner); 33-4-1 et seq. of this code (general provisions), except that 33-4-16 of this code may not be applicable thereto; 33-5-20 of this code (borrowing by insurers); 33-6-34 of this code (fee for form, rate and rule filing); 33-6C-1 et seq. of this code (guaranteed loss ratios as applied to individual sickness and accident insurance policies); 33-7-1 et seq. of this code (assets and liabilities); 33-8A-1 et seq. of this code (use of clearing corporations and Federal Reserve book-entry system); 33-11-1 et seq. of this code (unfair trade practices); 33-12-1 et seq. of this code (insurance producers and solicitors), except that the agents license fee shall be $25; 33-15-2a of this code (definitions); 33-15-2b of this code (guaranteed issue; limitation of coverage; election; denial of coverage; network plans); 33-15-2d of this code (exceptions to guaranteed renewability); 33-15-2e of this code (discontinuation of particular type of coverage; uniform termination of all coverage; uniform modification of coverage); 33-15-2f of this code (certification of creditable coverage); 33-15-2g (applicability); 33-15-4e of this code (benefits for mothers and newborns); 33-15-14 of this code (policies discriminating among health care providers); 33-15-16 of this code (policies not to exclude insureds children from coverage; required services; coordination with other insurance); 33-15-18 of this code (equal treatment of state agency); 33-15-19 of this code (coordination of benefits with Medicaid); 33-15A-1 et seq. of this code (West Virginia Long-Term Care Insurance Act); 33-15C-1 et seq. of this code (diabetes insurance); 33-16-3 of this code (required policy provisions); 33-16-3a of this code (same - mental health); 33-16-3d of this code (Medicare supplement insurance); 33-16-3f of this code (required policy provisions - treatment of temporomandibular joint disorder and craniomandibular disorder); 33-16-3j of this code (hospital benefits for mothers and newborns); 33-16-3k of this code (limitations on preexisting condition exclusions for health benefit plans); 33-16-3l of this code (renewability and modification of health benefit plans); 33-16-3m of this code (creditable coverage); 33-16-3n of this code (eligibility for enrollment); 33-16-11 of this code (group policies not to exclude insureds children from coverage; required services; coordination with other insurance); 33-16-13 of this code (equal treatment of state agency); 33-16-14 of this code (coordination of benefits with Medicaid); 33-16-16 of this code (insurance for diabetics); 33-16A-1 et seq. of this code (group health insurance conversion); 33-16C-1 et seq. of this code (employer group accident and sickness insurance policies); 33-16D-1 et seq. of this code (marketing and rate practices for small employer accident and sickness insurance policies); 33-26A-1 et seq. of this code (West Virginia Life and Health Insurance Guaranty Association Act), after October 1, 1991, 33-27-1 et seq. of this code (insurance holding company systems); 33-28-1 et seq. of this code (individual accident and sickness insurance minimum standards); 33-33-1 et seq. of this code (annual audited financial report); 33-34-1 et seq. of this code (administrative supervision); 33-34A-1 et seq. of this code (standards and commissioners authority for companies considered to be in hazardous financial condition); 33-35-1 et seq. of this code (criminal sanctions for failure to report impairment); 33-37-1 et seq. of this code (managing general agents); 33-40A-1 et seq. of this code (risk-based capital for health organizations); and 33-41-1 et seq. of this code (Insurance Fraud Prevention Act) and no other provision of this chapter may apply to these corporations unless specifically made applicable by the provisions of this article. If, however, the corporation is converted into a corporation organized for a pecuniary profit or if it transacts business without having obtained a license as required by 33-24-5 of this code, it shall thereupon forfeit its right to these exemptions.(b) Every corporation subject to this article shall comply with mental health parity requirements in this chapter.
Notwithstanding any other provisions of law, when any health insurance policy, health care services plan or other contract provides for the payment of medical expenses, benefits or procedures, such policy, plan or contract shall be construed to include payment to all health care providers including medical physicians, osteopathic physicians, podiatric physicians, chiropractic physicians, midwives and nurse practitioners who provide medical services, benefits or procedures which are within the scope of each respective provider's license. Any limitation or condition placed upon services, diagnoses or treatment by, or payment to any particular type of licensed provider shall apply equally to all types of licensed providers without unfair discrimination as to the usual and customary treatment procedures of any of the aforesaid providers.
The commissioner may as he deems necessary after notice and hearing promulgate rules and regulations in accordance with chapter twenty-nine-a of this code to define the commissioner's authority to consider the operating results of an insurer's affiliates and subsidiaries in the rate making and solvency determination of that insurer.
(a) Any entity regulated under this article that provides dental care coverage to a covered person shall honor an assignment, made in writing by the person covered under the policy, of payments due under the policy to a dentist or a dental corporation for services provided to the covered person that are covered under the policy. Upon notice of the assignment, the entity shall make payments directly to the provider of the covered services. A dentist or dental corporation with a valid assignment may bill the entity and notify the entity of the assignment. Upon request of the entity, the dentist or dental corporation shall provide a copy of the assignment to the entity.(b) A covered person may revoke an assignment made pursuant to subsection (a) of this section with or without the consent of the provider. The revocation shall be in writing. The covered person shall provide notice of the revocation to the entity. The entity shall send a copy of the revocation notice to the dentist or dental corporation subject to the assignment. The revocation is effective when both the entity and the provider have received a copy of the revocation notice. The revocation is only effective for any charges incurred after both parties have received the revocation notice.(c) If, under an assignment authorized in subsection (a) of this section, a dentist or dental corporation collects payment from a covered person and subsequently receives payment from the entity, the dentist or dental corporation shall reimburse the covered person, less any applicable copayments, deductibles, or coinsurance amounts, within 45 days.(d) Nothing in this section limits an entitys ability to determine the scope of the entitys benefits, services, or any other terms of the entitys policies or to negotiate any contract with a licensed health care provider regarding reimbursement rates or any other lawful provisions.(e) Any entity providing dental care shall provide conspicuous notice to the covered person that the assignment of benefits is optional, and that additional payments may be required if the assigned benefits are not sufficient to pay for received services. 
The provisions relating to clinical trials established in article twenty-five-f of this chapter shall apply to the insurance regulated by this article.
Notwithstanding any provision of this code to the contrary, article forty-one of this chapter is applicable to hospital service corporations, medical service corporations, dental service corporations and health service corporations.
(a) No such corporation shall enter into any contract with a subscriber until it has obtained from the commissioner a license as provided in this section. Application for a license shall be made on forms to be prescribed and furnished by the commissioner.(b) The application shall be accompanied by a copy of the following documents: (1) Certificate of incorporation; (2) bylaws; (3) contracts between the corporation and participating hospitals, physicians, dentists or other health agencies; (4) proposed contracts to be issued to subscribers, setting forth the hospital, medical or dental service to which subscribers are entitled, and the table of rates to be charged for such service; and (5) financial statement showing the amount of contributions paid, or agreed to be paid, to the corporation for working capital, the name or names of each contributor and the terms of each contribution.(c) The commissioner shall, upon payment to him of a license fee of $200, issue a license authorizing the corporation to transact business in this state in the area to be served by it, if he is satisfied (1) that the applicant is incorporated in this state under the provisions of article one, chapter thirty-one of this code, as a bona fide nonprofit corporation, (2) that the contracts between the corporation and participating hospitals, physicians, dentists and other health agencies contain all the terms required by section seven of this article, (3) that the working capital available to the corporation will be sufficient to pay all operating expenses, other than payment for hospital, medical or dental services, for a reasonable period after the issuance of the license, and (4) that the proposed plan will serve the best interests of all of the people of the area in which the corporation intends to operate, regardless of their race, color or economic status. Any license so issued may be renewed annually upon payment to the commissioner of a renewal fee of $200.(d) The term of such license, renewal, refusal to license, revocation, suspension or penalty in lieu thereof shall be governed by the provisions of sections eight, nine, ten and eleven, article three of this chapter, in the same manner that these sections are applicable to insurers generally.(e) No such corporation shall include in its name the words "insurance," "casualty," "surety," "health and accident," "accident and sickness," "mutual," or any other words descriptive of the insurance business; nor shall its name be so similar to that of any insurer which was licensed to transact insurance in this state when such corporation was formed, as to tend, in the opinion of the commissioner, to confuse the public.
(a) It shall be the duty of the commissioner to enforce the provisions of this article. If the commissioner finds that a corporation is impaired, he may issue such orders and otherwise require that the corporation take all actions that in his judgment are necessary for the corporation to cure the impairment. Failure of the corporation to follow such orders and directions is evidence that the management is incompetent and grounds for an order of rehabilitation or liquidation, as the commissioner deems appropriate.(b) No such corporation shall deliver or issue for delivery any subscriber's contract, changes in the terms of such contract, application, rider or endorsement, until a copy thereof and the rates pertaining thereto have been filed with and approved by the commissioner. All such forms filed with the commissioner shall be deemed approved after the expiration of sixty days from the date of such filing unless the commissioner shall have disapproved the same, stating his reasons for such disapproval in writing. Such forms may be used prior to the expiration of such periods if written approval thereof has been received from the commissioner.(c) No rates to be charged subscribers shall be used or established by any such corporation unless and until the same have been filed with the commissioner and approved by him The procedure for such filing and approval shall be the same as that prescribed in subsection (b) of this section for the approval of forms. The commissioner shall approve all such rates which are not excessive, inadequate or unfairly discriminatory.(d) The commissioner shall pass upon the actuarial soundness of the schedule of fees to be paid hospitals, physicians, dentists and other health agencies.
If a corporation utilizes a groups loss ratio as a rating factor at the time of renewal of a policy, plan, or contract, the corporation shall, upon request of an insured or subscriber, provide the loss ratio and the components of the loss ratio calculation to the insured or subscriber no more than 90 days but no less than 60 days before the renewal date of the policy, plan, or contract. For purposes of this section, "loss ratio" means the total losses paid out in medical claims divided by the total earned premiums: Provided, That that the requirements of this section do not apply to a dental service corporation as that term is defined in this article.
Each contract made by the corporation with participating hospitals, physicians, dentists and other health agencies shall contain the following provisions:(a) That the hospital, physician, dentist or other health agency will render to any subscriber such service as he may be entitled to under the terms and conditions of the contract issued to the subscriber by the corporation.(b) That in submitting bills to the corporation for services rendered to subscribers under the terms of their contracts, the hospitals, physicians, dentists and other health agencies will make only such charges as are set forth in an agreed schedule of fees to be paid by the corporation.
(a) Any contract made under the provisions of this article shall, on or after January 1, 1984, contain a provision that the corporation shall make available as covered benefits to all subscribers and members coverage for primary health care nursing services as defined in section four-b, article fifteen of this chapter, if such services are currently being reimbursed when rendered by any other duly licensed health care practitioner. No corporation may be required to pay for duplicative health care services actually provided by both a registered professional nurse or licensed midwife and other health providers.(b) Nothing in this section may be construed to permit any registered professional nurse licensee or midwife licensee to perform professional services beyond such individual's scope of professional competence as established by education, training and experience.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, whenever reimbursement or indemnity for laboratory or X-ray services are covered, reimbursement or indemnification shall not be denied for any of the following when performed for cancer screening or diagnostic purposes, at the direction of a person licensed to practice medicine and surgery by the Board of Medicine: (1) Mammograms when medically appropriate and consistent with the current guidelines from the United States Preventive Services Task Force;(2)A pap smear, either conventional or liquid-based cytology, whichever is medically appropriate and consistent with the current guidelines from either the United States Preventive Services Task Force or The American College of Obstetricians and Gynecologists, for women age eighteen or over; or(3) A test for the human papilloma virus (HPV), when medically appropriate and consistent with the current guidelines from either the United States Preventive Services Task Force or The American College of Obstetricians and Gynecologists, for women age eighteen or over.(b) A policy, provision, contract, plan or agreement may apply to mammograms, pap smears or human papilloma virus (HPV) test the same deductibles, coinsurance and other limitations as apply to other covered services.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall, on or after July 1, 1991, provide as benefits to all subscribers and members coverage for rehabilitation services as hereinafter set forth, unless rejected by the insured.(b) For purposes of this article and section, "rehabilitation services" includes those services which are designed to remediate patient's condition or restore patients to their optimal physical, medical, psychological, social, emotional, vocational and economic status. Rehabilitative services include by illustration and not limitation diagnostic testing, assessment, monitoring or treatment of the following conditions individually or in a combination:(1) Stroke;(2) Spinal cord injury;(3) Congenital deformity;(4) Amputation;(5) Major multiple trauma;(6) Fracture of femur;(7) Brain injury;(8) Polyarthritis, including rheumatoid arthritis;(9) Neurological disorders, including, but not limited to, multiple sclerosis, motor neuron diseases, polyneuropathy, muscular dystrophy and Parkinson's disease;(10) Cardiac disorders, including, but not limited to, acute myocardial infarction, angina pectoris, coronary arterial insufficiency, angioplasty, heart transplantation, chronic arrhythmias, congestive heart failure, valvular heart disease;(11) Burns.(c) Rehabilitative services includes care rendered by any of the following:(1) A hospital duly licensed by the State of West Virginia that meets the requirements for rehabilitation hospitals as described in Section 2803.2 of the Medicare Provider Reimbursement Manual, Part 1, as published by the U.S. Health Care Financing Administration;(2) A distinct part rehabilitation unit in a hospital duly licensed by the State of West Virginia. The distinct part unit must meet the requirements of Section 2803.61 of the Medicare Provider Reimbursement Manual, Part 1, as published by the U.S. Health Care Financing Administration;(3) A hospital duly licensed by the State of West Virginia which meets the requirements for cardiac rehabilitation as described in Section 35-25, Transmittal 41, dated August, 1989, as promulgated by the U.S. Health Care Financing Administration.(d) Rehabilitation services do not include services for mental health, chemical dependency, vocational rehabilitation, long-term maintenance or custodial services.(e) A policy, provision, contract, plan or agreement may apply to rehabilitation services the same deductibles, coinsurance and other limitations as apply to other covered services.
Each contract made by the corporation with participating hospitals, physicians, and other health agencies which provide immunizations to children shall require that bills submitted to the corporation for child immunization services rendered under the terms of their contracts will set forth separately those charges for said services. Charges for other health care services provided during the same visit shall not be included in the charge for immunization services.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall provide as benefits to all subscribers and members coverage for emergency services. A policy, provision, contract, plan or agreement may apply to emergency services the same deductibles, coinsurance and other limitations as apply to other covered services: Provided, That preauthorization or precertification shall not be required.(b) From July 1, 1998, the following provisions apply:(1) Every insurer shall provide coverage for emergency medical services, including prehospital services, to the extent necessary to screen and to stabilize an emergency medical condition. The insurer shall not require prior authorization of the screening services if a prudent layperson acting reasonably would have believed that an emergency medical condition existed. Prior authorization of coverage shall not be required for stabilization if an emergency medical condition exists. Payment of claims for emergency services shall be based on the retrospective review of the presenting history and symptoms of the covered person.(2) An insurer that has given prior authorization for emergency services shall cover the services and shall not retract the authorization after the services have been provided unless the authorization was based on a material misrepresentation about the covered person's health condition made by the referring provider, the provider of the emergency services or the covered person.(3) Coverage of emergency services shall be subject to coinsurance, copayments and deductibles applicable under the health benefit plan.(4) The emergency department and the insurer shall make a good faith effort to communicate with each other in a timely fashion to expedite postevaluation or poststabilization services in order to avoid material deterioration of the covered person's condition.(5) As used in this section:(A) "Emergency medical services" means those services required to screen for or treat an emergency medical condition until the condition is stabilized, including prehospital care;(B) "Prudent layperson" means a person who is without medical training and who draws on his or her practical experience when making a decision regarding whether an emergency medical condition exists for which emergency treatment should be sought;(C) "Emergency medical condition for the prudent layperson" means one that manifests itself by acute symptoms of sufficient severity, including severe pain, such that the person could reasonably expect the absence of immediate medical attention to result in serious jeopardy to the individual's health, or, with respect to a pregnant woman, the health of the unborn child; serious impairment to bodily functions; or serious dysfunction of any bodily organ or part;(D) "Stabilize" means with respect to an emergency medical condition, to provide medical treatment of the condition necessary to assure, with reasonable medical probability that no medical deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility: Provided, That this provision may not be construed to prohibit, limit or otherwise delay the transportation required for a higher level of care than that possible at the treating facility;(E) "Medical screening examination" means an appropriate examination within the capability of the hospital's emergency department, including ancillary services routinely available to the emergency department, to determine whether or not an emergency medical condition exists; and(F) "Emergency medical condition" means a condition that manifests itself by acute symptoms of sufficient severity including severe pain such that the absence of immediate medical attention could reasonably be expected to result in serious jeopardy to the individual's health or with respect to a pregnant woman the health of the unborn child, serious impairment to bodily functions or serious dysfunction of any bodily part or organ.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, reimbursement or indemnification for colorectal cancer examinations and laboratory testing may not be denied for any nonsymptomatic person fifty years of age or older, or a symptomatic person under fifty years of age, when reimbursement or indemnity for laboratory or X-ray services are covered under the policy and are performed for colorectal cancer screening or diagnostic purposes at the direction of a person licensed to practice medicine and surgery by the Board of Medicine. The tests are as follows: An annual fecal occult blood test, a flexible sigmoidoscopy repeated every five years, a colonoscopy repeated every ten years and a double contrast barium enema repeated every five years.(b) A symptomatic person is defined as: (i) An individual who experiences a change in bowel habits, rectal bleeding or stomach cramps that are persistent; or (ii) an individual who poses a higher than average risk for colorectal cancer because he or she has had colorectal cancer or polyps, inflammatory bowel disease, or an immediate family history of such conditions.(c) The same deductibles, coinsurance, network restrictions and other limitations for covered services found in the policy, provision, contract, plan or agreement of the covered person may apply to colorectal cancer examinations and laboratory testing.
(a) Any policy of insurance described in this article which provides medical and surgical benefits with respect to a mastectomy shall provide, in a case of a participant or beneficiary who is receiving benefits in connection with a mastectomy and who elects breast reconstruction in connection with such mastectomy, coverage for:(1) All stages of reconstruction of the breast on which the mastectomy has been performed;(2) Surgery and reconstruction of the other breast to produce a symmetrical appearance; and(3) Prostheses and physical complications of mastectomy, including lymphedemas in a manner determined in consultation with the attending physician and the patient. Coverage shall be provided for a minimum stay in the hospital of not less than forty-eight hours for a patient following a radical or modified mastectomy and not less than twenty-four hours of inpatient care following a total mastectomy or partial mastectomy with lymph node dissection for the treatment of breast cancer. Nothing in this section shall be construed as requiring inpatient coverage where inpatient coverage is not medically necessary or where the attending physician in consultation with the patient determines that a shorter period of hospital stay is appropriate. Such coverage may be subject to annual deductibles and coinsurance provisions as may be deemed appropriate and as are consistent with those established for other benefits under the health benefit plan policy or coverage. Written notice of the availability of such coverage shall be delivered to the participant upon enrollment and annually thereafter.(b) A health benefit plan policy, and a health insurer providing health insurance coverage in connection with a health benefit plan policy, shall provide notice to each participant and beneficiary under such plan regarding the coverage required by this section. Such notice shall be in writing and prominently positioned in any literature or correspondence made available or distributed by the issuer of the health benefit plan policy.(c) A health benefit plan policy and a health insurer offering health insurance coverage in connection with a health benefit plan policy, may not:(1) Deny to a patient eligibility, or continued eligibility, to enroll or to renew coverage under the terms of the plan, solely for the purpose of avoiding the requirements of this section; and(2) Penalize or otherwise reduce or limit the reimbursement of an attending provider, or provide incentives (monetary or otherwise) to an attending provider, to induce such provider to provide care to an individual participant or beneficiary in a manner inconsistent with this section.(d) Nothing in this section shall be construed to prevent a health benefit plan policy or a health insurer offering health insurance coverage from negotiating the level and type of reimbursement with a provider for care provided in accordance with this section.(e) The provisions of this section shall be included under any policy, contract or plan delivered after July 1, 2002.
(a) A corporation defined in section two of this article may not require any person covered under a contract which provides coverage for prescription drugs to obtain the prescription drugs from a mail-order pharmacy in order to obtain benefits for the drugs.(b) A corporation may not violate the provisions of subsection (a) of this section through the use of an agent or contractor or through the action of an administrator of prescription drug benefits.(c) The Insurance Commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to implement and enforce the provisions of this section.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, reimbursement or indemnification for annual kidney disease screening and laboratory testing as recommended by the National Kidney Foundation may not be denied for any person when reimbursement or indemnity for laboratory or X-ray services are covered under the policy and are performed for kidney disease screening or diagnostic purposes at the direction of a person licensed to practice medicine and surgery by the Board of Medicine. The tests are as follows: Any combination of blood pressure testing, urine albumin or urine protein testing and serum creatinine testing.(b) The same deductibles, coinsurance, network restrictions and other limitations for covered services found in the policy, provision, contract, plan or agreement of the covered person may apply to kidney disease screening and laboratory testing.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall, on or after July 1, 2009, provide as benefits to all subscribers and members coverage for dental anesthesia services as hereinafter set forth.(b) For purposes of this article and section, "dental anesthesia services" means general anesthesia for dental procedures and associated outpatient hospital or ambulatory facility charges provided by appropriately licensed health care individuals in conjunction with dental care provided to an enrollee or insured if the enrollee or insured is:(1) Seven years of age or younger or is developmentally disabled and is an individual for whom a successful result cannot be expected from dental care provided under local anesthesia because of a physical, intellectual or other medically compromising condition of the enrollee or insured and for whom a superior result can be expected from dental care provided under general anesthesia; or(2) A child who is twelve years of age or younger with documented phobias, or with documented mental illness, and with dental needs of such magnitude that treatment should not be delayed or deferred and for whom lack of treatment can be expected to result in infection, loss of teeth or other increased oral or dental morbidity and for whom a successful result cannot be expected from dental care provided under local anesthesia because of such condition and for whom a superior result can be expected from dental care provided under general anesthesia.(c) Prior authorization. -- An entity subject to this section may require prior authorization for general anesthesia and associated outpatient hospital or ambulatory facility charges for dental care in the same manner that prior authorization is required for these benefits in connection with other covered medical care.(d) An entity subject to this section may restrict coverage for general anesthesia and associated outpatient hospital or ambulatory facility charges unless the dental care is provided by:(1) A fully accredited specialist in pediatric dentistry; (2) A fully accredited specialist in oral and maxillofacial surgery; and(3) A dentist to whom hospital privileges have been granted.(e) Dental care coverage not required. -- The provisions of this section may not be construed to require coverage for the dental care for which the general anesthesia is provided.(f) Temporal mandibular joint disorders. -- The provisions of this section do not apply to dental care rendered for temporal mandibular joint disorders.(g) A policy, provision, contract, plan or agreement may apply to dental anesthesia services the same deductibles, coinsurance and other limitations as apply to other covered services.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article, for policies issued or renewed on or after January 1, 2012, which delivers, renews or issues a policy of group accident and sickness insurance in this state under the provisions of this article shall include coverage for diagnosis and treatment of autism spectrum disorder in individuals ages eighteen months to eighteen years. To be eligible for coverage and benefits under this section, the individual must be diagnosed with autism spectrum disorder at age eight or younger. The policy shall provide coverage for treatments that are medically necessary and ordered or prescribed by a licensed physician or licensed psychologist and in accordance with a treatment plan developed from a comprehensive evaluation by a certified behavior analyst for an individual diagnosed with autism spectrum disorder.(b) Coverage shall include, but not be limited to, applied behavior analysis. Applied behavior analysis shall be provided or supervised by a certified behavior analyst. The annual maximum benefit for applied behavior analysis required by this subsection shall be in an amount not to exceed $30,000 per individual, for three consecutive years from the date treatment commences. At the conclusion of the third year, coverage for applied behavior analysis required by this subsection shall be in an amount not to exceed $2,000 per month, until the individual reaches eighteen years of age, as long as the treatment is medically necessary and in accordance with a treatment plan developed by a certified behavior analyst pursuant to a comprehensive evaluation or reevaluation of the individual. This section shall not be construed as limiting, replacing or affecting any obligation to provide services to an individual under the Individuals with Disabilities Education Act, 20 U.S.C. 1400 et seq., as amended from time to time or other publicly funded programs. Nothing in this section shall be construed as requiring reimbursement for services provided by public school personnel.(c) The certified behavior analyst shall file progress reports with the agency semiannually. In order for treatment to continue, the insurer must receive objective evidence or a clinically supportable statement of expectation that:(1) The individual's condition is improving in response to treatment; and(2) A maximum improvement is yet to be attained; and(3) There is an expectation that the anticipated improvement is attainable in a reasonable and generally predictable period of time.(d) For purposes of this section, the term:(1) "Applied Behavior Analysis" means the design, implementation, and evaluation of environmental modifications using behavioral stimuli and consequences, to produce socially significant improvement in human behavior, including the use of direct observation, measurement, and functional analysis of the relationship between environment and behavior.(2) "Autism spectrum disorder" means any pervasive developmental disorder, including autistic disorder, Asperger's Syndrome, Rett Syndrome, childhood disintegrative disorder, or Pervasive Development Disorder as defined in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders of the American Psychiatric Association.(3) "Certified behavior analyst" means an individual who is certified by the Behavior Analyst Certification Board or certified by a similar nationally recognized organization.(4) "Objective evidence" means standardized patient assessment instruments, outcome measurements tools or measurable assessments of functional outcome. Use of objective measures at the beginning of treatment, during and after treatment is recommended to quantify progress and support justifications for continued treatment. The tools are not required, but their use will enhance the justification for continued treatment.(e) The provisions of this section do not apply to small employers. For purposes of this section a small employer means any person, firm, corporation, partnership or association actively engaged in business in the State of West Virginia who, during the preceding calendar year, employed an average of no more than twenty-five eligible employees.(f) To the extent that the application of this section for autism spectrum disorder causes an increase of at least one percent of actual total costs of coverage for the plan year the corporation may apply additional cost containment measures.(g) To the extent that the provisions of this section require benefits that exceed the essential health benefits specified under section 1302(b) of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, as amended, the specific benefits that exceed the specified essential health benefits shall not be required of a health benefit plan when the plan is offered by a corporation in this state.
Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, a health insurance policy subject to this article, issued or renewed on or after January 1, 2014, which provides health insurance coverage for maternity services, shall provide coverage for maternity services for all persons participating in, or receiving coverage under the policy. To the extent that the provisions of this section require benefits that exceed the essential health benefits specified under section 1302(b) of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, as amended, the specific benefits that exceed the specified essential health benefits are not required of a health benefit plan when the plan is offered by a health care insurer in this state. Coverage required under this section may not be subject to exclusions or limitations which are not applied to other maternity coverage under the policy.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any group accident and sickness insurance policy, plan, contract or agreement issued by an entity regulated by this article that covers anti-cancer medications that are injected or intravenously administered by a health care provider and patient administered anti-cancer medications, including, but not limited to, those medications orally administered or self-injected, may not require a less favorable basis for a copayment, deductible or coinsurance amount for patient administered anti-cancer medications than it requires for injected or intravenously administered anti-cancer medications, regardless of the formulation or benefit category determination by the policy or plan.(b) An accident or sickness insurance policy, plan, contract or agreement may not comply with subsection (a) of this section by:(1) Increasing the copayment, deductible or coinsurance amount required for injected or intravenously administered anti-cancer medications that are covered under the policy or plan; or(2) Reclassifying benefits with respect to anti-cancer medications.(c) As used in this section, "anti-cancer medication" means a FDA approved medication prescribed by a treating physician who determines that the medication is medically necessary to kill or slow the growth of cancerous cells in a manner consistent with nationally accepted standards of practice.(d) This section is effective for policy and plan years beginning on or after January 1, 2016. This section applies to all group accident and sickness insurance policies and plans subject to this article that are delivered, executed, issued, amended, adjusted or renewed in this state, on and after the effective date of this section.(e) Notwithstanding any other provision in this section to the contrary, in the event that an entity subject to this article can demonstrate actuarially to the Insurance Commissioner that its total anticipated costs for any policy, plan, contract or agreement to comply with this section will exceed or have exceeded two percent of the total costs for such policy, plan, contract or agreement in any experience period, then the entity may apply whatever cost containment measures may be necessary to maintain costs below two percent of the total costs for the policy, plan, contract or agreement: Provided, That such cost containment measures implemented are applicable only for the plan year or experience period following approval of the request to implement cost containment measures.(f) For any enrollee that is enrolled in a catastrophic plan as defined in Section 1302(e) of the Affordable Care Act or in a plan that, but for this requirement, would be a High Deductible Health Plan as defined in section 223(c)(2)(A) of the Internal Revenue Code of 1986, and that, in connection with every enrollment, opens and maintains for each enrollee a Health Savings Account as that term is defined in section 223(d) of the Internal Revenue Code of 1986, the cost-sharing limit outlined in subsection (a) of this section shall be applicable only after the minimum annual deductible specified in section 223(c)(2)(A) of the Internal Revenue Code of 1986 is reached. In all other cases, this limit shall be applicable at any point in the benefit design, including before and after any applicable deductible is reached.
A contract, plan or agreement issued by an insurer pursuant to this article for prescription topical eye medication may not deny coverage for the refilling of a prescription for topical eye medication when:(1) The medication is to treat a chronic condition of the eye;(2) The refill is requested by the insured prior to the last day of the prescribed dosage period and after at least 70% of the predicted days of use; and(3) A person licensed under chapter thirty and authorized to prescribe topical eye medication indicates on the original prescription that refills are permitted and that the early refills requested by the insured do not exceed the total number of refills prescribed.
a) As used in this section:(1) Abuse-deterrent opioid analgesic drug product means a brand name or generic opioid analgesic drug product approved by the United States Food and Drug Administration with abuse-deterrent labeling that indicates its abuse-deterrent properties are expected to deter or reduce its abuse; (2) Cost-sharing means any coverage limit, copayment, coinsurance, deductible or other out-of-pocket expense requirements;(3) Opioid analgesic drug product means a drug product that contains an opioid agonist and is indicated by the United States Food and Drug Administration for the treatment of pain, regardless of whether the drug product:(A) Is in immediate release or extended release form; or(B) Contains other drug substances.(b) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, on or after January 1, 2017:(1) Coverage shall be provided for at least one abuse-deterrent opioid analgesic drug product for each active opioid analgesic ingredient;(2) Cost-sharing for brand name abuse-deterrent opioid analgesic drug products shall not exceed the lowest tier for brand name prescription drugs on the entitys formulary for prescription drug coverage;(3) Cost-sharing for generic abuse-deterrent opioid analgesic drug products covered pursuant to this section shall not exceed the lowest cost-sharing level applied to generic prescription drugs covered under the applicable health plan or policy; and(4) An entity subject to this section may not require an insured or enrollee to first use an opioid analgesic drug product without abuse-deterrent labeling before providing coverage for an abuse-deterrent opioid analgesic drug product covered on the entity's formulary for prescription drug coverage. (c) Notwithstanding subdivision (3), subsection (b) of this section, an entity subject to this section may undertake utilization review, including preauthorization, for an abuse-deterrent opioid analgesic drug product covered by the entity, if the same utilization review requirements are applied to nonabuse-deterrent opioid analgesic drug products and with the same type of drug release, immediate or extended.(d) For purposes of subsection (b) of this section, the lowest tier and the lowest cost-sharing level shall not mean the cost-sharing tier applicable to preventive care services which are required to be provided at no cost-sharing under the Patient Protection and Affordable Care Act.
(a) As used in this article:(1) Health benefit plan means a policy, contract, certificate or agreement entered into, offered or issued by a health plan issuer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services.(2) Health plan issuer or issuer means an entity required to be licensed under this chapter that contracts, or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services under a health benefit plan, including accident and sickness insurers, nonprofit hospital service corporations, medical service corporations and dental service organizations, prepaid limited health service organizations, health maintenance organizations, preferred provider organizations, provider sponsored network, and any pharmacy benefit manager that administers a fully-funded or self-funded plan.(3) Step therapy protocol means a protocol or program that establishes the specific sequence in which prescription drugs for a specified medical condition, and medically appropriate for a particular patient, are covered by a health plan issuer or health benefit plan.(4) Step therapy override determination means a determination as to whether a step therapy protocol should apply in a particular situation, or whether the step therapy protocol should be overridden in favor of immediate coverage of the health care providers selected prescription drug. This determination is based on a review of the patients or prescribers request for an override, along with supporting rationale and documentation.(5) Utilization review organization means an entity that conducts utilization review, other than a health plan issuer performing utilization review for its own health benefit plan.(b) A health benefit plan that includes prescription drug benefits, and which utilizes step therapy protocols, and which is issued for delivery, delivered, renewed, or otherwise contracted in this state on or after January 1, 2018, shall comply with the provisions of this article.(c) Step therapy protocol exceptions include:(1) When coverage of a prescription drug for the treatment of any medical condition is restricted for use by health plan issuer or utilization review organization through the use of a step therapy protocol, the patient and prescribing practitioner shall have access to a clear and convenient process to request a step therapy exception determination. The process shall be made easily accessible on the health plan issuers or utilization review organizations website. The health plan issuer or utilization review organization must provide a prescription drug for treatment of the medical condition at least until the step therapy exception determination is made.(2) A step therapy override determination request shall be expeditiously granted if:(A) The required prescription drug is contraindicated or will likely cause an adverse reaction by or physical or mental harm to the patient.(B) The required prescription drug is expected to be ineffective based on the known relevant physical or mental characteristics of the patient and the known characteristics of the prescription drug regimen.(C) The patient has tried the required prescription drug while under their current or a previous health insurance or health benefit plan, or another prescription drug in the same pharmacologic class or with the same mechanism of action and such prescription drug was discontinued due to a lack of efficacy or effectiveness, diminished effect, or an adverse event.(D) The required prescription drug is not in the best interest of the patient, based upon medical appropriateness.(E) The patient is stable on a prescription drug selected by their health care provider for the medical condition under consideration.(3) Upon the granting of a step therapy override determination, the health plan issuer or utilization review organization shall authorize coverage for the prescription drug prescribed by the patients treating healthcare provider, provided such prescription drug is a covered prescription drug under such policy or contract.(4) This section shall not be construed to prevent:(A) A health plan issuer or utilization review organization from requiring a patient to try an AB-Rated generic equivalent prior to providing coverage for the equivalent branded prescription drug.(B) A health care provider from prescribing a prescription drug that is determined to be medically appropriate.
(a) A policy, plan, or contract that is issued or renewed on or after January 1, 2019, and that is subject to this article shall provide coverage, through the age of 20, for amino acid-based formula for the treatment of severe protein-allergic conditions or impaired absorption of nutrients caused by disorders affecting the absorptive surface, function, length, and motility of the gastrointestinal tract. This includes the following conditions, if diagnosed as related to the disorder by a physician licensed to practice in this state pursuant to either 30-3-1 et seq. or 30-14-1 et seq. of this code: (1) Immunoglobulin E and Nonimmunoglobulin E-medicated allergies to multiple food proteins; (2) Severe food protein-induced enterocolitis syndrome; (3) Eosinophilic disorders as evidenced by the results of a biopsy; and(4) Impaired absorption of nutrients caused by disorders affecting the absorptive surface, function, length, and motility of the gastrointestinal tract (short bowel).(b) The coverage required by 33-24-7q(a) of this code shall include medical foods for home use for which a physician has issued a prescription and has declared them to be medically necessary, regardless of methodology of delivery.(c) For purposes of this section, medically necessary foods or medical foods shall mean prescription amino acid-based elemental formulas obtained through a pharmacy: Provided, That these foods are specifically designated and manufactured for the treatment of severe allergic conditions or short bowel. (d) The provisions of this section shall not apply to persons with an intolerance for lactose or soy.
(a) As used in this section, the following words have the following meanings:(1) Concurrent review means inpatient care is reviewed as it is provided. Medically qualified reviewers monitor appropriateness of the care, the setting, and patient progress, and, as appropriate, the discharge plans.(2) Covered person means an individual, other than a Medicaid recipient, for whom coverage has been provided pursuant to the provisions of this article. (3) Insurance Commissioner means the person appointed pursuant to the provisions of 33-2-1 of this code.(4) Health benefit plan means the same as that term is defined in 33-24-7p of this code. (5) Health plan issuer means the same as that term is defined in 33-24-7p of this code.(6) Physician or psychiatrist means a person licensed pursuant to the provisions of either 30-3-1 et seq. or 30-14-1 et seq. of this code. (7) Psychologist means a person licensed pursuant to the provisions of 30-21-1 et seq. of this code. (8) Substance use disorder means the same as that term is defined by the American Psychiatric Association in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, and shall include substance use withdrawal. (b) A health benefit plan offered by a health plan issuer that provides hospital or medical expense benefits and is delivered, issued, executed, or renewed in this state, or approved for issuance or renewal by the Insurance Commissioner, on or after January 1, 2019, shall provide benefits for inpatient and outpatient treatment of substance use disorder at in-network facilities at the same level as other medical services offered by the health benefit plan. (c) The services for the treatment of substance use disorder shall be: (1) Prescribed by a physician or psychiatrist licensed pursuant to the provisions of 30-3-1 et seq. or 30-14-1 et seq. of this code or recommended by a psychologist licensed pursuant to the provisions of 30-21-1 et seq. of this code; and(2) Provided by licensed health care professionals or licensed or certified substance use disorder providers in licensed or otherwise state-approved facilities, as required by this code. (d) The inpatient and outpatient treatment of substance use disorders shall be provided when determined medically necessary by the covered persons physician, psychologist, or psychiatrist. The facility shall notify the insurer of both the admission and the initial treatment plan within 48 hours of the admission or initiation of treatment. If there is no in-network facility immediately available for a covered person, a health benefit plan offered by a health plan issuer shall provide necessary exceptions to its network to ensure admission in a treatment facility within 72 hours. A health benefit plan may transfer a covered person to an in-network facility if one becomes available during the course of the treatment plan. If a covered person is being treated at an out-of-network facility and an in-network facility becomes available during the course of the treatment plan, an insurer may transfer the covered person to the in-network facility.(e) Providers of treatment for substance use disorders to persons covered under a covered contract shall not require prepayment of medical expenses during this 180 days in excess of applicable copayment, deductible, or coinsurance as provided in the contract.(f) The benefits for outpatient visits may be subject to concurrent or retrospective review of medical necessity or any other utilization management review.(g)(1) If an insurer determines that continued inpatient care in a facility is no longer medically necessary, the insurer shall within 72 hours provide written notice to the covered person and the covered persons physician of its decision and the right to file for an expedited review of an adverse decision. (2) The insurer shall review and make a determination with respect to the internal appeal within 72 hours and communicate the determination to the covered person and the covered persons physician.(3) If the determination is to uphold the denial, the covered person and the covered persons physician have the right to file an expedited external appeal with an independent review organization. An independent utilization review organization shall make a determination within 72 hours.(4) If the insurers determination is upheld and it is determined continued inpatient care is not medically necessary, the insurer remains responsible to provide benefits for the inpatient care through the day following the date the determination is made and the covered person is only responsible for any applicable copayment, deductible, and coinsurance for the stay through that date as applicable under the contract. (5) The covered person shall not be discharged or released from the inpatient facility until all internal appeals and independent utilization review organization appeals are exhausted. For any costs incurred after the day following the date of determination until the day of discharge, the covered person is only responsible for any applicable cost-sharing, and any additional charges shall be paid by the facility or provider. (h) The Insurance Commissioner shall propose rules in accordance with the provisions of 29A-3-1 et seq. of this code to develop a procedure for an expedited review of an adverse decision as set forth in this section. The Legislature finds that for the purposes of 29A-3-15 of this code, an emergency exists requiring the promulgation of an emergency rule to respond to the growing need in our state for substance abuse treatment. (i)(1) The benefits for the first five days of intensive outpatient or partial hospitalization services shall be provided without any retrospective review of medical necessity, and medical necessity shall be determined by the covered persons physician. (2) The benefits beginning day six and every six days thereafter of intensive outpatient or partial hospitalization services are subject to a concurrent review of the medical necessity of the services.(j) Medical necessity review shall use an evidence-based and peer-reviewed clinical review tool. This tool shall be developed by the Insurance Commissioner. The Insurance Commissioner shall propose rules for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code to develop the tool.(k) The benefits for outpatient prescription drugs to treat substance use disorder shall be provided when determined medically necessary by the covered persons physician or psychiatrist without the imposition of any prior authorization or other prospective utilization management requirements. (l) The days per plan year of benefits shall be computed based on inpatient days. One or more unused inpatient days may be exchanged for two outpatient visits. All extended outpatient services such as partial hospitalization and intensive outpatient, shall be considered inpatient days for the purpose of the visit-to-day exchange provided in this subsection.(m) Except as provided in this section, the benefits and cost-sharing shall be provided to the same extent as for any other medical condition covered under the contract.(n) The benefits required by this section are to be provided to all covered persons with a diagnosis of substance use disorder. The presence of additional related or unrelated diagnoses shall not be a basis to reduce or deny the benefits required by this section.(o) The provisions of this section apply to all insurance contracts in which the insurer has reserved the right to change the premium.
(a) As used in this section, the following words and phrases have the meanings given to them in this section unless the context clearly indicates otherwise:"Episode of Care" means a specific medical problem, condition, or specific illness being managed including tests, procedures and rehabilitation initially requested by health care practitioner, to be performed at the site of service, excluding out of network care: Provided, That any additional testing or procedures related or unrelated to the specific medical problem, condition, or specific illness being managed may require a separate prior authorization. "National Council for Prescription Drug Programs (NCPDP) SCRIPT Standard" means the NCPDP SCRIPT Standard Version 201310 or the most recent standard adopted by the United States Department of Health and Human Services. Subsequently released versions may be used provided that the new version is backward compatible with the current version approved by the United States Department of Health and Human Services;"Prior Authorization" means obtaining advance approval from a health insurer about the coverage of a service or medication.(b)The health insurer is required to develop prior authorization forms and portals and shall accept one prior authorization for an episode of care. These forms are required to be placed in an easily identifiable and accessible place on the health insurers webpage. The forms shall: (1) Include instructions for the submission of clinical documentation; (2) Provide an electronic notification confirming receipt of the prior authorization request if forms are submitted electronically; (3) Contain a comprehensive list of all procedures, services, drugs, devices, treatment, durable medical equipment and anything else for which the health insurer requires a prior authorization. This list shall delineate those items which are bundled together as part of the episode of care. The standard for including any matter on this list shall be science-based using a nationally recognized standard. This list is required to be updated at least quarterly to ensure that the list remains current; (4) Inform the patient if the health insurer requires a plan member to use step therapy protocols. This must be conspicuous on the prior authorization form. If the patient has completed step therapy as required by the health insurer and the step therapy has been unsuccessful, this shall be clearly indicated on the form, including information regarding medication or therapies which were attempted and were unsuccessful; and (5) Be prepared by October 1, 2019. (c) The health insurer shall accept electronic prior authorization requests and respond to the request through electronic means by July 1, 2020. The health insurer is required to accept an electronically submitted prior authorization and may not require more than one prior authorization form for an episode of care. If the health insurer is currently accepting electronic prior authorization requests, the health insurer shall have until January 1, 2020, to implement the provisions of this section.(d) If the health care practitioner submits the request for prior authorization electronically, and all of the information as required is provided, the health insurer shall respond to the prior authorization request within seven days from the day on the electronic receipt of the prior authorization request, except that the health insurer shall respond to the prior authorization request within two days if the request is for medical care or other service for a condition where application of the time frame for making routine or non-life-threatening care determinations is either of the following:(1) Could seriously jeopardize the life, health, or safety of the patient or others due to the patients psychological state; or(2) In the opinion of a health care practitioner with knowledge of the patients medical condition, would subject the patient to adverse health consequences without the care or treatment that is the subject of the request. (e) If the information submitted is considered incomplete, the health insurer shall identify all deficiencies and within two business days from the day on the electronic receipt of the prior authorization request return the prior authorization to the health care practitioner. The health care practitioner shall provide the additional information requested within three business days from the day the return request is received by the health care practitioner or the prior authorization is deemed denied and a new request must be submitted.(f) If the health insurer wishes to audit the prior authorization or if the information regarding step therapy is incomplete, the prior authorization may be transferred to the peer review process. (g) A prior authorization approved by a health insurer is carried over to all other managed care organizations, health insurers and the Public Employees Insurance Agency for three months if the services are provided within the state.(h) The health insurer shall use national best practice guidelines to evaluate a prior authorization.(i) If a prior authorization is rejected by the health insurer and the health care practitioner who submitted the prior authorization requests an appeal by peer review of the decision to reject, the peer review shall be with a health care practitioner similar in specialty, education, and background. The health insurers medical director has the ultimate decision regarding the appeal determination and the health care practitioner has the option to consult with the medical director after the peer-to-peer consultation. Time frames regarding this appeal process shall take no longer than 30 days. (j) (1) Any prescription written for an inpatient at the time of discharge requiring a prior authorization shall not be subject to prior authorization requirements and shall be immediately approved for not less than three days: Provided, That the cost of the medication does not exceed $5,000 per day and the physician shall note on the prescription or notify the pharmacy that the prescription is being provided at discharge. After the three-day time frame, a prior authorization must be obtained. (2) If the approval of a prior authorization requires a medication substitution, the substituted medication shall be as required under 30-5-1 et seq. (k) In the event a health care practitioner has performed an average of 30 procedures per year and in a six-month time period has received a 100 percent prior approval rating, the health insurer shall not require the health care practitioner to submit a prior authorization for that procedure for the next six months. At the end of the six-month time frame, the exemption shall be reviewed prior to renewal. This exemption is subject to internal auditing, at any time, by the health insurer and may be rescinded if the health insurer determines the health care practitioner is not performing the procedure in conformity with the health insurers benefit plan based upon the results of the health insurers internal audit. (l) The health insurer must accept and respond to electronically submitted prior authorization requests for pharmacy benefits by July 1, 2020, or if the health insurer is currently accepting electronic prior authorization requests, it shall have until January 1, 2020, to implement this provision. The health insurer shall accept and respond to prior authorizations through a secure electronic transmission using the NCPDP SCRIPT Standard ePA transactions.(m) This section is effective for policy, contract, plans, or agreements beginning on or after January 1, 2020. This section applies to all policies, contracts, plans, or agreements, subject to this article, that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section.(n) The timeframes in this section are not applicable to prior authorization requests submitted through telephone, mail, or fax.
(a) As used in this section:"Cost sharing" means any copayment, coinsurance, or deductible required by or on behalf of an insured in order to receive a specific health care item or service covered by a health plan."Drug" means the same as the term is defined in 30-5-4(19)."Person" means a natural person, corporation, mutual company, unincorporated association, partnership, joint venture, limited liability company, trust, estate, foundation, nonprofit corporation, unincorporated organization, or government or governmental subdivision or agency."Pharmacy benefits manager" means the same as that term is defined in 33-51-3 of this code.(b) When calculating an insureds contribution to any applicable cost sharing requirement, including, but not limited to, the annual limitation on cost sharing subject to 42 U.S.C. 18022(c) and 42 U.S.C. 300gg-6(b):(1) An insurer shall include any cost sharing amounts paid by the insured or on behalf of the insured by another person; and(2) A pharmacy benefits manger shall include any cost sharing amounts paid by the insured or on behalf of the insured by another person.(c) The commissioner is authorized to propose rules for legislative approval in accordance with 29A-3-1 et seq. of this code, to implement the provisions of this section.(d) This section is effective for policy, contract, plans, or agreements beginning on or after January 1, 2020. This section applies to all policies, contracts, plans, or agreements, subject to this article that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section.
(a) As used in this section, the following words and phrases have the meaning given them in this section unless the context clearly indicates otherwise:To the extent that coverage is provided "behavioral health, mental health, and substance use disorder" means a condition or disorder, regardless of etiology, that may be the result of a combination of genetic and environmental factors and that falls under any of the diagnostic categories listed in the mental disorders section of the most recent version of:(1) The International Statistical Classification of Diseases and Related Health Problems;(2) The Diagnostic and Statistical Manual of Mental Disorders; or(3) The Diagnostic Classification of Mental Health and Developmental Disorders of Infancy and Early Childhood; and Includes autism spectrum disorder: Provided, That any service, even if it is related to the behavioral health, mental health, or substance use disorder diagnosis if medical in nature, shall be reviewed as a medical claim and undergo all utilization review as applicable.(b) The carrier is required to provide coverage for the prevention of, screening for, and treatment of behavioral health, mental health, and substance use disorders that is no less extensive than the coverage provided for any physical illness and that complies with the requirements of this section. This screening shall include, but is not limited to, unhealthy alcohol use for adults, substance use for adults and adolescents, and depression screening for adolescents and adults. (c) The carrier shall:(1) Include coverage and reimbursement for behavioral health screenings using a validated screening tool for behavioral health, which coverage and reimbursement is no less extensive than the coverage and reimbursement for the annual physical examination; (2) Comply with the nonquantitative treatment limitation requirements specified in 45 CFR 146.136(c)(4), or any successor regulation, regarding any limitations that are not expressed numerically but otherwise limit the scope or duration of benefits for treatment, which in addition to the limitations and examples listed in 45 CFR 146.136(c)(4)(ii) and (c)(4)(iii), or any successor regulation and 78 FR 68246, include the methods by which the carrier establishes and maintains its provider network and responds to deficiencies in the ability of its networks to provide timely access to care;(3) Comply with the financial requirements and quantitative treatment limitations specified in 45 CFR 146.136(c)(2) and (c)(3), or any successor regulation;(4) Not apply any nonquantitative treatment limitations to benefits for behavioral health, mental health, and substance use disorders that are not applied to medical and surgical benefits within the same classification of benefits;(5) Establish procedures to authorize treatment with a nonparticipating provider if a covered service is not available within established time and distance standards and within a reasonable period after service is requested, and with the same coinsurance, deductible, or copayment requirements as would apply if the service were provided at, a participating provider; (6) If a covered person obtains a covered service from a nonparticipating provider because the covered service is not available within the established time and distance standards, reimburse treatment or services for behavioral health, mental health, or substance use disorders required to be covered pursuant to this subsection that are provided by a nonparticipating provider using the same methodology that the carrier uses to reimburse covered medical services provided by nonparticipating providers and, upon request, provide evidence of the methodology to the person or provider. (d) If the carrier offers a plan that does not cover services provided by an out-of-network provider, it may provide the benefits required in subsection (c) of this section if the services are rendered by a provider who is designated by and affiliated with the carrier only if the same requirements apply for services for a physical illness.(e) In the event of a concurrent review for a claim for coverage of services for the prevention of, screening for, and treatment of behavioral health, mental health, and substance use disorders, the service continues to be a covered service until the carrier notifies the covered person of the determination of the claim. (f) Unless denied for nonpayment of premium, a denial of reimbursement for services for the prevention of, screening for, or treatment of behavioral health, mental health, and substance use disorders by the carrier must include the following language:(1) A statement explaining that covered persons are protected under this section, which provides that limitations placed on the access to mental health and substance use disorder benefits may be no greater than any limitations placed on access to medical and surgical benefits;(2) A statement providing information about the Consumer Services Division of the Office of the West Virginia Insurance Commissioner if the covered person believes his or her rights under this section have been violated; and(3) A statement specifying that covered persons are entitled, upon request to the carrier, to a copy of the medical necessity criteria for any behavioral health, mental health, and substance use disorder benefit.(g) On or after June 1, 2021, and annually thereafter, the Insurance Commissioner shall submit a written report to the Joint Committee on Government and Finance that contains the following information regarding plans offered pursuant to this section:(1) Data that demonstrates parity compliance for adverse determination regarding claims for behavioral health, mental health, or substance use disorder services and includes the total number of adverse determinations for such claims;(2) A description of the process used to develop and select:(A) The medical necessity criteria used in determining benefits for behavioral health, mental health, and substance use disorders; and(B) The medical necessity criteria used in determining medical and surgical benefits;(3) Identification of all nonquantitative treatment limitations that are applied to benefits for behavioral health, mental health, and substance use disorders and to medical and surgical benefits within each classification of benefits; and(4) The results of analyses demonstrating that, for medical necessity criteria described in subdivision (2) of this subsection and for each nonquantitative treatment limitation identified in subdivision (3) of this subsection, as written and in operation, the processes, strategies, evidentiary standards, or other factors used in applying the medical necessity criteria and each nonquantitative treatment limitation to benefits for behavioral health, mental health, and substance use disorders within each classification of benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the medical necessity criteria and each nonquantitative treatment limitation to medical and surgical benefits within the corresponding classification of benefits.(5) The Insurance Commissioners report of the analyses regarding nonquantitative treatment limitations shall include at a minimum: (A) Identifying factors used to determine whether a nonquantitative treatment limitation will apply to a benefit, including factors that were considered but rejected;(B) Identify and define the specific evidentiary standards used to define the factors and any other evidence relied on in designing each nonquantitative treatment limitation;(C) Provide the comparative analyses, including the results of the analyses, performed to determine that the processes and strategies used to design each nonquantitative treatment limitation, as written, and the written processes and strategies used to apply each nonquantitative treatment limitation for benefits for behavioral health, mental health, and substance use disorders are comparable to, and are applied no more stringently than, the processes and strategies used to design and apply each nonquantitative treatment limitation, as written, and the written processes and strategies used to apply each nonquantitative treatment limitation for medical and surgical benefits;(D) Provide the comparative analyses, including the results of the analyses, performed to determine that the processes and strategies used to apply each nonquantitative treatment limitation, in operation, for benefits for behavioral health, mental health, and substance use disorders are comparable to, and are applied no more stringently than, the processes and strategies used to apply each nonquantitative treatment limitation, in operation, for medical and surgical benefits; and(E) Disclose the specific findings and conclusions reached by the Insurance Commissioner that the results of the analyses indicate that each health benefit plan offered pursuant to this section complies with subsection (c) of this section.(h) The Insurance Commissioner shall adopt legislative rules to comply with the provisions of this section. These rules shall specify the information and analyses that carriers shall provide to the Insurance Commissioner necessary for the commissioner to complete the report described in subsection (g) of this section and shall delineate the format in which carriers shall submit such information and analyses. These rules or amendments to rules shall be proposed pursuant to the provisions of 29A-3-1 et seq. of this code within the applicable time limit to be considered by the Legislature during its regular session in the year 2021. The rules shall require that each carrier first submit the report to the Insurance Commissioner no earlier than one year after the rules are promulgated, and any year thereafter during which the carrier makes significant changes to how it designs and applies medical management protocols.(i) This section is effective for policies, contracts, plans or agreements, beginning on or after January 1, 2021. This section applies to all policies, contracts, plans, or agreements, subject to this article that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section.(j) The Insurance Commissioner shall enforce this section and may conduct a financial examination of the carrier to determine if it is in compliance with this section, including, but not limited to, a review of policies and procedures and a sample of mental health claims to determine these claims are treated in parity with medical and surgical benefits. The results of this examination shall be reported to the Legislature. If the Insurance Commissioner determines that the carrier is not in compliance with this section, the Insurance Commissioner may fine the carrier in conformity with the fines established in the legislative rule. 
The provisions of the Health Benefit Plan Network Access and Adequacy Act codified at 33-55-1 et seq. of this code is made applicable to the provisions of this article.
The provision requiring coverage for 12-month refill for contraceptive drugs codified at 33-58-1 of this code is made applicable to the provisions of this article.
(a) Every such corporation shall deliver to each contract holder a copy of the contract and to each holder of a master group contract for delivery to each subscriber to such group contract a certificate setting forth the essential terms of the contract to be performed.(b) A corporation may accept from governmental agencies payment of all or part of the cost of subscriptions for hospital, medical or other health care rendered needy persons, and may accept from private agencies, corporations, associations, groups or individuals, similar payment for such service to be rendered needy or other persons.
The officer charged with the duty of preparing the payroll of any subscriber, who is an employee of the state government or of any of its political subdivisions, including state-operated educational institutions, may upon request of the subscriber deduct from his payroll the amount of the fee owed by the subscriber to any hospital service corporation or medical service corporation, provided enrollment regulations of the particular corporation are satisfied, in which case the officer shall pay over such amount to the corporation.
In view of the desirability of making available to the people of this state various methods of procuring and financing increased hospital, medical, dental, other health services, or any one or more of them, the declared policy of the Legislature in the enactment of this article is to encourage the organization, promotion and expansion of health care corporations by exempting them from the payment of all taxes and from the operation of the general insurance laws of this state, but at the same time subjecting them to such regulation as may be necessary for the adequate protection of those members of the public who subscribe for the services offered by such corporations.
(a) The commissioner or his or her accredited examiners may at any reasonable time and shall, at least once every five years, visit each health care corporation and thoroughly examine its financial condition and methods of doing business and ascertain whether it has complied with all of the laws and rules of this state. All expenses of each such examination conducted shall be borne by such corporation. The commissioner shall make a full written report of each such examination of the corporation, certified to by the commissioner or the examiner in charge of such examinations. The commissioner shall furnish a copy of the report to the corporation examined not less than thirty days prior to filing the same in his or her office. If such corporation so requests in writing, within such thirty-day period, the commissioner shall consider the objections of such corporation to the report as proposed and shall not so file the report until after such modifications, if any, have been made therein as the commissioner deems proper. The report, when filed, shall be admissible in evidence in any action or proceeding brought by the commissioner against the corporation examined, or its officers or agents, and shall be prima facie evidence of the facts stated therein. The commissioner or his or her examiners may at any time testify and offer other proper evidence as to information secured during the course of an examination, whether or not a written report of the examination has at that time been either made, served or filed in the commissioner's office.(b) For such purposes the commissioner, his or her deputies and employees shall have free access to all books, records, papers, documents and correspondence of any such corporation and such books, records, papers, documents and records shall be and remain in the State of West Virginia. The licenses of said corporation shall be automatically revoked if such books, records, papers, documents and records are taken outside the State of West Virginia without the prior written approval of the commissioner.(c) The commissioner shall revoke the license of any such corporation which refuses to submit to such examination.
If a corporation considers a loss ratio at the time of renewal of a policy, plan, or contract, the corporation shall, upon request of a subscriber, provide the loss ratio and the components of the loss ratio calculation to the subscriber no more than 90 days but no less than 60 days before the renewal date of the policy, plan, or contract. For purposes of this section, "loss ratio" means the total losses paid out in medical claims divided by the total earned premiums.Medical claims do not include dental only or vision only coverage.
The commissioner is authorized to promulgate and adopt such rules and regulations relating to health care corporations as are necessary to discharge his duties and exercise his powers and to effectuate the provisions of this article and to protect and safeguard the interests of subscribers and the public of this state.
Each contract made by the corporation with any person (other than subscribers), corporation, association and institution, named or referred to in section three of this article shall contain the following provisions:(a) That the person, corporation, association or institution will render to any subscriber such service as he may be entitled to under the terms and conditions of the contract issued to the subscriber by the corporation;(b) That the person, corporation, association or institution will accept as full payment for services contracted for subscribers such compensation as is set forth in the contract between such person, corporation, association or institution and the corporation;(c) That in the event a surplus remains after an annual accounting of the financial condition of the corporation, such surplus may be used by the corporation, upon an affirmative vote of a majority of its board of directors for the following purposes, in the order of priority stated below:(1) To liquidate on a pro rata basis any obligation due any such person, corporation, association or institution in previous years;(2) To return the original contributions for working capital, or any part thereof, on a pro rata basis;(3) To reduce rates charged subscribers, or to expand the services rendered them.
(a) Every such corporation shall deliver to each subscriber to its health care plan a copy of the contract.(b) A corporation may accept from private agencies, corporations, associations, groups or individuals, payment for or on behalf of any subscriber of all or any part of the cost of subscriptions for direct health care services to be rendered: Provided, That no employer or sponsor may deduct the proportionate share of such payment attributable to any employee or subscriber from that employee's or subscriber's wages or salary, without the prior written consent of the employee or subscriber. It shall be unlawful for any governmental agency to pay subscriptions for or on behalf of any subscriber.
Any person may advance to such corporation any sums of money necessary for its business or to enable it to comply with any requirements of law. Such advances and such interest thereon not exceeding six percent per annum, as may be agreed upon, shall not be a liability or a claim against the corporation or any of its assets, except as provided in this section and shall be reimbursed only out of the surplus earnings of such corporation. This section does not affect the power to borrow money which any such corporation possesses under other laws. No commissions or promotion expenses shall be paid by the corporation in connection with the advance of any such money to the corporation. The amount of any such advance that has not been repaid shall be reported in each annual statement of the corporation.
All licenses or renewal fees, all auditing charges and any other income derived from this article shall be deposited with the treasurer of the State of West Virginia to the credit of the Insurance Commissioner to be used only for the cost of operation of the Insurance Commissioner's office.
Every officer or employee of any such corporation, who is entrusted with the handling of its funds, shall furnish, in such amount as may with the approval of the commissioner be fixed by the board of directors of the corporation, a bond with corporate surety, conditioned upon faithful performance of all his duties.
Every health care organization organized under the laws of this state is subject to the provisions of article thirty-three of this chapter.
Every health care corporation subject to the provisions of this article is subject to the provisions of article thirty-four of this chapter.
For the purpose of this article, unless the context otherwise indicates:(a) "Health care corporation" or "corporation" shall mean a corporation organized and licensed under the provisions of this article.(b) "Direct health care services" shall, subject to the limitations contained in this article, include all such services as are designed to preserve or restore a person's health.(c) "Subscriber" shall mean a person (including, as the case may be, the members of his family) who subscribes to the direct health care plan of a corporation.(d) "Commissioner" means the Insurance Commissioner of the State of West Virginia.(e) "Statutory surplus" means the minimum amount of unencumbered surplus which an association or corporation must maintain pursuant to the requirements of this article.(f) "Surplus" means the amount by which an association's or corporation's assets exceeds its liabilities and required reserves based upon the financial information which would be required by this chapter for the preparation of the association's or corporation's annual statement.
Notwithstanding any other provisions of law, when any health insurance policy, health care services plan or other contract provides for the payment of medical expenses, benefits or procedures, such policy, plan or contract shall be construed to include payment to all health care providers including medical physicians, osteopathic physicians, podiatric physicians, chiropractic physicians, midwives and nurse practitioners who provide medical services, benefits or procedures which are within the scope of each respective provider's license. Any limitation or condition placed upon services, diagnoses or treatment by, or payment to any particular type of licensed provider shall apply equally to all types of licensed providers without unfair discrimination as to the usual and customary treatment procedures of any of the aforesaid providers.
The commissioner may as he deems necessary after notice and hearing promulgate rules and regulations in accordance with chapter twenty-nine-a of this code to define the commissioner's authority to consider the operating results of an insurer's affiliates and subsidiaries in in the rate making and solvency determination of that insurer.
(a) Any entity regulated under this article that provides dental care coverage to a covered person shall honor an assignment, made in writing by the person covered under the policy, of payments due under the policy to a dentist or a dental corporation for services provided to the covered person that are covered under the policy. Upon notice of the assignment, the entity shall make payments directly to the provider of the covered services. A dentist or dental corporation with a valid assignment may bill the entity and notify the entity of the assignment. Upon request of the entity, the dentist or dental corporation shall provide a copy of the assignment to the entity.(b) A covered person may revoke an assignment made pursuant to subsection (a) of this section with or without the consent of the provider. The revocation shall be in writing. The covered person shall provide notice of the revocation to the entity. The entity shall send a copy of the revocation notice to the dentist or dental corporation subject to the assignment. The revocation is effective when both the entity and the provider have received a copy of the revocation notice. The revocation is only effective for any charges incurred after both parties have received the revocation notice.(c) If, under an assignment authorized in subsection (a) of this section, a dentist or dental corporation collects payment from a covered person and subsequently receives payment from the entity, the dentist or dental corporation shall reimburse the covered person, less any applicable copayments, deductibles, or coinsurance amounts, within 45 days.(d) Nothing in this section limits an entitys ability to determine the scope of the entitys benefits, services, or any other terms of the entitys policies or to negotiate any contract with a licensed health care provider regarding reimbursement rates or any other lawful provisions.(e) Any entity providing dental care shall provide conspicuous notice to the covered person that the assignment of benefits is optional, and that additional payments may be required if the assigned benefits are not sufficient to pay for received services. 
Any law to the contrary notwithstanding, nonprofit, nonstock corporations may be organized in accordance with the provisions of article one, chapter thirty-one of the Code of West Virginia, for the sole purpose of providing any or all of the following direct health care services, at the expense of the corporation, to its members and subscribers through contracts with duly licensed physicians and surgeons, osteopathic physicians and surgeons, chiropractors, chiropodists, nurses, dentists, optometrists and pharmacists, and any others who are licensed to engage in the practice of the healing arts, as well as hospitals, clinics, convalescent centers, nursing homes, and any other persons, corporations, associations, and institutions engaged in the business of providing facilities, appliances, supplies and services incidental to such health care.No such corporation shall include in its name the words "insurance," "casualty," "surety," "health and accident," "accident and sickness," "mutual," or any other words, which in the opinion of the commissioner are descriptive of the insurance, casualty or surety business, or deceptively similar to the name or description of any insurance or surety corporation doing business in the state.A corporation shall provide only direct health care services to the subscribers to its health care plan and shall not provide for the payment of any cash or cash indemnity to or on behalf of a subscriber: Provided, That a corporation may provide a cash reimbursement to a subscriber who employs or obtains in the event of an emergency the health care services of any person, corporation, association or institution named or referred to in this section and located outside the territorial boundaries within which the corporation is licensed to operate.
The board of directors of any corporation organized under this article shall consist of at least seven members, all of whom shall be residents of the State of West Virginia, a majority of whom shall be subscribers to its services, one of whom shall be a person licensed to practice medicine under the laws of the State of West Virginia, one of whom shall be a person connected with the healing arts, and one of whom shall be a member of the general public not connected with any contracting party. The members of the board shall serve without compensation but may be reimbursed for expenses incurred in carrying out their duties as members of the board.
Every such corporation is hereby declared to be a charitable, scientific, nonprofit institution and as such exempt from the payment of all property and other taxes.
(a) Corporations organized under this article are subject to supervision and regulation of the Insurance Commissioner. The corporations organized under this article, to the same extent these provisions are applicable to insurers transacting similar kinds of insurance and not inconsistent with the provisions of this article, shall be governed by and be subject to the provisions as herein below indicated of the following articles of this chapter: 33-4-1 et seq. of this code (general provisions), except that 33-4-16 of this code shall not be applicable thereto; 33-6C-1 et seq. of this code (guaranteed loss ratio); 33-7-1 et seq. of this code (assets and liabilities); 33-8-1 et seq. of this code (investments); 33-10-1 et seq. of this code (rehabilitation and liquidation); 33-15-2a of this code (definitions); 33-15-2b of this code (guaranteed issue); 33-15-2d of this code (exception to guaranteed renewability); 33-15-2e of this code (discontinuation of coverage); 33-15-2f of this code (certification of creditable coverage); 33-15-2g of this code (applicability); 33-15-4e of this code (benefits for mothers and newborns); 33-15-14 of this code (individual accident and sickness insurance); 33-15-16 of this code (coverage of children); 33-15-18 of this code (equal treatment of state agency); 33-15-19 of this code (coordination of benefits with Medicaid); 33-15C-1 of this code (diabetes insurance); 33-16-3 of this code (required policy provisions); 33-16-3a of this code (mental health); 33-16-3j of this code (benefits for mothers and newborns); 33-16-3k of this code (preexisting condition exclusions); 33-16-3l of this code (guaranteed renewability); 33-16-3m of this code (creditable coverage); 33-16-3n of this code (eligibility for enrollment); 33-16-11 of this code (coverage of children); 33-16-13 of this code (equal treatment of state agency); 33-16-14 of this code (coordination of benefits with Medicaid); 33-16-16 of this code (diabetes insurance); 33-16A-1 et seq. of this code (group health insurance conversion); 33-16C-1 et seq. of this code (small employer group policies); 33-16D-1 et seq. of this code (marketing and rate practices for small employers); 33-25F-1 et seq. of this code (coverage for patient cost of clinical trials); 33-26A-1 et seq. of this code (West Virginia Life and Health Insurance Guaranty Association Act); 33-27-1 et seq. of this code (insurance holding company systems); 33-33-1 et seq. of this code (annual audited financial report); 33-34A-1 et seq. of this code (standards and commissioners authority for companies considered to be in hazardous financial condition); 33-35-1 et seq. of this code (criminal sanctions for failure to report impairment); 33-37-1 et seq. of this code (managing general agents); 33-40A-1 et seq. of this code (risk-based capital for health organizations); and 33-41-1 et seq. of this code (privileges and immunity); and no other provision of this chapter may apply to these corporations unless specifically made applicable by the provisions of this article.(b) Every corporation subject to this article shall comply with mental health parity requirements in this chapter.
Notwithstanding any provision of this code to the contrary, article forty-one of this chapter is applicable to health care corporations.
(a) Before it may issue any contract to a subscriber, a corporation desiring to establish, maintain and operate a direct health care plan must first obtain from the commissioner a license as provided in this section.(b) Applications for an original license shall be made on forms prescribed and furnished by the commissioner and shall be accompanied by the following documents and information: (1) Certificate of incorporation; (2) bylaws; (3) list of names and residence addresses of all officers and board of directors of the corporation; (4) contracts between the corporation and persons, firms, corporations or associations to render direct health care services; (5) proposed contracts to be issued to subscribers setting forth in detail the direct health care services to which subscribers are entitled and the table of rates to be charged for such services; (6) financial statement showing the assets and liabilities of the corporation, the amount of contributions paid, or agreed to be paid, to the corporation for working capital, the names or name of each contributor and the terms of each contribution; and (7) any additional information as the commissioner may require.(c) Within thirty days after receipt of an application, the commissioner shall, upon payment to him of a license fee of $200, issue a license authorizing the corporation to transact business in this state in the area to be served by it, if he is satisfied (1) that the applicant is incorporated in this state under the provisions of article one, chapter thirty-one of the Code of West Virginia as a bona fide, nonprofit corporation, (2) that the health care plan which the corporation proposes to operate, as well as the forms of all contracts which it proposes to issue under such health care plan, are based upon sound business principles and will be in every respect equitable, just and fair to the subscriber, (3) that the working capital available to the corporation will be sufficient to pay all operating expenses during the subscription period, (4) that the proposed plan will adequately serve the best interests of all the people of the area in which the corporation intends to operate, regardless of their race, color or religion, and (5) that the corporation shall have and maintain statutory surplus funds of at least $2,000,000: Provided, That corporations duly licensed under this article in West Virginia prior to the effective date of this section whose surplus requirements are increased by virtue of this section shall have until January 1, 1994, to meet such increased requirements.(d) The commissioner may refuse to license a corporation when he determines that such corporation has not complied with the laws of this state, or that it is not in the best interest of the people of the state that such corporation be licensed, or that such corporation would transact business in this state in an improper, illegal or unjust manner. In such event, the commissioner shall enter an order refusing such license and the applicant therefor may have a hearing and judicial review in accordance with the applicable provisions of article two of this chapter relating to hearings before and judicial review of orders entered by the commissioner.(e) All licenses issued under the provisions of this article shall expire at midnight on the thirty-first day of March next following the date of issuance. The commissioner shall renew annually the license of all corporations which qualify and make applications therefor upon a form prescribed by the commissioner upon payment to the commissioner of a renewal fee of $200.(f) The commissioner shall, after notice and hearing, refuse to renew or shall revoke or suspend the license of a corporation, if the corporation: (1) Violates any provision of this article; (2) fails to comply with any lawful rule, regulation or order of the commissioner; (3) is transacting its business in an illegal, improper or unjust manner, or is operating in contravention of its articles of incorporation or any amendments thereto, of its bylaws, or of its health care plan; (4) is found by the commissioner to be in an unsound condition or in such condition as to jeopardize its obligations to subscribers and those with whom it has contracted; (5) compels subscribers to its health care program to accept less than the obligation due them under their contracts or agreements with the corporation; (6) refuses to be examined or to produce its accounts, records and files for examination by the commissioner when required; (7) fails to pay any final judgment rendered against it in West Virginia within thirty days after the judgment became final or time for appeal expired, whichever is later; (8) fails to pay when due to the State of West Virginia any fees, charges or penalties required by this chapter.In those cases where the commissioner has the right to revoke, suspend or terminate the license or any renewal thereof of said corporation, the commissioner shall, by order, require the corporation to pay to the State of West Virginia a penalty in the sum not exceeding $1,000, and on the failure of the corporation to pay the penalty within thirty days after notice thereof, the commissioner shall revoke or suspend the license of the corporation.When any license has been revoked, suspended or terminated, the commissioner may reinstate the license when he is satisfied that the conditions causing the revocation, suspension or termination have ceased to exist and are unlikely to recur.In the event the commissioner revokes, suspends or terminates a license, the corporation may demand a hearing in the manner provided in article two of this chapter.
(a) It shall be the duty of the commissioner to enforce the provisions of this article.(b) No such corporation shall deliver or issue for delivery any subscriber's contract, changes in the terms of such contract, application, rider or endorsement until a copy thereof and the rates pertaining thereto have been filed with and approved by the commissioner. All such forms filed with the commissioner shall be deemed approved after the expiration of thirty days from the date of such filing unless the commissioner shall have disapproved the same, stating his reasons for such disapproval in writing, except that such period may be extended for an additional period not to exceed fifteen days upon written notice thereof from the commissioner to the applicant. Such forms may be used prior to the expiration of such periods if written approval thereof has been received from the commissioner.(c) No rates to be charged subscribers shall be used or established by any such corporation unless and until the same have been filed with the commissioner and approved by him The procedure for such filing and approval shall be the same as that prescribed in subsection (b) of this section for the approval of forms. The commissioner shall approve all such rates which are not excessive, inadequate, or unfairly discriminatory.(d) The commissioner shall pass upon the actuarial soundness of all direct health care services plans.(e) The corporation shall accumulate a fund to be derived from a minimum of two percent of every subscriber's monthly premium which shall be known as a contingency and liability reserve fund except that the same shall not exceed an amount equal to three months' average obligation of said corporation, nor shall it fall below a minimum of one month's average obligation of said corporation. Said fund shall be expended by the corporation according to rules and regulations to be promulgated by the commissioner.In addition to the above requirements, every subscriber shall pay into the corporation a membership fee equal to one monthly premium. The membership fee shall be collected in full by said corporation within ninety days of said subscriber's application for membership.(f) Each such rate filing and each such form filing made with the commissioner pursuant to this section is subject to the filing fee of section thirty-four, article six of this chapter.33-25-8. Commissioner to enforce article; approval of contracts, forms and rates; reserve fund; membership fee.(a) It shall be the duty of the commissioner to enforce the provisions of this article.(b) No such corporation shall deliver or issue for delivery any subscriber's contract, changes in the terms of such contract, application, rider or endorsement until a copy thereof and the rates pertaining thereto have been filed with and approved by the commissioner. All such forms filed with the commissioner shall be deemed approved after the expiration of sixty days from the date of such filing unless the commissioner shall have disapproved the same, stating his reasons for such disapproval in writing. Such forms may be used prior to the expiration of such periods if written approval thereof has been received from the commissioner.(c) No rates to be charged subscribers shall be used or established by any such corporation unless and until the same have been filed with the commissioner and approved by him The procedure for such filing and approval shall be the same as that prescribed in paragraph (b) of this section for the approval of forms. The commissioner shall approve all such rates which are not excessive, inadequate, or unfairly discriminatory.(d) The commissioner shall pass upon the actuarial soundness of all direct health care services plans.(e) The corporation shall accumulate a fund to be derived from a minimum of two percent of every subscriber's monthly premium which shall be known as a contingency and liability reserve fund except that the same shall not exceed an amount equal to three months' average obligation of said corporation, nor shall it fall below a minimum of one month's average obligation of said corporation. Said fund shall be expended by the corporation according to rules and regulations to be promulgated by the commissioner.In addition to the above requirements, every subscriber shall pay into the corporation a membership fee equal to one monthly premium. The membership fee shall be collected in full by said corporation within ninety days of said subscriber's application for membership.(f) Each such rate filing and each such form filing made with the commissioner pursuant to this section is subject to the filing fee of section thirty-four, article six of this chapter.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, whenever reimbursement or indemnity for laboratory or X-ray services are covered, reimbursement or indemnification shall not be denied for any of the following when performed for cancer screening or diagnostic purposes, at the direction of a person licensed to practice medicine and surgery by the Board of Medicine: (1) Mammograms when medically appropriate and consistent with the current guidelines from the United States Preventive Services Task Force;(2) A pap smear, either conventional or liquid-based cytology, whichever is medically appropriate and consistent with the current guidelines from either the United States Preventive Services Task Force or The American College of Obstetricians and Gynecologists, for women age eighteen or over; and(3) A test for the human papilloma virus (HPV)for women age eighteen or over, when medically appropriate and consistent with the current guidelines from either the United States Preventive Services Task Force or The American College of Obstetricians and Gynecologists for women age eighteen and over.(b) A policy, provision, contract, plan or agreement may apply to mammograms, pap smears or human papilloma virus (HPV) test the same deductibles, coinsurance and other limitations as apply to other covered services.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall on or after July 1, 1991, provide as benefits to all subscribers and members coverage for rehabilitation services as hereinafter set forth, unless rejected by the insured.(b) For purposes of this article and section, "rehabilitation services" includes those services which are designed to remediate patient's condition or restore patients to their optimal physical, medical, psychological, social, emotional, vocational and economic status. Rehabilitative services include by illustration and not limitation diagnostic testing, assessment, monitoring or treatment of the following conditions individually or in a combination:(1) Stroke;(2) Spinal cord injury;(3) Congenital deformity;(4) Amputation;(5) Major multiple trauma;(6) Fracture of femur;(7) Brain injury;(8) Polyarthritis, including rheumatoid arthritis;(9) Neurological disorders, including, but not limited to, multiple sclerosis, motor neuron diseases, polyneuropathy, muscular dystrophy and Parkinson's disease;(10) Cardiac disorders, including, but no limited to, acute myocardial infarction, angina pectoris, coronary arterial insufficiency, angioplasty, heart transplantation, chronic arrhythmias, congestive heart failure, valvular heart disease;(11) Burns.(c) Rehabilitative services includes care rendered by any of the following:(1) A hospital duly licensed by the State of West Virginia that meets the requirements for rehabilitation hospitals as described in Section 2803.2 of the Medicare Provider Reimbursement Manual, Part 1, as published by the U.S. Health Care Financing Administration;(2) A distinct part rehabilitation unit in a hospital duly licensed by the State of West Virginia. The distinct part unit must meet the requirements of Section 2803.61 of the Medicare Provider Reimbursement Manual, Part 1, as published by the U.S. Health Care Financing Administration;(3) A hospital duly licensed by the State of West Virginia which meets the requirements for cardiac rehabilitation as described in Section 35-25, Transmittal 41, dated August, 1989, as promulgated by the U.S. Health Care Financing Administration.(d) Rehabilitation services do not include services for mental health, chemical dependency, vocational rehabilitation, long-term maintenance or custodial services.(e) A policy, provision, contract, plan or agreement may apply to rehabilitation services the same deductibles, coinsurance and other limitations as apply to other covered services.
Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall, on or after July 1, 1994, provide as benefits to all subscribers and members coverage for child immunization services as described in section five, article three, chapter sixteen of this code. This coverage will cover all costs associated with immunization, including the cost of the vaccine, if incurred by the health care provider, and all costs of vaccine administration. These services shall be exempt from any deductible, per-visit charge and/or copayment provisions which may be in force in these policies, provisions, plans, agreements or contracts. This section does not require that other health care services provided at the time of immunization be exempt from any deductible and/or copayment provisions.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall provide as benefits to all subscribers and members coverage for emergency services. A policy, provision, contract, plan or agreement may apply to emergency services the same deductibles, coinsurance and other limitations as apply to other covered services: Provided, That preauthorization or precertification shall not be required.(b) From July 1, 1998, the following provisions apply:(1) Every insurer shall provide coverage for emergency medical services, including prehospital services, to the extent necessary to screen and to stabilize an emergency medical condition. The insurer shall not require prior authorization of the screening services if a prudent layperson acting reasonably would have believed that an emergency medical condition existed. Prior authorization of coverage shall not be required for stabilization if an emergency medical condition exists. Payment of claims for emergency services shall be based on the retrospective review of the presenting history and symptoms of the covered person.(2) An insurer that has given prior authorization for emergency services shall cover the services and shall not retract the authorization after the services have been provided unless the authorization was based on a material misrepresentation about the covered person's health condition made by the referring provider, the provider of the emergency services or the covered person.(3) Coverage of emergency services shall be subject to coinsurance, copayments and deductibles applicable under the health benefit plan. (4) The emergency department and the insurer shall make a good faith effort to communicate with each other in a timely fashion to expedite postevaluation or poststabilization services in order to avoid material deterioration of the covered person's condition.(5) As used in this section:(A) "Emergency medical services" means those services required to screen for or treat an emergency medical condition until the condition is stabilized, including prehospital care;(B) "Prudent layperson" means a person who is without medical training and who draws on his or her practical experience when making a decision regarding whether an emergency medical condition exists for which emergency treatment should be sought;(C) "Emergency medical condition for the prudent layperson" means one that manifests itself by acute symptoms of sufficient severity, including severe pain, such that the person could reasonably expect the absence of immediate medical attention to result in serious jeopardy to the individual's health, or, with respect to a pregnant woman, the health of the unborn child; serious impairment to bodily functions; or serious dysfunction of any bodily organ or part;(D) "Stabilize" means with respect to an emergency medical condition, to provide medical treatment of the condition necessary to assure, with reasonable medical probability that no medical deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility: Provided, That this provision may not be construed to prohibit, limit or otherwise delay the transportation required for a higher level of care than that possible at the treating facility; (E) "Medical screening examination" means an appropriate examination within the capability of the hospital's emergency department, including ancillary services routinely available to the emergency department, to determine whether or not an emergency medical condition exists; and(F) "Emergency medical condition" means a condition that manifests itself by acute symptoms of sufficient severity including severe pain such that the absence of immediate medical attention could reasonably be expected to result in serious jeopardy to the individual's health or with respect to a pregnant woman the health of the unborn child, serious impairment to bodily functions or serious dysfunction of any bodily part or organ.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, reimbursement or indemnification for colorectal cancer examinations and laboratory testing may not be denied for any nonsymptomatic person fifty years of age or older, or a symptomatic person under fifty years of age, when reimbursement or indemnity for laboratory or X-ray services are covered under the policy and are performed for colorectal cancer screening or diagnostic purposes at the direction of a person licensed to practice medicine and surgery by the Board of Medicine. The tests are as follows: An annual fecal occult blood test, a flexible sigmoidoscopy repeated every five years, a colonoscopy repeated every ten years and a double contrast barium enema repeated every five years.(b) A symptomatic person is defined as: (i) An individual who experiences a change in bowel habits, rectal bleeding or stomach cramps that are persistent; or (ii) an individual who poses a higher than average risk for colorectal cancer because he or she has had colorectal cancer or polyps, inflammatory bowel disease, or an immediate family history of such conditions.(c) The same deductibles, coinsurance, network restrictions and other limitations for covered services found in the policy, provision, contract, plan or agreement of the covered person may apply to colorectal cancer examinations and laboratory testing.
(a) A health care corporation issuing a contract under the provisions of this article may not require any person covered under a contract which provides coverage for prescription drugs to obtain the prescription drugs from a mail-order pharmacy in order to obtain benefits for the drugs.(b) A health care corporation may not violate the provisions of subsection (a) of this section through the use of an agent or contractor or through the action of an administrator of prescription drug benefits.(c) The Insurance Commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to implement and enforce the provisions of this section.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, reimbursement or indemnification for annual kidney disease screening and laboratory testing as recommended by the National Kidney Foundation may not be denied for any person when reimbursement or indemnity for laboratory or X-ray services are covered under the policy and are performed for kidney disease screening or diagnostic purposes at the direction of a person licensed to practice medicine and surgery by the Board of Medicine. The tests are as follows: Any combination of blood pressure testing, urine albumin or urine protein testing and serum creatinine testing.(b) The same deductibles, coinsurance, network restrictions and other limitations for covered services found in the policy, provision, contract, plan or agreement of the covered person may apply to kidney disease screening and laboratory testing.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall, on or after July 1, 2009, provide as benefits to all subscribers and members coverage for dental anesthesia services as hereinafter set forth.(b) For purposes of this article and section, "dental anesthesia services" means general anesthesia for dental procedures and associated outpatient hospital or ambulatory facility charges provided by appropriately licensed health care individuals in conjunction with dental care provided to an enrollee or insured if the enrollee or insured is:(1) Seven years of age or younger or is developmentally disabled and is an individual for whom a successful result cannot be expected from dental care provided under local anesthesia because of a physical, intellectual or other medically compromising condition of the enrollee or insured and for whom a superior result can be expected from dental care provided under general anesthesia; or(2) A child who is twelve years of age or younger with documented phobias, or with documented mental illness, and with dental needs of such magnitude that treatment should not be delayed or deferred and for whom lack of treatment can be expected to result in infection, loss of teeth or other increased oral or dental morbidity and for whom a successful result cannot be expected from dental care provided under local anesthesia because of such condition and for whom a superior result can be expected from dental care provided under general anesthesia.(c) Prior authorization. -- An entity subject to this section may require prior authorization for general anesthesia and associated outpatient hospital or ambulatory facility charges for dental care in the same manner that prior authorization is required for these benefits in connection with other covered medical care.(d) An entity subject to this section may restrict coverage for general anesthesia and associated outpatient hospital or ambulatory facility charges unless the dental care is provided by:(1) A fully accredited specialist in pediatric dentistry;(2) A fully accredited specialist in oral and maxillofacial surgery; and(3) A dentist to whom hospital privileges have been granted.(e) Dental care coverage not required. -- The provisions of this section may not be construed to require coverage for the dental care for which the general anesthesia is provided.(f) Temporal mandibular joint disorders. -- The provisions of this section do not apply to dental care rendered for temporal mandibular joint disorders.(g) A policy, provision, contract, plan or agreement may apply to dental anesthesia services the same deductibles, coinsurance and other limitations as apply to other covered services.
Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, a health insurance policy subject to this article, issued or renewed on or after January 1, 2014, which provides health insurance coverage for maternity services, shall provide coverage for maternity services for all persons participating in, or receiving coverage under the policy. To the extent that the provisions of this section require benefits that exceed the essential health benefits specified under section 1302(b) of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, as amended, the specific benefits that exceed the specified essential health benefits are not required of a health benefit plan when the plan is offered by a health care insurer in this state. Coverage required under this section may not be subject to exclusions or limitations which are not applied to other maternity coverage under the policy.
(a) Notwithstanding any provision of any policy, contract, plan or agreement to which this article applies, a policy, contract, plan or agreement issued to a member or subscriber by an entity regulated by this article that covers anti-cancer medications that are injected or intravenously administered by a health care provider and patient administered anti-cancer medications, including, but not limited to, those medications orally administered or self-injected, may not require a less favorable basis for a copayment, deductible or coinsurance amount for patient administered anti-cancer medications than it requires for injected or intravenously administered anti-cancer medications, regardless of the formulation or benefit category determination by the policy or plan.(b) A contract issued to a member or subscriber that is subject to this article may not comply with subsection (a) of this section by:(1) Increasing the copayment, deductible or coinsurance amount required for injected or intravenously administered anti-cancer medications that are covered under the policy, contract, or plan or agreement; or(2) Reclassifying benefits with respect to anti-cancer medications.(c) As used in this section, "anti-cancer medication" means a FDA approved medication prescribed by a treating physician who determines that the medication is medically necessary to kill or slow the growth of cancerous cells in a manner consistent with nationally accepted standards of practice.(d) This section is effective for policy, plan or agreement years beginning on or after January 1, 2016. This section applies to all policies, plans, contracts or agreements subject to this article that are delivered, executed, issued, amended, adjusted or renewed in this state, on and after the effective date of this section.(e) Notwithstanding any other provision in this section to the contrary, in the event that an entity subject to this article can demonstrate actuarially to the Insurance Commissioner that its total anticipated costs for benefits to all members or subscribers to comply with this section will exceed or have exceeded two percent of the total costs for all benefits of the policy, plan, contract or agreement in any experience period, then the entity may apply whatever cost containment measures may be necessary to maintain costs below two percent of the total costs for the policy, plan, contract or agreement: Provided, That such cost containment measures implemented are applicable only for the plan year or experience period following approval of the request to implement cost containment measures.(f) For any enrollee that is enrolled in a catastrophic plan as defined in Section 1302(e) of the Affordable Care Act or in a plan that, but for this requirement, would be a High Deductible Health Plan as defined in section 223(c)(2)(A) of the Internal Revenue Code of 1986, and that, in connection with every enrollment, opens and maintains for each enrollee a Health Savings Account as that term is defined in section 223(d) of the Internal Revenue Code of 1986, the cost-sharing limit outlined in subsection (a) of this section shall be applicable only after the minimum annual deductible specified in section 223(c)(2)(A) of the Internal Revenue Code of 1986 is reached. In all other cases, this limit shall be applicable at any point in the benefit design, including before and after any applicable deductible is reached.
A contract, plan or agreement issued by an insurer pursuant to this article for prescription topical eye medication may not deny coverage for the refilling of a prescription for topical eye medication when:(1) The medication is to treat a chronic condition of the eye;(2) The refill is requested by the insured prior to the last day of the prescribed dosage period and after at least 70% of the predicted days of use; and(3) A person licensed under chapter thirty and authorized to prescribe topical eye medication indicates on the original prescription that refills are permitted and that the early refills requested by the insured do not exceed the total number of refills prescribed.
(a) As used in this section:(1) Abuse-deterrent opioid analgesic drug product means a brand name or generic opioid analgesic drug product approved by the United States Food and Drug Administration with abuse-deterrent labeling that indicates its abuse-deterrent properties are expected to deter or reduce its abuse; (2) Cost-sharing means any coverage limit, copayment, coinsurance, deductible or other out-of-pocket expense requirements;(3) Opioid analgesic drug product means a drug product that contains an opioid agonist and is indicated by the United States Food and Drug Administration for the treatment of pain, regardless of whether the drug product:(A) Is in immediate release or extended release form; or(B) Contains other drug substances.(b) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, on or after January 1, 2017:(1) Coverage shall be provided for at least one abuse-deterrent opioid analgesic drug product for each active opioid analgesic ingredient;(2) Cost-sharing for brand name abuse-deterrent opioid analgesic drug products shall not exceed the lowest tier for brand name prescription drugs on the entitys formulary for prescription drug coverage;(3) Cost-sharing for generic abuse-deterrent opioid analgesic drug products covered pursuant to this section shall not exceed the lowest cost-sharing level applied to generic prescription drugs covered under the applicable health plan or policy; and(4) An entity subject to this section may not require an insured or enrollee to first use an opioid analgesic drug product without abuse-deterrent labeling before providing coverage for an abuse-deterrent opioid analgesic drug product covered on the entity's formulary for prescription drug coverage.(c) Notwithstanding subdivision (3), subsection (b) of this section, an entity subject to this section may undertake utilization review, including preauthorization, for an abuse-deterrent opioid analgesic drug product covered by the entity, if the same utilization review requirements are applied to nonabuse-deterrent opioid analgesic drug products and with the same type of drug release, immediate or extended.(d) For purposes of subsection (b) of this section, the lowest tier and the lowest cost-sharing level shall not mean the cost-sharing tier applicable to preventive care services which are required to be provided at no cost-sharing under the Patient Protection and Affordable Care Act.
(a) As used in this article:(1) Health benefit plan means a policy, contract, certificate or agreement entered into, offered or issued by a health plan issuer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services.(2) Health plan issuer or issuer means an entity required to be licensed under this chapter that contracts, or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services under a health benefit plan, including accident and sickness insurers, nonprofit hospital service corporations, medical service corporations and dental service organizations, prepaid limited health service organizations, health maintenance organizations, preferred provider organizations, provider sponsored network, and any pharmacy benefit manager that administers a fully-funded or self-funded plan.(3) Step therapy protocol means a protocol or program that establishes the specific sequence in which prescription drugs for a specified medical condition, and medically appropriate for a particular patient, are covered by a health plan issuer or health benefit plan.(4) Step therapy override determination means a determination as to whether a step therapy protocol should apply in a particular situation, or whether the step therapy protocol should be overridden in favor of immediate coverage of the health care providers selected prescription drug. This determination is based on a review of the patients or prescribers request for an override, along with supporting rationale and documentation.(5) Utilization review organization means an entity that conducts utilization review, other than a health plan issuer performing utilization review for its own health benefit plan.(b) A health benefit plan that includes prescription drug benefits, and which utilizes step therapy protocols, and which is issued for delivery, delivered, renewed, or otherwise contracted in this state on or after January 1, 2018, shall comply with the provisions of this article.(c) Step therapy protocol exceptions include:(1) When coverage of a prescription drug for the treatment of any medical condition is restricted for use by health plan issuer or utilization review organization through the use of a step therapy protocol, the patient and prescribing practitioner shall have access to a clear and convenient process to request a step therapy exception determination. The process shall be made easily accessible on the health plan issuers or utilization review organizations website. The health plan issuer or utilization review organization must provide a prescription drug for treatment of the medical condition at least until the step therapy exception determination is made.(2) A step therapy override determination request shall be expeditiously granted if:(A) The required prescription drug is contraindicated or will likely cause an adverse reaction by or physical or mental harm to the patient.(B) The required prescription drug is expected to be ineffective based on the known relevant physical or mental characteristics of the patient and the known characteristics of the prescription drug regimen.(C) The patient has tried the required prescription drug while under their current or a previous health insurance or health benefit plan, or another prescription drug in the same pharmacologic class or with the same mechanism of action and such prescription drug was discontinued due to a lack of efficacy or effectiveness, diminished effect, or an adverse event.(D) The required prescription drug is not in the best interest of the patient, based upon medical appropriateness.(E) The patient is stable on a prescription drug selected by their health care provider for the medical condition under consideration.(3) Upon the granting of a step therapy override determination, the health plan issuer or utilization review organization shall authorize coverage for the prescription drug prescribed by the patients treating healthcare provider, provided such prescription drug is a covered prescription drug under such policy or contract.(4) This section shall not be construed to prevent:(A) A health plan issuer or utilization review organization from requiring a patient to try an AB-Rated generic equivalent prior to providing coverage for the equivalent branded prescription drug.(B) A health care provider from prescribing a prescription drug that is determined to be medically appropriate.
(a) A policy, plan, or contract that is issued or renewed on or after January 1, 2019, and that is subject to this article shall provide coverage, through the age of 20, for amino acid-based formula for the treatment of severe protein-allergic conditions or impaired absorption of nutrients caused by disorders affecting the absorptive surface, function, length, and motility of the gastrointestinal tract. This includes the following conditions, if diagnosed as related to the disorder by a physician licensed to practice in this state pursuant to either 30-3-1 et seq. or 30-14-1 et seq. of this code: (1) Immunoglobulin E and Nonimmunoglobulin E-medicated allergies to multiple food proteins; (2) Severe food protein-induced enterocolitis syndrome; (3) Eosinophilic disorders as evidenced by the results of a biopsy; and(4) Impaired absorption of nutrients caused by disorders affecting the absorptive surface, function, length, and motility of the gastrointestinal tract (short bowel).(b) The coverage required by 33-25-8n(a) of this code shall include medical foods for home use for which a physician has issued a prescription and has declared them to be medically necessary, regardless of methodology of delivery.(c) For purposes of this section, medically necessary foods or medical foods shall mean prescription amino acid-based elemental formulas obtained through a pharmacy: Provided, That these foods are specifically designated and manufactured for the treatment of severe allergic conditions or short bowel. (d) The provisions of this section shall not apply to persons with an intolerance for lactose or soy.
(a) As used in this section, the following words have the following meanings:(1) Concurrent review means inpatient care is reviewed as it is provided. Medically qualified reviewers monitor appropriateness of the care, the setting, and patient progress, and, as appropriate, the discharge plans.(2) Covered person means an individual, other than a Medicaid recipient, for whom coverage has been provided pursuant to the provisions of this article. (3) Insurance Commissioner means the person appointed pursuant to the provisions of 33-2-1 of this code. (4) Health benefit plan means the same as that term is defined in 33-25-8m of this code. (5) Health plan issuer means the same as that term is defined in 33-25-8m of this code.(6) Physician or psychiatrist means a person licensed pursuant to the provisions of either 30-3-1 et seq. or 30-3-14 et seq. of this code. (7) Psychologist means a person licensed pursuant to the provisions of 30-21-1 et seq. of this code. (8) Substance use disorder means the same as that term is defined by the American Psychiatric Association in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, and shall include substance use withdrawal. (b) A health benefit plan offered by a health plan issuer that provides hospital or medical expense benefits and is delivered, issued, executed, or renewed in this state, or approved for issuance or renewal by the Insurance Commissioner, on or after January 1, 2019, shall provide benefits for inpatient and outpatient treatment of substance use disorder at in-network facilities at the same level as other medical services offered by the health benefit plan offered by a health plan issuer. (c) The services for the treatment of substance use disorder shall be: (1) Prescribed by a physician or psychiatrist licensed pursuant to the provisions of 30-3-1 et seq. or 30-14-1 et seq. of this code or recommended by a psychologist licensed pursuant to the provisions of 30-21-1 et seq. of this code; and(2) Provided by licensed health care professionals or licensed or certified substance use disorder providers in licensed or otherwise state-approved facilities, as required by this code.(d) The inpatient and outpatient treatment of substance use disorders shall be provided when determined medically necessary by the covered persons physician, psychologist, or psychiatrist. The facility shall notify the insurer of both the admission and the initial treatment plan within 48 hours of the admission or initiation of treatment. If there is no in-network facility immediately available for a covered person, a health benefit plan offered by a health plan issuer shall provide necessary exceptions to its network to ensure admission in a treatment facility within 72 hours. If a covered person is being treated at an out-of-network facility and an in-network facility becomes available during the course of the treatment plan, an insurer may transfer the covered person to the in-network facility.(e) Providers of treatment for substance use disorders to persons covered under a covered contract shall not require prepayment of medical expenses during this 180 days in excess of applicable copayment, deductible, or coinsurance as provided in the contract.(f) The benefits for outpatient visits may be subject to concurrent or retrospective review of medical necessity or any other utilization management review.(g)(1) If an insurer determines that continued inpatient care in a facility is no longer medically necessary, the insurer shall, within 72 hours, provide written notice to the covered person and the covered persons physician of its decision and the right to file for an expedited review of an adverse decision. (2) The insurer shall review and make a determination with respect to the internal appeal within 72 hours and communicate that determination to the covered person and the covered persons physician.(3) If the determination is to uphold the denial, the covered person and the covered persons physician have the right to file an expedited external appeal with an independent review organization. An independent utilization review organization shall make a determination within 72 hours.(4) If the insurers determination is upheld and it is determined continued inpatient care is not medically necessary, the insurer remains responsible to provide benefits for the inpatient care through the day following the date the determination is made and the covered person is only responsible for any applicable copayment, deductible, and coinsurance for the stay through that date as applicable under the contract.(5) The covered person shall not be discharged or released from the inpatient facility until all internal appeals and independent utilization review organization appeals are exhausted. For any costs incurred after the day following the date of determination until the day of discharge, the covered person is only responsible for any applicable cost-sharing, and any additional charges shall be paid by the facility or provider. (h) The Insurance Commissioner shall propose rules in accordance with the provisions of 29A-3-1 et seq. of this code to develop a procedure for an expedited review of an adverse decision as set forth in this section. The Legislature finds that for the purposes of 29A-3-15 of this code, an emergency exists requiring the promulgation of an emergency rule to respond to the growing need in our state for substance abuse treatment. (i)(1) The benefits for the first five days of intensive outpatient or partial hospitalization services shall be provided without any retrospective review of medical necessity, and medical necessity shall be determined by the covered persons physician. (2) The benefits beginning day six and every six days thereafter of intensive outpatient or partial hospitalization services is subject to a concurrent review of the medical necessity of the services.(j) Medical necessity review shall use an evidence-based and peer-reviewed clinical review tool. This tool shall be developed by the Insurance Commissioner. The Insurance Commissioner shall propose rules for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code to develop the tool.(k) The benefits for outpatient prescription drugs to treat substance use disorder shall be provided when determined medically necessary by the covered persons physician or psychiatrist without the imposition of any prior authorization or other prospective utilization management requirements. (l) The days per plan year of benefits shall be computed based on inpatient days. One or more unused inpatient days may be exchanged for two outpatient visits. All extended outpatient services such as partial hospitalization and intensive outpatient, shall be considered inpatient days for the purpose of the visit-to-day exchange provided in this subsection.(m) Except as provided in this section, the benefits and cost-sharing shall be provided to the same extent as for any other medical condition covered under the contract.(n) The benefits required by this section are to be provided to all covered persons with a diagnosis of substance use disorder. The presence of additional related or unrelated diagnoses shall not be a basis to reduce or deny the benefits required by this section.(o) The provisions of this section apply to all insurance contracts in which the insurer has reserved the right to change the premium.
(a) As used in this section, the following words and phrases have the meanings given to them in this section unless the context clearly indicates otherwise:"Episode of Care" means a specific medical problem, condition, or specific illness being managed including tests, procedures and rehabilitation initially requested by health care practitioner, to be performed at the site of service, excluding out of network care: Provided, That any additional testing or procedures related or unrelated to the specific medical problem, condition, or specific illness being managed may require a separate prior authorization. "National Council for Prescription Drug Programs (NCPDP) SCRIPT Standard" means the NCPDP SCRIPT Standard Version 201310 or the most recent standard adopted by the United States Department of Health and Human Services. Subsequently released versions may be used provided that the new version is backward compatible with the current version approved by the United States Department of Health and Human Services;"Prior Authorization" means obtaining advance approval from a health insurer about the coverage of a service or medication.(b)The health insurer is required to develop prior authorization forms and portals and shall accept one prior authorization for an episode of care. These forms are required to be placed in an easily identifiable and accessible place on the health insurers webpage. The forms shall: (1) Include instructions for the submission of clinical documentation; (2) Provide an electronic notification confirming receipt of the prior authorization request if forms are submitted electronically; (3) Contain a comprehensive list of all procedures, services, drugs, devices, treatment, durable medical equipment and anything else for which the health insurer requires a prior authorization. This list shall delineate those items which are bundled together as part of the episode of care. The standard for including any matter on this list shall be science-based using a nationally recognized standard. This list is required to be updated at least quarterly to ensure that the list remains current; (4) Inform the patient if the health insurer requires a plan member to use step therapy protocols. This must be conspicuous on the prior authorization form. If the patient has completed step therapy as required by the health insurer and the step therapy has been unsuccessful, this shall be clearly indicated on the form, including information regarding medication or therapies which were attempted and were unsuccessful; and (5) Be prepared by October 1, 2019. (c) The health insurer shall accept electronic prior authorization requests and respond to the request through electronic means by July 1, 2020. The health insurer is required to accept an electronically submitted prior authorization and may not require more than one prior authorization form for an episode of care. If the health insurer is currently accepting electronic prior authorization requests, the health insurer shall have until January 1, 2020, to implement the provisions of this section.(d) If the health care practitioner submits the request for prior authorization electronically, and all of the information as required is provided, the health insurer shall respond to the prior authorization request within seven days from the day on the electronic receipt of the prior authorization request, except that the health insurer shall respond to the prior authorization request within two days if the request is for medical care or other service for a condition where application of the time frame for making routine or non-life-threatening care determinations is either of the following:(1) Could seriously jeopardize the life, health, or safety of the patient or others due to the patients psychological state; or(2) In the opinion of a health care practitioner with knowledge of the patients medical condition, would subject the patient to adverse health consequences without the care or treatment that is the subject of the request. (e) If the information submitted is considered incomplete, the health insurer shall identify all deficiencies and within two business days from the day on the electronic receipt of the prior authorization request return the prior authorization to the health care practitioner. The health care practitioner shall provide the additional information requested within three business days from the day the return request is received by the health care practitioner or the prior authorization is deemed denied and a new request must be submitted.(f) If the health insurer wishes to audit the prior authorization or if the information regarding step therapy is incomplete, the prior authorization may be transferred to the peer review process. (g) A prior authorization approved by a health insurer is carried over to all other managed care organizations, health insurers and the Public Employees Insurance Agency for three months if the services are provided within the state.(h) The health insurer shall use national best practice guidelines to evaluate a prior authorization.(i) If a prior authorization is rejected by the health insurer and the health care practitioner who submitted the prior authorization requests an appeal by peer review of the decision to reject, the peer review shall be with a health care practitioner similar in specialty, education, and background. The health insurers medical director has the ultimate decision regarding the appeal determination and the health care practitioner has the option to consult with the medical director after the peer-to-peer consultation. Time frames regarding this appeal process shall take no longer than 30 days. (j) (1) Any prescription written for an inpatient at the time of discharge requiring a prior authorization shall not be subject to prior authorization requirements and shall be immediately approved for not less than three days: Provided, That the cost of the medication does not exceed $5,000 per day and the physician shall note on the prescription or notify the pharmacy that the prescription is being provided at discharge. After the three-day time frame, a prior authorization must be obtained. (2) If the approval of a prior authorization requires a medication substitution, the substituted medication shall be as required under 30-5-1 et seq. (k) In the event a health care practitioner has performed an average of 30 procedures per year and in a six-month time period has received a 100 percent prior approval rating, the health insurer shall not require the health care practitioner to submit a prior authorization for that procedure for the next six months. At the end of the six-month time frame, the exemption shall be reviewed prior to renewal. This exemption is subject to internal auditing, at any time, by the health insurer and may be rescinded if the health insurer determines the health care practitioner is not performing the procedure in conformity with the health insurers benefit plan based upon the results of the health insurers internal audit. (l) The health insurer must accept and respond to electronically submitted prior authorization requests for pharmacy benefits by July 1, 2020, or if the health insurer is currently accepting electronic prior authorization requests, it shall have until January 1, 2020, to implement this provision. The health insurer shall accept and respond to prior authorizations through a secure electronic transmission using the NCPDP SCRIPT Standard ePA transactions.(m) This section is effective for policy, contract, plans, or agreements beginning on or after January 1, 2020. This section applies to all policies, contracts, plans, or agreements, subject to this article, that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section.(n) The timeframes in this section are not applicable to prior authorization requests submitted through telephone, mail, or fax.
(a) As used in this section:"Cost sharing" means any copayment, coinsurance, or deductible required by or on behalf of an insured in order to receive a specific health care item or service covered by a health plan."Drug" means the same as the term is defined in 30-5-4(19)."Person" means a natural person, corporation, mutual company, unincorporated association, partnership, joint venture, limited liability company, trust, estate, foundation, nonprofit corporation, unincorporated organization, or government or governmental subdivision or agency."Pharmacy benefits manager" means the same as that term is defined in 33-51-3 of this code.(b) When calculating an insureds contribution to any applicable cost sharing requirement, including, but not limited to, the annual limitation on cost sharing subject to 42 U.S.C. 18022(c) and 42 U.S.C. 300gg-6(b):(1) An insurer shall include any cost sharing amounts paid by the insured or on behalf of the insured by another person; and(2) A pharmacy benefits manger shall include any cost sharing amounts paid by the insured or on behalf of the insured by another person.(c) The commissioner is authorized to propose rules for legislative approval in accordance with 29A-3-1 et seq. of this code, to implement the provisions of this section.(d) This section is effective for policy, contract, plans, or agreements beginning on or after January 1, 2020. This section applies to all policies, contracts, plans, or agreements, subject to this article that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section. 
(a) As used in this section, the following words and phrases have the meaning given them in this section unless the context clearly indicates otherwise:To the extent that coverage is provided "behavioral health, mental health, and substance use disorder" means a condition or disorder, regardless of etiology, that may be the result of a combination of genetic and environmental factors and that falls under any of the diagnostic categories listed in the mental disorders section of the most recent version of:(1) The International Statistical Classification of Diseases and Related Health Problems;(2) The Diagnostic and Statistical Manual of Mental Disorders; or(3) The Diagnostic Classification of Mental Health and Developmental Disorders of Infancy and Early Childhood; and Includes autism spectrum disorder: Provided, That any service, even if it is related to the behavioral health, mental health, or substance use disorder diagnosis if medical in nature, shall be reviewed as a medical claim and undergo all utilization review as applicable.(b) The carrier is required to provide coverage for the prevention of, screening for, and treatment of behavioral health, mental health, and substance use disorders that is no less extensive than the coverage provided for any physical illness and that complies with the requirements of this section. This screening shall include, but is not limited to, unhealthy alcohol use for adults, substance use for adults and adolescents, and depression screening for adolescents and adults. (c) The carrier shall:(1) Include coverage and reimbursement for behavioral health screenings using a validated screening tool for behavioral health, which coverage and reimbursement is no less extensive than the coverage and reimbursement for the annual physical examination; (2) Comply with the nonquantitative treatment limitation requirements specified in 45 CFR 146.136(c)(4), or any successor regulation, regarding any limitations that are not expressed numerically but otherwise limit the scope or duration of benefits for treatment, which in addition to the limitations and examples listed in 45 CFR 146.136(c)(4)(ii) and (c)(4)(iii), or any successor regulation and 78 FR 68246, include the methods by which the carrier establishes and maintains its provider network and responds to deficiencies in the ability of its networks to provide timely access to care;(3) Comply with the financial requirements and quantitative treatment limitations specified in 45 CFR 146.136(c)(2) and (c)(3), or any successor regulation;(4) Not apply any nonquantitative treatment limitations to benefits for behavioral health, mental health, and substance use disorders that are not applied to medical and surgical benefits within the same classification of benefits;(5) Establish procedures to authorize treatment with a nonparticipating provider if a covered service is not available within established time and distance standards and within a reasonable period after service is requested, and with the same coinsurance, deductible, or copayment requirements as would apply if the service were provided at a participating provider, and at no greater cost to the covered person than if the services were obtained at, or from a participating provider; and(6) If a covered person obtains a covered service from a nonparticipating provider because the covered service is not available within the established time and distance standards, reimburse treatment or services for behavioral health, mental health, or substance use disorders required to be covered pursuant to this subsection that are provided by a nonparticipating provider using the same methodology that the carrier uses to reimburse covered medical services provided by nonparticipating providers and, upon request, provide evidence of the methodology to the person or provider. (d) If the carrier offers a plan that does not cover services provided by an out-of-network provider, it may provide the benefits required in subsection (c) of this section if the services are rendered by a provider who is designated by and affiliated with the carrier only if the same requirements apply for services for a physical illness.(e) In the event of a concurrent review for a claim for coverage of services for the prevention of, screening for, and treatment of behavioral health, mental health, and substance use disorders, the service continues to be a covered service until the carrier notifies the covered person of the determination of the claim. (f) Unless denied for nonpayment of premium, a denial of reimbursement for services for the prevention of, screening for, or treatment of behavioral health, mental health, and substance use disorders by the carrier must include the following language:(1) A statement explaining that covered persons are protected under this section, which provides that limitations placed on the access to mental health and substance use disorder benefits may be no greater than any limitations placed on access to medical and surgical benefits;(2) A statement providing information about the Consumer Services Division of the Office of the West Virginia Insurance Commissioner if the covered person believes his or her rights under this section have been violated; and(3) A statement specifying that covered persons are entitled, upon request to the carrier, to a copy of the medical necessity criteria for any behavioral health, mental health, and substance use disorder benefit.(g) On or after June 1, 2021, and annually thereafter, the Insurance Commissioner shall submit a written report to the Joint Committee on Government and Finance that contains the following information regarding plans offered pursuant to this section:(1) Data that demonstrates parity compliance for adverse determination regarding claims for behavioral health, mental health, or substance use disorder services and includes the total number of adverse determinations for such claims;(2) A description of the process used to develop and select:(A) The medical necessity criteria used in determining benefits for behavioral health, mental health, substance use disorders; and(B) The medical necessity criteria used in determining medical and surgical benefits;(3) Identification of all nonquantitative treatment limitations that are applied to benefits for behavioral health, mental health, and substance use disorders and to medical and surgical benefits within each classification of benefits; and(4) The results of analyses demonstrating that, for medical necessity criteria described in subdivision (2) of this subsection and for each nonquantitative treatment limitation identified in subdivision (3) of this subsection, as written and in operation, the processes, strategies, evidentiary standards, or other factors used in applying the medical necessity criteria and each nonquantitative treatment limitation to benefits for behavioral health, mental health, and substance use disorders within each classification of benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the medical necessity criteria and each nonquantitative treatment limitation to medical and surgical benefits within the corresponding classification of benefits.(5) The Insurance Commissioners report of the analyses regarding nonquantitative treatment limitations shall include at a minimum: (A) Identifying factors used to determine whether a nonquantitative treatment limitation will apply to a benefit, including factors that were considered but rejected;(B) Identify and define the specific evidentiary standards used to define the factors and any other evidence relied on in designing each nonquantitative treatment limitation;(C) Provide the comparative analyses, including the results of the analyses, performed to determine that the processes and strategies used to design each nonquantitative treatment limitation, as written, and the written processes and strategies used to apply each nonquantitative treatment limitation for benefits for behavioral health, mental health, and substance use disorders are comparable to, and are applied no more stringently than, the processes and strategies used to design and apply each nonquantitative treatment limitation, as written, and the written processes and strategies used to apply each nonquantitative treatment limitation for medical and surgical benefits;(D) Provide the comparative analyses, including the results of the analyses, performed to determine that the processes and strategies used to apply each nonquantitative treatment limitation, in operation, for benefits for behavioral health, mental health, and substance use disorders are comparable to, and are applied no more stringently than, the processes and strategies used to apply each nonquantitative treatment limitation, in operation, for medical and surgical benefits; and(E) Disclose the specific findings and conclusions reached by the Insurance Commissioner that the results of the analyses indicate that each health benefit plan offered pursuant to this section complies with subsection (c) of this section.(h) The Insurance Commissioner shall adopt legislative rules to comply with the provisions of this section. These rules shall specify the information and analyses that carriers shall provide to the Insurance Commissioner necessary for the commissioner to complete the report described in subsection (g) of this section and shall delineate the format in which carriers shall submit such information and analyses. These rules or amendments to rules shall be proposed pursuant to the provisions of 29A-3-1 et seq. of this code within the applicable time limit to be considered by the Legislature during its regular session in the year 2021. The rules shall require that each carrier first submit the report to the Insurance Commissioner no earlier than one year after the rules are promulgated, and any year thereafter during which the carrier makes significant changes to how it designs and applies medical management protocols.(i) This section is effective for policies, contracts, plans or agreements, beginning on or after January 1, 2021. This section applies to all policies, contracts, plans, or agreements, subject to this article that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section.(j) The Insurance Commissioner shall enforce this section and may conduct a financial examination of the carrier to determine if it is in compliance with this section, including, but not limited to, a review of policies and procedures and a sample of mental health claims to determine these claims are treated in parity with medical and surgical benefits. The results of this examination shall be reported to the Legislature. If the Insurance Commissioner determines that the carrier is not in compliance with this section, the Insurance Commissioner may fine the carrier in conformity with the fines established in the legislative rule. 
The provisions of the Health Benefit Plan Network Access and Adequacy Act codified at 33-55-1 et seq. of this code are made applicable to the provisions of this article.
 The provision requiring coverage for 12-month refill for contraceptive drugs codified at 33-58-1 of this code is made applicable to the provisions of this article.
Every corporation shall annually on or before March 1, file, with its application for renewal license, a report, verified by an officer of the corporation, with the commissioner, showing its condition on the last day of the preceding calendar year, on forms required by section fourteen, article four of this chapter, which report shall include:(a) A financial statement of such corporation, including its balance sheet and its receipts and disbursements for the preceding calendar year;(b) A list of the names and residence addresses of all its officers and directors, and the total amount of expense reimbursement to all officers and directors during the preceding calendar year;(c) The number of subscribers' contracts issued by such corporation and outstanding;(d) The names of those persons (other than subscribers), corporations, associations, and institutions with which such corporation has agreements;(e) Number and type of services currently covered under the health care plan of the corporation.
(a) This article may be cited as the "Health Maintenance Organization Act of 1977."(b) Faced with the continuation of mounting costs of health care coupled with its inaccessibility to large segments of the population, the Legislature has determined that there is a need to encourage alternative methods for the delivery of health care services, with a view toward achieving greater efficiency, availability, distribution and economy in providing these services.In carrying out this intention, it is the policy of the state to eliminate legal barriers to the establishment of prepaid health care plans accountable to consumers for the health care services they provide; to provide for the financial and administrative soundness of these health care plans as it relates to their ability to provide such services, and to exempt prepaid health care plans from regulation as an insurer, the operation of insurance laws of the state and all other laws inconsistent with the purposes of this article.
Every health maintenance organization or its representative shall annually, before April 1, provide to its enrollees a summary of: Its most recent annual financial statement, including a balance sheet and statement of receipts and disbursements; a description of the health maintenance organization, its basic health care services, its facilities and personnel, any material changes therein since the last report, the current evidence of coverage, and a clear and understandable description of the health maintenance organization's method for resolving enrollee complaints: Provided, That with respect to enrollees who have been enrolled through contracts between a health maintenance organization and an employer, the health maintenance organization shall be deemed to have satisfied the requirement of this section by providing the requisite summary to each enrolled employee: Provided, however, That with respect to Medicaid recipients enrolled under a group contract between a health maintenance organization and the governmental agency responsible for administering the Medicaid program, the health maintenance organization shall be deemed to have satisfied the requirement of this section by providing the requisite summary to each local office of the governmental agency responsible for administering the Medicaid program for inspection by enrollees of the health maintenance organization.
(1) Once a health maintenance organization has been in operation at least five years, or has enrollment of not less than fifty thousand persons, the health maintenance organization shall, in any year following a year in which the health maintenance organization has achieved an operating surplus, maintain an open enrollment period of at least thirty days during which time the health maintenance organization shall, within the limits of its capacity, accept individuals in the order in which they apply without regard to preexisting illness, medical conditions or degree of disability except for individuals who are confined to an institution because of chronic illness or permanent injury: Provided, That no health maintenance organization shall be required to continue an open enrollment period after such time as enrollment pursuant to the open enrollment period is equal to three percent of the health maintenance organization's net increase in enrollment during the previous year.(2) Where a health maintenance organization demonstrates to the satisfaction of the commissioner that it has a disproportionate share of high-risk enrollees and that, by maintaining open enrollment, it would be required to enroll so disproportionate a share of high-risk enrollees as to jeopardize its economic viability, the commissioner may:(a) Waive the requirement for open enrollment for a period of not more than three years; or(b) Authorize the organization to impose any underwriting restrictions upon open enrollment as are necessary: (i) To preserve its financial stability; (ii) to prevent excessive adverse selection by prospective enrollees; or (iii) to avoid unreasonably high or unmarketable charges for enrollee coverage of health services. A health maintenance organization may receive more than one waiver or authorization.
(a) A health maintenance organization shall establish and maintain a grievance procedure, which has been approved by the Commissioner, to provide adequate and reasonable procedures for the expeditious resolution of written grievances initiated by enrollees concerning any matter relating to any provisions of the organization's health maintenance contracts, including, but not limited to, claims regarding the scope of coverage for health care services; denials, cancellations or nonrenewals of enrollee coverage; observance of an enrollee's rights as a patient; and the quality of the health care services rendered.(b) A detailed description of the HMO's subscriber grievance procedure shall be included in all group and individual contracts as well as any certificate or member handbook provided to subscribers. This procedure shall be administered at no cost to the subscriber. An HMO subscriber grievance procedure shall include the following:(1) Both informal and formal steps shall be available to resolve the grievance. A grievance is not considered formal until a written grievance is executed by the subscriber or completed on forms prescribed and received by the HMO;(2) Each HMO shall designate at least one grievance coordinator who is responsible for the implementation of the HMO's grievance procedure;(3) Phone numbers shall be specified by the HMO for the subscriber to call to present an informal grievance or to contact the grievance coordinator. Each phone number shall be toll free within the subscriber's geographic area and provide reasonable access to the HMO without undue delays. There must be an adequate number of phone lines to handle incoming grievances;(4) An address shall be included for written grievances;(5) Each level of the grievance procedure shall have some person with problem-solving authority to participate in each step of the grievance procedure;(6) The HMO shall process the formal written subscriber grievance through all phases of the grievance procedure in a reasonable length of time not to exceed sixty days, unless the subscriber and HMO mutually agree to extend the time frame. If the complaint involves the collection of information outside the service area, the HMO has thirty additional days to process the subscriber complaint through all phases of the grievance procedure. The time limitations prescribed in this subdivision requiring completion of the grievance process within sixty days shall be tolled after the HMO has notified the subscriber, in writing, that additional information is required in order to properly complete review of the grievance. Upon receipt by the HMO of the additional information requested, the time for completion of the grievance process set forth in this subdivision shall resume;(7) The subscriber grievance procedure shall state that the subscriber has the right to appeal to the Commissioner. There shall be the additional requirement that subscribers under a group contract between the HMO and a department or division of the state shall first appeal to the state agency responsible for administering the relevant program, and if either of the two parties are not satisfied with the outcome of the appeal, they may then appeal to the Commissioner. The HMO shall provide to the subscriber written notice of the right to appeal upon completion of the full grievance procedure and supply the Commissioner with a copy of the final decision letter;(8) The HMO shall have physician involvement in reviewing medically related grievances. Physician involvement in the grievance process should not be limited to the subscriber's primary care physician, but may include at least one other physician;(9) The HMO shall offer to meet with the subscriber during the formal grievance process. The location of the meeting shall be at the administrative offices of the HMO within the service area or at a location within the service area which is convenient to the subscriber;(10) The HMO may not establish time limits of less than one year from the date of occurrence for the subscriber to file a formal grievance;(11) Each HMO shall maintain an accurate record of each formal grievance. Each record shall include the following: A complete description of the grievance, the subscriber's name and address, the provider's name and address and the HMO's name and address; a complete description of the HMO's factual findings and conclusions after completion of the full formal grievance procedure; a complete description of the HMO's conclusions pertaining to the grievance as well as the HMO's final disposition of the grievance; and a statement as to which levels of the grievance procedure the grievance has been processed and how many more levels of the grievance procedure are remaining before the grievance has been processed through the HMO's entire grievance procedure.(c) Copies of the grievances and the responses to the grievances shall be available to the Commissioner and, subject to state and federal privacy laws, to the public for inspection for five years.(d) Any subscriber grievance in which time is of the essence shall be handled on an expedited basis, such that a reasonable person would believe that a prevailing subscriber would be able to realize the full benefit of a decision in his or her favor.(e) Each health maintenance organization shall submit to the Commissioner an annual report in a form prescribed by the Commissioner which describes the grievance procedure and contains a compilation and analysis of the grievances filed, their disposition, and their underlying causes.
With the exception of investments otherwise made in accordance with this article, the investable funds of a health maintenance organization shall be invested only in securities or other investments permitted by the laws of this state for the investment of assets constituting the legal reserves of life insurance companies or such other securities or investments as the commissioner may permit.
(a) No health maintenance organization, or representative of a health maintenance organization, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. No advertising may be used until it has been approved by the Commissioner. Advertising which has not been disapproved by the Commissioner within sixty days of filing shall be considered approved. For purposes of this article:(1) A statement or item of information shall be considered to be untrue if it does not conform to fact in any respect which is or may be significant to an enrollee of, or person considering enrollment in, a health maintenance organization;(2) A statement or item of information shall be considered to be misleading, whether or not it may be literally untrue if, in the total context in which the statement is made or the item of information is communicated, the statement or item of information may be reasonably understood by a reasonable person, not possessing special knowledge regarding health care coverage, as indicating any benefit or advantage or the absence of any exclusion, limitation, or disadvantage of possible significance to an enrollee of, or person considering enrollment in, a health maintenance organization, if the benefit or advantage or absence of limitation, exclusion or disadvantage does not in fact exist;(3) An evidence of coverage shall be considered to be deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as language, is such as to cause a reasonable person, not possessing special knowledge regarding health maintenance organizations, and evidences of coverage therefor, to expect benefits, services or other advantages which the evidence of coverage does not provide or which the health maintenance organization issuing the evidence of coverage does not regularly make available for enrollees covered under the evidence of coverage; and(4) The Commissioner may propose rules for legislative approval in accordance with article three, chapter twenty-nine-a of this code to further define practices which are untrue, misleading or deceptive.(b)(1) No health maintenance organization may use in its name, contracts, logo or literature any of the words "insurance", "casualty", "surety", "mutual" or any other words which are descriptive of the insurance, casualty or surety business or deceptively similar to the name or description of any insurance or surety corporation doing business in this state: Provided, That when a health maintenance organization has contracted with an insurance company for any coverage permitted by this article, it may so state; and(2) Only a person that has been issued a certificate of authority under this article may use the words "health maintenance organization" or the initials "HMO" in its name, contracts, logo or literature to imply, directly or indirectly, that it is a health maintenance organization or hold itself out to be a health maintenance organization.(c)(1) No agent of a health maintenance organization or person selling enrollments in a health maintenance organization shall sell an enrollment in a health maintenance organization unless the agent or person shall first disclose in writing to the prospective purchaser the following information using the following exact terms in bold print: "Services offered", including any exclusions or limitations; "full cost", including copayments; "facilities available"; "transportation services"; "disenrollment rate"; and "staff", including the names of all full-time staff physicians, consulting specialists, hospitals and pharmacies associated with the health maintenance organization. In any home solicitation, any three-day cooling-off period applicable to consumer transactions generally applies in the same manner as consumer transactions.(2) The form disclosure statement shall not be used in sales until it has been approved by the Commissioner or submitted to the Commissioner for sixty days without disapproval.(d) No contract with an enrollee shall prohibit an enrollee from canceling his or her enrollment at any time for any reason except that the contract may require thirty days' notice to the health maintenance organization.(e) Any person who, in connection with an enrollment, violates any provision of this section may be held liable for an amount equivalent to one year's subscription rate, plus costs and a reasonable attorney's fee.
(a) No health maintenance organization may cancel or fail to renew the coverage of an enrollee except for: (1) Failure to pay the charge for health care coverage; (2) termination of the health maintenance organization; (3) termination of the group plan; (4) enrollee moving out of the area served; (5) enrollee moving out of an eligible group; or (6) other reasons established in rules promulgated by the Commissioner. No health maintenance organization shall use any technique of rating or grouping to cancel or fail to renew the coverage of an enrollee. An enrollee shall be given thirty days' notice of any cancellation or nonrenewal and the notice shall include the reasons for the cancellation or nonrenewal: Provided, That each enrollee moving out of an eligible group shall be granted the opportunity to enroll in the health maintenance organization on an individual basis. A health maintenance organization may not disenroll an enrollee for nonpayment of copayments unless the enrollee has failed to make payment in at least three instances over any twelve-month period: Provided, however, That the enrollee may not be disenrolled if the disenrollment would constitute abandonment of a patient. Any enrollee wrongfully disenrolled shall be reenrolled.(b) The providers of a health maintenance organization who provide health care services and the health maintenance organization shall not have recourse against enrollees for amounts above those specified in the evidence of coverage as the periodic prepayment or copayment for health care services.(c) No health maintenance organization shall enroll more than three hundred thousand persons in this state: Provided, That a health maintenance organization may petition the Commissioner to exceed an enrollment of three hundred thousand persons and, upon notice and hearing, good cause being shown and a determination made that an increase would be beneficial to the subscribers, creditors and stockholders of the organization or would otherwise increase the availability of coverage to consumers within the state, the Commissioner may, by written order only, allow the petitioning organization to exceed an enrollment of three hundred thousand persons.(d) No health maintenance organization shall discriminate in enrollment policies or quality of services against any person on the basis of race, sex, age, religion, place of residence, source of payment or, with respect to enrollment in group policies, health status: Provided, That differences in rates based on valid actuarial distinctions, including distinctions relating to age and sex, shall not be considered discrimination in enrollment policies.(e) Any person who, in connection with an enrollment, violates any provision of this section may be held liable for an amount equivalent to one year's subscription rate, plus costs and a reasonable attorney's fee.
(1) Health maintenance organizations are subject to the provisions of article twelve of this chapter.(2) With respect to individual and group contracts covering fewer than twenty-five subscribers, after a subscriber signs a health maintenance organization enrollment application and before the health maintenance organization may process the application changing or initiating the subscriber coverage, each health maintenance organization must verify in writing, in a form prescribed by the commissioner, the intent and desire of the individual subscriber to join the health maintenance organization. The verification shall be conducted by someone outside the health maintenance organization marketing department and shall show that:(a) The subscriber intends and desires to join the health maintenance organization;(b) If the subscriber is a Medicare or Medicaid recipient, the subscriber understands that by joining the health maintenance organization he or she will be limited to the benefits provided by the health maintenance organization, and Medicare or Medicaid will pay the health maintenance organization for the subscriber coverage;(c) The subscriber understands the applicable restrictions of health maintenance organizations especially that he or she must use the health maintenance organization providers and secure approval from the health maintenance organization to use health care providers outside the plan; and(d) If the subscriber is a member of a health maintenance organization, the subscriber understands that he or she is transferring to another health maintenance organization.(3) The health maintenance organization shall not pay a commission, fee, money or any other form of scheduled compensation to any health insurance agent until the subscriber's application has been processed and the health maintenance organization has confirmed the subscriber's enrollment by written notice in the form prescribed by the commissioner. The confirmation notice shall be accompanied by the evidence of coverage required by section eight of this article and shall confirm:(a) The subscriber's transfer from his or her existing coverage (i.e. from Medicare, Medicaid, another health maintenance organization, etc.) to the new health maintenance organization; and(b) The date enrollment begins and when benefits will be available.(4) The enrollment process shall be considered complete seven days after the health maintenance organization mails the confirmation notice and evidence of coverage to the subscriber. Each health maintenance organization is directly responsible for enrollment abuses.(5) The commissioner may, in his or her discretion, after notice and hearing, promulgate rules as are necessary to regulate marketing of health maintenance organizations by persons compensated directly or indirectly by the health maintenance organizations. When necessary the rules may prohibit door-to-door solicitations, may prohibit commission sales, and may provide for such other proscriptions and other rules as are required to effectuate the purposes of this article.
(1) An insurance company licensed in this state or a hospital or medical service corporation authorized to do business in this state, after applying for and receiving a certificate of authority as a health maintenance organization, may through a subsidiary or affiliate organize and operate a health maintenance organization under the provisions of this article. Notwithstanding any other law to the contrary, any two or more insurance companies, hospital or medical service corporations, or subsidiaries or affiliates thereof, may jointly organize and operate a health maintenance organization. The business of insurance is considered to include the providing of health care by a health maintenance organization owned or operated by an insurer or a subsidiary thereof.(2) Notwithstanding any provision of insurance and hospital or medical service corporation laws, an insurer or a hospital or medical service corporation may contract with a health maintenance organization to provide insurance or similar protection against the cost of care provided through health maintenance organizations and to provide coverage in the event of the failure of the health maintenance organization to meet its obligations. The enrollees of a health maintenance organization constitute a permissible group under such laws. Among other things, under the contracts, the insurer or hospital or medical service corporation may make benefit payments to health maintenance organizations for health care services rendered by providers.
(a) The Commissioner may make an examination of the affairs of any health maintenance organization and providers with whom the organization has contracts, agreements or other arrangements as often as he or she considers it necessary for the protection of the interests of the people of this state but not less frequently than once every five years.(b) The Commissioner may contract with the Department of Health and Human Resources, any entity which has been accredited by a nationally recognized accrediting organization and has been approved by the Commissioner to make examinations concerning the quality of health care services of any health maintenance organization and providers with whom the organization has contracts, agreements or other arrangements, or any entity contracted with by the Department of Health and Human Resources, as often as it considers necessary for the protection of the interests of the people of this state, but not less frequently than once every three years: Provided, That in making the examination, the Department of Health and Human Resources or the accredited entity shall use the services of persons or organizations with demonstrable expertise in assessing quality of health care.(c) Every health maintenance organization and affiliated provider shall submit its books and records to the examinations and in every way facilitate them. For the purpose of examinations, the Commissioner and the Department of Health and Human Resources have all powers necessary to conduct the examinations, including, but not limited to, the power to issue subpoenas, the power to administer oaths to and examine the officers and agents of the health maintenance organization and the principals of the providers concerning their business.(d) The health maintenance organization and any other entity subject to examination pursuant to this article are subject to the provisions of sections four, five, six, seven, eight and nine, article two of this chapter in regard to the expense and conduct of examinations.(e) In lieu of the examination, the Commissioner may accept the report of an examination made by other states.(f) The expenses of an examination assessing quality of health care under subsection (b) of this section and section seventeen-a of this article shall be reimbursed pursuant to subsection (n), section nine, article two of this chapter.
(a) Each health maintenance organization shall have in writing a quality assurance program that describes the program's objectives, organization and problem solving activities.(b) The scope of the quality assurance program shall include, at a minimum:(1) Organizational arrangements and responsibilities for quality management and improvement processes;(2) A documented utilization management program;(3) Written policies and procedures for credentialing and recredentialing physicians and other licensed providers who fall under the scope of authority of the health maintenance organization;(4) A written policy that addresses enrollee's rights and responsibilities;(5) The adoption of practice guidelines for the use of preventive health services; and(6) Any other criteria deemed necessary by the commissioner.(c) As a condition of doing business in this state, each health maintenance organization which has been in existence for at least three years shall apply for and submit to an accreditation examination to be performed by a nationally recognized accreditation and review organization approved by the commissioner. The accreditation and review organization must be experienced in health maintenance organization activities and in the appraisal of medical practice and quality assurance in a health maintenance organization setting: Provided, That in those instances where a health maintenance organization has timely applied for and reasonably pursued an accreditation examination, but the examination has not been completed, the health maintenance organization may, upon compliance with all other provisions of this article, engage in business in this state upon submission of proof to the commissioner of its application for review.(d) Within thirty days of receipt of the written report of the accreditation and review organization by the health maintenance organization, the health maintenance organization shall submit a copy of this report to the commissioner.(e) This section shall become effective on May 1, 1998.
(1) The commissioner may suspend or revoke any certificate of authority issued to a health maintenance organization under this article if he or she finds that any of the following conditions exist:(a) The health maintenance organization is operating significantly in contravention of its basic organization document, in any material breach of contract with an enrollee, or in a manner contrary to that described in and reasonably inferred from any other information submitted under section three of this article unless amendments to the submissions have been filed with an approval of the commissioner;(b) The health maintenance organization issues evidence of coverage or uses a schedule of premiums for health care services which do not comply with the requirements of section eight of this article;(c) The health maintenance organization does not provide or arrange for basic health care services;(d) The Department of Health and Human Resources or other accredited entity certifies to the commissioner that: (i) The health maintenance organization is unable to fulfill its obligations to furnish health care services as required under its contract with enrollees; or (ii) the health maintenance organization does not meet the requirements of subsection (l), section four of this article;(e) The health maintenance organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees or is otherwise determined by the commissioner to be in a hazardous financial condition;(f) The health maintenance organization has failed to implement a mechanism affording the enrollees an opportunity to participate in matters of policy and operation under section six of this article;(g) The health maintenance organization has failed to implement the grievance procedure required by section twelve of this article in a manner to reasonably resolve valid grievances;(h) The health maintenance organization, or any person on its behalf, has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive or unfair manner;(i) The continued operation of the health maintenance organization would be hazardous to its enrollees;(j) The health maintenance organization has otherwise failed to substantially comply with this article; (k) The health maintenance organization has violated a lawful order of the commissioner; or(l) The health maintenance organization has not complied with the requirements of section seventeen-a of this article.(2) A certificate of authority shall be suspended or revoked only after compliance with the requirements of section twenty-one of this article.(3) When the certificate of authority of a health maintenance organization is suspended, the health maintenance organization shall not, during the period of the suspension, enroll any additional enrollees except newborn children or other newly acquired dependents of existing enrollees, and shall not engage in any advertising or solicitation whatsoever.(4) When the certificate of authority of a health maintenance organization is revoked, the organization shall proceed, immediately following the effective date of the order of revocation, to terminate its affairs, and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of the organization. It shall engage in no further advertising or solicitation whatsoever. The commissioner may, by written order, permit such further operation of the organization as he or she may find to be in the best interests of enrollees, to the end that enrollees will be afforded the greatest practical opportunity to obtain continuing health care coverage.
Any rehabilitation, liquidation or conservation of a health maintenance organization shall be considered to be the rehabilitation, liquidation or conservation of an insurance company, shall be the exclusive remedy for rehabilitation, liquidation and conservation of an HMO as provided by this article and shall be conducted under the supervision of the commissioner pursuant to the law governing the rehabilitation, liquidation or conservation of insurance companies. The commissioner may apply for an order directing him or her to rehabilitate, liquidate or conserve a health maintenance organization upon any one or more grounds set out in the rehabilitation statutes or when, in his or her opinion, the continued operation of the health maintenance organization would be hazardous either to the enrollees or to the people of this state.
(1) "Basic health care services" means physician, hospital, out-of-area, podiatric, chiropractic, laboratory, X ray, emergency, treatment for serious mental illness as provided in section three-a, article sixteen of this chapter, and cost-effective preventive services including immunizations, well-child care, periodic health evaluations for adults, voluntary family planning services, infertility services, and children's eye and ear examinations conducted to determine the need for vision and hearing corrections, which services need not necessarily include all procedures or services offered by a service provider.(2) "Capitation" means the fixed amount paid by a health maintenance organization to a health care provider under contract with the health maintenance organization in exchange for the rendering of health care services.(3) "Commissioner" means the Commissioner of Insurance.(4) "Consumer" means any person who is not a provider of care or an employee, officer, director or stockholder of any provider of care.(5) "Copayment" means a specific dollar amount, or percentage, except as otherwise provided for by statute, that the subscriber must pay upon receipt of covered health care services and which is set at an amount or percentage consistent with allowing subscriber access to health care services.(6) "Employee" means a person in some official employment or position working for a salary or wage continuously for no less than one calendar quarter and who is in such a relation to another person that the latter may control the work of the former and direct the manner in which the work shall be done.(7) "Employer" means any individual, corporation, partnership, other private association, or state or local government that employs the equivalent of at least two full-time employees during any four consecutive calendar quarters.(8) "Enrollee", "subscriber" or "member" means an individual who has been voluntarily enrolled in a health maintenance organization, including individuals on whose behalf a contractual arrangement has been entered into with a health maintenance organization to receive health care services.(9) "Evidence of coverage" means any certificate, agreement or contract issued to an enrollee setting out the coverage and other rights to which the enrollee is entitled.(10) "Health care services" means any services or goods included in the furnishing to any individual of medical, mental or dental care, or hospitalization or incident to the furnishing of the care or hospitalization, osteopathic services, chiropractic services, podiatric services, home health, health education or rehabilitation, as well as the furnishing to any person of any and all other services or goods for the purpose of preventing, alleviating, curing or healing human illness or injury.(11) "Health maintenance organization" or "HMO" means a public or private organization which provides, or otherwise makes available to enrollees, health care services, including at a minimum basic health care services and which:(A) Receives premiums for the provision of basic health care services to enrollees on a prepaid per capita or prepaid aggregate fixed sum basis, excluding copayments;(B) Provides physicians' services primarily: (i) Directly through physicians who are either employees or partners of the organization; or (ii) through arrangements with individual physicians or one or more groups of physicians organized on a group practice or individual practice arrangement; or (iii) through some combination of paragraphs (i) and (ii) of this subdivision;(C) Assures the availability, accessibility and quality, including effective utilization, of the health care services which it provides or makes available through clearly identifiable focal points of legal and administrative responsibility; and(D) Offers services through an organized delivery system in which a primary care physician or primary care provider is designated for each subscriber upon enrollment. The primary care physician or primary care provider is responsible for coordinating the health care of the subscriber and is responsible for referring the subscriber to other providers when necessary: Provided, That when dental care is provided by the health maintenance organization the dentist selected by the subscriber from the list provided by the health maintenance organization shall coordinate the covered dental care of the subscriber, as approved by the primary care physician or the health maintenance organization.(12) "Impaired" means a financial situation in which, based upon the financial information which would be required by this chapter for the preparation of the health maintenance organization's annual statement, the assets of the health maintenance organization are less than the sum of all of its liabilities and required reserves including any minimum capital and surplus required of the health maintenance organization by this chapter so as to maintain its authority to transact the kinds of business or insurance it is authorized to transact.(13) "Individual practice arrangement" means any agreement or arrangement to provide medical services on behalf of a health maintenance organization among or between physicians or between a health maintenance organization and individual physicians or groups of physicians, where the physicians are not employees or partners of the health maintenance organization and are not members of or affiliated with a medical group.(14) "Insolvent" or "insolvency" means a financial situation in which, based upon the financial information that would be required by this chapter for the preparation of the health maintenance organization's annual statement, the assets of the health maintenance organization are less than the sum of all of its liabilities and required reserves.(15) "Medical group" or "group practice" means a professional corporation, partnership, association or other organization composed solely of health professionals licensed to practice medicine or osteopathy and of other licensed health professionals, including podiatrists, dentists and optometrists, as are necessary for the provision of health services for which the group is responsible: (a) A majority of the members of which are licensed to practice medicine or osteopathy; (b) who as their principal professional activity engage in the coordinated practice of their profession; (c) who pool their income for practice as members of the group and distribute it among themselves according to a prearranged salary, drawing account or other plan; and (d) who share medical and other records and substantial portions of major equipment and professional, technical and administrative staff.(16) "Point of service option" means a delivery system that permits an enrollee to receive health care services from a provider outside of the panel of providers with which the health maintenance organization has a contractual arrangement under the terms and conditions of the enrollee's contract with the health maintenance organization or the insurance carrier that provides the point of service option.(17) "Premium" means a prepaid per capita or prepaid aggregate fixed sum unrelated to the actual or potential utilization of services of any particular person which is charged by the health maintenance organization for health services provided to an enrollee.(18) "Primary care physician" means the general practitioner, family practitioner, obstetrician/gynecologist, pediatrician or specialist in general internal medicine who is chosen or designated for each subscriber who will be responsible for coordinating the health care of the subscriber, including necessary referrals to other providers.(19) "Primary care provider" means a person who may be chosen or designated in lieu of a primary care physician for each subscriber, who will be responsible for coordinating the health care of the subscriber, including necessary referrals to other providers, and includes:(A) An advanced nurse practitioner practicing in compliance with article seven, chapter thirty of this code and other applicable state and federal laws, who develops a mutually agreed upon association in writing with a primary care physician on the panel of and credentialed by the health maintenance organization; and(B) A certified nurse-midwife, but only if chosen or designated in lieu of a subscriber's primary care physician or primary care provider during the subscriber's pregnancy and for a period extending through the end of the month in which the sixty-day period following termination of pregnancy ends.(C) Nothing in this subsection may be construed to expand the scope of practice for advanced nurse practitioners as governed by article seven, chapter thirty of this code or any legislative rule, or for certified nurse-midwives, as defined in article fifteen, chapter thirty of this code.(20) "Provider" means any physician, hospital or other person or organization which is licensed or otherwise authorized in this state to furnish health care services.(21) "Uncovered expenses" means the cost of health care services that are covered by a health maintenance organization, for which a subscriber would also be liable in the event of the insolvency of the organization.(22) "Service area" means the county or counties approved by the commissioner within which the health maintenance organization may provide or arrange for health care services to be available to its subscribers.(23) "Statutory surplus" means the minimum amount of unencumbered surplus which a corporation must maintain pursuant to the requirements of this article.(24) "Surplus" means the amount by which a corporation's assets exceeds its liabilities and required reserves based upon the financial information which would be required by this chapter for the preparation of the corporation's annual statement except that assets pledged to secure debts not reflected on the books of the health maintenance organization shall not be included in surplus.(25) "Surplus notes" means debt which has been subordinated to all claims of subscribers and general creditors of the organization.(26) "Qualified independent actuary" means an actuary who is a member of the American academy of actuaries or the society of actuaries and has experience in establishing rates for health maintenance organizations and who has no financial or employment interest in the health maintenance organization.(27) "Quality assurance" means an ongoing program designed to objectively and systematically monitor and evaluate the quality and appropriateness of the enrollee's care, pursue opportunities to improve the enrollee's care and to resolve identified problems at the prevailing professional standard of care.(28) "Utilization management" means a system for the evaluation of the necessity, appropriateness and efficiency of the use of health care services, procedure and facilities.
The commissioner may after notice and hearing promulgate reasonable rules and regulations in accordance with chapter twenty-nine-a of this code, as are necessary or proper to effectuate the purposes of this article and to prevent circumvention and evasion thereof.
(1) When the commissioner has cause to believe that grounds for the denial of an application for a certificate of authority exist, or that grounds for the suspension or revocation of a certificate of authority exist, he shall notify the health maintenance organization in writing specifically stating the grounds for denial, suspension or revocation and fixing a time of at least twenty days thereafter for a hearing on the matter.(2) After such hearing, or upon the failure of the health maintenance organization to appear at such hearing, the commissioner shall take action as is deemed advisable on written findings which shall be mailed to the health maintenance organization. The action of the commissioner shall be subject to review. The court may modify, affirm or reverse the order of the commissioner in whole or in part.(3) The provisions of the administrative procedures act, chapter twenty-nine-a of this code, shall apply to proceedings under this article to the extent that they are not in conflict with subsections (1) and (2) of this section.
Every health maintenance organization subject to this article shall pay to the Commissioner the following fees: For filing an application for a certificate of authority or amendment to the application, $200; for each renewal of a certificate of authority, the annual fee as provided in section thirteen, article three of this chapter; for each form filing and for each rate filing, the fee, as provided in section thirty-four, article six of this chapter; and for filing each annual report, $100. Fees charged under this section shall be for the purposes set forth in section thirteen, article three of this chapter.
(1) The Commissioner may, in lieu of suspension or revocation of a certificate of authority under section eighteen of this article, levy an administrative penalty in an amount not less than $100 nor more than $5,000, if reasonable notice in writing is given of the intent to levy the penalty and the health maintenance organization has a reasonable time within which to remedy the defect in its operations which gave rise to the penalty citation. The Commissioner may augment this penalty by an amount equal to the sum that he or she calculates to be the damages suffered by enrollees or other members of the public.(2) Any person who violates any provision of this article shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not less than $1,000 nor more than $10,000, or imprisoned in jail not more than one year, or both fined and imprisoned.(3)(a) If the Commissioner has cause to believe that any violation of this article or rules promulgated pursuant to this article has occurred or is threatened, prior to the levy of a penalty or suspension or revocation of a certificate of authority, the Commissioner shall give notice to the health maintenance organization and to the representatives, or other persons who appear to be involved in the suspected violation, to arrange a conference with the alleged violators or their authorized representatives for the purpose of attempting to ascertain the facts relating to the suspected violation and, in the event it appears that any violation has occurred or is threatened, to arrive at an adequate and effective means of correcting or preventing the violation.(b) Proceedings under this subsection shall not be governed by any formal procedural requirements and may be conducted in a manner the Commissioner determines appropriate under the circumstances. Enrollees shall be afforded notice by publication of proceedings under this subsection and shall be afforded the opportunity to intervene.(4)(a) The Commissioner may issue an order directing a health maintenance organization or a representative of a health maintenance organization to cease and desist from engaging in any act or practice in violation of the provisions of this article or regulations promulgated pursuant to this article.(b) Within ten days after service of the order of cease and desist, the respondent may request a hearing on the question of whether acts or practices in violation of this article have occurred. The hearings shall be conducted pursuant to chapter twenty-nine-a of this code and judicial review shall be available as provided by chapter twenty-nine-a of this code.(5) In the case of any violation of the provisions of this article or rules promulgated pursuant to this article, if the Commissioner elects not to issue a cease and desist order, or in the event of noncompliance with a cease and desist order issued pursuant to subsection (4) of this section, the Commissioner may institute a proceeding to obtain injunctive relief, or seek other appropriate relief, in the circuit court of the county of the principal place of business of the health maintenance organization.(6) Any enrollee of or resident of the service area of the health maintenance organization may bring an action to enforce any provision, standard or rule enforceable by the Commissioner. In the case of any successful action to enforce this article, or accompanying standards or rules the individual shall be awarded the costs of the action together with a reasonable attorney's fee as determined by the court.
No provider shall collect or attempt to collect from a health maintenance organization enrollee any money for services covered by the health maintenance organization. If a provider collects or attempts to collect from a health maintenance organization enrollee any money for services covered by the health maintenance organization, then the provider may be subjected to a civil money penalty to be imposed by the commissioner. Upon a determination that there is probable cause to believe that there has been a violation of this section, the commissioner may provide written notice to the alleged violator, stating the nature of the alleged violation and that failure to refund the amount of any improper billing within thirty days may result in imposition of a civil penalty pursuant to the provisions of this section. If the alleged violator fails to make a refund within thirty days, the commissioner shall issue a written notice of hearing stating the nature of the alleged violation and the time and place at which the alleged violator shall appear to show good cause why a civil penalty should not be imposed: Provided, That if the commissioner has previously found on three occasions that probable cause existed to support a violation, the alleged violator shall not be afforded the opportunity to make a refund before issuance of the notice of hearing for any subsequent violation.If, after notice and hearing, the commissioner determines that a violation of this section has occurred, the commissioner may assess a civil penalty of not less than the amount charged the subscriber but not more than $1,000. Subsequent violations of this section result in fines of not more than $2,000. Any provider so assessed shall be notified of the assessment in writing and the notice shall specify the reasons for the assessment. Any provider may waive the right to a hearing and receive a reduction in penalties of twenty-five percent.
(a) Except as otherwise provided in this article, provisions of the insurance laws and provisions of hospital or medical service corporation laws are not applicable to any health maintenance organization granted a certificate of authority under this article. The provisions of this article shall not apply to an insurer or hospital or medical service corporation licensed and regulated pursuant to the insurance laws or the hospital or medical service corporation laws of this state except with respect to its health maintenance corporation activities authorized and regulated pursuant to this article. The provisions of this article may not apply to an entity properly licensed by a reciprocal state to provide health care services to employer groups, where residents of West Virginia are members of an employer group, and the employer group contract is entered into in the reciprocal state. For purposes of this subsection, a reciprocal state means a state which physically borders West Virginia and which has subscriber or enrollee hold harmless requirements substantially similar to those set out in section seven-a of this article.(b) Factually accurate advertising or solicitation regarding the range of services provided, the premiums and copayments charged, the sites of services and hours of operation and any other quantifiable, nonprofessional aspects of its operation by a health maintenance organization granted a certificate of authority or its representative may not be construed to violate any provision of law relating to solicitation or advertising by health professions: Provided, That nothing contained in this subsection shall be construed as authorizing any solicitation or advertising which identifies or refers to any individual provider or makes any qualitative judgment concerning any provider.(c) Any health maintenance organization authorized under this article may not be considered to be practicing medicine and is exempt from the provisions of chapter thirty of this code relating to the practice of medicine.(d) The following provisions of this chapter are applicable to any health maintenance organization granted a certificate of authority under this article or which is otherwise subject to the provisions of this article: The provisions of sections four, five, six, seven, eight, nine and nine-a, article two (Insurance Commissioner); sections fifteen and twenty, article four (general provisions); section twenty, article five (borrowing by insurers); section seventeen, article six (validity of noncomplying forms); article six-c (guaranteed loss ratios as applied to individual sickness and accident insurance policies); article seven (assets and liabilities); article eight (investments); article eight-a (use of clearing corporations and federal reserve book-entry system); article nine (administration of deposits); article ten (rehabilitation and liquidation); article twelve (insurance producers and solicitors); section fourteen, article fifteen (policies discriminating among health care providers); section sixteen, article fifteen (policies not to exclude insureds children from coverage; required services; coordination with other insurance); section eighteen, article fifteen (equal treatment of state agency); section nineteen, article fifteen (coordination of benefits with Medicaid); article fifteen-b (Uniform Health Care Administration Act); section three, article sixteen (required policy provisions); section three-f, article sixteen (required policy provisions - treatment of temporomandibular joint disorder and craniomandibular disorder); section eleven, article sixteen (group policies not to exclude insureds children from coverage; required services; coordination with other insurance); section thirteen, article sixteen (equal treatment of state agency); section fourteen, article sixteen (coordination of benefits with Medicaid); article sixteen-a (group health insurance conversion); article sixteen-d (marketing and rate practices for small employer accident and sickness insurance policies); article twenty-five-c (Health Maintenance Organization Patient Bill of Rights); article twenty-five-f (coverage for patient cost of clinical trials); article twenty-seven (insurance holding company systems); article thirty-three (annual audited financial report); article thirty-four (administrative supervision); article thirty-four-a (standards and commissioners authority for companies considered to be in hazardous financial condition); article thirty-five (criminal sanctions for failure to report impairment); article thirty-seven (managing general agents); article thirty-nine (disclosure of material transactions); article forty-a (risk-based capital for health organizations); article forty-one (Insurance Fraud Prevention Act); and article forty-two (Womens Access to Health Care Act). In circumstances where the code provisions made applicable to health maintenance organizations by this subsection refer to the insurer, the corporation or words of similar import, the language shall be construed to include health maintenance organizations.(e) Any long-term care insurance policy delivered or issued for delivery in this state by a health maintenance organization shall comply with the provisions of article fifteen-a of this chapter.
All applications, filings and reports required under this article shall be treated as public documents: Provided, That where the provisions of other articles in this chapter are applicable to health maintenance organizations, all applications, filings and reports required under those articles shall be afforded the level of confidentiality as provided in those articles.
Any data or information pertaining to the diagnosis, treatment or health of any enrollee or applicant obtained from that person or from any provider by any health maintenance organization shall be held in confidence and shall not be disclosed to any person except: (1) To the extent that it may be necessary to facilitate an assessment of the quality of care delivered pursuant to section seventeen of this article or to review the grievance procedure pursuant to section twelve of this article; (2) upon the express written consent of the enrollee or his or her legally authorized representative; (3) pursuant to statute or court order for the production of evidence or the discovery thereof; (4) in the event of claim or litigation between that person and the health maintenance organization wherein the data or information is pertinent; or (5) to a department or division of the state pursuant to the terms of a group contract for the provision of health care services between the HMO and the department or division of the state. A health maintenance organization is entitled to claim any statutory privileges against the disclosure which the provider who furnished the information to the health maintenance organization is entitled to claim.
The department of welfare is hereby authorized to enter into contracts with health maintenance organizations certified and permitted to market under the laws of this state, and to furnish to recipients of medical assistance under Title XIX of the Social Security Act, 42 U.S.C. Section 1396, et. seq., health care services offered to such recipients under the medical assistance plan of West Virginia.
(1) Each employer shall offer no less than once every year to every employee and dependent entitled to receive health care under an existing health benefit plan supported in whole or in part by such employer the opportunity to become enrollees in certified health maintenance organizations which have the capacity to provide basic health services in health maintenance organization service areas in which at least twenty-five such employees reside: Provided, That nothing herein shall require an employer to contribute more on behalf of an employee seeking to enroll in a health maintenance organization than would be contributed on the employee's behalf to the existing health plan.(2) If any employees of an employer are represented by a collective bargaining representative or other employee representative designated or selected under any law of this state, the offer described in subsection (1) of this section should be made to such collective bargaining representatives or other employee representative, and only if such representative approves the offer should it be made to employees represented by such representatives.(3) If there is more than one certified health maintenance organization which meets the requirements of subsection (1) of this section and such health maintenance organizations have service areas contemporaneously covering the same twenty-five or more employees, the employer shall offer such employees at least one health maintenance organization which provides health services primarily through staff physicians, or medical groups, or a combination of both; and one health maintenance organization which provides health services through other means.(4) Any employer who knowingly fails to comply with any of the requirements of this section shall be subject to a fine of not more than $10,000 for every thirty-day period that such violation continues.(5) The commissioner is authorized, in addition to the remedy provided in subsection (4) of this section, to seek an injunction in a court of competent jurisdiction to compel compliance with the provisions of this section.
(1) Notwithstanding any law of this state to the contrary, any person may apply to the commissioner for and obtain a certificate of authority to establish or operate a health maintenance organization in compliance with this article. No person shall sell health maintenance organization enrollee contracts, nor shall any health maintenance organization commence services, prior to receipt of a certificate of authority as a health maintenance organization. Any person may, however, establish the feasibility of a health maintenance organization prior to receipt of a certificate of authority through funding drives and by receiving loans and grants.(2) Every health maintenance organization in operation as of the effective date of this article shall submit an application for a certificate of authority under this section within thirty days of the effective date of this article. Each applicant may continue to operate until the commissioner acts upon the application. In the event that an application is denied pursuant to section four of this article, the applicant shall be treated as a health maintenance organization whose certificate of authority has been revoked: Provided, That all health maintenance organizations in operation for at least five years are exempt from filing applications for a new certificate of authority.(3) The commissioner may require any organization providing or arranging for health care services on a prepaid per capita or prepaid aggregate fixed sum basis to apply for a certificate of authority as a health maintenance organization. The commissioner shall promulgate rules to facilitate the enforcement of this subsection: Provided, That any provider who is assuming risk by virtue of a contract or other arrangement with a health maintenance organization or entity which has a certificate may not be required to file for a certificate: Provided, however, That the commissioner may require the exempted entities to file complete financial data for a determination as to their solvency. Any organization directed to apply for a certificate of authority is subject to the provisions of subsection (2) of this section.(4) Each application for a certificate of authority shall be verified by an officer or authorized representative of the applicant, shall be in a form prescribed by the commissioner and shall set forth or be accompanied by any and all information required by the commissioner, including:(a) The basic organizational document;(b) The bylaws or rules;(c) A list of names, addresses and official positions of each member of the governing body, which shall contain a full disclosure in the application of any financial interest by the officer or member of the governing body or any provider or any organization or corporation owned or controlled by that person and the health maintenance organization and the extent and nature of any contract or financial arrangements between that person and the health maintenance organization;(d) A description of the health maintenance organization;(e) A copy of each evidence of coverage form and of each enrollee contract form;(f) Financial statements which include the assets, liabilities and sources of financial support of the applicant and any corporation or organization owned or controlled by the applicant;(g)(i) A description of the proposed method of marketing the plan;(ii) A schedule of proposed charges; and(iii) A financial plan which includes a three-year projection of the expenses and income and other sources of future capital;(h) A statement reasonably describing the service area or areas to be served and the type or types of enrollees to be served;(i) A description of the complaint procedures to be utilized as required under section twelve of this article;(j) A description of the mechanism by which enrollees will be afforded an opportunity to participate in matters of policy and operation under section six of this article;(k) A complete biographical statement on forms prescribed by the commissioner and an independent investigation report on all of the individuals referred to in subdivision (c) of this subsection and all officers, directors and persons holding five percent or more of the common stock of the organization;(l) A comprehensive feasibility study, performed by a qualified independent actuary in conjunction with a certified public accountant which shall contain a certification by the qualified actuary and an opinion by the certified public accountant as to the feasibility of the proposed organization. The study shall be for the greater of three years or until the health maintenance organization has been projected to be profitable for twelve consecutive months. The study must show that the health maintenance organization would not, at the end of any month of the projection period, have less than the minimum capital and surplus as required by paragraph (ii), subdivision (c), subsection (2), section four of this article. The qualified independent actuary shall certify that: The rates are neither inadequate nor excessive nor unfairly discriminatory; the rates are appropriate for the classes of risks for which they have been computed; the rating methodology is appropriate: Provided, That the certification shall include an adequate description of the rating methodology showing that the methodology follows consistent and equitable actuarial principles; the health maintenance organization is actuarially sound: Provided, however, That the certification shall consider the rates, benefits and expenses of, and any other funds available for the payment of obligations of, the organization; the rates being charged or to be charged are actuarially adequate to the end of the period for which rates have been guaranteed; and incurred but not reported claims and claims reported but not fully paid have been adequately provided for;(m) A description of the health maintenance organization's quality assurance program; and(n) Such other information as the commissioner may require to be provided.(5) A health maintenance organization shall, unless otherwise provided for by rules promulgated by the commissioner, file notice prior to any modification of the operations or documents filed pursuant to this section or as the commissioner may require by rule. If the commissioner does not disapprove of the filing within ninety days of filing, it shall be considered approved and may be implemented by the health maintenance organization.
Notwithstanding any other provisions of law, when any health insurance policy, health care services plan or other contract provides for the payment of medical expenses, benefits or procedures, such policy, plan or contract shall be construed to include payment to all health care providers including medical physicians, osteopathic physicians, podiatric physicians, chiropractic physicians, midwives and nurse practitioners who provide medical services, benefits or procedures which are within the scope of each respective provider's license. Any limitation or condition placed upon services, diagnoses or treatment by, or payment to any particular type of licensed provider shall apply equally to all types of licensed providers without unfair discrimination as to the usual and customary treatment procedures of any of the aforesaid providers.
The commissioner may as he deems necessary after notice and hearing promulgate rules and regulations in accordance with chapter twenty-nine-a of this code to define the commissioner's authority to consider the operating results of an insurer's affiliates and subsidiaries in the rate making and solvency determination of that insurer.
On or before January 15, 1996, the commissioner shall submit a report to the Legislature setting forth a plan to establish a guaranty fund for health maintenance organizations operating in West Virginia.
The Legislature finds that ambulance services in this state are performed by various volunteer emergency service squads, county operations and small businesses, which may lack the sophistication and expertise required to negotiate a contract with a health maintenance organization for the provision of ambulance services, and that the best interests of the citizens of the state require the continued development and preservation of an emergency medical system to serve all the citizens of the state, including those citizens who do not receive health care services through a health maintenance organization. Therefore, the commissioner shall promulgate legislative rules, pursuant to the provisions of article twenty-nine-a of this code, to regulate contracting for emergency medical services. The rules shall be promulgated as expeditiously as possible in order to be considered by the Legislature in the regular session in the year one thousand nine hundred ninety-seven. The rules shall consider the following: Reimbursement for nonemergency transportation by nonparticipating providers and the appropriate use of 911 or community dispatching, as well as other items the commissioner may deem necessary.
[Repealed.]
(a) Any entity regulated under this article that provides dental care coverage to a covered person shall honor an assignment, made in writing by the person covered under the policy, of payments due under the policy to a dentist or a dental corporation for services provided to the covered person that are covered under the policy. Upon notice of the assignment, the entity shall make payments directly to the provider of the covered services. A dentist or dental corporation with a valid assignment may bill the entity and notify the entity of the assignment. Upon request of the entity, the dentist or dental corporation shall provide a copy of the assignment to the entity.(b) A covered person may revoke an assignment made pursuant to subsection (a) of this section with or without the consent of the provider. The revocation shall be in writing. The covered person shall provide notice of the revocation to the entity. The entity shall send a copy of the revocation notice to the dentist or dental corporation subject to the assignment. The revocation is effective when both the entity and the provider have received a copy of the revocation notice. The revocation is only effective for any charges incurred after both parties have received the revocation notice.(c) If, under an assignment authorized in subsection (a) of this section, a dentist or dental corporation collects payment from a covered person and subsequently receives payment from the entity, the dentist or dental corporation shall reimburse the covered person, less any applicable copayments, deductibles, or coinsurance amounts, within 45 days.(d) Nothing in this section limits an entitys ability to determine the scope of the entitys benefits, services, or any other terms of the entitys policies or to negotiate any contract with a licensed health care provider regarding reimbursement rates or any other lawful provisions.(e) Any entity providing dental care shall provide conspicuous notice to the covered person that the assignment of benefits is optional, and that additional payments may be required if the assigned benefits are not sufficient to pay for received services. (f) The provisions of this section shall not apply to insurers or managed care organizations with respect to their Medicaid or CHIP plans or contracts which are reviewed and approved by the Department of Health and Human Resources Bureau for Medical Services.
(a) As a condition precedent to the issuance or maintenance of a certificate of authority, a health maintenance organization shall file or have on file with the Commissioner:(1) An acknowledgment that a delinquency proceeding pursuant to article ten of this chapter, or supervision by the Commissioner pursuant to article thirty-four of this chapter, constitute the exclusive methods for the liquidation, rehabilitation, reorganization or conservation of a health maintenance organization;(2) A waiver of any right to file or be subject to a bankruptcy proceeding;(3) Within thirty days of any change in the membership of the governing body of the organization or in the officers or persons holding five percent or more of the common stock of the organization, or as otherwise required by the Commissioner:(A) An amended list of the names, addresses and official positions of each member of the governing body and a full disclosure of any financial interest by a member of the governing body or any provider or any organization or corporation owned or controlled by that person and the health maintenance organization and the extent and nature of any contract or financial arrangements between that person and the health maintenance organization; and(B) A complete biographical statement on forms prescribed by the Commissioner and an independent investigation report on each person for whom a biographical statement and independent investigation report have not previously been submitted; and(4) For health maintenance organizations that have been operating in this state for at least three years, a copy of the current quality assurance report submitted to the health maintenance organization by a nationally recognized accreditation and review organization approved by the Commissioner, or in the case of the issuance of an initial certificate of authority to a health maintenance organization, a determination by the Commissioner as to the feasibility of the health maintenance organization's proposed quality assurance program: Provided, That if a health maintenance organization files proof found in the Commissioner's discretion to be sufficient to demonstrate that the health maintenance organization has timely applied for and reasonably pursued a review of its quality assurance program, but a quality report has not been issued by the accreditation and review organization, the health maintenance organization shall be considered to have complied with this subdivision.(b) All certificates of authority issued to health maintenance organizations expire at midnight on the thirty-first day of May of each year. The Commissioner shall renew annually the certificates of authority of all health maintenance organizations that continue to meet all requirements of this section and subsection (2), section four of this article: Provided, That a health maintenance organization shall not qualify for renewal of its certificate of authority if the organization has no subscribers in this state within twelve months after issuance of the certificate of authority: Provided, however, That an organization not qualifying for renewal may apply for a new certificate of authority under section three of this article.(c) The commencement of a bankruptcy proceeding either by or against a health maintenance organization shall, by operation of law;Terminate the health maintenance organization's certificate of authority; andVest in the Commissioner for the use and benefit of the subscribers of the health maintenance organization the title to any deposits of the health maintenance organization held by the Commissioner: Provided, That if the bankruptcy proceeding is initiated by a party other than the health maintenance organization, the operation of this subsection shall be stayed for a period of sixty days following the date of commencement of the proceeding.
(1) Upon receipt of an application for a certificate of authority, the commissioner shall determine whether the application for a certificate of authority, with respect to health care services to be furnished, has demonstrated:(a) The willingness and potential ability of the organization to assure that basic health services will be provided in a manner to enhance and assure both the availability and accessibility of adequate personnel and facilities;(b) Arrangements for an ongoing evaluation of the quality of health care provided by the organization and utilization review which meet those standards required by the commissioner by rule; and(c) That the organization has a procedure to develop, compile, evaluate and report statistics relating to the cost of its operations, the pattern of utilization of its services, the quality, availability and accessibility of its services and any other matters reasonably required by rule.(2) The commissioner shall issue or deny a certificate of authority to any person filing an application within one hundred twenty days after receipt of the application. Issuance of a certificate of authority shall be granted upon payment of the application fee prescribed, if the commissioner is satisfied that the following conditions are met:(a) The health maintenance organization's proposed plan of operation meets the requirements of subsection (1) of this section;(b) The health maintenance organization will effectively provide or arrange for the provision of at least basic health care services on a prepaid basis except for copayments: Provided, That nothing in this section shall be construed to relieve a health maintenance organization from the obligations to provide health care services because of the nonpayment of copayments unless the enrollee fails to make payment in at least three instances over any twelve-month period: Provided, however, That nothing in this section shall permit a health maintenance organization to charge copayments to Medicare beneficiaries or Medicaid recipients in excess of the copayments permitted under those programs, nor shall a health maintenance organization be required to provide services to the Medicare beneficiaries or Medicaid recipients in excess of the benefits compensated under those programs;(c) The health maintenance organization is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees. In making this determination, the commissioner may consider:(i) The financial soundness of the health maintenance organization's arrangements for health care services and the proposed schedule of charges used in connection with the health care services;(ii) That the health maintenance organization has and maintains the following:(A) If a for-profit stock corporation, at least $1 million of fully paid-in capital stock; or(B) If a nonprofit corporation, at least $1 million of statutory surplus funds; and(C) Both for-profit and nonprofit health maintenance organization, additional surplus funds of at least $1 million;(iii) Any arrangements that will guarantee for the continuation of benefits and payments to providers for services rendered both prior to and after insolvency for the duration of the contract period for which payment has been made, except that benefits to members who are confined on the date of insolvency in an inpatient facility shall be continued until their discharge; and(iv) Any agreement with providers for the provision of health care services;(d) Reasonable provisions have been made for emergency and out-of-area health care services;(e) The enrollees will be afforded an opportunity to participate in matters of policy and operation pursuant to section six of this article;(f) The health maintenance organization has demonstrated that it will assume full financial risk on a prospective basis for the provision of health care services, including hospital care: Provided, That the requirement of this subdivision shall not prohibit a health maintenance organization from obtaining reinsurance acceptable to the commissioner from an accredited reinsurer or making other arrangements acceptable to the commissioner:(i) For the cost of providing to any enrollee health care services, the aggregate value of which exceeds $4,000 in any year;(ii) For the cost of providing health care services to its members on a nonelective emergency basis, or while they are outside the area served by the organization; or(iii) For not more than ninety-five percent of the amount by which the health maintenance organization's costs for any of its fiscal years exceed one hundred five percent of its income for those fiscal years;(g) The ownership, control and management of the organization is competent and trustworthy and possesses managerial experience that would make the proposed health maintenance organization operation beneficial to the subscribers. The commissioner may, at his or her discretion, refuse to grant or continue authority to transact the business of a health maintenance organization in this state at any time during which the commissioner has probable cause to believe that the ownership, control or management of the organization includes any person whose business operations are or have been marked by business practices or conduct that is to the detriment of the public, stockholders, investors or creditors;(h) The health maintenance organization has deposited and maintained in trust with the State Treasurer, for the protection of its subscribers or its subscribers and creditors, cash or government securities eligible for the investment of capital funds of domestic insurers as described in paragraph (A) or (B), subdivision (1), subsection (a), section eleven, article eight of this chapter or paragraph (A), (B) or (C), subdivision (3) of said subsection, in the amount of $100,000; and(i) The health maintenance organization has a quality assurance program which has been reviewed by the commissioner or by a nationally recognized accreditation and review organization approved by the commissioner; meets at least those standards set forth in section seventeen-a of this article; and is determined satisfactory by the commissioner. If the commissioner determines that the quality assurance program of a health maintenance organization is deficient in any significant area, the commissioner, in addition to other remedies provided in this chapter, may establish a corrective action plan that the health maintenance organization must follow as a condition to the issuance of a certificate of authority: Provided, That in those instances where a health maintenance organization has timely applied for and reasonably pursued a review of its quality assurance program, but the review has not been completed, the health maintenance organization shall submit proof to the commissioner of its application for that review.(3) A certificate of authority shall be denied only after compliance with the requirements of section twenty-one of this article.(4) No person who has not been issued a certificate of authority shall use the words "health maintenance organization" or the initials "HMO" in its name, contracts, logo or literature: Provided, That persons who are operating under a contract with, operating in association with, enrolling enrollees for, or otherwise authorized by a health maintenance organization licensed under this article to act on its behalf may use the terms "health maintenance organization", or "HMO" for the limited purpose of denoting or explaining their association or relationship with the authorized health maintenance organization. No health maintenance organization which has a minority of board members who are consumers shall use the words "consumer controlled" in its name or in any way represent to the public that it is controlled by consumers.
(a) Upon obtaining a certificate of authority as required under this article, a health maintenance organization may enter into health maintenance contracts in this state and engage in any activities, consistent with the purposes and provisions of this article, which are necessary to the performance of its obligations under such contracts, subject to the limitations provided in this article. A health maintenance organization may offer to its enrollees in conjunction with the benefits provided to them through their contractual arrangement for health services with the health maintenance organization a point of service option to be provided either by the health maintenance organization directly or by an insurance carrier licensed in this state with which the health maintenance organization has a contractual arrangement. Benefits for health care services within the health maintenance organization's contracted provider panel shall comply with all other provisions of this article.(b) The commissioner shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code limiting or regulating the powers of health maintenance organizations which the commissioner finds to be in the public interest. The commissioner may promulgate emergency rules pursuant to the provisions of section fifteen, article three, chapter twenty-nine-a of this code to implement standards and requirements for a point of service option.
(1) The governing body of any health maintenance organization may include enrollees, providers, or other individuals.(2) Such governing body shall establish a mechanism to afford the enrollees an opportunity to participate in matters of policy and operation through the establishment of advisory panels, by the use of advisory referenda on major policy decisions, or through the use of other mechanisms as may be prescribed by the commissioner.
(a) Any director, officer or partner of a health maintenance organization who receives, collects, disburses or invests funds in connection with the activities of the organization is responsible for the funds in a fiduciary relationship to the enrollees.(b) A health maintenance organization shall maintain a blanket fidelity bond covering all directors, officers, managers and employees of the organization who receive, collect, disburse or invest funds in connection with the activities of the organization, issued by an insurer licensed in this state or, if the fidelity bond required by this subsection is not available from an insurer licensed in this state, a fidelity bond procured by an excess line broker licensed in this state, in an amount at least equal to the minimum amount of fidelity insurance as provided in the national association of Insurance Commissioners handbook, as amended, or as determined under a rule promulgated by the commissioner.(c) Any contracts made with providers of health care services enabling a health maintenance organization to provide health care services authorized under this article shall be filed with the commissioner. The commissioner has the power to require immediate cancellation of the contracts or the immediate renegotiation of the contract by the parties whenever he or she determines that they provide for excessive payments, or that they fail to include reasonable incentives for cost control, or that they otherwise substantially and unreasonably contribute to escalation of the costs of providing health care services to enrollees.
(1) Whenever a contract exists between a health maintenance organization and a provider and the organization fails to meet its obligations to pay fees for services already rendered to a subscriber, the health maintenance organization is liable for the fee or fees rather than the subscriber; and the contract shall state that liability.(2) No subscriber of a health maintenance organization is liable to any provider of health care services for any services covered by the health maintenance organization if at any time during the provision of the services, the provider, or its agents, are aware the subscriber is a health maintenance organization enrollee.(3) If at any time during the provision of the services, a provider, or its agents, are aware that the subscriber is a health maintenance organization enrollee, that provider of services or any representative of the provider may not collect or attempt to collect from a health maintenance organization subscriber any money for services covered by a health maintenance organization and no provider or representative of the provider may maintain any action at law against a subscriber of a health maintenance organization to collect money owed to the provider by a health maintenance organization.(4) Every contract between a health maintenance organization and a provider of health care services shall be in writing and shall contain a provision that the subscriber is not liable to the provider for any services covered by the subscriber's contract with the health maintenance organization.(5) The provisions of this section shall not be construed to apply to the amount of any deductible or copayment which is not covered by the contract of the health maintenance organization.(6) When a subscriber receives covered emergency health care services from a noncontracting provider, the health maintenance organization shall be responsible for payment of the providers normal charges for those health care services, exclusive of any applicable deductibles or copayments.(7) For all provider contracts executed on or after April 15, one thousand nine hundred ninety-five, and within one hundred eighty days of that date for contracts in existence on that date:(a) The contracts must provide that the provider shall provide sixty days advance written notice to the health maintenance organization and the commissioner before canceling the contract with the health maintenance organization for any reason; and(b) The contract must also provide that nonpayment for goods or services rendered by the provider to the health maintenance organization is not a valid reason for avoiding the sixty day advance notice of cancellation.(8) Upon receipt by the health maintenance organization of a sixty day cancellation notice, the health maintenance organization may, if requested by the provider, terminate the contract in less than sixty days if the health maintenance organization is not financially impaired or insolvent.
If a health maintenance organization considers a loss ratio at the time of renewal of a policy, plan, or contract, the health maintenance organization shall, upon request of a subscriber, provide the loss ratio and the components of the loss ratio calculation to the subscriber no more than 90 days but no less than 60 days before the renewal date of the policy, plan, or contract. For purposes of this section, "loss ratio" means the total losses paid out in medical claims divided by the total earned premiums: Provided, However, that medical claims do not include dental only or vision only coverage. For purposes of this section, "subscriber" does not include a subscriber or beneficiary of any policy, plan, or contract approved by the Bureau of Medical Services of the Department of Health and Human Resources and entered into by a health maintenance organization with Medicaid or the Childrens Health Insurance Program.
(1) (a) Every enrollee is entitled to evidence of coverage in accordance with this section. The health maintenance organization or its designated representative shall issue the evidence of coverage.(b) No evidence of coverage, or amendment thereto, shall be issued or delivered to any person in this state until a copy of the form of the evidence of coverage, or amendment thereto, has been filed with and approved by the commissioner.(c) An evidence of coverage shall contain a clear, concise and complete statement of:(i) The health care services and the insurance or other benefits, if any, to which the enrollee is entitled;(ii) Any exclusions or limitations on the services, kind of services, benefits, or kind of benefits, to be provided, including any copayments;(iii) Where and in what manner information is available as to how services, including emergency and out-of-area services, may be obtained;(iv) The total amount of payment and copayment, if any, for health care services and the indemnity or service benefits, if any, which the enrollee is obligated to pay with respect to individual contracts, or an indication whether the plan is contributory or noncontributory with respect to group certificates; (v) A description of the health maintenance organization's method for resolving enrollee grievances; and(vi) The following exact statement in bold print: "Each subscriber or enrollee, by acceptance of the benefits described in this evidence of coverage, shall be deemed to have consented to the examination of his or her medical records for purposes of utilization review, quality assurance and peer review by the health maintenance organization or its designee."(d) Any subsequent approved change in an evidence of coverage shall be issued to each enrollee.(e) A copy of the form of the evidence of coverage to be used in this state, and any amendment thereto, is subject to the filing and approval requirements of subdivision (b), subsection (1) of this section, unless the commissioner promulgates a rule dispensing with this requirement or unless it is subject to the jurisdiction of the commissioner under the laws governing health insurance or, hospital or medical service corporations, in which event the filing and approval provisions of those laws apply. To the extent, however, that those provisions do not apply the requirements in subdivision (c), subsection (1) of this section, are applicable.(2) Premiums may be established in accordance with actuarial principles: Provided, That premiums shall not be excessive, inadequate or unfairly discriminatory. A certification by a qualified independent actuary shall accompany a rate filing and shall certify that: The rates are neither inadequate nor excessive nor unfairly discriminatory; that the rates are appropriate for the classes of risks for which they have been computed; provide an adequate description of the rating methodology showing that the methodology follows consistent and equitable actuarial principles; and the rates being charged are actuarially adequate to the end of the period for which rates have been guaranteed. In determining whether the charges are reasonable, the commissioner shall consider whether the health maintenance organization has: (a) Made a vigorous, good faith effort to control rates paid to health care providers; (b) established a premium schedule, including copayments, if any, which encourages enrollees to seek out preventive health care services; (c) made a good faith effort to secure arrangements whereby basic services can be obtained by subscribers from local providers to the extent that the providers offer the services; and (d) made a good faith effort to support community health assessments and efforts directed at community health needs.(3) Rates are inadequate if the premiums derived from the rating structure, plus investment income, copayments, and revenues from coordination of benefits and subrogation, fees-for-service and reinsurance recoveries are not set at a level at least equal to the anticipated cost of medical and hospital benefits during the period for which the rates are to be effective, and the other expenses which would be incurred if other expenses were at the level for the current or nearest future period during which the health maintenance organization is projected to make a profit. For this analysis, investment income shall not exceed three percent of total projected revenues.(4) The commissioner shall within a reasonable period approve any form if the requirements of subsection (1) of this section are met and any schedule of charges if the requirements of subsection (2) of this section are met. It is unlawful to issue the form or to use the schedule of charges until approved. If the commissioner disapproves of the filing, he or she shall notify the filer promptly. In the notice, the commissioner shall specify the reasons for his or her disapproval and the findings of fact and conclusions which support his or her reasons. A hearing will be granted by the commissioner within fifteen days after a request in writing, by the person filing, has been received by the commission. If the commissioner does not disapprove any form or schedule of charges within sixty days of the filing of the forms or charges, they shall be considered approved.(5) The commissioner may require the submission of whatever relevant information in addition to the schedule of charges which he or she considers necessary in determining whether to approve or disapprove a filing made pursuant to this section.(6) An individual enrollee may cancel a contract with a health maintenance organization at any time for any reason: Provided, That a health maintenance organization may require that the enrollee give thirty days advance notice: Provided, however, That an individual enrollee whose premium rate was determined pursuant to a group contract may cancel a contract with a health maintenance organization pursuant to the terms of that contract.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, whenever reimbursement or indemnity for laboratory or X-ray services are covered, reimbursement or indemnification shall not be denied for any of the following when performed for cancer screening or diagnostic purposes, at the direction of a person licensed to practice medicine and surgery by the Board of Medicine: (1) Mammograms when medically appropriate and consistent with the current guidelines from the United States Preventive Services Task Force or The American College of Obstetricians and Gynecologists.(2) A pap smear, either conventional or liquid-based cytology, whichever is medically appropriate and consistent with the current guidelines from the United States Preventive Services Task Force or The American College of Obstetricians and Gynecologists, for women age eighteen or over; or(3) A test for the human papilloma virus (HPV)for women age eighteen or over, when medically appropriate and consistent with the current guidelines from either the United States Preventive Services Task Force or The American College of Obstetricians and Gynecologists for women age eighteen and over.(b) A policy, provision, contract, plan or agreement may apply to mammograms, pap smears or human papilloma virus (HPV) test the same deductibles, coinsurance and other limitations as apply to other covered services.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall, on or after July 1, 1991, provide as benefits to all subscribers and members coverage for rehabilitation services as hereinafter set forth, unless rejected by the insured.(b) For purposes of this article and section, "rehabilitation services" includes those services which are designed to remediate patient's condition or restore patients to their optimal physical, medical, psychological, social, emotional, vocational and economic status. Rehabilitative services include by illustration and not limitation diagnostic testing, assessment, monitoring or treatment of the following conditions individually or in a combination:(1) Stroke;(2) Spinal cord injury;(3) Congenital deformity;(4) Amputation;(5) Major multiple trauma;(6) Fracture of femur;(7) Brain injury;(8) Polyarthritis, including rheumatoid arthritis;(9) Neurological disorders, including, but not limited to, multiple sclerosis, motor neuron diseases, polyneuropathy, muscular dystrophy and Parkinson's disease;(10) Cardiac disorders, including, but not limited to, acute myocardial infarction, angina pectoris, coronary arterial insufficiency, angioplasty, heart transplantation, chronic arrhythmias, congestive heart failure, valvular heart disease;(11) Burns.(c) Rehabilitative services includes care rendered by any of the following:(1) A hospital duly licensed by the State of West Virginia that meets the requirements for rehabilitation hospitals as described in Section 2803.2 of the Medicare Provider Reimbursement Manual, Part 1, as published by the U.S. Health Care Financing Administration;(2) A distinct part rehabilitation unit in a hospital duly licensed by the State of West Virginia. The distinct part unit must meet the requirements of Section 2803.61 of the Medicare Provider Reimbursement Manual, Part 1, as published by the U.S. Health Care Financing Administration;(3) A hospital duly licensed by the State of West Virginia which meets the requirements for cardiac rehabilitation as described in Section 35-25, Transmittal 41, dated August, 1989, as promulgated by the U.S. Health Care Financing Administration.(d) Rehabilitation services do not include services for mental health, chemical dependency, vocational rehabilitation, long-term maintenance or custodial services.(e) A policy, provision, contract, plan or agreement may apply to rehabilitation services the same deductibles, coinsurance and other limitations as apply to other covered services.
Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall, on or after July 1, 1994, provide as benefits to all subscribers and members coverage for child immunization services as described in section five, article three, chapter sixteen of this code. This coverage will cover all costs associated with immunization, including the cost of the vaccine, if incurred by the health care provider, and all costs of vaccine administration. These services shall be exempt from any deductible, per-visit charge and/or copayment provisions which may be in force in these policies, provisions, plans, agreements or contracts. This section does not require that other health care services provided at the time of immunization be exempt from any deductible and/or copayment provisions.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall provide as benefits to all subscribers and members coverage for emergency services. A policy, provision, contract, plan or agreement may apply to emergency services the same deductibles, coinsurance and other limitations as apply to other covered services: Provided, That preauthorization or precertification shall not be required.(b) From July 1, 1998, the following provisions apply:(1) Every insurer shall provide coverage for emergency medical services, including prehospital services, to the extent necessary to screen and to stabilize an emergency medical condition. The insurer shall not require prior authorization of the screening services if a prudent layperson acting reasonably would have believed that an emergency medical condition existed. Prior authorization of coverage shall not be required for stabilization if an emergency medical condition exists. Payment of claims for emergency services shall be based on the retrospective review of the presenting history and symptoms of the covered person.(2) An insurer that has given prior authorization for emergency services shall cover the services and shall not retract the authorization after the services have been provided unless the authorization was based on a material misrepresentation about the covered person's health condition made by the referring provider, the provider of the emergency services or the covered person.(3) Coverage of emergency services shall be subject to coinsurance, copayments and deductibles applicable under the health benefit plan.(4) The emergency department and the insurer shall make a good faith effort to communicate with each other in a timely fashion to expedite postevaluation or poststabilization services in order to avoid material deterioration of the covered person's condition.(5) As used in this section:(A) "Emergency medical services" means those services required to screen for or treat an emergency medical condition until the condition is stabilized, including prehospital care;(B) "Prudent layperson" means a person who is without medical training and who draws on his or her practical experience when making a decision regarding whether an emergency medical condition exists for which emergency treatment should be sought;(C) "Emergency medical condition for the prudent layperson" means one that manifests itself by acute symptoms of sufficient severity, including severe pain, such that the person could reasonably expect the absence of immediate medical attention to result in serious jeopardy to the individual's health, or, with respect to a pregnant woman, the health of the unborn child; serious impairment to bodily functions; or serious dysfunction of any bodily organ or part;(D) "Stabilize" means with respect to an emergency medical condition, to provide medical treatment of the condition necessary to assure, with reasonable medical probability that no medical deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility: Provided, That this provision may not be construed to prohibit, limit or otherwise delay the transportation required for a higher level of care than that possible at the treating facility;(E) "Medical screening examination" means an appropriate examination within the capability of the hospital's emergency department, including ancillary services routinely available to the emergency department, to determine whether or not an emergency medical condition exists; and(F) "Emergency medical condition" means a condition that manifests itself by acute symptoms of sufficient severity including severe pain such that the absence of immediate medical attention could reasonably be expected to result in serious jeopardy to the individual's health or with respect to a pregnant woman the health of the unborn child, serious impairment to bodily functions or serious dysfunction of any bodily part or organ.(6) Each insurer shall provide the enrolled member with a description of procedures to be followed by the member for emergency services, including the following:(A) The appropriate use of emergency facilities;(B) The appropriate use of any prehospital services provided by the health maintenance organization;(C) Any potential responsibility of the member for payment for nonemergency services rendered in an emergency facility;(D) Any cost-sharing provisions for emergency services; and(E) An explanation of the prudent layperson standard for emergency medical condition.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, reimbursement or indemnification for colorectal cancer examinations and laboratory testing may not be denied for any nonsymptomatic person fifty years of age or older, or a symptomatic person under fifty years of age, when reimbursement or indemnity for laboratory or X-ray services are covered under the policy and are performed for colorectal cancer screening or diagnostic purposes at the direction of a person licensed to practice medicine and surgery by the Board of Medicine. The tests are as follows: An annual fecal occult blood test, a flexible sigmoidoscopy repeated every five years, a colonoscopy repeated every ten years and a double contrast barium enema repeated every five years.(b) A symptomatic person is defined as: (i) An individual who experiences a change in bowel habits, rectal bleeding or stomach cramps that are persistent; or (ii) an individual who poses a higher than average risk for colorectal cancer because he or she has had colorectal cancer or polyps, inflammatory bowel disease, or an immediate family history of such conditions.(c) The same deductibles, coinsurance, network restrictions and other limitations for covered services found in the policy, provision, contract, plan or agreement of the covered person may apply to colorectal cancer examinations and laboratory testing.
(a) Any policy of insurance described in this article which provides medical and surgical benefits with respect to a mastectomy shall provide, in a case of a participant or beneficiary who is receiving benefits in connection with a mastectomy and who elects breast reconstruction in connection with such mastectomy, coverage for:(1) All stages of reconstruction of the breast on which the mastectomy has been performed;(2) Surgery and reconstruction of the other breast to produce a symmetrical appearance; and(3) Prostheses and physical complications of mastectomy, including lymphedemas in a manner determined in consultation with the attending physician and the patient. Coverage shall be provided for a minimum stay in the hospital of not less than forty-eight hours for a patient following a radical or modified mastectomy and not less than twenty-four hours of inpatient care following a total mastectomy or partial mastectomy with lymph node dissection for the treatment of breast cancer. Nothing in this section shall be construed as requiring inpatient coverage where inpatient coverage is not medically necessary or where the attending physician in consultation with the patient determines that a shorter period of hospital stay is appropriate. Such coverage may be subject to annual deductibles and coinsurance provisions as may be deemed appropriate and as are consistent with those established for other benefits under the health benefit plan policy or coverage. Written notice of the availability of such coverage shall be delivered to the participant upon enrollment and annually thereafter.(b) A health benefit plan policy, and a health insurer providing health insurance coverage in connection with a health benefit plan policy, shall provide notice to each participant and beneficiary under such plan regarding the coverage required by this section. Such notice shall be in writing and prominently positioned in any literature or correspondence made available or distributed by the issuer of the health benefit plan policy.(c) A health benefit plan policy and a health insurer offering health insurance coverage in connection with a health benefit plan policy, may not:(1) Deny to a patient eligibility, or continued eligibility, to enroll or to renew coverage under the terms of the plan, solely for the purpose of avoiding the requirements of this section; and(2) Penalize or otherwise reduce or limit the reimbursement of an attending provider, or provide incentives (monetary or otherwise) to an attending provider, to induce such provider to provide care to an individual participant or beneficiary in a manner inconsistent with this section.(d) Nothing in this section shall be construed to prevent a health benefit plan policy or a health insurer offering health insurance coverage from negotiating the level and type of reimbursement with a provider for care provided in accordance with this section.(e) The provisions of this section shall be included under any policy, contract or plan delivered after July 1, 2002.
(a) A health maintenance organization issuing coverage in this state pursuant to the provisions of this article may not require any person covered under a contract which provides coverage for prescription drugs to obtain the prescription drugs from a mail-order pharmacy in order to obtain benefits for the drugs.(b) A health maintenance organization may not violate the provisions of subsection (a) of this section through the use of an agent or contractor or through the action of an administrator of prescription drug benefits.(c) The Insurance Commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to implement and enforce the provisions of this section.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, reimbursement or indemnification for annual kidney disease screening and laboratory testing as recommended by the National Kidney Foundation may not be denied for any person when reimbursement or indemnity for laboratory or X-ray services are covered under the policy and are performed for kidney disease screening or diagnostic purposes at the direction of a person licensed to practice medicine and surgery by the Board of Medicine. The tests are as follows: Any combination of blood pressure testing, urine albumin or urine protein testing and serum creatinine testing.(b) The same deductibles, coinsurance, network restrictions and other limitations for covered services found in the policy, provision, contract, plan or agreement of the covered person may apply to kidney disease screening and laboratory testing.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article shall, on or after July 1, 2009, provide as benefits to all subscribers and members coverage for dental anesthesia services as hereinafter set forth.(b) For purposes of this section, "dental anesthesia services" means general anesthesia for dental procedures and associated outpatient hospital or ambulatory facility charges provided by appropriately licensed health care individuals in conjunction with dental care provided to a subscriber or member if the subscriber or member is:(1) Seven years of age or younger or is developmentally disabled and is an individual for whom a successful result cannot be expected from dental care provided under local anesthesia because of a physical, intellectual or other medically compromising condition of the subscriber or member and for whom a superior result can be expected from dental care provided under general anesthesia; or(2) A child who is twelve years of age or younger with documented phobias, or with documented mental illness, and with dental needs of such magnitude that treatment should not be delayed or deferred and for whom lack of treatment can be expected to result in infection, loss of teeth, or other increased oral or dental morbidity and for whom a successful result cannot be expected from dental care provided under local anesthesia because of such condition and for whom a superior result can be expected from dental care provided under general anesthesia.(c) Prior authorization. -- An entity subject to this section may require prior authorization for general anesthesia and associated outpatient hospital, ambulatory facility or similar charges for dental care in the same manner that prior authorization is required for these benefits in connection with other covered medical care.(d) An entity subject to this section may restrict coverage for general anesthesia and associated outpatient hospital or ambulatory facility charges unless the dental care is provided by:(1) A fully accredited specialist in pediatric dentistry;(2) A fully accredited specialist in oral and maxillofacial surgery; and(3) A dentist to whom hospital privileges have been granted.(e) Dental care coverage not required. -- The provisions of this section may not be construed to require coverage for the dental care for which the general anesthesia is provided.(f) Temporal mandibular joint disorders. -- The provisions of this section do not apply to dental care rendered for temporal mandibular joint disorders.(g) A policy, provision, contract, plan or agreement may apply to dental anesthesia services the same deductibles, coinsurance and other limitations as apply to other covered services.
(a) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, any entity regulated by this article for policies issued or renewed on or after January 1, 2012, which delivers, renews or issues a policy of group accident and sickness insurance in this state under the provisions of this article shall include coverage for diagnosis, evaluation and treatment of autism spectrum disorder in individuals ages eighteen months to eighteen years. To be eligible for coverage and benefits under this section, the individual must be diagnosed with autism spectrum disorder at age eight or younger. The policy shall provide coverage for treatments that are medically necessary and ordered or prescribed by a licensed physician or licensed psychologist and in accordance with a treatment plan developed from a comprehensive evaluation by a certified behavior analyst for an individual diagnosed with autism spectrum disorder.(b) Coverage shall include, but not be limited to, applied behavior analysis. Applied behavior analysis shall be provided or supervised by a certified behavior analyst. The annual maximum benefit for applied behavior analysis required by this subsection shall be in amount not to exceed $30,000 per individual, for three consecutive years from the date treatment commences. At the conclusion of the third year, coverage for applied behavior analysis required by this subsection shall be in an amount not to exceed $2,000 per month, until the individual reaches eighteen years of age, as long as the treatment is medically necessary and in accordance with a treatment plan developed by a certified behavior analyst pursuant to a comprehensive evaluation or reevaluation of the individual. This section shall not be construed as limiting, replacing or affecting any obligation to provide services to an individual under the Individuals with Disabilities Education Act, 20 U.S.C. 1400 et seq., as amended from time to time or other publicly funded programs. Nothing in this section shall be construed as requiring reimbursement for services provided by public school personnel.(c) The certified behavior analyst shall file progress reports with the agency semiannually. In order for treatment to continue, the agency must receive objective evidence or a clinically supportable statement of expectation that:(1) The individual's condition is improving in response to treatment; and(2) A maximum improvement is yet to be attained; and(3) There is an expectation that the anticipated improvement is attainable in a reasonable and generally predictable period of time.(d) For purposes of this section, the term:(1) "Applied Behavior Analysis" means the design, implementation, and evaluation of environmental modifications using behavioral stimuli and consequences, to produce socially significant improvement in human behavior, including the use of direct observation, measurement, and functional analysis of the relationship between environment and behavior.(2) "Autism spectrum disorder" means any pervasive developmental disorder, including autistic disorder, Asperger's Syndrome, Rett syndrome, childhood disintegrative disorder, or Pervasive Development Disorder as defined in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders of the American Psychiatric Association.(3) "Certified behavior analyst" means an individual who is certified by the Behavior Analyst Certification Board or certified by a similar nationally recognized organization.(4) "Objective evidence" means standardized patient assessment instruments, outcome measurements tools or measurable assessments of functional outcome. Use of objective measures at the beginning of treatment, during and after treatment is recommended to quantify progress and support justifications for continued treatment. The tools are not required, but their use will enhance the justification for continued treatment.(e) The provisions of this section do not apply to small employers. For purposes of this section a small employer means any person, firm, corporation, partnership or association actively engaged in business in the State of West Virginia who, during the preceding calendar year, employed an average of no more than twenty-five eligible employees.(f) To the extent that the application of this section for autism spectrum disorder causes an increase of at least one percent of actual total costs of coverage for the plan year the health maintenance organization may apply additional cost containment measures.(g) To the extent that the provisions of this section require benefits that exceed the essential health benefits specified under section 1302(b) of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, as amended, the specific benefits that exceed the specified essential health benefits shall not be required of a health benefit plan when the plan is offered by a health maintenance organization in this state.
Notwithstanding any provision of any policy, provision, contract, plan or agreement applicable to this article, a health insurance policy subject to this article, issued or renewed on or after January 1, 2014, which provides health insurance coverage for maternity services, shall provide coverage for maternity services for all persons participating in, or receiving coverage under the policy. To the extent that the provisions of this section require benefits that exceed the essential health benefits specified under section 1302(b) of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, as amended, the specific benefits that exceed the specified essential health benefits are not required of a health benefit plan when the plan is offered by a health care insurer in this state. Coverage required under this section may not be subject to exclusions or limitations which are not applied to other maternity coverage under the policy.
(a) Notwithstanding any provision of any policy, contract, plan or agreement to which this article applies, any policy, contract, plan or agreement issued by a health maintenance organization pursuant to this article that covers anti-cancer medications that are injected or intravenously administered by a health care provider and patient administered anti-cancer medications, including, but not limited to, those medications orally administered or self-injected, may not require a less favorable basis for a copayment, deductible or coinsurance amount for patient administered anti-cancer medications than it requires for injected or intravenously administered anti-cancer medications, regardless of the formulation or benefit category determination by the policy or plan.(b) A policy, contract, plan or agreement or a health maintenance organization may not comply with subsection (a) of this section by:(1) Increasing the copayment, deductible or coinsurance amount required for injected or intravenously administered anti-cancer medications that are covered under the policy, contract, or plan or agreement; or(2) Reclassifying benefits with respect to anti-cancer medications.(c) As used in this section, "anti-cancer medication" means a FDA approved medication prescribed by a treating physician who determines that the medication is medically necessary to kill or slow the growth of cancerous cells in a manner consistent with nationally accepted standards of practice.(d) This section is effective for policy, contract, plan or agreement beginning on or after January 1, 2016. This section applies to all policies, contracts, plans or agreements subject to this article that are delivered, executed, issued, amended, adjusted or renewed in this state, on and after the effective date of this section.(e) Notwithstanding any other provision in this section to the contrary, in the event that a health maintenance organization subject to this article can demonstrate actuarially to the Insurance Commissioner that its total anticipated costs for any health maintenance contract to comply with this section will exceed or have exceeded two percent of the total costs for the policy, contract, plan or agreement in any experience period, then the health maintenance organization may apply whatever cost containment measures may be necessary to maintain costs below two percent of the total costs for the policy, contract, plan or agreement: Provided, That such cost containment measures implemented are applicable only for the plan year or experience period following approval of the request to implement cost containment measures.(f) For any enrollee that is enrolled in a catastrophic plan as defined in Section 1302(e) of the Affordable Care Act or in a plan that, but for this requirement, would be a High Deductible Health Plan as defined in section 223(c)(2)(A) of the Internal Revenue Code of 1986, and that, in connection with every enrollment, opens and maintains for each enrollee a Health Savings Account as that term is defined in section 223(d) of the Internal Revenue Code of 1986, the cost-sharing limit outlined in subsection (a) of this section shall be applicable only after the minimum annual deductible specified in section 223(c)(2)(A) of the Internal Revenue Code of 1986 is reached. In all other cases, this limit shall be applicable at any point in the benefit design, including before and after any applicable deductible is reached.
A contract, plan or agreement issued by an insurer pursuant to this article for prescription topical eye medication may not deny coverage for the refilling of a prescription for topical eye medication when:(1) The medication is to treat a chronic condition of the eye;(2) The refill is requested by the insured prior to the last day of the prescribed dosage period and after at least 70% of the predicted days of use; and(3) A person licensed under chapter thirty and authorized to prescribe topical eye medication indicates on the original prescription that refills are permitted and that the early refills requested by the insured do not exceed the total number of refills prescribed.
(a) As used in this section:(1) Abuse-deterrent opioid analgesic drug product means a brand name or generic opioid analgesic drug product approved by the United States Food and Drug Administration with abuse-deterrent labeling that indicates its abuse-deterrent properties are expected to deter or reduce its abuse; (2) Cost-sharing means any coverage limit, copayment, coinsurance, deductible or other out-of-pocket expense requirements;(3) Opioid analgesic drug product means a drug product that contains an opioid agonist and is indicated by the United States Food and Drug Administration for the treatment of pain, regardless of whether the drug product:(A) Is in immediate release or extended release form; or(B) Contains other drug substances.(b) Notwithstanding any provision of any policy, provision, contract, plan or agreement to which this article applies, on or after January 1, 2017:(1) Coverage shall be provided for at least one abuse-deterrent opioid analgesic drug product for each active opioid analgesic ingredient;(2) Cost-sharing for brand name abuse-deterrent opioid analgesic drug products shall not exceed the lowest tier for brand name prescription drugs on the entitys formulary for prescription drug coverage;(3) Cost-sharing for generic abuse-deterrent opioid analgesic drug products covered pursuant to this section shall not exceed the lowest cost-sharing level applied to generic prescription drugs covered under the applicable health plan or policy; and(4) An entity subject to this section may not require an insured or enrollee to first use an opioid analgesic drug product without abuse-deterrent labeling before providing coverage for an abuse-deterrent opioid analgesic drug product covered on the entity's formulary for prescription drug coverage.(c) Notwithstanding subdivision (3), subsection (b) of this section, an entity subject to this section may undertake utilization review, including preauthorization, for an abuse-deterrent opioid analgesic drug product covered by the entity, if the same utilization review requirements are applied to nonabuse-deterrent opioid analgesic drug products and with the same type of drug release, immediate or extended.(d) For purposes of subsection (b) of this section, the lowest tier and the lowest cost-sharing level shall not mean the cost-sharing tier applicable to preventive care services which are required to be provided at no cost-sharing under the Patient Protection and Affordable Care Act.
(a) As used in this article:(1) Health benefit plan means a policy, contract, certificate or agreement entered into, offered or issued by a health plan issuer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services.(2) Health plan issuer or issuer means an entity required to be licensed under this chapter that contracts, or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services under a health benefit plan, including accident and sickness insurers, nonprofit hospital service corporations, medical service corporations and dental service organizations, prepaid limited health service organizations, health maintenance organizations, preferred provider organizations, provider sponsored network, and any pharmacy benefit manager that administers a fully-funded or self-funded plan.(3) Step therapy protocol means a protocol or program that establishes the specific sequence in which prescription drugs for a specified medical condition, and medically appropriate for a particular patient, are covered by a health plan issuer or health benefit plan.(4) Step therapy override determination means a determination as to whether a step therapy protocol should apply in a particular situation, or whether the step therapy protocol should be overridden in favor of immediate coverage of the health care providers selected prescription drug. This determination is based on a review of the patients or prescribers request for an override, along with supporting rationale and documentation.(5) Utilization review organization means an entity that conducts utilization review, other than a health plan issuer performing utilization review for its own health benefit plan.(b) A health benefit plan that includes prescription drug benefits, and which utilizes step therapy protocols, and which is issued for delivery, delivered, renewed, or otherwise contracted in this state on or after January 1, 2018, shall comply with the provisions of this article.(c) Step therapy protocol exceptions include:(1) When coverage of a prescription drug for the treatment of any medical condition is restricted for use by health plan issuer or utilization review organization through the use of a step therapy protocol, the patient and prescribing practitioner shall have access to a clear and convenient process to request a step therapy exception determination. The process shall be made easily accessible on the health plan issuers or utilization review organizations website. The health plan issuer or utilization review organization must provide a prescription drug for treatment of the medical condition at least until the step therapy exception determination is made.(2) A step therapy override determination request shall be expeditiously granted if:(A) The required prescription drug is contraindicated or will likely cause an adverse reaction by or physical or mental harm to the patient.(B) The required prescription drug is expected to be ineffective based on the known relevant physical or mental characteristics of the patient and the known characteristics of the prescription drug regimen.(C) The patient has tried the required prescription drug while under their current or a previous health insurance or health benefit plan, or another prescription drug in the same pharmacologic class or with the same mechanism of action and such prescription drug was discontinued due to a lack of efficacy or effectiveness, diminished effect, or an adverse event.(D) The required prescription drug is not in the best interest of the patient, based upon medical appropriateness.(E) The patient is stable on a prescription drug selected by their health care provider for the medical condition under consideration.(3) Upon the granting of a step therapy override determination, the health plan issuer or utilization review organization shall authorize coverage for the prescription drug prescribed by the patients treating healthcare provider, provided such prescription drug is a covered prescription drug under such policy or contract.(4) This section shall not be construed to prevent:(A) A health plan issuer or utilization review organization from requiring a patient to try an AB-Rated generic equivalent prior to providing coverage for the equivalent branded prescription drug.(B) A health care provider from prescribing a prescription drug that is determined to be medically appropriate.
A health maintenance organization issuing coverage in this state pursuant to the provisions of this article shall make available as benefits to all subscribers and members coverage on an expense-incurred basis and individual and group service or indemnity type contracts issued by a nonprofit corporation shall provide coverage for long-term antibiotic therapy for a patient with Lyme disease when determined to be medically necessary and ordered by a licensed physician after making a thorough evaluation of the patients symptoms, diagnostic test results, or response to treatment.
(a) A policy, plan, or contract that is issued or renewed on or after January 1, 2019, and that is subject to this article shall provide coverage, through the age of 20, for amino acid-based formula for the treatment of severe protein-allergic conditions or impaired absorption of nutrients caused by disorders affecting the absorptive surface, function, length, and motility of the gastrointestinal tract. This includes the following conditions, if diagnosed as related to the disorder by a physician licensed to practice in this state pursuant to either 30-3-1 et seq. or 30-14-1 et seq. of this code: (1) Immunoglobulin E and Nonimmunoglobulin E-medicated allergies to multiple food proteins; (2) Severe food protein-induced enterocolitis syndrome; (3) Eosinophilic disorders as evidenced by the results of a biopsy; and(4) Impaired absorption of nutrients caused by disorders affecting the absorptive surface, function, length, and motility of the gastrointestinal tract (short bowel).(b) The coverage required by 33-25A-8p(a) of this code shall include medical foods for home use for which a physician has issued a prescription and has declared them to be medically necessary, regardless of methodology of delivery.(c) For purposes of this section, medically necessary foods or medical foods shall mean prescription amino acid-based elemental formulas obtained through a pharmacy: Provided, That these foods are specifically designated and manufactured for the treatment of severe allergic conditions or short bowel. (d) The provisions of this section shall not apply to persons with an intolerance for lactose or soy.
(a) As used in this section, the following words have the following meanings:(1) Concurrent review means inpatient care is reviewed as it is provided. Medically qualified reviewers monitor appropriateness of the care, the setting, and patient progress, and, as appropriate, the discharge plans.(2) Covered person means an individual, other than a Medicaid recipient, for whom coverage has been provided pursuant to the provisions of this article. (3) Insurance Commissioner means the person appointed pursuant to the provisions of 33-2-1 of this code. (4) Health benefit plan means the same as that term is defined in 33-24-7p of this code. (5) Health plan issuer means the same as that term is defined in 33-24-7p of this code. (6) Physician or psychiatrist means a person licensed pursuant to the provisions of either 30-3-1 et seq. or 30-14-1 et seq. of this code. (7) Psychologist means a person licensed pursuant to the provisions of 30-21-1 et seq. of this code. (8) Substance use disorder means the same as that term is defined by the American Psychiatric Association in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, and shall include substance use withdrawal. (b) A health benefit plan offered by a health plan issuer that provides hospital or medical expense benefits and is delivered, issued, executed, or renewed in this state, or approved for issuance or renewal by the Insurance Commissioner, on or after January 1, 2019, shall provide benefits for inpatient and outpatient treatment of substance use disorder at in-network facilities at the same level as other medical benefits offered by the health benefit plan offered by a health plan insurer.(c) The services for the treatment of substance use disorder shall be: (1) Prescribed by a physician or psychiatrist licensed pursuant to the provisions of 30-3-1 et seq. or 30-14-1 et seq. of this code or recommended by a psychologist licensed pursuant to the provisions of 30-21-1 et seq. of this code; and(2) Provided by licensed health care professionals or licensed or certified substance use disorder providers in licensed or otherwise state-approved facilities, as required by this code.(d) The inpatient and outpatient treatment of substance use disorders shall be provided when determined medically necessary by the covered persons physician, psychologist, or psychiatrist. The facility shall notify the insurer of both the admission and the initial treatment plan within 48 hours of the admission or initiation of treatment. If there is no in-network facility immediately available for a covered person, a health benefit plan offered by a health plan issuer shall provide necessary exceptions to its network to ensure admission in a treatment facility within 72 hours. If a covered person is being treated at an out-of-network facility and an in-network facility becomes available during the course of the treatment plan, an insurer may transfer the covered person to the in-network facility.(e) Providers of treatment for substance use disorders to persons covered under a covered contract shall not require prepayment of medical expenses during this 180 days in excess of applicable copayment, deductible, or coinsurance as provided in the contract.(f) The benefits for outpatient visits may be subject to concurrent or retrospective review of medical necessity or any other utilization management review.(g)(1) If an insurer determines that continued inpatient care in a facility is no longer medically necessary, the insurer shall, within 72 hours, provide written notice to the covered person and the covered persons physician of its decision and the right to file for an expedited review of an adverse decision. (2) The insurer shall review and make a determination with respect to the internal appeal within 72 hours and communicate that determination to the covered person and the covered persons physician.(3) If the determination is to uphold the denial, the covered person and the covered persons physician have the right to file an expedited external appeal with an independent review organization. An independent utilization review organization shall make a determination within 72 hours.(4) If the insurers determination is upheld and it is determined continued inpatient care is not medically necessary, the insurer remains responsible to provide benefits for the inpatient care through the day following the date the determination is made and the covered person shall only be responsible for any applicable copayment, deductible, and coinsurance for the stay through that date as applicable under the contract. (5) The covered person shall not be discharged or released from the inpatient facility until all internal appeals and independent utilization review organization appeals are exhausted. For any costs incurred after the day following the date of determination until the day of discharge, the covered person is only responsible for any applicable cost-sharing, and any additional charges shall be paid by the facility or provider. (h) The Insurance Commissioner shall propose rules in accordance with the provisions of 29A-3-1 et seq. of this code to develop a procedure for an expedited review of an adverse decision as set forth in this section. The Legislature finds that for the purposes of 29A-3-15 of this code, an emergency exists requiring the promulgation of an emergency rule to respond to the growing need in our state for substance abuse treatment.(i)(1) The benefits for the first five days of intensive outpatient or partial hospitalization services shall be provided without any retrospective review of medical necessity, and medical necessity shall be determined by the covered persons physician. (2) The benefits beginning day six and every six days thereafter of intensive outpatient or partial hospitalization services is subject to a concurrent review of the medical necessity of the services.(j) Medical necessity review shall use an evidence-based and peer-reviewed clinical review tool. This tool shall be developed by the Insurance Commissioner. The Insurance Commissioner shall propose rules for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code to develop the tool.(k) The benefits for outpatient prescription drugs to treat substance use disorder shall be provided when determined medically necessary by the covered persons physician or psychiatrist without the imposition of any prior authorization or other prospective utilization management requirements. (l) The days per plan year of benefits shall be computed based on inpatient days. One or more unused inpatient days may be exchanged for two outpatient visits. All extended outpatient services such as partial hospitalization and intensive outpatient, shall be considered inpatient days for the purpose of the visit-to-day exchange provided in this subsection.(m) Except as provided in this section, the benefits and cost-sharing shall be provided to the same extent as for any other medical condition covered under the contract.(n) The benefits required by this section are to be provided to all covered persons with a diagnosis of substance use disorder. The presence of additional related or unrelated diagnoses shall not be a basis to reduce or deny the benefits required by this section.(o) The provisions of this section apply to all insurance contracts in which the insurer has reserved the right to change the premium. 
(a) As used in this section, the following words and phrases have the meanings given to them in this section unless the context clearly indicates otherwise:"Episode of Care" means a specific medical problem, condition, or specific illness being managed including tests, procedures and rehabilitation initially requested by health care practitioner, to be performed at the site of service, excluding out of network care: Provided, That any additional testing or procedures related or unrelated to the specific medical problem, condition, or specific illness being managed may require a separate prior authorization. "National Council for Prescription Drug Programs (NCPDP) SCRIPT Standard" means the NCPDP SCRIPT Standard Version 201310 or the most recent standard adopted by the United States Department of Health and Human Services. Subsequently released versions may be used provided that the new version is backward compatible with the current version approved by the United States Department of Health and Human Services;"Prior Authorization" means obtaining advance approval from a health maintenance organization about the coverage of a service or medication.(b)The health maintenance organization is required to develop prior authorization forms and portals and shall accept one prior authorization for an episode of care. These forms are required to be placed in an easily identifiable and accessible place on the health maintenance organizations webpage. The forms shall: (1) Include instructions for the submission of clinical documentation; (2) Provide an electronic notification confirming receipt of the prior authorization request if forms are submitted electronically; (3) Contain a comprehensive list of all procedures, services, drugs, devices, treatment, durable medical equipment and anything else for which the health maintenance organization requires a prior authorization. This list shall also delineate those items which are bundled together as part of the episode of care. The standard for including any matter on this list shall be science-based using a nationally recognized standard. This list is required to be updated at least quarterly to ensure that the list remains current; (4) Inform the patient if the health maintenance organization requires a plan member to use step therapy protocols. This must be conspicuous on the prior authorization form. If the patient has completed step therapy as required by the health maintenance organization and the step therapy has been unsuccessful, this shall be clearly indicated on the form, including information regarding medication or therapies which were attempted and were unsuccessful; and (5) Be prepared by October 1, 2019. (c) The health maintenance organization shall accept electronic prior authorization requests and respond to the request through electronic means by July 1, 2020. The health maintenance organization is required to accept an electronically submitted prior authorization and may not require more than one prior authorization form for an episode of care. If the health maintenance organization is currently accepting electronic prior authorization requests, the health maintenance organization shall have until January 1, 2020, to implement the provisions of this section.(d) If the health care practitioner submits the request for prior authorization electronically, and all of the information as required is provided, the health maintenance organization shall respond to the prior authorization request within seven days from the day on the electronic receipt of the prior authorization request, except that the health maintenance organization shall respond to the prior authorization request within two days if the request is for medical care or other service for a condition where application of the time frame for making routine or non-life-threatening care determinations is either of the following:(1) Could seriously jeopardize the life, health, or safety of the patient or others due to the patients psychological state; or(2) In the opinion of a health care practitioner with knowledge of the patients medical condition, would subject the patient to adverse health consequences without the care or treatment that is the subject of the request. (e) If the information submitted is considered incomplete, the health maintenance organization shall identify all deficiencies and within two business days from the day on the electronic receipt of the prior authorization request return the prior authorization to the health care practitioner. The health care practitioner shall provide the additional information requested within three business days from the day the return request is received by the health care practitioner or the prior authorization is deemed denied and a new request must be submitted.(f) If the health maintenance organization wishes to audit the prior authorization or if the information regarding step therapy is incomplete, the prior authorization may be transferred to the peer review process. (g) A prior authorization approved by a health maintenance organization is carried over to all other managed care organizations, health insurers and the Public Employees Insurance Agency for three months if the services are provided within the state.(h) The health maintenance organization shall use national best practice guidelines to evaluate a prior authorization.(i) If a prior authorization is rejected by the health maintenance organization and the health care practitioner who submitted the prior authorization requests an appeal by peer review of the decision to reject, the peer review shall be with a health care practitioner similar in specialty, education, and background. The health maintenance organizations medical director has the ultimate decision regarding the appeal determination and the health care practitioner has the option to consult with the medical director after the peer-to-peer consultation. Time frames regarding this appeal process shall take no longer than 30 days. (j) (1) Any prescription written for an inpatient at the time of discharge requiring a prior authorization shall not be subject to prior authorization requirements and shall be immediately approved for not less than three days: Provided, That the cost of the medication does not exceed $5,000 per day and the physician shall note on the prescription or notify the pharmacy that the prescription is being provided at discharge. After the three-day time frame, a prior authorization must be obtained. (2) If the approval of a prior authorization requires a medication substitution, the substituted medication shall be as required under 30-5-1 et seq. (k) In the event a health care practitioner has performed an average of 30 procedures per year and in a six-month time period has received a 100 percent prior approval rating, the health maintenance organization shall not require the health care practitioner to submit a prior authorization for that procedure for the next six months. At the end of the six-month time frame, the exemption shall be reviewed prior to renewal. This exemption is subject to internal auditing, at any time, by the health maintenance organization and may be rescinded if the health maintenance organization determines the health care practitioner is not performing the procedure in conformity with the health maintenance organizations benefit plan based upon the results of the health maintenance organizations internal audit. (l) The health maintenance organization must accept and respond to electronically submitted prior authorization requests for pharmacy benefits by July 1, 2020, or if the health maintenance organization are currently accepting electronic prior authorization requests, it shall have until January 1, 2020, to implement this provision. The health maintenance organizations shall accept and respond to prior authorizations through a secure electronic transmission using the NCPDP SCRIPT Standard ePA transactions.(m) This section is effective for policy, contract, plans, or agreements beginning on or after January 1, 2020. This section applies to all policies, contracts, plans, or agreements, subject to this article, that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section.(n) The timeframes in this section are not applicable to prior authorization requests submitted through telephone, mail, or fax.
(a) As used in this section:"Cost sharing" means any copayment, coinsurance, or deductible required by or on behalf of an insured in order to receive a specific health care item or service covered by a health plan."Drug" means the same as the term is defined in 30-5-4(19)."Person" means a natural person, corporation, mutual company, unincorporated association, partnership, joint venture, limited liability company, trust, estate, foundation, nonprofit corporation, unincorporated organization, or government or governmental subdivision or agency."Pharmacy benefits manager" means the same as that term is defined in 33-51-3 of this code.(b) When calculating an insureds contribution to any applicable cost sharing requirement, including, but not limited to, the annual limitation on cost sharing subject to 42 U.S.C. 18022(c) and 42 U.S.C. 300gg-6(b):(1) An insurer shall include any cost sharing amounts paid by the insured or on behalf of the insured by another person; and(2) A pharmacy benefits manger shall include any cost sharing amounts paid by the insured or on behalf of the insured by another person.(c) The commissioner is authorized to propose rules for legislative approval in accordance with 29A-3-1 et seq. of this code, to implement the provisions of this section.(d) This section is effective for policy, contract, plans, or agreements beginning on or after January 1, 2020. This section applies to all policies, contracts, plans, or agreements, subject to this article that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section. 
(a) As used in this section, the following words and phrases have the meaning given them in this section unless the context clearly indicates otherwise:To the extent that coverage is provided "behavioral health, mental health, and substance use disorder" means a condition or disorder, regardless of etiology, that may be the result of a combination of genetic and environmental factors and that falls under any of the diagnostic categories listed in the mental disorders section of the most recent version of:(1) The International Statistical Classification of Diseases and Related Health Problems;(2) The Diagnostic and Statistical Manual of Mental Disorders; or(3) The Diagnostic Classification of Mental Health and Developmental Disorders of Infancy and Early Childhood; and Includes autism spectrum disorder: Provided, That any service, even if it is related to the behavioral health, mental health, or substance use disorder diagnosis if medical in nature, shall be reviewed as a medical claim and undergo all utilization review as applicable.(b) The carrier is required to provide coverage for the prevention of, screening for, and treatment of behavioral health, mental health, and substance use disorders that is no less extensive than the coverage provided for any physical illness and that complies with the requirements of this section. This screening shall include, but is not limited to, unhealthy alcohol use for adults, substance use for adults and adolescents, and depression screening for adolescents and adults. (c) The carrier shall:(1) Include coverage and reimbursement for behavioral health screenings using a validated screening tool for behavioral health, which coverage and reimbursement is no less extensive than the coverage and reimbursement for the annual physical examination; (2) Comply with the nonquantitative treatment limitation requirements specified in 45 CFR 146.136(c)(4), or any successor regulation, regarding any limitations that are not expressed numerically but otherwise limit the scope or duration of benefits for treatment, which in addition to the limitations and examples listed in 45 CFR 146.136(c)(4)(ii) and (c)(4)(iii), or any successor regulation and 78 FR 68246, include the methods by which the carrier establishes and maintains its provider network and responds to deficiencies in the ability of its networks to provide timely access to care;(3) Comply with the financial requirements and quantitative treatment limitations specified in 45 CFR 146.136(c)(2) and (c)(3), or any successor regulation;(4) Not apply any nonquantitative treatment limitations to benefits for behavioral health, mental health, and substance use disorders that are not applied to medical and surgical benefits within the same classification of benefits;(5) Establish procedures to authorize treatment with a nonparticipating provider if a covered service is not available within established time and distance standards and within a reasonable period after service is requested, and with the same coinsurance, deductible, or copayment requirements as would apply if the service were provided at a participating provider, and at no greater cost to the covered person than if the services were obtained at, or from a participating provider;(6) If a covered person obtains a covered service from a nonparticipating provider because the covered service is not available within the established time and distance standards, reimburse treatment or services for behavioral health, mental health, or substance use disorders required to be covered pursuant to this subsection that are provided by a nonparticipating provider using the same methodology that the carrier uses to reimburse covered medical services provided by nonparticipating providers and, upon request, provide evidence of the methodology to the person or provider. (d) If the carrier offers a plan that does not cover services provided by an out-of-network provider, it may provide the benefits required in subsection (c) of this section if the services are rendered by a provider who is designated by and affiliated with the carrier only if the same requirements apply for services for a physical illness.(e) In the event of a concurrent review for a claim for coverage of services for the prevention of, screening for, and treatment of behavioral health, mental health, and substance use disorders, the service continues to be a covered service until the carrier notifies the covered person of the determination of the claim. (f) Unless denied for nonpayment of premium, a denial of reimbursement for services for the prevention of, screening for, or treatment of behavioral health, mental health, and substance use disorders by the carrier must include the following language:(1) A statement explaining that covered persons are protected under this section, which provides that limitations placed on the access to mental health and substance use disorder benefits may be no greater than any limitations placed on access to medical and surgical benefits;(2) A statement providing information about the Division of Consumer Services of the Office of the West Virginia Insurance Commissioner if the covered person believes his or her rights under this section have been violated; and(3) A statement specifying that covered persons are entitled, upon request to the carrier, to a copy of the medical necessity criteria for any behavioral health, mental health, and substance use disorder benefit.(g) On or after June 1, 2021, and annually thereafter, the Insurance Commissioner shall submit a written report to the Joint Committee on Government and Finance that contains the following information regarding plans offered pursuant to this section:(1) Data that demonstrates parity compliance for adverse determination regarding claims for behavioral health, mental health, or substance use disorder services and includes the total number of adverse determinations for such claims;(2) A description of the process used to develop and select:(A) The medical necessity criteria used in determining benefits for behavioral health, mental health, and substance use disorders; and(B) The medical necessity criteria used in determining medical and surgical benefits;(3) Identification of all nonquantitative treatment limitations that are applied to benefits for behavioral health, mental health, and substance use disorders and to medical and surgical benefits within each classification of benefits; and(4)The results of analyses demonstrating that, for medical necessity criteria described in subdivision (2) of this subsection and for each nonquantitative treatment limitation identified in subdivision (3) of this subsection, as written and in operation, the processes, strategies, evidentiary standards, or other factors used in applying the medical necessity criteria and each nonquantitative treatment limitation to benefits for behavioral health, mental health, and substance use disorders within each classification of benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the medical necessity criteria and each nonquantitative treatment limitation to medical and surgical benefits within the corresponding classification of benefits.(5) The Insurance Commissioners report of the analyses regarding nonquantitative treatment limitations shall include at a minimum: (A) Identifying factors used to determine whether a nonquantitative treatment limitation will apply to a benefit, including factors that were considered but rejected;(B) Identifying and define the specific evidentiary standards used to define the factors and any other evidence relied on in designing each nonquantitative treatment limitation;(C) Provide the comparative analyses, including the results of the analyses, performed to determine that the processes and strategies used to design each nonquantitative treatment limitation, as written, and the written processes and strategies used to apply each nonquantitative treatment limitation for benefits for behavioral health, mental health, and substance use disorders are comparable to, and are applied no more stringently than, the processes and strategies used to design and apply each nonquantitative treatment limitation, as written, and the written processes and strategies used to apply each nonquantitative treatment limitation for medical and surgical benefits;(D) Provide the comparative analyses, including the results of the analyses, performed to determine that the processes and strategies used to apply each nonquantitative treatment limitation, in operation, for benefits for behavioral health, mental health, and substance use disorders are comparable to, and are applied no more stringently than, the processes and strategies used to apply each nonquantitative treatment limitation, in operation, for medical and surgical benefits; and(E) Disclose the specific findings and conclusions reached by the Insurance Commissioner that the results of the analyses indicate that each health benefit plan offered pursuant to this section complies with subsection (c) of this section.(h) The Insurance Commissioner shall adopt legislative rules to comply with the provisions of this section. These rules shall specify the information and analyses that carriers shall provide to the Insurance Commissioner necessary for the commissioner to complete the report described in subsection (g) of this section and shall delineate the format in which carriers shall submit such information and analyses. These rules or amendments to rules shall be proposed pursuant to the provisions of 29A-3-1 et seq. of this code within the applicable time limit to be considered by the Legislature during its regular session in the year 2021. The rules shall require that each carrier first submit the report to the Insurance Commissioner no earlier than one year after the rules are promulgated, and any year thereafter during which the carrier makes significant changes to how it designs and applies medical management protocols.(i) This section is effective for policies, contracts, plans or agreements, beginning on or after January 1, 2021. This section applies to all policies, contracts, plans, or agreements, subject to this article that are delivered, executed, issued, amended, adjusted, or renewed in this state on or after the effective date of this section.(j) The Insurance Commissioner shall enforce this section and may conduct a financial examination of the carrier to determine if it is in compliance with this section, including, but not limited to, a review of policies and procedures and a sample of mental health claims to determine these claims are treated in parity with medical and surgical benefits. The results of this examination shall be reported to the Legislature. If the Insurance Commissioner determines that the carrier is not in compliance with this section, the Insurance Commissioner may fine the carrier in conformity with the fines established in the legislative rule.
The provisions of the Health Benefit Plan Network Access and Adequacy Act codified at 33-55-1 et seq. of this code is made applicable to the provisions of this article.
The provision requiring coverage for 12-month refill for contraceptive drugs codified at 33-58-1 of this code is made applicable to the provisions of this article.
Every health maintenance organization shall comply with and is subject to the provisions of section fourteen, article four of this chapter relating to filing of financial statements with the commissioner and the national association of Insurance Commissioners. The annual financial statement required by that section shall include, but not be limited to, the following:(a) A statutory financial statement of the organization, including its balance sheet and receipts and disbursements for the preceding year certified by an independent certified public accountant, reflecting at least: (i) All prepayment and other payments received for health care services rendered; (ii) expenditures to all providers, by classes or groups of providers, and insurance companies or nonprofit health service plan corporations engaged to fulfill obligations arising out of the health maintenance contract; (iii) expenditures for capital improvements, or additions thereto, including, but not limited to, construction, renovation or purchase of facilities and capital equipment; and (iv) the organization's fidelity bond;(b) The number of new enrollees enrolled during the year, the number of enrollees as of the end of the year and the number of enrollees terminated during the year on a form prescribed by the commissioner;(c) A summary of information compiled pursuant to subdivision (c), subsection (1), section four of this article in such form as may be required by the Department of Health and Human Resources or a nationally recognized accreditation and review organization or as the commissioner may by rule require;(d) A report of the names and residence addresses of all persons set forth in subdivision (c), subsection (4), section three of this article who were associated with the health maintenance organization during the preceding year, and the amount of wages, expense reimbursements or other payments to those individuals for services to the health maintenance organization, including a full disclosure of all financial arrangements during the preceding year required to be disclosed pursuant to subdivision (c), subsection (4), section three of this article; and(e) Any other information relating to the performance of the health maintenance organization as is reasonably necessary to enable the commissioner to carry out his or her duties under this article.
The following words, as used in this article, have the meanings set forth below, unless the context clearly requires otherwise:(a) "Applicant aide" means an individual licensed by the state to care for the physical or emotional needs of children or an employee authorized by his employer where the employer is an institution licensed by the state to care for the physical or emotional needs of children and who has received an applicant aide certificate. Individuals include, but are not limited to, licensed teachers, child care workers, social workers, guidance counselors, psychologists, nurses and physicians. Licensed institutions include, but are not limited to, hospitals, schools, local human services offices, child care centers and medical clinics;(b) "Approved providers" means any accident and health insurer licensed by the state or any health services organization licensed by the state or any other entity approved by the Insurance Commissioner for provision of health care coverage for children;(c) "Corporation" means a nonprofit corporation organized under the laws of West Virginia which has undertaken to implement a federal insurance subsidy for children's health insurance created by this article; and(d) "Insurance subsidy fund" or "fund" means a fund or account established by the corporation for the deposit of moneys to implement the insurance subsidy program.
Any corporation organized for the purposes of this article is exempt from all franchise, corporate, business and taxes of every nature levied by the state.
No person acting on behalf of the corporation executing any contracts, commitments or agreements issued pursuant to this article may be liable personally upon the contracts, commitments or agreements or be subject to any personal liability or accountability by reason thereof.
The purpose of this article is to:(a) Assist, promote, encourage, develop and advance the knowledge of lower to moderate income families with dependent children of the earned income credit available for money spent on health insurance;(b) Cooperate and act in conjunction with other organizations, public and private, the objects of which are the promotion and education of lower to moderate income families with dependent children of the earned income credit available for money spent on health insurance;(c) Establish a system of qualified applicant aides who shall be trained by the department of health and human services and, who, for a modest dollar incentive, will on a volunteer basis make knowledge of this program available to the targeted families; and(d) Establish a mechanism by which to provide counseling and assistance to families and aid them in filing for the insurance voucher, selecting an appropriate health insurance policy and completing the required federal income tax return.
In order for a nonprofit corporation to participate in the program provided pursuant to this article, the nonprofit corporation must be organized and incorporated as a nonprofit corporation pursuant to the provisions of article one, section thirty-one of this code. The nonprofit corporation, in addition to all other lawful powers, shall have the power to provide counseling services to West Virginia families on the purchase of federally subsidized health insurance and to accept gifts, grants, or loans from and enter into contracts or other transactions with any federal or state agency, any municipality, any private organization or any other source as may be authorized by law.
A guardian or applicant aide may file with a nonprofit corporation, organized for the purposes of this article, a sworn voucher application signed by the guardian asserting:(a) That the guardian meets the requirements for the federal earned income credit for child health insurance for the current or next calendar year;(b) The good-faith estimate value of the health insurance earned income credit for the year in question;(c) That the guardian will use the voucher to purchase health insurance covering dependent children;(d) That the guardian will prepare a federal tax return for the year in question; and(e) That the guardian agrees to assign the value of any federal tax refund, in the amount of the voucher issued by the corporation to the corporation when filing the guardian's federal tax return.
Upon presentation of a valid voucher application, the corporation shall issue from its insurance subsidy fund a voucher to the guardian or applicant aide, made out in behalf of the guardian and redeemable for the face amount by any approved provider. The corporation shall retain in the fund all moneys received from refundable tax credits of guardians. These moneys shall be used to extend additional vouchers. The corporation may solicit and receive donations of moneys for the fund. No corporation may require that vouchers be presented to a specific approved provider in order to be eligible to participate in the program.
(a) The Department of Health and Human Resources shall design and provide the vouchers to any corporation wishing to participate in the program at a cost not to exceed the actual cost of the voucher.(b) No later than ninety days after a request is made by a corporation wishing to participate in the insurance subsidy program, the Department of Health and Human Resources in cooperation with the corporations participating in the program, shall begin to conduct regional training and information sessions in all regions of the state. The purpose of these sessions is to train guardians and potential applicant aides in the necessary rules to qualify under the federal guidelines for earned income credits and the requirements of this section. These sessions shall be open to the public and potential applicant aides, at a charge not to exceed $10 which shall be used solely to defray the costs of conducting the training sessions. Sessions shall be available in at least the first and fourth quarter of the calendar year in all regions of the state after a request has been made by a corporation to commence such training sessions. The Department of Health and Human Resources may waive the fee for guardians.(c) Potential applicant aides shall be tested by the Department of Health and Human Resources. Potential applicant aides who successfully complete the test shall be awarded a certificate entitling them to work as an applicant aide. The Department of Health and Human Resources shall propose legislative rules for promulgation in accordance with the provisions of article three, chapter twenty-nine-a of this code.
 (a) Applicant aides may receive a commission not to exceed five percent of the voucher, from an approved provider. No commission may be paid until the fund is fully reimbursed for the voucher. Applicant aides may not solicit or accept any compensation from guardians or potential guardians. (b) An applicant aide shall be prohibited from entering into any agreement with an approved provider, whether such agreement is for profit or not for profit, to recommend a specific approved provider, to the exclusion of all other approved providers, in the course of counseling guardians or applicants.(c) Applicant aides who engage in deceptive practices or who aid or encourage deception or fraud may, upon hearing by the corporation, have their certificate as an applicant aide revoked for a period of not less than five years. This action shall be in addition to any other penalties available at law.(d) The corporation may pursue triple damages in civil court for any losses to the fund attributable to actions or the conduct of applicant aides or guardians.
(a) Assisting individuals in the preparation of applications to the fund and selection of the providers does not constitute the sale of insurance and shall not be subject to regulation by the Insurance Commissioner.(b) Insurance coverage bought by the guardian through the use of a voucher provided pursuant to the provisions of this article will be exempt from state law and regulations requiring certain mandatory state insurance coverages or benefits.(c) Insurance coverage bought by guardians through the use of a voucher provided pursuant to the provisions of this article shall not be subject to state premium taxes.
On January 1, of each year the corporation shall report on its operations for the preceding fiscal year to the Governor and the State Legislature. The report shall include a summary of the activities of the corporation and a complete operating and financial statement. A corporation shall cause an annual audit to be made by a resident certified public accountant or a registered public accountant of its books, accounts and records, with respect to its receipts, disbursements and all other matters related to the operation of the insurance subsidy program. The person performing such audit shall also furnish copies of the audit report to the Joint Committee on Government and Finance and the Legislative Auditor.
This article may be referred to as the "Patients' Bill of Rights." It is the intent of the Legislature that enrollees covered by health care plans receive quality, cost-effective health care designed to maintain and improve their health. The purpose of this article is to ensure that health plan enrollees:(a) Have improved access to information regarding their health plans;(b) Have sufficient and timely access to appropriate health care services, and choice among health care providers;(c) Are assured that health care decisions are made by appropriate medical personnel;(d) Have access to a quick and impartial process for appealing plan decisions;(e) Are protected from unnecessary invasions of health care privacy; and(f) Are assured that personal health care information will be used only as necessary to obtain and pay for health care or to improve the quality of care.
To the extent permitted by law, if any provision of this article conflict with other state or federal law, then the provision must be construed in a manner most favorable to the enrollee.
For purposes of this article:(a) "Commissioner" means the commissioner of insurance.(b) "Credentials" means medical training, education, specialties, and board certifications of the provider.(c) "Enrollee" is a natural person who has entered into an agreement with a health maintenance organization or prepaid limited health service organization for the provision of managed health care.(d) "External review" means a process, independent of all affected parties, to determine if a health care service is medically necessary, or experimental.(e) "Health care plan" means a plan that establishes, operates, or maintains a network of health care providers that have entered into agreements with the plan to provide health care services to enrollees to whom the plan has the ultimate obligation to arrange for the provision of or payment for services through organizational arrangements for ongoing quality assurance, utilization review programs, or dispute resolution.For purposes of this definition, "health care plan" shall not include indemnity health insurance policies including those using a contracted provider network;(f) "Managed care plan" or "plan" means any health maintenance organization or prepaid limited health service organization: Provided, That this article only applies to prepaid limited health service organizations to the extent of coverage and services these organizations offer;(g) "Provider" means any physician, hospital or other person or organization which is licensed or otherwise authorized in this state to provide health care services or supplies.
All managed care plans must on or after July 1, 2002, provide to enrollees a notice of certain enrollee rights. The notice shall be provided to enrollees on a yearly basis on a form prescribed by the commissioner and shall include, but not be limited to:(a) The enrollee's rights to a description of his or her rights and responsibilities, plan benefits, benefit limitations, premiums, and individual cost-sharing requirements;(b) The enrollee's right to a description of the plan's grievance procedure and the right to pursue grievance and hearing procedures without reprisal from the managed care plan;(c) A description of the method in which an enrollee can obtain a listing of the plan's provider network, including the names and credentials of all participating providers, and the method in which an enrollee may choose providers within the plan;(d) The enrollee's right to privacy and confidentiality;(e) The right to full disclosure from the enrollee's health care provider of any information relating to his or her medical condition or treatment plan, and the ability to examine and offer corrections to the enrollee's medical records;(f) The enrollee's right to be informed of plan policies and any charges for which the enrollee will be responsible;(g) The right of enrollees to have coverage denials involving medical necessity or experimental treatment reviewed by appropriate medical professionals who are knowledgeable about the recommended or requested health service, as part of an external review as provided in this article;(h) A description of the method in which an enrollee can obtain access to a summary of the plan's accreditation report;(i) The right of an enrollee to have medical advice or options communicated to him or her without any limitations or restrictions being placed upon the provider or primary care physician by the managed care plan;(j) A list of all other legally mandated benefits to which the enrollee is entitled, including coverage for services provided pursuant to sections eight-a, eight-b, eight-c, eight-d, eight-e, article twenty-five-a of this chapter, article twenty-five-e of this chapter, and article forty-two of this chapter, and all rules promulgated pursuant to this chapter regulating managed care plans.(k) Any other areas the commissioner may propose in accordance with section nine of this article.
(a) Each managed care plan must allow an enrollee to choose a primary care provider who is accepting new enrollees from a list of participating providers. Enrollees also must be permitted to change primary care providers after six months with the change becoming effective no later than the beginning of the month next following the enrollee's request for the change.(b) The enrollee's managed care plan may not provide to any provider or any primary care physician an incentive or disincentive plan that includes specific payment made directly or indirectly, in any form, to the provider or primary care physician as an inducement to deny, release, limit, or delay specific, medically necessary and appropriate services provided with respect to a specific enrollee or groups of enrollees with similar medical conditions.(c) A managed care plan shall have a procedure by which an enrollee, upon diagnosis with a life-threatening, degenerative or disabling condition or disease, either of which requires specialized health care over a prolonged period of time, may receive a standing referral to a specialist with expertise in that condition or disease who will be responsible for and capable of providing and coordinating the member's specialty care. When a standing referral is made, the managed care plan shall periodically review the referral for continued necessity.(d) Each managed care plan must provide for appropriate and timely referral of enrollees to a choice of specialists within the plan if specialty care is warranted. The referral shall be first to a specialist located in the geographic area of the plan in which the enrollee resides and if an appropriate specialist is not available in the area, then to a specialist located elsewhere within the plan. If the type of medical specialist who is appropriate for a specific condition is not represented on the specialty panel, enrollees must have access to nonparticipating specialty health care providers in a manner consistent with their managed care contract.(e) Each managed care plan must, upon the request of an enrollee, provide access by the enrollee to a second opinion regarding a diagnosis or treatment plan requiring a serious or complex procedure, from a qualified participating provider.(f) Each managed care plan must, at the option of the enrollee, continue to cover services of a primary care provider whose contract with the plan or whose contract with a subcontractor is being terminated by the plan or subcontractor without cause under the terms of that contract for at least sixty days following notice of termination to the enrollees. The plan's obligation to continue to cover the primary care physician's services is contingent upon the primary care physician's acceptance and compliance with the same terms and conditions as those of the contract the plan or subcontractor is terminating, except for any provision requiring that the managed care plan assign new enrollees to the terminated provider.
Each managed care plan is accountable for and must oversee any activities required by this article that it delegates to any subcontractor. No contract with a subcontractor executed by the managed care plan or the subcontractor may relieve the managed care plan of its obligations to any enrollee for the provision of health care services or of its responsibility for compliance with statutes or rules.
This article may be cited as the "Prepaid Limited Health Service Organization Act."
(a) A prepaid limited health service organization shall file with the commissioner any contracts made with providers of a limited health service, enabling the prepaid limited health service organization to provide limited health services authorized under this article. The commissioner may require the immediate cancellation of a contract or the immediate renegotiation of a contract by the parties if he or she determines that a contract provides for excessive payments, fails to include reasonable incentives for cost control, or otherwise substantially and unreasonably contributes to escalation of the costs of providing a limited health service to enrollees.(b) Whenever a contract exists between a prepaid limited health service organization and a provider and the organization fails to meet its obligations to pay fees for services already rendered to a subscriber, the prepaid limited health service organization is liable for the fee or fees rather than the subscriber; and the contract shall state that liability.(c) No enrollee of a prepaid limited health service organization is liable to any provider of a limited health service for any service covered by the prepaid limited health service organization if at any time during the provision of the service, the provider or its agents are aware the individual to whom the service is provided is an enrollee of a prepaid limited health service organization.(d) If at any time during the provision of a limited health service, a provider or its agents are aware that the subscriber is a prepaid limited health service organization enrollee for the service provided, the provider of services or any agent or representative of the provider may not collect or attempt to collect from a subscriber any money for services covered by a prepaid limited health service organization, and no provider or agent or representative of the provider may maintain any action at law against a subscriber of a prepaid limited health service organization to collect money owed to the provider by a prepaid limited health service organization.(e) Every contract between a prepaid limited health service organization and a provider of a limited health service shall be in writing and shall contain a provision that the subscriber is not liable to the provider for any services covered by the subscriber's contract with the prepaid limited health service organization.(f) The provisions of this section do not apply to the amount of any deductible or copayment not payable by the prepaid limited health service organization pursuant to its contract with its subscriber.(g) When a subscriber receives covered emergency health care services from a noncontracting provider, the prepaid limited health service organization is responsible for payment of the provider's normal charges for the health care services, exclusive of any applicable deductibles or copayments.(h) For all provider contracts executed on or after the effective date of this article and within one hundred eighty days of that date for contracts in existence on that date:(1) The contracts shall provide that the provider provide sixty days advance written notice to the prepaid limited health service organization and the commissioner before canceling the contract with the prepaid limited health service organization for any reason; and(2) The contract shall provide that nonpayment for goods or services rendered by the provider to the prepaid limited health service organization is not a valid reason for avoiding the sixty-day advance notice of cancellation.(i) Upon receipt by the prepaid limited health service organization of a sixty-day cancellation notice, the prepaid limited health service organization may, if requested by the provider, terminate the contract in less than sixty days if the prepaid limited health service organization is not financially impaired or insolvent.
(a)(1) Every enrollee is entitled to evidence of coverage in accordance with this section. The prepaid limited health service organization or its designated representative shall issue the evidence of coverage.(2) No evidence of coverage, or amendment thereto, shall be issued or delivered to any person in this state until a copy of the form of the evidence of coverage, or amendment thereto, has been filed with and approved by the commissioner.(3) An evidence of coverage shall contain a clear, concise and complete statement of:(A) The limited health service and the insurance or other benefits, if any, to which the enrollee is entitled;(B) Any exclusions or limitations on the service, kind of service, benefits, or kind of benefits, to be provided, including any copayments;(C) Where and in what manner information is available as to how a service may be obtained: Provided, That with respect to any limited health service for which inpatient services, hospital surgical services or emergency services are provided, the evidence of coverage shall contain a definition of inpatient services, hospital surgical services or emergency services, respectively; describe procedures for determination by the prepaid limited health service organization of whether the services qualify for reimbursement as inpatient services, hospital surgical services or emergency services; and contain specific examples of situations in which the services would be made available;(D) The total amount of payment and copayment, if any, for the limited health service and the indemnity or service benefits, if any, which the enrollee is obligated to pay with respect to individual contracts, or an indication whether the plan is contributory or noncontributory with respect to group certificates;(E) A description of the prepaid limited health service organization's method for resolving enrollee grievances; and(F) The following exact statement in bold print: "Each subscriber or enrollee, by acceptance of the benefits described in this evidence of coverage, consents to the examination of his or her medical records for purposes of utilization review, quality assurance and peer review by the prepaid limited health service organization or its designee."(4) Any subsequent approved change in an evidence of coverage shall be issued to each enrollee.(5) A copy of the form of the evidence of coverage to be used in this state, and any amendment thereto, is subject to the filing and approval requirements of subdivision (2), subsection (a) of this section, unless the commissioner promulgates a rule dispensing with this requirement or unless it is subject to the jurisdiction of the commissioner under the laws governing health insurance or hospital, medical, dental or health service corporations, in which event the filing and approval provisions of those laws apply. To the extent, however, that those provisions do not apply the requirements in subdivision (3), subsection (a) of this section, are applicable.(b)(1) Premiums for each limited health service offered may be established in accordance with actuarial principles: Provided, That premiums may not be excessive, inadequate, or unfairly discriminatory. A certification by a qualified independent actuary shall accompany a rate filing for each limited health service offered and shall certify that: (A) The rates are neither inadequate nor excessive nor unfairly discriminatory; (B) That the rates are appropriate for the classes of risks for which they have been computed; (C) Provide an adequate description of the rating methodology showing that the methodology follows consistent and equitable actuarial principles; and (D) The rates being charged are actuarially adequate to the end of the period for which rates have been guaranteed. (2) In determining whether the charges are reasonable, the commissioner shall consider whether the prepaid limited health service organization has: (A) Made a vigorous, good faith effort to control rates paid to limited health service providers; (B) Established a premium schedule, including copayments, if any, which encourages enrollees to seek out preventive limited health services; and (C) Made a good faith effort to secure arrangements whereby the limited health service can be obtained by subscribers from local providers to the extent that the providers offer the services.(c) Rates for a particular limited health service are inadequate if the premiums derived from the rating structure, plus investment income, copayments, and revenues from coordination of benefits and subrogation, fees-for-service and reinsurance recoveries are not set at a level at least equal to the anticipated cost of benefits for the limited health service during the period for which the rates are to be effective and the other expenses which would be incurred if other expenses were at the level for the current or nearest future period during which the prepaid limited health service organization is projected to make a profit. For this analysis, total investment income added to premiums, copayments and revenues from coordination of benefits and subrogation, fees-for-service and reinsurance recoveries with respect to all limited health services offered may not exceed three percent of the prepaid limited health service organization's total projected revenues.(d) The commissioner shall within a reasonable period approve any form if the requirements of subsection (a) of this section are met and any schedule of charges if the requirements of subsections (b) and (c) of this section are met. It is unlawful to issue the form or to use the schedule of charges until approved. If the commissioner disapproves of the filing, he or she shall notify the filer promptly. In the notice, the commissioner shall specify the reasons for his or her disapproval and the findings of fact and conclusions which support his or her reasons. A hearing will be granted by the commissioner within forty-five days after a request in writing, by the person filing, has been received by the commission. If the commissioner does not disapprove any form or schedule of charges within sixty days of the filing of the forms or charges, they are approved.(e) The commissioner may require the submission of whatever relevant information in addition to the schedule of charges which he or she considers necessary in determining whether to approve or disapprove a filing made pursuant to this section.(f) An individual enrollee may cancel a contract with a prepaid limited health service organization at any time for any reason: Provided, That a prepaid limited health service organization may require that the enrollee give thirty days advance notice: Provided, however, That an individual enrollee whose premium rate was determined pursuant to a group contract may cancel a contract with a prepaid limited health service organization pursuant to the terms of that contract.
(a) Every prepaid limited health service organization shall comply with and is subject to the provisions of section fourteen, article four of this chapter relating to filing of financial statements with the commissioner and the national association of Insurance Commissioners. The annual financial statement required by that section shall include, but not be limited to, the following: (1) A statutory financial statement of the organization, including its balance sheet and receipts and disbursements for the preceding year certified by an independent certified public accountant, reflecting at least: (A) All prepayment and other payments received for limited health services rendered; (B) Expenditures to all providers, by classes or groups of providers, and insurance companies or nonprofit health service plan corporations engaged to fulfill obligations arising out of the limited health service contract; (C) Expenditures for capital improvements, or additions thereto, including, but not limited to, construction, renovation or purchase of facilities and capital equipment; and (D) The organization's fidelity bond;(2) The number of new enrollees enrolled during the year, the number of enrollees as of the end of the year and the number of enrollees terminated during the year on a form prescribed by the commissioner;(3) A summary of information compiled pursuant to subdivision (3), subsection (a), section five of this article in such form as the commissioner requires;(4) A report of the names and residence addresses of all persons set forth in subdivision (3), subsection (d), section three of this article who were associated with the prepaid limited health service organization during the preceding year, and the amount of wages, expense reimbursements, or other payments to those individuals for services to the prepaid limited health service organization, including a full disclosure of all financial arrangements during the preceding year required to be disclosed pursuant to subdivision (3), subsection (d), section three of this article; and(5) Other information relating to the performance of the prepaid limited health service organization as is reasonably necessary to enable the commissioner to carry out his or her duties under this article.
Every prepaid limited health service organization or its representative shall annually, before April 1, provide to each enrollee a summary of: Its most recent annual financial statement, including a balance sheet and statement of receipts and disbursements; a description of the prepaid limited health service organization, each limited health service offered, its facilities and personnel for each limited health service offered, any material changes therein since the last report, the current evidence of coverage for each limited health service for which the enrollee is enrolled, and a clear and understandable description of the prepaid limited health service organization's method for resolving enrollee complaints: Provided, That with respect to enrollees who have been enrolled through contracts between a prepaid limited health service organization and an employer, the prepaid limited health service organization satisfies the requirement of this section by providing the requisite summary to each enrolled employee: Provided, however, That with respect to Medicaid recipients enrolled under a group contract between a prepaid limited health service organization and the governmental agency responsible for administering the Medicaid program, the prepaid limited health service organization satisfies the requirement of this section by providing the requisite summary to each local office of the governmental agency responsible for administering the Medicaid program for inspection by enrollees of the prepaid limited health service organization.
(a) A prepaid limited health service organization shall establish and maintain a grievance procedure, which has been approved by the commissioner, to provide adequate and reasonable procedures for the expeditious resolution of written grievances initiated by enrollees concerning any matter relating to any provisions of the organization's limited health service contracts, including, but not limited to, claims regarding the scope of coverage for health care services; denials, cancellations or nonrenewals of enrollee coverage; observance of an enrollee's rights as a patient; and the quality of the health care services rendered.(b) A detailed description of the prepaid limited health service organization's subscriber grievance procedure shall be included in all group and individual contracts as well as any certificate or member handbook provided to subscribers. This procedure shall be administered at no cost to the subscriber. A prepaid limited health service organization subscriber grievance procedure shall include the following:(1) Both informal and formal steps shall be available to resolve the grievance. A grievance is not considered formal until a written grievance is executed by the subscriber or completed on forms prescribed and received by the prepaid limited health service organization;(2) Each prepaid limited health service organization shall designate at least one grievance coordinator who is responsible for the implementation of the prepaid limited health service organization's grievance procedure;(3) Phone numbers shall be specified by the prepaid limited health service organization for the subscriber to call to present an informal grievance or to contact the grievance coordinator. Each phone number shall be toll free within the subscriber's geographic area and provide reasonable access to the prepaid limited health service organization without undue delays. There shall be an adequate number of phone lines to handle incoming grievances;(4) An address shall be included for written grievances;(5) Each level of the grievance procedure shall have some person with problem solving authority to participate in each step of the grievance procedure;(6) The prepaid limited health service organization shall process the formal written subscriber grievance through all phases of the grievance procedure in a reasonable length of time not to exceed forty-five days, unless the subscriber and prepaid limited health service organization mutually agree to extend the time frame. If the complaint involves the collection of information outside the service area, the prepaid limited health service organization has thirty additional days to process the subscriber complaint through all phases of the grievance procedure. The time limitations prescribed in this subdivision requiring completion of the grievance process within sixty days are tolled after the prepaid limited health service organization has notified the subscriber, in writing, that additional information is required in order to properly complete review of the grievance. Upon receipt by the prepaid limited health service organization of the additional information requested, the time for completion of the grievance process set forth in this subdivision resumes;(7) The subscriber grievance procedure shall state that the subscriber has the right to appeal to the commissioner within thirty days of receipt by the subscriber of a written ruling by the prepaid limited health service organization which denies, in whole or in part, relief requested by the subscriber in a formal written subscriber grievance. There shall be the additional requirement that subscribers under a group contract between the prepaid limited health service organization and a department or division of the state shall first appeal to the state agency responsible for administering the relevant program, and if either party is not satisfied with the outcome of the appeal, the unsatisfied party may appeal to the commissioner. The prepaid limited health service organization shall provide the subscriber a written notice of the right to appeal upon completion of the full grievance procedure and supply the commissioner with a copy of the final decision letter. A subscriber has thirty days after receipt of the written notice to appeal to the commissioner if the prepaid limited health service organization's ruling denies the relief requested by the subscriber, in whole or in part;(8) The prepaid limited health service organization shall have provider involvement in reviewing grievances related to a provider's services. Provider involvement in the grievance process may not be limited to the subscriber's coordinating provider, but shall include at least one other provider;(9) The prepaid limited health service organization shall offer to meet with the subscriber during the formal grievance process. The location of the meeting shall be at the administrative offices of the prepaid limited health service organization within the service area or at a location within the service area which is convenient to the subscriber;(10) The prepaid limited health service organization may not establish time limits of less than one year from the date of occurrence for the subscriber to file a formal grievance. The date of occurrence is the date upon which a claim, service or other matter sought by the subscriber was denied by the prepaid limited health service organization or date of occurrence of the event which gave rise to the grievance;(11) Each prepaid limited health service organization shall maintain an accurate record of each formal grievance. Each record shall include the following: (A) A complete description of the grievance, the subscriber's name and address, the provider's name and address and the prepaid limited health service organization's name and address; (B) A complete description of the prepaid limited health service organization's factual findings and conclusions after completion of the full formal grievance procedure; (C) A complete description of the prepaid limited health service organization's conclusions pertaining to the grievance as well as the prepaid limited health service organization's final disposition of the grievance; and (D) A statement as to which levels of the grievance procedure the grievance has been processed and how many more levels of the grievance procedure are remaining before the grievance has been processed through the prepaid limited health service organization's entire grievance procedure.(12) Copies of the grievances and the responses thereto shall be available to the commissioner and the public for inspection for three years.(c) Any subscriber grievance in which time is of the essence shall be handled on an expedited basis, so that a reasonable person would believe that a prevailing subscriber would be able to realize the full benefit of a decision in his or her favor.(d) Each prepaid limited health service organization shall submit to the commissioner an annual report in a form prescribed by the commissioner which describes the grievance procedure and contains a compilation and analysis of the grievances filed, their disposition, and their underlying causes.
(a) No prepaid limited health service organization, or representative thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. No advertising may be used until it has been approved by the commissioner. Advertising which has not been disapproved by the commissioner within sixty days of filing is considered approved. For purposes of this article:(1) A statement or item of information is untrue if it does not conform to fact in any respect which is or may be significant to an enrollee of, or person considering enrollment in, a prepaid limited health service organization;(2) A statement or item of information is misleading, whether or not it may be literally untrue, if, in the total context in which the statement is made or the item of information is communicated, the statement or item of information may be reasonably understood by a reasonable person, not possessing special knowledge regarding health care coverage, as indicating any benefit or advantage or the absence of any exclusion, limitation, or disadvantage of possible significance to an enrollee of, or person considering enrollment in, a prepaid limited health service organization, if the benefit or advantage or absence of limitation, exclusion or disadvantage does not in fact exist;(3) An evidence of coverage is deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as language, causes a reasonable person, not possessing special knowledge regarding prepaid limited health service organizations, and evidences of coverage therefor, to expect benefits, services or other advantages which the evidence of coverage does not provide or which the prepaid limited health service organization issuing the evidence of coverage does not regularly make available for enrollees covered under the evidence of coverage; and(4) The commissioner may further define practices which are untrue, misleading or deceptive.(b)(1) No prepaid limited health service organization may cancel or fail to renew the coverage of an enrollee except for: (A) Failure to pay the charge for health care coverage; (B) Termination of the prepaid limited health service organization; (C) Termination of the group plan; (D) Enrollee moving out of the area served; (E) Enrollee moving out of an eligible group; or (F) Other reasons established in rules promulgated by the commissioner. (2) No prepaid limited health service organization may use any technique of rating or grouping to cancel or fail to renew the coverage of an enrollee. An enrollee shall be given thirty days' notice of any cancellation or nonrenewal and the notice shall include the reasons for the cancellation or nonrenewal: Provided, That each enrollee moving out of an eligible group shall be granted the opportunity to enroll in the prepaid limited health service organization on an individual basis. A prepaid limited health service organization may not disenroll an enrollee for nonpayment of copayments unless the enrollee has failed to make payment in at least three instances over any twelve-month period: Provided, however, That the enrollee may not be disenrolled if the disenrollment would constitute abandonment of a patient. Any enrollee wrongfully disenrolled shall be reenrolled.(c)(1) No prepaid limited health service organization may use in its name, contracts, logo or literature any of the words "insurance," "casualty," "surety," "mutual" or any other words which are descriptive of the insurance, casualty or surety business or deceptively similar to the name or description of any insurance or surety corporation doing business in this state: Provided, That when a prepaid limited health service organization has contracted with another insurer for any coverage permitted by this article, it may so state; and(2) No person who has not been issued a certificate of authority under this article may use the words "prepaid limited health service organization" or the initials "PLHSO" in its name, contracts, logo or literature to imply, directly or indirectly, that it is a prepaid limited health service organization or hold itself out to be a prepaid limited health service organization.(d) The providers of a prepaid limited health service organization who provide limited health services and the prepaid limited health service organization do not have recourse against enrollees for amounts above those specified in the evidence of coverage as the periodic prepayment or copayment for health care services.(e) No prepaid limited health service organization may discriminate in enrollment policies or quality of services against any person on the basis of race, sex, age, religion, place of residence, health status or source of payment: Provided, That differences in rates based on valid actuarial distinctions, including distinctions relating to age and sex, are not considered discrimination in enrollment policies.(f)(1) No agent of a prepaid limited health service organization or person selling enrollments in a prepaid limited health service organization may sell an enrollment in a prepaid limited health service organization unless the agent or person first discloses in writing to the prospective purchaser the following information using the following exact terms in bold print: (A) "Services offered," including any exclusions or limitations; (B) "Full cost," including copayments; (C) "Facilities available and hours of services"; (D) "Transportation services"; (E) "Disenrollment rate"; and (F) "Staff," including the names of all full-time staff physicians, consulting specialists and inpatient facilities, if any, associated with the prepaid limited health service organization. (2) In any home solicitation, any three-day cooling-off period applicable to consumer transactions generally applies in the same manner as consumer transactions.(3) The form disclosure statement may not be used in sales until it has been approved by the commissioner. Any person who fails to disclose the requisite information prior to the sale of an enrollment may be held liable in an amount equivalent to one year's subscription rate to the prepaid limited health service organization, plus costs and a reasonable attorney's fee.(g) No contract with an enrollee may prohibit an enrollee from canceling his or her enrollment at any time for any reason except that the contract may require thirty days' notice to the prepaid limited health service organization.(h) No contract with an enrollee may contain any provision purporting to make any portion of the articles of incorporation, charter, bylaws or other organizational document of the prepaid limited health service organization a part of the contract unless the provision is set forth in full in the contract.(i) Any person who in connection with an enrollment violates any subsection of this section may be held liable for an amount equivalent to one year's subscription rate, plus costs and a reasonable attorney's fee.
(a) Prepaid limited health service organizations are subject to the provisions of article twelve of this chapter.(b) With respect to individual or group contracts covering fewer than twenty-five subscribers, after a subscriber signs a prepaid limited health service organization enrollment application and before the prepaid limited health service organization may process the application changing or initiating the subscriber coverage, each prepaid limited health service organization shall verify in writing, in a form prescribed by the commissioner, the intent and desire of the individual subscriber to join the prepaid limited health service organization. The verification shall be conducted by someone outside the prepaid limited health service organization's marketing department and shall show that:(1) The subscriber intends and desires to join the prepaid limited health service organization;(2) If the subscriber is a Medicare or Medicaid recipient, the subscriber understands that by joining the prepaid limited health service organization he or she will be limited to the benefits provided by the prepaid limited health service organization, and Medicare or Medicaid will pay the prepaid limited health service organization for the subscriber coverage;(3) The subscriber understands the applicable restrictions of prepaid limited health service organizations, especially that he or she must use the prepaid limited health service organization providers and secure approval from the prepaid limited health service organization to use health care providers outside the plan; and(4) If the subscriber is a member of a prepaid limited health service organization, the subscriber understands that he or she is transferring to another prepaid limited health service organization.(c) The prepaid limited health service organization may not pay a commission, fee, money or any other form of scheduled compensation to any health insurance agent until the subscriber's application has been processed and the prepaid limited health service organization has confirmed the subscriber's enrollment by written notice in the form prescribed by the commissioner. The confirmation notice shall be accompanied by the evidence of coverage required by section eleven of this article and shall confirm:(1) The subscriber's transfer from his or her existing coverage, such as from Medicare, Medicaid, another prepaid limited health service organization, etc., to the new prepaid limited health service organization; and(2) The date enrollment begins and when benefits will be available.(d) The enrollment process is considered complete seven days after the prepaid limited health service organization mails the confirmation notice and evidence of coverage to the subscriber. Each prepaid limited health service organization is directly responsible for enrollment abuses.(e) The commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code, to regulate marketing of prepaid limited health service organizations by persons compensated directly or indirectly by the prepaid limited health service organization. The rules may prohibit door-to-door solicitations, may prohibit commission sales, and may provide for other proscriptions required to effectuate the purposes of this article.
(a) An insurance company licensed in this state, a hospital, medical, dental or health service corporation authorized to do business in this state or a health maintenance organization holding a certificate of authority under article twenty-five-a of this chapter, after applying for and receiving a certificate of authority as a prepaid limited health service organization, may through a subsidiary or affiliate organize and operate a prepaid limited health service organization under the provisions of this article. Notwithstanding any other law to the contrary, any two or more insurance companies, hospital, medical, dental or health service corporations, health maintenance organizations or subsidiaries or affiliates thereof, may jointly organize and operate a prepaid limited health service organization. The business of insurance is considered to include the providing of health care by a prepaid limited health service organization owned or operated by an insurer or a subsidiary of the insurer.(b) Notwithstanding any provision of insurance, hospital, medical, dental or health service corporation or health maintenance organization laws, an insurer, a hospital, medical, dental or health service corporation or a health maintenance organization may contract with a prepaid limited health service organization to provide insurance or similar protection against the cost of care provided through prepaid limited health service organizations and to provide coverage in the event of the failure of the prepaid limited health service organization to meet its obligations. The enrollees of a prepaid limited health service organization constitute a permissible group under those laws. Under the contracts, the insurer or hospital, medical, dental or health service corporation or health maintenance organization may make benefit payments to prepaid limited health service organizations for limited health services rendered by providers.(c) Notwithstanding any provision of insurance, hospital, medical, dental or health service corporation or health maintenance organization laws, an insurer, a hospital, medical, dental or health service corporation or a health maintenance organization may exclude in any contract or policy issued to a group, any coverage which would duplicate the coverage of a prepaid limited health service organization, whether for services, supplies or reimbursement, to the extent that the coverage or service is provided in accordance with this chapter pursuant to a contract or policy issued to the same group or to a part of that group by a prepaid limited health service organization.
(a) The commissioner may make an examination of the affairs of any prepaid limited health service organization and providers with whom the organization has contracts, agreements or other arrangements as often as he or she considers it necessary for the protection of the interests of the people of this state but not less frequently than once every five years.(b) The commissioner may contract with the Department of Health and Human Resources, any entity which has been accredited by a nationally recognized accrediting organization and has been approved by the commissioner to make examinations concerning the quality of health care services of any prepaid limited health service organization and providers with whom the organization has contracts, agreements or other arrangements, or any such entity contracted with by the Department of Health and Human Resources, as often as it considers necessary for the protection of the interests of the people of this state, but not less frequently than once every five years: Provided, That in making the examination, the Department of Health and Human Resources or the accredited entity shall utilize the services of persons or organizations with demonstrable expertise in assessing quality of health care.(c) Every prepaid limited health service organization and affiliated provider shall submit its books and records to the examinations and in every way facilitate them. For the purpose of examinations, the commissioner and the Department of Health and Human Resources have all powers necessary to conduct the examinations, including, but not limited to, the power to issue subpoenas, the power to administer oaths to and examine the officers and agents of the prepaid limited health service organization and the principals of the providers concerning their business.(d) The prepaid limited health service organization is subject to the provisions of section nine, article two of this chapter in regard to the expense and conduct of examinations.(e) In lieu of the examination, the commissioner may accept the report of an examination made by another state.(f) The expenses of an examination assessing quality of health care under subsection (b) of this section and section nineteen of this article shall be reimbursed pursuant to subdivision (5), subsection (i), section nine, article two of this chapter.
(a) Each prepaid limited health service organization shall have in writing a quality assurance program approved by the commissioner which describes the program's objectives, organization and problem solving activities.(b) The scope of the quality assurance program shall include, at a minimum:(1) Organizational arrangements and responsibilities for quality management and improvement processes;(2) A documented utilization management program;(3) Written policies and procedures for credentialing and recredentialing physicians and other licensed providers who fall under the scope of authority of the prepaid limited health service organization;(4) A written policy that addresses enrollees' rights and responsibilities;(5) The adoption of practice guidelines for the use of preventive health services; and(6) Any other criteria considered necessary by the commissioner.(c) This section becomes effective on May 1, 1999.
(a) "Capitation" means the fixed amount paid by a prepaid limited health service organization to a health care provider under contract with the prepaid limited health service organization in exchange for the rendering of no more than four limited health services.(b) "Commissioner" means the Commissioner of Insurance.(c) "Consumer" means any person who is not a provider of care or an employee, officer, director or stockholder of any provider of care.(d) "Coordinating provider" means the provider of a particular limited health service who is chosen or designated for each subscriber and who will be responsible for coordinating the provision of that particular limited health service to the subscriber, including necessary referrals to other providers of the limited health service: Provided, That if a subscriber is also enrolled in a health maintenance organization, the coordinating provider shall send a written report at least annually to the subscriber's primary care physician, as defined in article twenty-five-a of this chapter, describing the limited health service provided to the subscriber: Provided, however, That the coordinating provider may disclose data or information only as permitted under section twenty-eight of this article.(e) "Copayment" means a specific dollar amount, except as otherwise provided by statute, that the subscriber must pay upon receipt of covered limited health services and which is set at an amount consistent with allowing the subscriber access to covered limited health services.(f) "Employee" means a person in some official employment or position working for a salary or wage continuously for no less than one calendar quarter and who is in such a relation to another person that the latter may control the work of the former and direct the manner in which the work is done.(g) "Employer" means any individual, corporation, partnership, other private association, or state or local government that employs the equivalent of at least two full-time employees during any four consecutive calendar quarters.(h) "Enrollee," "subscriber," or "member" means an individual who has been voluntarily enrolled in a prepaid limited health service organization, including individuals on whose behalf a contractual arrangement has been entered into with a prepaid limited health service organization to receive no more than four limited health services.(i) "Evidence of coverage" means any certificate, agreement or contract issued to an enrollee setting out the coverage and other rights to which the enrollee is entitled.(j) "Group practice" means a professional corporation, partnership, association, or other organization composed solely of health professionals licensed to practice medicine or osteopathy and of such other licensed health professionals, including podiatrists, dentists, optometrists and chiropractors, as are necessary for the provision of limited health services for which the group is responsible:(1) A majority of the members of which are licensed to practice medicine, osteopathy or chiropractic;(2) Who as their principal professional activity engage in the coordinated practice of their profession;(3) Who pool their income for practice as members of the group and distribute it among themselves according to a prearranged salary, drawing account or other plan; and(4) Who share medical and other records and substantial portions of major equipment and professional, technical and administrative staff.(k) "Impaired" means a financial situation in which, based upon the financial information which would be required by this chapter for the preparation of the prepaid limited health service organization's annual statement, the assets of the prepaid limited health service organization are less than the sum of all of its liabilities and required reserves including any minimum capital and surplus required of the prepaid limited health service organization by this chapter so as to maintain its authority to transact the kinds of business or insurance it is authorized to transact.(l) "Individual practice arrangement" means any agreement or arrangement to provide medical services on behalf of a prepaid limited health service organization among or between providers or between a prepaid limited health service organization and individual providers or groups of providers, where the providers are not employees or partners of the prepaid limited health service organization and are not members of or affiliated with a group practice.(m) "Insolvent" or "insolvency" means a financial situation in which, based upon the financial information which would be required by this chapter for the preparation of the prepaid limited health service organization's annual statement, the assets of the prepaid limited health service organization are less than the sum of all of its liabilities and required reserves.(n) "Limited health service" means mental or behavioral health services (including mental illness, mental retardation, developmental disabilities, substance abuse, and chemical dependency services), dental care services, vision care services, podiatric care services, pharmaceutical services (including Medicare prescription drug plans), together with any services or goods included in the furnishing to any individual of a limited health service. "Limited health service" does not include inpatient services, hospital surgical services or emergency services except as such services are provided incident to and directly related to a limited health service set forth in this subsection.(o) "Premium" means a prepaid per capita or prepaid aggregate fixed sum unrelated to the actual or potential utilization of services of any particular person which is charged by the prepaid limited health service organization for health services provided to an enrollee.(p) "Prepaid limited health service organization" means a public or private organization which provides, or otherwise makes available to enrollees, no more than four limited health services and which:(1) Receives premiums for the provision of no more than four limited health services to enrollees on a prepaid per capita or prepaid aggregate fixed sum basis, excluding copayments;(2) Provides no more than four limited health services primarily: (A) Directly through an exclusive panel of physicians or other providers who are employees or partners of the organization;(B) Through arrangements with individual physicians or other providers or one or more groups of physicians or other providers organized on a group practice or individual practice arrangement; or(C) Some combination of paragraphs (A) and (B) of this subdivision;(3) Assures the availability, accessibility and quality, including effective utilization, of the limited health service or services that it provides or makes available through clearly identifiable focal points of legal and administrative responsibility; and(4) Offers services through an organized delivery system, in which a coordinating provider of a limited health service is designated for each subscriber to that limited health service. Prepaid limited health service organization does not include an entity otherwise authorized pursuant to the laws of this state to indemnify for any limited health service, or a provider or entity when providing a limited health service pursuant to a contract with a prepaid limited health service organization, a health maintenance organization, a health insurer or a self-insurance plan.(q) "Provider" means any physician or other person or organization licensed or otherwise authorized in this state to furnish a limited health service.(r) "Qualified independent actuary" means an actuary who is a member of the American academy of actuaries or the society of actuaries and has experience in establishing rates for prepaid limited health service organizations and who has no financial or employment interest in the prepaid limited health service organization.(s) "Quality assurance" means an ongoing program designed to objectively and systematically monitor and evaluate the quality and appropriateness of the enrollee's care, pursue opportunities to improve the enrollee's care, and resolve identified problems at the prevailing professional standard of care.(t) "Service area" means the county or counties approved by the commissioner within which the prepaid limited health service organization may provide or arrange for a limited health service to be available to its subscribers.(u) "Statutory surplus" means the minimum amount of unencumbered surplus which a corporation must maintain pursuant to the requirements of this article.(v) "Surplus" means the amount by which a corporation's assets exceed its liabilities and required reserves based upon the financial information which would be required by this chapter for the preparation of the corporation's annual statement except that assets pledged to secure debts not reflected on the books of the prepaid limited health service organization shall not be included in surplus.(w) "Surplus notes" means debt which has been subordinated to all claims of subscribers and all creditors of the organization.(x) "Uncovered expenses" means the cost of a limited health service covered by a prepaid limited health service organization, for which a subscriber would also be liable in the event of the insolvency of the organization.(y) "Utilization management" means a system for the evaluation of the necessity, appropriateness, and efficiency of the use of health care services, procedures and facilities.
(a) The commissioner may suspend or revoke any certificate of authority issued to a prepaid limited health service organization under this article if he or she finds that any of the following conditions exist:(1) The prepaid limited health service organization is operating significantly in contravention of its basic organizational document, in any material breach of contract with an enrollee, or in a manner contrary to that described in and reasonably inferred from any other information submitted under section three of this article unless amendments to the submissions have been filed with an approval of the commissioner;(2) The prepaid limited health service organization issues an evidence of coverage or uses a schedule of premiums limited health services which do not comply with the requirements of section eleven of this article;(3) The prepaid limited health service organization does not provide or arrange for those limited health services which it has contracted to provide to enrollees;(4) The Department of Health and Human Resources or other accredited entity certifies to the commissioner that: (A) The prepaid limited health service organization is unable to fulfill its obligations to furnish limited health services as required under its contract with enrollees; or (B) The prepaid limited health service organization does not meet the requirements of subsection (a), section five of this article;(5) The prepaid limited health service organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees or is otherwise determined by the commissioner to be in a hazardous financial condition;(6) The prepaid limited health service organization has failed to implement a mechanism affording the enrollees an opportunity to participate in matters of policy and operation under section eight of this article;(7) The prepaid limited health service organization has failed to implement the grievance procedure required by section fourteen of this article in a manner to reasonably resolve valid grievances;(8) The prepaid limited health service organization, or any person on its behalf, has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive or unfair manner;(9) The continued operation of the prepaid limited health service organization would be hazardous to its enrollees;(10) The prepaid limited health service organization has otherwise failed to substantially comply with this article;(11) The prepaid limited health service organization has violated a lawful order of the commissioner; or(12) The prepaid limited health service organization has failed to implement or maintain a quality assurance program considered satisfactory by the commissioner which meets the minimum standards set forth in section nineteen of this article.(b) A certificate of authority may be suspended or revoked only after compliance with the requirements of section twenty-three of this article.(c) When the certificate of authority of a prepaid limited health service organization is suspended, the prepaid limited health service organization may not, during the period of the suspension, enroll any additional enrollees except newborn children or other newly acquired dependents of existing enrollees, and may not engage in any advertising or solicitation.(d) When the certificate of authority of a prepaid limited health service organization is revoked, the organization shall proceed, immediately following the effective date of the order of revocation, to terminate its affairs, and may conduct no further business except as may be essential to the orderly conclusion of the affairs of the organization. It may engage in no further advertising or solicitation. The commissioner may, by written order, permit further operation of the organization as he or she may find to be in the best interests of enrollees, to the end that enrollees will be afforded the greatest practical opportunity to obtain continuing limited health service coverage.
Any rehabilitation, liquidation or conservation of a prepaid limited health service organization is considered to be the rehabilitation, liquidation or conservation of an insurance company, is the exclusive remedy for rehabilitation, liquidation and conservation of a prepaid limited health service organization as provided by this article and shall be conducted under the supervision of the commissioner pursuant to the law governing the rehabilitation, liquidation or conservation of insurance companies. The commissioner may apply for an order directing him or her to rehabilitate, liquidate or conserve a prepaid limited health service organization upon any one or more grounds set out in the rehabilitation statutes or when, in his or her opinion, the continued operation of the prepaid limited health service organization would be hazardous either to the enrollees or to the people of this state.
The commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code:(1) To effectuate the purposes of this article and to prevent circumvention and evasion thereof; and(2) To define the commissioner's authority to consider the operating results of a prepaid limited health service organization's affiliates and subsidiaries in the rate making and solvency determination of that prepaid limited health service organization.
(a) When the commissioner has cause to believe that grounds for the denial of an application for a certificate of authority exist, or that grounds for the suspension or revocation of a certificate of authority exist, he or she shall notify the prepaid limited health service organization in writing specifically stating the grounds for denial, suspension or revocation and fixing a time of at least twenty days thereafter for a hearing on the matter.(b) After the hearing, or upon the failure of the prepaid limited health service organization to appear at the hearing, the commissioner shall take action as is considered advisable on written findings which shall be mailed to the prepaid limited health service organization. The action of the commissioner is subject to review. The court may modify, affirm or reverse the order of the commissioner, in whole or in part.(c) Proceedings under this article are governed by the provisions of section thirteen, article two of this chapter.
Every prepaid limited health service organization subject to this article shall pay to the commissioner the following fees: (1) For filing an application for a certificate of authority or amendment thereto, $200; (2) For each renewal of a certificate of authority, the annual fee as provided in section thirteen, article three of this chapter; (3) For each form filing and for each rate filing, the fee as provided in section thirty-four, article six of this chapter; and (4) For filing each annual report, $25. Fees charged under this section are for the purposes set forth in section thirteen, article three of this chapter.
(a) The commissioner may, in lieu of suspension or revocation of a certificate of authority under section twenty of this article, levy an administrative penalty in an amount not less than $100 nor more than $5,000, if reasonable notice in writing is given of the intent to levy the penalty and the prepaid limited health service organization has a reasonable time within which to remedy the defect in its operations which gave rise to the penalty citation. The commissioner may augment this penalty by an amount equal to the sum that he or she calculates to be the damages suffered by enrollees or other members of the public.(b) Any person who violates any provision of this article is guilty of a misdemeanor and, upon conviction thereof, shall be fined not less than $1,000 nor more than $10,000, or confined in the county jail not more than one year, or both fined and confined.(c)(1) If the commissioner, for any reason, has cause to believe that any violation of this article or rules promulgated pursuant thereto has occurred or is threatened, prior to the levy of a penalty or suspension or revocation of a certificate of authority, the commissioner may give notice to the prepaid limited health service organization and to the representatives, or other persons who appear to be involved in the suspected violation, to arrange a conference with the alleged violators or their authorized representatives for the purpose of attempting to ascertain the facts relating to the suspected violation, and, in the event it appears that any violation has occurred or is threatened, to arrive at an adequate and effective means of correcting or preventing the violation.(2) Proceedings under this subsection are not governed by any formal procedural requirements, and may be conducted in a manner as the commissioner considers appropriate under the circumstances. Enrollees shall be afforded notice by publication of proceedings under this subsection and shall be afforded the opportunity to intervene.(d)(1) The commissioner may issue an order directing a prepaid limited health service organization or a representative of a prepaid limited health service organization to cease and desist from engaging in any act or practice in violation of the provisions of this article or rules promulgated pursuant to this article.(2) Within ten days after service of the order of cease and desist, the respondent may request a hearing on the question of whether acts or practices in violation of this article have occurred. The hearings shall be conducted pursuant to section thirteen, article two of this chapter.(e) In the case of any violation of the provisions of this article or rules promulgated pursuant to this article, if the commissioner elects not to issue a cease and desist order, or in the event of noncompliance with a cease and desist order issued pursuant to subsection (d) of this section, the commissioner may institute a proceeding to obtain injunctive relief, or seek other appropriate relief, in the circuit court of the county of the principal place of business of the prepaid limited health service organization.(f) Any enrollee of or resident of this state may bring an action against the prepaid limited health service organization to enforce any provision, standard or rule enforceable by the commissioner: Provided, That this subsection does not authorize a civil action against the commissioner, his or her employees or any other agency or instrumentality of this state. In the case of any successful action to enforce this article, or accompanying standards or rules, the individual shall be awarded the costs of the action together with a reasonable attorney's fee as determined by the court.
(a) Except as otherwise provided in this article, provisions of the insurance laws, provisions of hospital, medical, dental or health service corporation laws and provisions of health maintenance organization laws are not applicable to any prepaid limited health service organization granted a certificate of authority under this article. The provisions of this article do not apply to an insurer, hospital, medical, dental or health service corporation, or health maintenance organization licensed and regulated pursuant to the insurance laws, hospital, medical, dental or health service corporation laws or health maintenance organization laws of this state except with respect to its prepaid limited health service corporation activities authorized and regulated pursuant to this article. The provisions of this article do not apply to an entity properly licensed by a reciprocal state to provide a limited health care service to employer groups, where residents of West Virginia are members of an employer group, and the employer group contract is entered into in the reciprocal state. For purposes of this subsection, a reciprocal state means a state which physically borders West Virginia and which has subscriber or enrollee hold harmless requirements substantially similar to those set out in section ten of this article.(b) Factually accurate advertising or solicitation regarding the range of services provided, the premiums and copayments charged, the sites of services and hours of operation and any other quantifiable, nonprofessional aspects of its operation by a prepaid limited health service organization granted a certificate of authority, or its representative do not violate any provision of law relating to solicitation or advertising by health professions: Provided, That nothing contained in this subsection authorizes any solicitation or advertising which identifies or refers to any individual provider or makes any qualitative judgment concerning any provider.(c) Any prepaid limited health service organization authorized under this article is not considered to be practicing medicine and is exempt from the provision of chapter thirty of this code relating to the practice of medicine.(d) The provisions of section nine, article two, examinations; section nine-a, article two, one-time assessment; section thirteen, article two, hearings; sections fifteen and twenty, article four, general provisions; section twenty, article five, borrowing by insurers; section seventeen, article six, noncomplying forms; article six-c, guaranteed loss ratio; article seven, assets and liabilities; article eight, investments; article eight-a, use of clearing corporations and Federal Reserve book-entry system; article nine, administration of deposits; article ten, rehabilitation and liquidation; article twelve, agents, brokers, solicitors and excess line; section fourteen, article fifteen, individual accident and sickness insurance; section sixteen, article fifteen, coverage of children; section eighteen, article fifteen, equal treatment of state agency; section nineteen, article fifteen, coordination of benefits with Medicaid; article fifteen-b, Uniform Health Care Administration Act; section three, article sixteen, required policy provisions; section eleven, article sixteen, coverage of children; section thirteen, article sixteen, equal treatment of state agency; section fourteen, article sixteen, coordination of benefits with Medicaid; article sixteen-a, group health insurance conversion; article sixteen-d, marketing and rate practices for small employers; article twenty-seven, insurance holding company systems; article thirty-three, annual audited financial report; article thirty-four, administrative supervision; article thirty-four-a, standards and commissioners authority for companies considered to be in hazardous financial condition; article thirty-five, criminal sanctions for failure to report impairment; article thirty-seven, managing general agents; article thirty-nine, disclosure of material transactions; article forty-a, risk-based capital for health organizations; and article forty-one, privileges and immunity, all of this chapter are applicable to any prepaid limited health service organization granted a certificate of authority under this article. In circumstances where the code provisions made applicable to prepaid limited health service organizations by this section refer to the insurer, the corporation or words of similar import, the language includes prepaid limited health service organizations.(e) Any long-term care insurance policy delivered or issued for delivery in this state by a prepaid limited health service organization shall comply with the provisions of article fifteen-a of this chapter.(f) A prepaid limited health service organization granted a certificate of authority under this article is exempt from paying municipal business and occupation taxes on gross income it receives from its enrollees, or from their employers or others on their behalf, for health care items or services provided directly or indirectly by the prepaid limited health service organization.
All applications, filings and reports required under this article are public documents: Provided, That where the provisions of other articles in this chapter are applicable to prepaid limited health service organizations, all applications, filings and reports required under those articles shall be afforded the level of confidentiality as provided in those articles.
(a) Any data or information pertaining to the diagnosis, treatment or health of any enrollee or applicant obtained from that person or from any provider by any prepaid limited health service organization shall be held in confidence and may not be disclosed to any person except:(1) To the extent that it may be necessary to facilitate an assessment of the quality of care delivered pursuant to section eighteen of this article or to review the grievance procedure pursuant to section fourteen of this article;(2) Upon the express written consent of the enrollee or his or her legally authorized representative;(3) Pursuant to statute or court order for the production of evidence or the discovery thereof;(4) In the event of claim or litigation between that person and the prepaid limited health service organization where the data or information is pertinent;(5) To a department or division of the state pursuant to the terms of a group contract for the provision of health care services between the prepaid limited health service organization and the department or division of the state; or(6) For a Medicaid recipient enrolled under a group contract between a prepaid limited health service organization and the governmental agency responsible for administering the Medicaid program, in accordance with confidentiality rules applicable to the Medicaid program.(b) A prepaid limited health service organization is entitled to claim any statutory privileges against the disclosure which the provider who furnished the information to the prepaid limited health service organization is entitled to claim.(c) Any information provided to the division of insurance that is part of the division investigation or examination is confidential and exempt from disclosure under subsection (a) of this section or otherwise until the investigation is completed or ceases to be active. For purposes of this subsection, an investigation is considered "active" while the investigation is being conducted by the division with a reasonable, good faith belief that it may lead to the filing of administrative, civil, or criminal proceedings. An investigation does not cease to be active if the division is proceeding with reasonable dispatch and there is a good faith belief that action may be initiated by the division or other administrative or law-enforcement agency. After an investigation or examination is completed or ceases to be active, portions of the records relating to the investigation or examination remain confidential and are exempt from disclosure under subsection (a) of this section or otherwise if the disclosure would:(1) Jeopardize the integrity of another active investigation;(2) Impair the safety and financial soundness of the licensee or affiliated party;(3) Reveal personal financial information;(4) Reveal the identity of a confidential source;(5) Defame or cause unwarranted damage to the good name or reputation of an individual or jeopardize the safety of an individual; or(6) Reveal investigative techniques or procedures.
The Department of Health and Human Resources is authorized to enter into contracts with prepaid limited health service organizations certified and permitted to market under the laws of this state, and to furnish to recipients of medical assistance under Title XIX of the Social Security Act, 42 U.S.C. 1396, et seq., limited health services offered to such recipients under the medical assistance plan of West Virginia. The children's health policy board, the Department of Health and Human Resources, and the Division of Juvenile Services within the Department of Military Affairs and Public Safety are further authorized to enter into contracts with prepaid limited health service organizations to furnish behavioral health services to adults and children who are eligible to receive such services under chapter five, chapter sixteen, chapter twenty-seven or chapter forty-nine of this code.
(a) Notwithstanding any law of this state to the contrary, any person may apply to the commissioner for and obtain a certificate of authority to establish or operate a prepaid limited health service organization in compliance with this article: Provided, That the organization for which a certificate of authority to operate a prepaid limited health service organization is sought shall be incorporated under the provisions of article one, chapter thirty-one of this code. No person may sell prepaid limited health service organization enrollee contracts, nor may any prepaid limited health service organization commence services, prior to receipt of a certificate of authority from the commissioner. Any person may, however, establish the feasibility of a prepaid limited health service organization prior to receipt of a certificate of authority through funding drives and by receiving loans and grants.(b) Every prepaid limited health service organization in operation as of the effective date of this article shall submit an application for a certificate of authority under this section within thirty days of the effective date of this article. Each applicant may continue to operate until the commissioner acts upon the application. In the event that an application is denied pursuant to section five of this article, the applicant shall be treated as a prepaid limited health service organization whose certificate of authority has been revoked.(c) The commissioner may require any organization providing or arranging for one or more limited health services on a prepaid per capita or prepaid aggregate fixed sum basis to apply for a certificate of authority under this article. Any organization directed to apply for a certificate of authority is subject to the provisions of subsection (b) of this section. (d) Each application for a certificate of authority shall be sworn to by an officer or authorized representative of the applicant before a notary public, shall be in a form prescribed by the commissioner and shall set forth or be accompanied by any and all information required by the commissioner, including:(1) The basic organizational document;(2) The bylaws or rules;(3) A list of the names, addresses and official positions of each member of the governing body, which shall contain a full disclosure in the application of any financial interest by the officer or member of the governing body or any provider or any organization or corporation owned or controlled by that person and the prepaid limited health service organization and the extent and nature of any contract or financial arrangements between that person and the prepaid limited health service organization;(4) A description of the prepaid limited health service organization and the limited health service or services to be offered;(5) A copy of each evidence of coverage form and of each enrollee contract form;(6) Financial statements which include the assets, liabilities and sources of financial support of the applicant and any corporation or organization owned or controlled by the applicant;(7)(A) A description of the proposed method of marketing the plan; (B) A schedule of proposed charges; and (C) A financial plan which includes a three-year projection of the expenses and income and other sources of future capital;(8) A power of attorney duly executed by the applicant, if not domiciled in this state, appointing the commissioner and his or her successors in office, and duly authorized deputies, as the true and lawful attorney of the applicant in and for this state upon whom all lawful process in any legal action or proceeding against the prepaid limited health service organization on a cause of action arising in this state may be served;(9) A statement reasonably describing the service area or areas to be served and the type or types of enrollees to be served;(10) A description of the complaint procedures to be utilized as required under section fourteen of this article;(11) A description of the mechanism by which enrollees will be afforded an opportunity to participate in matters of policy and operation under section eight of this article;(12) A complete biographical statement on forms prescribed by the commissioner and an independent investigation report on all of the individuals referred to in subdivision (3) of this subsection and all officers, directors and persons holding five percent or more of the common stock of the organization;(13) A comprehensive feasibility study, performed by a qualified independent actuary in conjunction with a certified public accountant which shall contain a certification by the qualified actuary and an opinion by the certified public accountant as to the feasibility of the proposed organization. The study shall be for the greater of three years or until the prepaid limited health service organization has been projected to be profitable for twelve consecutive months. The study shall show that the prepaid limited health service organization would not, at the end of any month of the projection period, have less than the minimum capital and surplus as required by section six of this article. The qualified independent actuary shall certify that: (A) The rates for each limited health service offered are neither inadequate nor excessive nor unfairly discriminatory; (B) The rates are appropriate for the classes of risks for which they have been computed; (C) The rating methodology is appropriate: Provided, That the certification shall include an adequate description of the rating methodology showing that the methodology follows consistent and equitable actuarial principles; (D) The prepaid limited health service organization is actuarially sound: Provided, That the certification shall consider the rates, benefits, and expenses of, and any other funds available for the payment of obligations of, the organization; (E) The rates being charged or to be charged are actuarially adequate to the end of the period for which rates have been guaranteed; and (F) Incurred but not reported claims and claims reported but not fully paid have been adequately provided for;(14) A description of the prepaid limited health service organization's quality assurance program; and(15) Such other information as the commissioner may require to be provided.(e) A prepaid limited health service organization shall, unless otherwise provided for by rules promulgated by the commissioner, file notice prior to any modification of the operations or documents filed pursuant to this section or as the commissioner may require by rule. If the commissioner does not disapprove of the filing within ninety days of filing, it is considered approved and may be implemented by the prepaid limited health service organization: Provided, That an application to add one or more limited health services to those offered by the organization shall be submitted and reviewed in accordance with subsection (f) of this section.(f) If a prepaid limited health service organization wishes to offer one or more additional limited health services to subscribers, the organization shall submit an application in accordance with the procedure set forth in subsection (d) of this section, with respect to the additional service or services: Provided, That the organization may not at any time offer more than four limited health services. The organization is not required to submit the information required by subdivisions (1), (2), (3), (8), (10), (11) or (12), subsection (d) of this section, if there has been no change in the information required by the respective subdivisions since the information was most recently filed with the commissioner.
The commissioner may after notice and hearing propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to define the commissioner's authority to consider the operating results of an insurer's affiliates and subsidiaries in the rate making and solvency determination of that insurer.
(a) As a condition precedent to the issuance or maintenance of a certificate of authority, a prepaid limited health service organization shall file or have on file with the commissioner:(1) An acknowledgment that a delinquency proceeding pursuant to article ten of this chapter or supervision by the commissioner pursuant to article thirty-four of this chapter is the sole and exclusive method for the liquidation, rehabilitation, reorganization, or conservation of a prepaid limited health service organization;(2) A waiver of any right to file or be subject to a bankruptcy proceeding; (3) Within thirty days of any change in the membership of the governing body of the organization or in the officers or persons holding five percent or more of the common stock of the organization, or as otherwise required by the commissioner:(A) An amended list of the names, addresses and official positions of each member of the governing body, and a full disclosure of any financial interest by a member of the governing body or any provider or any organization or corporation owned or controlled by that person and the prepaid limited health service organization and the extent and nature of any contract or financial arrangements between that person and the prepaid limited health service organization; and(B) A complete biographical statement on forms prescribed by the commissioner and an independent investigation report on each such person for whom a biographical statement and independent investigation report have not previously been submitted.(b) All certificates of authority issued to prepaid limited health service organizations expire at midnight on the thirty-first day of May of each year. The commissioner shall renew annually the certificates of authority of all prepaid limited health service organizations which continue to meet all requirements of this section and subsection (b), section five of this article, make application therefor upon a form prescribed by the commissioner and pay the renewal fee prescribed: Provided, That a prepaid limited health service organization does not qualify for renewal of its certificate of authority if the organization has no subscribers in this state within twelve months after issuance of the certificate of authority: Provided, however, That an organization not qualifying for renewal may apply for a new certificate of authority under section three of this article.(c) The commencement of a bankruptcy proceeding either by or against a prepaid limited health service organization, by operation of law:(1) Terminates the prepaid limited health service organization's certificate of authority; and(2) Vests in the commissioner for the use and benefit of the subscribers of the prepaid limited health service organization the title to any deposits of the prepaid limited health service organization held by the commissioner.(d) If the bankruptcy proceeding is initiated by a party other than the prepaid limited health service organization, the operation of subsection (c) of this section is stayed for a period of sixty days following the date of commencement of the proceeding.
(a) Upon receipt of an application for a certificate of authority, the commissioner shall determine whether the application for a certificate of authority, with respect to limited health services to be furnished has demonstrated:(1) The willingness and potential ability of the organization to assure that limited health services will be provided in such a manner as to enhance and assure both the availability and accessibility of adequate personnel and facilities;(2) Arrangements for an ongoing evaluation of the quality of health care provided by the organization and utilization review which meet the minimum standards set forth in section nineteen of this article;(3) That the organization has a procedure to develop, compile, evaluate and report statistics relating to the cost of its operations, the pattern of utilization of its services, the quality, availability and accessibility of its services and other matters as may be reasonably required by rule.(b) The commissioner shall issue or deny a certificate of authority to any person filing an application within one hundred twenty days after receipt of the application. Issuance of a certificate of authority shall be granted upon payment of the application fee prescribed, if the commissioner is satisfied that the following conditions are met:(1) The prepaid limited health service organization's proposed plan of operation meets the requirements of subsection (a) of this section;(2) The prepaid limited health service organization will effectively provide or arrange for the provision of no more than four limited health services on a prepaid basis except for copayments: Provided, That nothing in this section relieves a prepaid limited health service organization from the obligations to provide a limited health service because of the nonpayment of copayments unless the enrollee fails to make payment in at least three instances over any twelve-month period: Provided, however, That nothing in this section permits a prepaid limited health service organization to charge copayments to Medicare beneficiaries or Medicaid recipients in excess of the copayments permitted under those programs, nor is a prepaid limited health service organization required to provide a limited health service to Medicare beneficiaries or Medicaid recipients in excess of the benefits compensated under those programs;(3) The prepaid limited health service organization is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees. In making this determination, the commissioner may consider:(A) The financial soundness of the prepaid limited health service organization's arrangements for no more than four limited health services and the proposed schedule of charges used in connection with each limited health service offered;(B) Arrangements for maintenance of the minimum capital and surplus required under section six of this article;(C) Any arrangements which will guarantee the continuation of benefits and payments to providers for services rendered both prior to and after insolvency for the duration of the contract period for which payment has been made, except that benefits to members who are confined on the date of insolvency in an inpatient facility shall be continued until their discharge; and(D) Any agreement with providers for the provision of limited health care services;(4) The enrollees will be afforded an opportunity to participate in matters of policy and operation pursuant to section eight of this article;(5) The prepaid limited health service organization has demonstrated that it will assume full financial risk on a prospective basis for the provision of no more than four limited health services: Provided, That notwithstanding the requirement of this subdivision, a prepaid limited health service organization may obtain reinsurance acceptable to the commissioner from an accredited reinsurer or make other arrangements:(A) For the cost of providing to any enrollee limited health services, the aggregate value of which exceeds $4,000 in any year;(B) For the cost of providing no more than four limited health services to its enrollees on a nonelective emergency basis; or(C) For not more than ninety-five percent of the amount by which the prepaid limited health service organization's costs for any of its fiscal years exceed one hundred five percent of its income for those fiscal years;(6) The ownership, control and management of the prepaid limited health service organization is competent and trustworthy and possesses managerial experience that would make the proposed organization operation beneficial to the subscribers. The commissioner may, at his or her discretion, refuse to grant or continue authority to transact the business of a prepaid limited health service organization in this state at any time during which the commissioner has probable cause to believe that the ownership, control or management of the organization includes any person whose business operations are or have been marked by business practices or conduct that is to the detriment of the public, stockholders, investors or creditors; and(7) The prepaid limited health service organization has deposited and maintained in trust with the State Treasurer, for the protection of its subscribers or its subscribers and creditors, cash or government securities eligible for the investment of capital funds of domestic insurers as described in paragraph (A) or (B), subdivision (1), subsection (a), section eleven, article eight of this chapter or paragraph (A), (B) or (C), subdivision (3) of said subsection, in the amount of $50,000.(c) A certificate of authority may be denied only after compliance with the requirements of section twenty-three of this article.(d) No person who has not been issued a certificate of authority may use the words "prepaid limited health service organization" or the initials "PLHSO" in its name, contracts, logo or literature: Provided, That persons who are operating under a contract with, operating in association with, enrolling enrollees for, or otherwise authorized by a prepaid limited health service organization licensed under this article to act on its behalf may use the terms "prepaid limited health service organization" or "PLHSO" for the limited purpose of denoting or explaining their association or relationship with the authorized prepaid limited health service organization. No prepaid limited health service organization which has a minority of board members who are consumers may use the words "consumer controlled" in its name or in any way represent to the public that it is controlled by consumers.
(a) Each prepaid limited health service organization shall have and maintain fully paid-in capital stock, if a for-profit stock corporation, or statutory surplus funds, if a nonprofit corporation, totaling at least:(1) The greater of $250,000 or ten percent of its expenses for the previous twelve-month period as reported in its most recent financial statement filed pursuant to subsection (a), section twelve of this article, with respect to each limited health service for which the organization will not offer inpatient services up to a maximum total for all limited health services of the required capital and surplus for an insurer under article three, section five-b of this chapter; and(2) The greater of $1 million or ten percent of its expenses for the previous twelve-month period as reported in its most recent financial statement filed pursuant to subsection (a), section twelve of this article, with respect to each limited health service for which the organization will offer inpatient services up to a maximum total for all limited health services of the required capital and surplus for an insurer under article three, section five-b of this chapter.(b) For purposes of this section, "expenses" means those costs set forth by the national association of Insurance Commissioners (NAIC) in the statement of revenues, expenses and net worth contained in the annual statement instruction--limited health service organization and the official NAIC annual statement blanks--limited health service organization.
(a) Upon obtaining a certificate of authority as required under this article, a prepaid limited health service organization may enter into limited health service contracts in this state and engage in any activities, consistent with the purposes and provisions of this article, which are necessary to the performance of its obligations under such contracts, subject to the limitations provided for in this article: Provided, That nothing in this article authorizes any prepaid limited health service organization to transact any insurance other than that for which the organization is granted a certificate of authority under this article.(b) The commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code, limiting or regulating the powers of prepaid limited health service organizations which he or she finds to be in the public interest.
(a) The governing body of any prepaid limited health service organization may include enrollees, providers, or other individuals.(b) The governing body shall establish a mechanism to afford the enrollees an opportunity to participate in matters of policy and operation through the establishment of advisory panels, by the use of advisory referenda on major policy decisions, or through the use of other mechanisms as may be prescribed by the commissioner.
(a) Any director, officer or other manager of a prepaid limited health service organization who receives, collects, disburses or invests funds in connection with the activities of the organization is responsible for the funds in a fiduciary relationship to the enrollees.(b) A prepaid limited health service organization shall maintain a blanket fidelity bond covering all directors, officers, managers and employees of the organization who receive, collect, disburse or invest funds in connection with the activities of the organization, issued by an insurer licensed in this state or, if the fidelity bond required by this subdivision is not available from an insurer licensed in this state, a fidelity bond procured by an excess line broker licensed in this state, in an amount at least equal to the minimum amount of fidelity insurance as provided in the national association of Insurance Commissioners handbook, as amended, or as the commissioner may by rule, propose for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code, require.
This article may be referred to as the patients' eye care act.
For the purposes of this article:(1) Commissioner means the Insurance Commissioner of West Virginia.(2) Covered services and covered materials means services or materials for which reimbursement from the insurer or vision care plan or vision care discount plan is available under an enrollees vision plan or contract, or for which a reimbursement would be available but for the application of contractual limitations such as deductibles, copayments, coinsurance, waiting periods, annual or lifetime maximums, frequency limitations, alternative benefit payments or other limitations.(3) "Covered person" means an individual enrolled in a health benefit plan or an eligible dependent of that person.(4) Enrollee means any individual enrolled in a health care plan, vision care plan or vision care discount plan provided by a group, employer or other entity that purchases or supplies coverage for a vision care plan or vision care discount plan. (5) Eye care provider means a licensed doctor of optometry practicing under the authority of article eight, chapter thirty of this code or a licensed medical physician specializing in ophthalmology licensed in West Virginia to practice medicine and surgery under the authority of article three, chapter thirty of this code or osteopathy under article fourteen, chapter thirty of this code.(6) "Eye care benefits" means coverage for the diagnosis, treatment and management of eye disease and injury.(7) "Health benefit policy" means any individual or group plan, policy or contract providing medical, hospital or surgical coverage issued, delivered, issued for delivery or renewed in this state by an insurer, after January 1, 2001. It does not include credit accident and sickness, long-term care, Medicare supplement, champus supplement, disability or limited benefits policies.(8) "Insurer" means any health care corporation, health maintenance organization, accident and sickness insurer, nonprofit hospital service corporation, nonprofit medical service corporation or similar entity. (9) Materials means ophthalmic devices, including, but not limited to, lenses, devices containing lenses, artificial intraocular lenses, ophthalmic frames and other lens-mounting apparatus, prisms, lens treatments and coatings, contact lenses and prosthetic devices to correct, relieve or treat defects or abnormal conditions of the human eye or its adnexa.(10) Services means the professional work performed by an eye care provider.(11) Subcontractor means any company, group or third party entity, including, but not limited to, agents, servants, partially- or wholly-owned subsidiaries and controlled organizations that is contracted by the insurer, vision care plan or vision care discount plan to supply services or materials for an eye care provider or enrollee to fulfill the benefit plan of an insurer, vision care plan or vision care discount plan.(12) "Vision care benefits" means benefits for the refraction of the eyes and other optical benefits.(13) Vision care discount plan means a business arrangement or contract offered by an insurer in which a person, in exchange for fees, dues, charges or other consideration, offers access for its plan members to providers of eye care or ancillary services and the right to receive discounts on eye care or ancillary services provided under the discount vision care plan from those providers.(14) Vision care plan means an entity that creates, promotes, sells, provides, advertises or administers an integrated or stand-alone vision benefit plan, or a vision care insurance policy or contract which provides vision benefits to an enrollee pertaining to the provision of covered services or covered materials.
(a)Health benefits policies may not require that an optometrist hold hospital staff privileges.(b)When any health benefits policy provides for the payment of eye care benefits or vision care benefits, such policy shall be construed to include payment to all eye care providers who provide benefits within the scope of their providers' licenses.(c)Any limitation or condition placed upon services, diagnosis or treatment by or payment to a particular type of licensed provider shall apply equally to all licensed providers without unfair discrimination as to the usual and customary treatment procedures of an eye care provider.(d)Any health benefits policy that includes eye care benefits, including a diabetic retinal examination, shall provide each covered person diagnosed with diabetes direct access to an eye care provider of their choice from the insurer's panel of providers independent of, and without referral from, any other provider or entity for one annual diabetic retinal examination. The eye care provider shall provide copies of the results of the examination to the covered person's primary care physician. No other services shall be provided to the covered person by the eye care provider without the prior authorization of the insurer or of its designee. This benefit shall be subject to all coinsurance, deductibles, copayments and other policy requirements. When the diabetic retinal examination reveals the beginning stages of an abnormal condition, access to future examinations shall be subject to prior authorization from a primary care physician.(e)Any health benefits policy that includes eye care benefits or vision care benefits shall include both optometrists and ophthalmologists.(f)This article may not be construed to require any health benefits policy to cover any specific health care service.(g)This article may not be construed to require a health benefit plan or an insurer to include on the insurer's panel of providers all providers willing to meet the terms and conditions of participation as a plan provider.
Every health benefits policy that is issued, delivered, issued for redelivery or renewed in this state on or after January 1, 2001, that provides for eye care benefits, including a diabetic retinal examination, shall disclose in writing, in clear and accurate language, to enrollees, subscribers, providers and insureds that any covered person diagnosed with diabetes has the right to direct access to an eye care provider of their choice from the insurer's panel of providers for an annual diabetic retinal examination.
(a) An agreement between an insurer, vision care plan or vision care discount plan and an eye care provider may not seek to or require that an eye care provider provide services or materials at a fee limited or set by the insurer, vision care plan or vision care discount plan, unless the services or materials are reimbursed as covered services or covered materials under the contract.(1) An eye care provider may not charge more for services and materials that are non-covered services or non-covered materials to an enrollee of a vision care plan, vision care discount plan or insurer than his or her usual and customary rate for the services and materials.(2) Reimbursements paid by an insurer, vision care plan or vision care discount plan for covered services and covered materials, regardless of supplier or optical lab used to obtain materials, shall be reasonable, shall be clearly listed on a fee schedule that is made available to the eye care provider prior to accepting a contract from the insurer, vision care plan or vision discount plan and shall not provide nominal reimbursement or advertise services and materials to be covered with additional copay or coinsurance if the health plan, vision care plan or vision care discount plan does not reimburse for the services or materials in order to claim that services and materials are covered services and materials.(3) Insurers, vision care plans and vision care discount plans shall not falsely represent, publish or disseminate the benefits that are provided to groups, employers or individual enrollees as a means of selling coverage to or communicating benefit coverage to enrollees.(4) All provisions in this section apply to any successors in interest of an insurer, vision care plan or vision care discount plan and apply to any subcontractors that are used by an insurer, vision care plan or vision care discount plan to supply materials or services to an eye care provider or enrollee and are subject to all applicable penalties as provided in this section.(b) An agreement between an insurer, vision care plan or vision care discount plan and an eye care provider may not require that an eye care provider must participate with or be credentialed by any specific vision care plan or vision care discount plan as a condition of participation in the health care network of the insurer to provide covered medical services to its enrollees.(1) Any insurer issuing or renewing a health benefit plan, vision care plan or vision care discount plan issued or renewed which provides coverage for services rendered by an eye care provider shall provide the same reimbursement for services to optometrists as allowed for those services rendered by physicians or osteopaths.(2) An insurer may not require an optometrist to meet terms and conditions that are not required of a physician or osteopath as a condition for participation in its provider network for the provision of services that are within the scope of practice of an optometrist.(3) If an eye care provider enters into any subcontract agreement with another provider to provide covered services or covered materials to an enrollee which provides that the subcontracted provider will bill the vision care plan or enrollee directly for the subcontracted services or materials, the subcontract agreement shall meet all requirements of this section.(4) The provisions of subdivisions (1), (2) and (3) of this subsection also apply to any agreements an insurer enters into for services covered under the health benefit plan, vision care plan or vision care discount plan.(c) An insurer, vision care plan or vision care discount plan may not change or alter an agreement entered into with an eye care provider without performing the following steps:(1) Mailing a certified letter detailing proposed changes to the eye care provider; (2) Obtaining agreement or disagreement to the proposed changes from the eye care provider; and(3) Providing a new agreement after three or more material changes are made to an existing agreement from an insurer, vision care plan or vision care discount plan.(d) An agreement between an insurer, vision care plan or vision care discount plan and an eye care provider may not restrict or limit, either directly or indirectly, the eye care providers choice of sources and suppliers of services or materials or use of optical labs provided by the eye care provider to an enrollee.(e) An insurer, vision care plan or vision care discount plan may not change the terms, discounts or reimbursement rates contained in the agreement, regardless of supplier or fabricating lab used to supply materials, without a signed acknowledgement of written agreement from the eye care provider.(f) A person or entity adversely affected by a violation of this section may bring action in a court of competent jurisdiction for injunctive relief against the insurer, vision care plan or vision care discount plan and, upon prevailing, may recover monetary damages of no more than $1,000 for each instance found to be in violation of this section, plus attorneys fees and costs.(g) In a fiscal year, an insurer, vision care plan or vision care discount plan may not charge back or otherwise recoup administrative fees or other amounts from an eye care provider in a total amount of more than three percent of the payments received by the eye care provider from the insurer, vision care plan or vision care discount plan for providing services to enrollees without the written agreement of the eye care provider.(h) The Commissioner may seek an injunction against an insurer, vision care plan or vision care discount plan in a court of competent jurisdiction for violation of this section.(i) The requirements of this section apply to insurers, vision care plans, vision care discount plans, contracts, addendums and certificates executed, delivered, issued for delivery, continued or renewed in the State of West Virginia.(1) An insurer, vision care plan or vision care discount plan contract may not be in effect for more than two years from the date that it was first signed.(2) An insurer, vision care plan or vision care discount plan may not construe recredentialing as recontracting with an eye care provider. (j) An insurer, vision care plan or vision care discount plan may not discriminate against any eye care provider who is located within the geographic coverage area of the insurer, vision care plan or vision care discount plan and who is willing to meet the terms and conditions for participation established by the insurer, vision care plan or vision care discount plan, including West Virginia Medicaid programs and Medicaid partnerships.(k) This section becomes effective on July 1, 2016, and applies to vision care plans and vision care discount plans which take effect or are renewed on or after July 1, 2016.
For purposes of this article:(a) A "clinical trial" is a study that determines whether new drugs, treatments or medical procedures are safe and effective on humans. To determine the efficacy of experimental drugs, treatments or procedures, a study is conducted in four phases including the following:Phase II: The experimental drug or treatment is given to, or a procedure is performed on, a larger group of people to further measure its effectiveness and safety.Phase III: Further research is conducted to confirm the effectiveness of the drug, treatment or procedure, to monitor the side effects, to compare commonly used treatments and to collect information on safe use. Phase IV: After the drug, treatment or medical procedure is marketed, investigators continue testing to determine the effects on various populations and to determine whether there are side effects associated with long-term use.(b) "Cooperative group" means a formal network of facilities that collaborate on research projects and have an established NIH-approved peer review program operating within the group.(c) "Cooperative group" includes:(1) The national cancer institute clinical cooperative group;(2) The national cancer institute community clinical oncology program;(3) The AIDS clinical trial group; and(4) The community programs for clinical research in AIDS.(d) "FDA" means the federal food and drug administration.(e) "Life-threatening condition" means that the member has a terminal condition or illness that according to current diagnosis has a high probability of death within two years, even with treatment with an existing generally accepted treatment protocol.(f) "Member" means a policyholder, subscriber, insured, certificate holder or a covered dependent of a policyholder, subscriber, insured or certificate holder.(g) "Multiple project assurance contract" means a contract between an institution and the federal department of health and human services that defines the relationship of the institution to the federal department of health and human services and sets out the responsibilities of the institution and the procedures that will be used by the institution to protect human subjects.(h) "NIH" means the national institutes of health.(i) "Patient cost" means the routine costs of a medically necessary health care service that is incurred by a member as a result of the treatment being provided pursuant to the protocols of the clinical trial. Routine costs of a clinical trial include all items or services that are otherwise generally available to beneficiaries of the insurance policies. "Patient cost" does not include:(1) The cost of the investigational drug or device;(2) The cost of nonhealth care services that a patient may be required to receive as a result of the treatment being provided to the member for purposes of the clinical trial;(3) Services customarily provided by the research sponsor free of charge for any participant in the trial;(4) Costs associated with managing the research associated with the clinical trial including, but not limited to, services furnished to satisfy data collection and analysis needs that are not used in the direct clinical management of the participant; or(5) Costs that would not be covered under the participant's policy, plan, or contract for noninvestigational treatments;(6) Adverse events during treatment are divided into those that reflect the natural history of the disease, or its progression, and those that are unique in the experimental treatment. Costs for the former are the responsibility of the payor as provided in section two of this article, and costs for the later are the responsibility of the sponsor. The sponsor shall hold harmless any payor for any losses and injuries sustained by any member as a result of his or her participation in the clinical trial.
(a) This section applies to:(1) Insurers and nonprofit health service plans that provide hospital, medical, surgical or pharmaceutical benefits to individuals or groups on an expense-incurred basis under a health insurance policy or contract issued or delivered in the state; and(2) Health maintenance organizations that provide hospital, medical, surgical or pharmaceutical benefits to individuals or groups under contracts that are issued or delivered in the state.(b) This section does not apply to a policy, plan or contract paid for under Title XVIII of the Social Security Act.(c) A policy, plan or contract subject to this section shall provide coverage for patient cost to a member in a clinical trial, as a result of:(1) Treatment provided for a life-threatening condition; or(2) Prevention of, early detection of or treatment studies on cancer.(d) The coverage under subsection (c) of this section is required if:(1)(A) The treatment is being provided or the studies are being conducted in a Phase II, Phase III or Phase IV clinical trial for cancer and has therapeutic intent; or(B) The treatment is being provided in a Phase II, Phase III or Phase IV clinical trial for any other life-threatening condition and has therapeutic intent;(2) The treatment is being provided in a clinical trial approved by:(A) One of the national institutes of health;(B) An NIH cooperative group or an NIH center;(C) The FDA in the form of an investigational new drug application or investigational device exemption; (D) The federal department of Veterans Affairs; or (E) An institutional review board of an institution in the state which has a multiple project assurance contract approved by the office of protection from research risks of the national institutes of health;(3) The facility and personnel providing the treatment are capable of doing so by virtue of their experience, training and volume of patients treated to maintain expertise;(4) There is no clearly superior, noninvestigational treatment alternative;(5) The available clinical or preclinical data provide a reasonable expectation that the treatment will be more effective than the noninvestigational treatment alternative;(6) The treatment is provided in this state: Provided, That, if the treatment is provided outside of this state, the treatment must be approved by the payor designated in subsection (a) of this section;(7) Reimbursement for treatment is subject to all coinsurance, copayment and deductibles and is otherwise subject to all restrictions and obligations of the health plan; and(8) Reimbursement for treatment by an out of network or noncontracting provider shall be reimbursed at a rate which is no greater than that provided by an in network or contracting provider. Coverage shall not be required if the out of network or noncontracting provider will not accept this level of reimbursement.(e) Payment for patient costs for a clinical trial is not required by the provisions of this section, if:(1) The purpose of the clinical trial is designed to extend the patent of any existing drug, to gain approval or coverage of a metabolite of an existing drug, or to gain approval or coverage relating to additional clinical indications for an existing drug; or(2) The purpose of the clinical trial is designed to keep a generic version of a drug from becoming available on the market; or(3) The purpose of the clinical trial is to gain approval of or coverage for a reformulated or repackaged version of an existing drug.(f) Any provider billing a third party payor for services or products provided to a patient in a clinical trial shall provide written notice to the payor that specifically identifies the services as part of a clinical trial.(g) Notwithstanding any provision in this section to the contrary, coverage is not required for Phase I of any clinical trial.
[Repealed.]
[Repealed.]
[Repealed.]
[Repealed.]
[Repealed.]
This article may be cited as the "West Virginia Insurance Guaranty Association Act."
(a) The commissioner shall:(1) Notify the association of the existence of an insolvent insurer not later than three business days after he or she receives notice of the determination of the insolvency.(2) Upon request of the board of directors, provide the association a statement of the net direct written premiums of each member insurer.(b) The commissioner may:(1) Require that the association notify the insureds of the insolvent insurer and any other interested parties of the determination of insolvency and of their rights under this article. The notification shall be by mail at their last known address, where available, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation is sufficient.(2) Suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the commissioner may levy a fine on any member insurer which fails to pay an assessment when due. The fine may not exceed five percent of the unpaid assessment per month, except that no fine may be less than $100 per month.(3) Revoke the designation of any servicing facility if he or she finds that claims are being handled unsatisfactorily.(c) Any final order of the commissioner under this article is subject to judicial review as provided by section fourteen, article two of this chapter.
 (a) Any person recovering under this article is considered to have assigned the persons rights under the policy to the association to the extent of the persons recovery from the association. Every insured or claimant seeking the protection of this article shall cooperate with the association to the same extent as that person would have been required to cooperate with the insolvent insurer. The association has no cause of action against the insured of the insolvent insurer for any sums it has paid out except such causes of action as the insolvent insurer would have had if the sums had been paid by the insolvent insurer and except as provided in subsection (b) of this section. In the case of an insolvent insurer operating on a plan whereby insurance policies with assessment liability have been issued to insureds, payments of claims by the association may not operate to reduce the liability of the insureds to the receiver, liquidator or statutory successor for unpaid assessments.(b) The association may recover from the following persons all amounts paid by the association on behalf of the person, whether for indemnity or defense or otherwise:(1) Any insured whose net worth on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer exceeds $25 million: Provided, That an insureds net worth on such date shall be considered to include the aggregate net worth of the insured and all of its subsidiaries and affiliates as calculated on a consolidated basis: Provided, however, That this provision may not apply to any claim for benefits under a workers compensation insurance policy required by chapter twenty-three of this code; and(2) Any person who is an affiliate of the insolvent insurer.(c) The association and any association similar to the association in another state shall be recognized as claimants in the liquidation of an insolvent insurer for any amounts paid by them on covered claims obligations as determined under this article or similar laws in other states and shall receive dividends and any other distributions at the priority set forth in section nineteen-a, article ten of this chapter. The receiver, liquidator or statutory successor of an insolvent insurer shall be bound by determinations of covered claim eligibility under this article and by settlements of claims made by the association or a similar organization in another state. The court having jurisdiction shall grant such claims priority equal to that to which the claimant would have been entitled, in the absence of this article, against the assets of the insolvent insurer. The expenses of the association or similar organization in handling claims shall be accorded the same priority as the receivers expenses.(d) The association shall periodically file with the receiver or the liquidator of the insolvent insurer statements of the covered claims paid by the association and estimates of anticipated claims against the association which shall preserve the rights of the association against the assets of the insolvent insurer.
(a) Any person having a claim under an insurance policy, whether or not it is a policy issued by a member insurer, and the claim under such other policy arises from the same facts, injury, or loss that gave rise to the covered claim against the association, shall first exhaust all coverage provided by any such policy. Any amount payable on a covered claim under this article shall be reduced by the full applicable limits stated in such other insurance policy and the association shall receive a full credit for such stated limits or, where there are no applicable stated limits, the claim shall be reduced by the total recovery. Notwithstanding the foregoing, no person may be required to exhaust any right under the policy of an insolvent insurer.(1) A claim under a policy providing liability coverage to a person who may be jointly and severally liable with or a joint tortfeasor with the person covered under the policy of the insolvent insurer that gives rise to the covered claim is considered to be a claim arising from the same facts, injury or loss that gave rise to the covered claim against the association.(2) A claim under an insurance policy shall also include, for purposes of this section:(A) A claim against a health maintenance organization, a hospital plan corporation or a professional health service corporation; and(B) Any amount payable by or on behalf of a self-insurer.(3) To the extent that the associations obligation is reduced by the application of this section, the liability of the person insured by the insolvent insurers policy for the claim shall be reduced in the same amount.(b) Any person having a claim which may be recovered under more than one Insurance Guaranty Association or its equivalent shall seek recovery first from the association of the place of residence of the insured except that if it is a first party claim for damage to property with a permanent location, he or she shall seek recovery first from the association of the location of the property, and if it is a workers compensation claim, the person shall seek recovery first from the association of the residence of the claimant. Any recovery under this article shall be reduced by the amount of the recovery from any other insurance guaranty association or its equivalent.(c) To the extent the association pays any deductible claim for which the insurer would have been entitled to reimbursement from the insured, the association is entitled to the full amount of the reimbursement and available collateral as provided under this subsection to the extent necessary to reimburse the association. Reimbursements paid to the association pursuant to this subsection may not be treated as distributions or as early access payments. To the extent that the association pays a deductible claim that is not reimbursed either from collateral or by insured payments, or incurred expenses in connection with large deductible policies that are not reimbursed under this subsection, the association has an exclusive cause of action against the insured, including the right to enforce against the insured the rights of the insurer with respect to any obligation of the insured to reimburse the insurer for deductibles or pay claims within a deductible. Further, the fund is vested with a first lien in any collateral provided by the insured to the insolvent insurer to secure the insureds performance, to the extent of claims paid by the association, which lien can be perfected by notice to the liquidator. Nothing in this subsection limits any rights of the association that may otherwise exist under applicable law to obtain reimbursement from insureds for claims payments made by the association under policies of the insurer or for the associations related expenses.
To aid in the detection and prevention of insurer insolvencies:(1) The board of directors may, upon majority vote, make recommendations to the commissioner on matters generally related to improving or enhancing regulation for solvency.(2) At the conclusion of any domestic insurer insolvency in which the association was obligated to pay covered claims, the board of directors may, upon majority vote, prepare a report on the history and causes of the insolvency, based on the information available to the association and submit the report to the commissioner.(3) Reports and recommendations provided under this section may not be considered public documents subject to disclosure under chapter twenty-nine-b of this code.
The association shall be subject to examination and regulation by the commissioner. The board of directors shall submit, not later than April 30 of each year, a financial report for the preceding calendar year, in a form approved by the commissioner.
The association shall be exempt from payment of all fees and all taxes levied by this state or any of its subdivisions except taxes levied on real or personal property.
The rates and premiums charged for insurance policies to which this article applies shall include amounts sufficient to recoup a sum equal to the amounts paid to the association by the member insurer less any amounts returned to the member insurer by the association and such rates shall not be deemed excessive because they contain an amount reasonably calculated to recoup assessments paid by the member insurer.
There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer, the association or its agents or employees, the board of directors, or the commissioner or his representatives for any action taken by them in the exercise and performance of their powers and duties under this article.
(a) All proceedings in which the insolvent insurer is a party or obligated to defend a party in any court in this state shall, subject to waiver by the association in specific cases involving covered claims, be stayed for six months and such additional time as may be determined by the court from the date the insolvency is determined to permit proper defense by the association of all pending causes of action.(b) The liquidator, receiver or statutory successor of an insolvent insurer covered by this article shall permit access by the association, or its authorized representative to such of the insolvent insurers records that are necessary for the association in carrying out its functions under this article with regard to covered claims. In addition, the liquidator, receiver or statutory successor shall provide the association or its representative with copies of such records upon the request by the association and at the expense of the association.(c) As to any covered claims arising from a judgment under any order, decision, verdict or finding based on the default of the insolvent insurer or its wrongful failure to defend an insured, the association either on its own behalf or on behalf of such insured may apply to have such judgment, order, decision, verdict or finding set aside by the same court or administrator that made such judgment, order, decision, verdict or finding and shall be permitted to defend against such claim on the merits.
In the event any part or provision of this article be held to be unconstitutional by any court of competent jurisdiction, such holding and decision of the court shall not affect the validity and Constitutionality of the remaining parts and provisions of this article.
The purpose of this article is to provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to the extent provided in this article, minimize financial loss to claimants or policyholders because of the insolvency of an insurer, and to permit and to provide an association to assess the cost of this protection among insurers.
This article applies to all kinds of direct insurance, but is not applicable to the following:(1) Life, annuity, health or disability insurance;(2) Mortgage guaranty, financial guaranty or other forms of insurance offering protection against investment risks;(3) Fidelity or surety bonds, or any other bonding obligations;(4) Credit insurance, vendors single interest insurance or collateral protection insurance or any similar insurance protecting the interests of a creditor arising out of a creditor-debtor transaction;(5) Insurance of warranties or service contracts including insurance that provides for the repair, replacement or service of goods or property, indemnification for repair, replacement or service for the operational or structural failure of the goods or property due to a defect in materials, workmanship or normal wear and tear, or provides reimbursement for the liability incurred by the issuer of agreements or service contracts that provide such benefits;(6) Title insurance;(7) Ocean marine insurance;(8) Any transaction or combination of transactions between a person, including affiliates of such person, and an insurer, including affiliates of the insurer, which involves the transfer of investment or credit risk unaccompanied by transfer of insurance risk; or(9) Any insurance provided by or guaranteed by a government entity or agency.
This article shall be construed to effect the purpose under section two of this article which constitutes an aid and guide to interpretation.
As used in this article:(1) Account means any one of the three accounts created by section six of this article.(2) Affiliate means a person who directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with another person on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer.(3) Affiliate of the insolvent insurer means a person who directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with an insolvent insurer on December 31 of the year prior to the date the insurer becomes an insolvent insurer.(4) Association means the West Virginia Insurance Guaranty Association created under section six of this article.(5) Association similar to the association means any guaranty association, security fund or other insolvency mechanism that affords protection similar to that of the association. The term shall also include any property and casualty insolvency mechanism that obtains assessments or other contributions from insurers on a preinsolvency basis.(6) Claimant means any insured making a first party claim or any person instituting a liability claim, provided that no person who is an affiliate of the insolvent insurer may be a claimant.(7) Commissioner means the Insurance Commissioner of West Virginia.(8) Control means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing that control does not exist in fact. (9) (A) Covered claim means an unpaid claim, including one for unearned premiums, submitted by a claimant, which arises out of and is within the coverage and is subject to the applicable limits of an insurance policy to which this article applies issued by an insurer, if the insurer becomes an insolvent insurer after the effective date of this article and:(i) The claimant or insured is a resident of this state at the time of the insured event: Provided, That for entities other than an individual, the residence of a claimant, insured or policyholder is the state in which its principal place of business is located at the time of the insured event; or(ii) The claim is a first party claim for damage to property with a permanent location in this state.(B) Covered claim does not include:(i) Any amount awarded as punitive or exemplary damages;(ii) Any amount sought as a return of premium under any retrospective rating plan;(iii) Any amount due any reinsurer, insurer, insurance pool, underwriting association, health maintenance organization, hospital plan corporation, professional health service corporation or self-insurer as subrogation recoveries, reinsurance recoveries, contribution, indemnification or otherwise. No such claim for any amount due any reinsurer, insurer, insurance pool, underwriting association, health maintenance organization, hospital plan corporation or self-insurer may be asserted against a person insured under a policy issued by an insolvent insurer other than to the extent such claim exceeds the association obligation limitations set forth in section eight of this article;(iv) Any first party claim by an insured whose net worth exceeds $25 million on December 31 of the year next preceding the date the insurer becomes an insolvent insurer: Provided, That an insureds net worth on that date shall be considered to include the aggregate net worth of the insured and all of its subsidiaries and affiliates as calculated on a consolidated basis: Provided, however, That this exclusion does not apply to any claim for benefits under a workers compensation insurance policy required by chapter twenty-three of this code;(v) Any third party claim relating to a policy of an insured whose net worth exceeds $25 million on December 31 of the year next preceding the date the insurer becomes an insolvent insurer: Provided, That an insureds net worth on that date shall be considered to include the aggregate net worth of the insured and all of its subsidiaries and affiliates as calculated on a consolidated basis: Provided, however, That this exclusion does not apply to:(I) Third party claims against the insured where the insured has applied for or consented to the appointment of a receiver, trustee or liquidator for all or a substantial part of its assets, filed a voluntary petition in bankruptcy, filed a petition or an answer seeking a reorganization or arrangement with creditors or to take advantage of any insolvency law, or if an order, judgment or decree is entered by a court of competent jurisdiction, on the application of a creditor, adjudicating the insured bankrupt or insolvent or approving a petition seeking reorganization of the insured or of all or substantial part of its assets; or(II) Any claim for benefits under a workers compensation insurance policy required by chapter twenty-three of this code;(vi) Any claim that would otherwise be a covered claim but is an obligation to, or on behalf of a, person who has a net worth greater than that allowed by the insurance guaranty association law of the state of residence of the claimant at the time specified by that law and which association has denied coverage to that claimant on that basis: Provided, That this exclusion does not apply to any claim for benefits under a workers compensation insurance policy required by chapter twenty-three of this code;(vii) Any first party claims by an insured which is an affiliate of the insolvent insurer;(viii) Any fee or other amount relating to goods or services sought by, or on behalf of, any attorney or other provider of goods or services retained by the insolvent insurer or an insured prior to the date it was determined to be insolvent;(ix) Any fee or other amount sought by, or on behalf of, any attorney or other provider of goods or services retained by any insured or claimant in connection with the assertion or prosecution of any claim, covered or otherwise, against the association; or (x) Any claims for interest.(10) Insolvent insurer means an insurer licensed to transact insurance in this state, either at the time the policy was issued or when the insured event occurred, and against whom a final order of liquidation has been entered with a finding of insolvency by a court of competent jurisdiction in the insurers state of domicile.(11) "Member insurer" means any person who: writes any kind of insurance to which this article applies under section three of this article, including farmers mutual fire insurance companies and the exchange of reciprocal or interinsurance contracts; and is licensed to transact insurance in this state. An insurer shall cease to be a member insurer effective on the day following the termination or expiration of its license to transact the kinds of insurance to which this article applies, however the insurer shall remain liable as a member insurer for any and all obligations, including obligations for assessments levied prior to the termination or expiration of the insurers license and assessments levied after the termination or expiration, which relate to any insurer which became an insolvent insurer prior to the termination or expiration of the insurers license.(12) Net direct written premiums means direct gross premiums written in this state on insurance policies to which this article applies, less return premiums on the policies and dividends paid or credited to policyholders on such direct business. Net direct written premiums does not include premiums on contracts between insurers or reinsurers.(13) Person means any individual or legal entity, including governmental entities.(14) Receiver means receiver, liquidator, rehabilitator or conservator as the context may require. (15) Self-insurer means a person that covers its liability through a qualified individual or group self-insurance program or any other formal program created for the specific purpose of covering liabilities typically covered by insurance.
There is created a nonprofit unincorporated legal entity to be known as the West Virginia Insurance Guaranty Association. All insurers defined as member insurers in section five of this article shall be and remain members of the association as a condition of their authority to transact insurance in this state. The association shall perform its functions under a plan of operation established and approved under section nine of this article and shall exercise its powers through a board of directors established under section seven of this article. For purposes of administration and assessment, the association shall establish and maintain three separate accounts:(1) The automobile insurance account;(2) The workers' compensation insurance account; and(3) The account for all other insurance to which this article applies.
(1) The board of directors of the association shall consist of not less than five nor more than nine persons serving terms as established in the plan of operation. The members of the board shall be selected by member insurers subject to the approval of the commissioner. Vacancies on the board shall be filled for the remaining period of the term in the same manner as initial appointments. If no members are selected within sixty days after the effective date of this article, the commissioner may appoint the initial members of the board of directors.(2) In approving selections to the board, the commissioner shall consider among other things whether all member insurers are fairly represented.(3) Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors.
(a) The association shall:(1) Be obligated to pay covered claims existing prior to the final order of liquidation, that arise within thirty days after the final order of liquidation or before the policy expiration date if the expiration date is less than thirty days after the final order of liquidation, or that arise before the insured replaces the policy or causes its cancellation, if the insured does so within thirty days of the final order of liquidation. This obligation shall be satisfied by paying to the claimant an amount as follows:(A) The full amount of a covered claim for benefits under a workers compensation insurance policy: Provided, That any covered claim for deliberate intention, including any action pursuant to section two, article four, chapter twenty-three of this code, may not exceed $300,000 per claim.(B) An amount not exceeding $10,000 per policy for a covered claim for the return of unearned premium.(C) An amount not exceeding $300,000 per claim for all other covered claims: Provided, That for purposes of this limitation, all claims of any kind whatsoever arising out of, or related to, bodily injury or death to any one person constitutes a single claim, regardless of the number of claims made, or the number of claimants.In no event may the association be obligated to pay a claimant an amount in excess of the obligation of the insolvent insurer under the policy or coverage from which the claim arises. Notwithstanding any other provisions of this article, a covered claim may not include a claim filed with the association after the earlier of: (i) Twenty-five months after the date of the final order of liquidation; or (ii) the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer.Any obligation of the association to defend an insured on a covered claim shall cease upon the associations: (i) Payment, either by settlement releasing the insured or on a judgment, of an amount equal to the lesser of the associations covered claim obligation limit or the applicable policy limit; or (ii) tender of such amount.(2) Be considered the insurer only to the extent of its obligation on the covered claims and to that extent, subject to the limitations provided in this article, have all rights, duties and obligations of the insolvent insurer as if the insurer had not become insolvent, including, but not limited to, the right to pursue and retain salvage and subrogation recoverable on paid covered claim obligations. The association may not be considered the insolvent insurer for any purpose relating to the issue of whether the association is amenable to the personal jurisdiction of the courts of any state.(3) Allocate claims paid and expenses incurred among the three accounts separately, and assess member insurers separately for each account amounts necessary to pay the obligations of the association under subdivision (1) of this subsection subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, the cost of preparing any reports specified in section thirteen of this article and other expenses authorized by this article. The assessments of each member insurer shall be in the proportion that the net direct written premiums of the member insurer for the calendar year prior to the assessment on the kinds of insurance in the account bears to the net direct written premiums of all member insurers for the calendar year prior to the assessment on the kinds of insurance in the account: Provided, That farmers mutual insurance companies that do not issue workers compensation insurance policies may not be assessed to pay for the obligations of the association payable from the workers compensation insurance account. Each member insurer shall be notified of the assessment not later than thirty days before it is due. No member insurer may be assessed in any one year on any account an amount greater than two percent of that member insurers net direct written premiums for the calendar year preceding the assessment on the kinds of insurance in the account. If the maximum assessment, together with the other assets of the association in any account, does not provide in any one year in any account an amount sufficient to make all necessary payments from that account, the funds available shall be prorated and the unpaid portion shall be paid as soon after that as funds become available. The association shall pay claims in any order that it deems reasonable, including the payment of claims as they are received from the claimant or in groups or categories of claims. The association may exempt or defer, in whole or in part, the assessment of any member insurer, if the assessment would cause the member insurers financial statement to reflect the amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance: Provided, however, That during the period of deferment, no dividends may be paid to shareholders or policyholders. Deferred assessments shall be paid when the payment does not reduce capital or surplus below required minimums. The payments shall be refunded to those companies receiving larger assessments by virtue of the deferment, or at the election of any such company, credited against future assessments.(4) Investigate claims brought against the association and adjust, compromise, settle, and pay covered claims to the extent of the associations obligation and deny all other claims. The association may appoint and direct legal counsel retained under liability insurance policies for the defense of covered claims.(5) Notify claimants in this state as determined necessary by the commissioner and upon the commissioners request, to the extent records are available to the association.(6) (A) Have the right to review and contest as set forth in this subsection settlements, releases, compromises, waivers and judgments to which the insolvent insurer or its insureds were parties prior to the entry of the final order of liquidation. In an action to enforce settlements, releases and judgments to which the insolvent insurer or its insureds were parties prior to the entry of the final order of liquidation, the association may assert the following defenses, in addition to the defenses available to the insurer:(i) The association is not bound by a settlement, release, compromise or waiver executed by an insured or the insurer, or any judgment entered against an insured or the insurer by consent or through a failure to exhaust all appeals, if the settlement, release, compromise, waiver or judgment was:(I) Executed or entered within one hundred twenty days prior to the entry of a final order of liquidation and the insured or the insurer did not use reasonable care in entering into the settlement, release, compromise, waiver or judgment, or did not pursue all reasonable appeals of an adverse judgment; or(II) Executed by or taken against an insured or the insurer based on default, fraud, collusion or the insurers failure to defend.(ii) If a court of competent jurisdiction finds that the association is not bound by a settlement, release, compromise, waiver or judgment for the reasons described in subparagraph (i), paragraph (A), subdivision (6) of this subsection, the settlement, release, compromise, waiver or judgment shall be set aside and the association may defend any covered claim on the merits. The settlement, release, compromise, waiver or judgment may not be considered as evidence of liability or damages in connection with any claim brought against the association or any other party under this article.(iii) The association may assert any statutory defenses or other defenses or rights of offset against any settlement, release, compromise or waiver executed by an insured or the insurer, or any judgment taken against the insured or the insurer.(B) As to any covered claims arising from a judgment under any decision, verdict or finding based on the default of the insolvent insurer or its failure to defend, the association, either on its own behalf or on behalf of an insured may apply to have the judgment, order, decision, verdict or finding set aside by the same court or administrator that entered the judgment, order, decision, verdict or finding and may defend the claim on the merits.(7) Handle claims through its employees or through one or more insurers or other persons designated as servicing facilities. Designation of a servicing facility is subject to the approval of the commissioner, but the designation may be declined by a member insurer.(8) Reimburse each servicing facility for obligations of the association paid by the facility and for expenses incurred by the facility while handling claims on behalf of the association and shall pay the other expenses of the association authorized by this article.(9) Establish procedures for requesting financial information from insureds and claimants on a confidential basis for purposes of applying sections of this article concerning the net worth of first and third-party claimants, subject to that information being shared with any other association similar to the association and the liquidator for the insolvent company on the same confidential basis. If the insured or claimant refuses to provide the requested financial information and an auditors certification of the same where requested and available, the association may consider the net worth of the insured or claimant to be in excess of $25 million at the relevant time.(b) The association may:(1) Employ or retain persons that are necessary to handle claims and perform other duties of the association.(2) Borrow funds necessary to effect the purposes of this article in accord with the plan of operation.(3) Sue or be sued, and the power to sue includes the power and right to intervene as a party as a matter of right before any court in this state that has jurisdiction over an insolvent insurer as defined by this article.(4) Negotiate and become a party to contracts that are necessary to carry out the purpose of this article.(5) Perform other acts that are necessary or proper to effectuate the purpose of this article.(6) Refund to the member insurers in proportion to the contribution of each member insurer to an account that amount by which the assets of the account exceed the liabilities, if, at the end of any calendar year, the board of directors finds that the assets of the association in any account exceed the liabilities of that account as estimated by the board of directors for the coming year.
(a) The association shall:(1) Submit to the commissioner a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable and equitable administration of the association. The plan of operation and any amendments thereto become effective upon approval in writing by the commissioner.(2) If the association fails to submit a suitable plan of operation within ninety days following the effective date of this article or if at any time thereafter the association fails to submit suitable amendments to the plan, the commissioner shall, after notice and hearing, adopt rules for legislative approval as are necessary or advisable to effectuate the provisions of this article. The rules shall continue in force until modified by the commissioner or superseded by a plan submitted by the association and approved by the commissioner. All such rules shall be proposed in accordance with chapter twenty-nine-a of this code.(b) All member insurers shall comply with the plan of operation.(c) The plan of operation shall:(1) Establish the procedures whereby all the powers and duties of the association under section eight of this article will be performed.(2) Establish procedures for handling assets of the association.(3) Establish the amount and method of reimbursing members of the board of directors under section seven of this article.(4) Establish procedures by which claims may be filed with the association and establish acceptable forms of proof of covered claims. (5) Establish regular places and times for meetings of the board of directors.(6) Establish procedures for records to be kept of all financial transactions of the association, its agents and the board of directors.(7) Provide that any member insurer aggrieved by a final action or decision of the association may appeal to the commissioner within thirty days after the action or decision.(8) Establish the procedures whereby selections for the board of directors will be submitted to the commissioner.(9) Contain additional provisions necessary or proper for the execution of the powers and duties of the association.(d) The plan of operation may provide that any or all powers and duties of the association, except those under subdivision (3), subsection (a), and subdivision (2), subsection (b), section eight of this article are delegated to a corporation, association or other organization which performs or will perform functions similar to those of this association, or its equivalent, in two or more states. Such a corporation, association or organization shall be reimbursed as a servicing facility would be reimbursed and shall be paid for its performance of any other functions of the association. A delegation under this subsection may take effect only with the approval of both the board of directors and the commissioner, and may be made only to a corporation, association or organization which extends protection not substantially less favorable and effective than that provided by this article.
This article shall be known and may be cited as the "West Virginia Life and Health Insurance Guaranty Association Act."
(a) (1) The association shall submit to the commissioner a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable and equitable administration of the association. The plan of operation and any amendments thereto shall become effective upon the commissioner's written approval or unless he or she has not disapproved of the same within thirty days.(2) If the association fails to submit a suitable plan of operation within one hundred eighty days following the effective date of this article or if at any time thereafter the association fails to submit suitable amendments to the plan, the commissioner shall, after notice and hearing, adopt and promulgate such reasonable rules as are necessary or advisable to effectuate the provisions of this article. Such rules shall continue in force until modified by the commissioner or superseded by a plan submitted by the association and approved by the commissioner.(b) All member insurers shall comply with the plan of operation.(c) The plan of operation shall, in addition to requirements enumerated elsewhere in this article:(1) Establish procedures for handling the assets of the association;(2) Establish the amount and method of reimbursing members of the board of directors under section seven of this article;(3) Establish regular places and times for meetings including telephone conference calls of the board of directors;(4) Establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of directors;(5) Establish the procedures whereby selections for the board of directors will be made and submitted to the commissioner;(6) Establish any additional procedures for assessments under section nine of this article;(7) Contain additional provisions necessary or proper for the execution of the powers and duties of the association;(8) Establish procedures whereby a director may be removed for cause, including in the case where a member insurer director becomes an impaired or insolvent insurer; and(9) Require the board of directors to establish a policy and procedures for addressing conflicts of interests.(d) The plan of operation may provide that any or all powers and duties of the association, except those under subdivision (3), subsection (l), section eight and section nine of this article, are delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this association, or its equivalent, in two or more states. Such a corporation, association or organization shall be reimbursed for any payments made on behalf of the association and shall be paid for its performance of any function of the association. A delegation under this subsection shall take effect only with the approval of both the board of directors and the commissioner, and may be made only to a corporation, association or organization which extends protection not substantially less favorable and effective than that provided by this article.
In addition to the duties and powers enumerated elsewhere in this article:(a) The commissioner shall:(1) Upon request of the board of directors, provide the association with a statement of the premiums in this and any other appropriate states for each member insurer;(2) When an impairment is declared and the amount of the impairment is determined, serve a demand upon the impaired insurer to make good the impairment within a reasonable time. Notice to the impaired insurer shall constitute notice to its shareholders, if any; the failure of the impaired insurer to promptly comply with the demand shall not excuse the association from the performance of its powers and duties under this article; and(3) In any liquidation or rehabilitation proceeding involving a domestic insurer, be appointed as the liquidator or rehabilitator.(b) The commissioner may suspend or revoke, after notice and hearing, the certificate of authority to transact business in this state of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the commissioner may levy a forfeiture on any member insurer which fails to pay an assessment when due. The forfeiture shall not exceed five percent of the unpaid assessment per month, but no forfeiture shall be less than $100 per month.(c) A final action of the board of directors or the association may be appealed to the commissioner by any member insurer if such appeal is taken within 60 days of its receipt of notice of the final action being appealed. If a member company is appealing an assessment, the amount assessed shall be paid to the association and available to meet association obligations during the pendency of an appeal. If the appeal on the assessment is upheld, the amount paid in error or excess shall be returned to the member company. Any final action or order of the commissioner shall be subject to judicial review in a court of competent jurisdiction.(d) The liquidator, rehabilitator, or conservator of any impaired insurer may notify all interested persons of the effect of this article.
To aid in the detection and prevention of member insurer insolvencies or impairments:(a) It shall be the duty of the commissioner:(1) To notify the commissioners of all the other states, territories of the United States, and the District of Columbia within 30 days following the action taken or the date the action occurs, when the commissioner takes any of the following actions against a member insurer:(A) Revocation of license;(B) Suspension of license; or(C) Makes any formal order that the member insurer restrict its premium writing, obtain additional contributions to surplus, withdraw from the state, reinsure all or any part of its business, or increase capital, surplus, or any other account for the security of policy owners, contract owners, certificate holders, or creditors.(2) To report to the board of directors when the commissioner has taken any of the actions set forth in 33-26A-12(a)(1) of this code or has received a report from any other commissioner indicating that any such action has been taken in another state. The report to the board of directors shall contain all significant details of the action taken or the report received from another commissioner.(3) To report to the board of directors when the commissioner has reasonable cause to believe from any examination, whether completed or in process, of any member insurer that the insurer may be an impaired or insolvent insurer.(4) To furnish to the board of directors the National Association of Insurance Commissioners (NAIC) Insurance Regulatory Information System (IRIS) ratios and listings of companies not included in the ratios developed by the NAIC, and the board may use the information contained therein in carrying out its duties and responsibilities under this section. The report and the information contained therein shall be kept confidential by the board of directors until it is made public by the commissioner or other lawful authority.(b) The commissioner may seek the advice and recommendations of the board of directors concerning any matter affecting his or her duties and responsibilities regarding the financial condition of member insurers and insurers or health maintenance organizations seeking admission to transact business in this state.(c) The board of directors may, upon majority vote, make reports and recommendations to the commissioner upon any matter germane to the solvency, liquidation, rehabilitation, or conservation of any member insurer or germane to the solvency of any insurer or health maintenance organization seeking to do business in this state. The reports and recommendations shall not be considered public documents.(d) It shall be the duty of the board of directors, upon majority vote, to notify the commissioner of any information indicating any member insurer may be an impaired or insolvent insurer.(e) The board of directors may, upon majority vote, make recommendations to the commissioner for the detection and prevention of insurer insolvencies.
The association may recommend a natural person to serve as a special deputy to act for the commissioner and under his or her supervision in the liquidation, rehabilitation or conservation of any member insurer.
(a) Nothing in this article shall be construed to reduce the liability for unpaid assessments of the insureds of an impaired or insolvent insurer operating under a plan with assessment liability.(b) Records shall be kept of all negotiations and meetings in which the association or its representatives are involved to discuss the activities of the association in carrying out its powers and duties under 33-26A-8 of this code. Records of such negotiations or meetings shall be made public only upon the termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent insurer, upon the termination of the impairment or insolvency of the insurer, or upon the order of a court of competent jurisdiction. Nothing in this subsection shall limit the duty of the association to render a report of its activities under 33-26A-15 of this code.(c) For the purpose of carrying out its obligations under this article, the association shall be deemed to be a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies reduced by any amounts to which the association is entitled as assignee or subrogee pursuant to 33-26A-8(k) of this code. All assets of the impaired or insolvent insurer attributable to covered policies or contracts shall be used to continue all covered policies or contracts and pay all contractual obligations of the impaired or insolvent insurer as required by this article. Assets attributable to covered policies or contracts, as used in this subsection, are that proportion of the assets which the reserves that should have been established for such policies or contracts bear to the reserves that should have been established for all policies of insurance or health benefit plans written by the impaired or insolvent insurer. (d) As a creditor of the impaired or insolvent insurer as established in 33-26A-14(c) of this code and consistent with 33-10-1 et seq. of this code, the association and other similar associations shall be entitled to receive a disbursement of assets out of the marshaled assets, from time to time as the assets become available to reimburse it, as a credit against contractual obligations under this article. If the liquidator has not, within 120 days of a final determination of insolvency of a member insurer by the receivership court, made an application to the court for the approval of a proposal to disburse assets out of marshaled assets to guaranty associations having obligations because of the insolvency, then the association shall be entitled to make application to the receivership court for approval of its own proposal to disburse these assets.(e)(1) Prior to the termination of any liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contributions of the respective parties, including the association, the shareholders, contract owners, certificate holders, enrollees, and policy owners of the insolvent insurer, and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of such insolvent insurer. In making such a determination, consideration shall be given to the welfare of the policy owners, contract owners, certificate holders, and enrollees of the continuing or successor member insurer.(2) No distribution to stockholders, if any, of an impaired or insolvent insurer shall be made until and unless the total amount of valid claims of the association with interest thereon for funds expended in carrying out its powers and duties under 33-26A-8 of this code with respect to the member insurer have been fully recovered by the association. (f)(1) If an order for liquidation or rehabilitation of a member insurer domiciled in this state has been entered, the receiver appointed under such order shall have a right to recover on behalf of the member insurer, from any affiliate that controlled it, the amount of distributions, other than stock dividends paid by the member insurer on its capital stock, made at any time during the five years preceding the petition for liquidation or rehabilitation subject to the limitations of this subsection.(2) No such distribution shall be recoverable if the member insurer shows that when paid the distribution was lawful and reasonable, and that the member insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the member insurer to fulfill its contractual obligations.(3) Any person who, as an affiliate, controlled the member insurer at the time the distributions were paid shall be liable up to the amount of distributions received. Any person who, as an affiliate, controlled the member insurer at the time the distributions were declared, shall be liable up to the amount of distributions which would have been received if they had been paid immediately. If two or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.(4) The maximum amount recoverable under this subsection shall be the amount needed in excess of all other available assets of the insolvent insurer to pay the contractual obligations of the insolvent insurer.(5) If any person under 33-26A-14(f)(3) of this code is insolvent, all its affiliates that controlled it at the time the distribution was paid shall be jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate.
The association shall be subject to examination and regulation by the commissioner. The board of directors shall submit to the commissioner, not later than May 1 of each year, a financial report for the preceding calendar year in a form approved by the commissioner and a report of its activities during the preceding calendar year.
The association shall be exempt from payment of all fees and all taxes levied by this state or any of its subdivisions, except taxes levied on real property.
There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer or its agents or employees, the association or its agents or employees, members of the board of directors, or the commissioner or his or her representatives, for any action or omission by them in the performance of their powers and duties under this article. Such immunity shall extend to the participation in any organization of one or more other state associations of similar purposes and to any such organization and its agents or employees.
All proceedings in which the impaired or insolvent insurer is a party in any court in this state shall be stayed one hundred eighty days from the date an order of liquidation, rehabilitation or conservation is final to permit proper legal action by the association on any matters germane to its powers or duties. As to a judgment under any decision, order, verdict or finding based on default the association may apply to have the judgment set aside by the same court that made the judgment and shall be permitted to defend against the suit on the merits.
(a) A person, including a member insurer, agent, or affiliate of a member insurer, shall not make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio station or television station, or in any other way, any advertisement, announcement, or statement, written or oral, which uses the existence of the insurance guaranty association of this state for the purpose of sales, solicitation, or inducement to purchase any form of insurance or other coverage covered by the West Virginia Life and Health Insurance Guaranty Association Act: Provided, That this section shall not apply to the association or any other entity which does not sell or solicit insurance or coverage by a health maintenance organization.(b) Within 180 days of the effective date of this article, the association shall prepare a summary document describing the general purposes and current limitations of the act and complying with 33-26A-19(c) of this code. This document shall be submitted to the commissioner for approval. Sixty days after receiving such approval, no member insurer may deliver a policy or contract described in 33-26A-3(b)(1) of this code to a policy owner, contract owner, certificate holder, or enrollee unless the summary document is delivered to the policy owner, contract owner, certificate holder, or enrollee prior to or at the time of delivery of the policy or contract. The document shall also be available upon request by a policy owner, contract owner, certificate holder, or enrollee. The distribution, delivery, or contents or interpretation of this document shall not guarantee that either the policy or the contract or the policy owner, contract owner, certificate holder, or enrollee is covered in the event of the impairment or insolvency of a member insurer. The description document shall be revised by the association as amendments to the article may require. Failure to receive this document does not give the policy owner, contract owner, certificate holder, enrollee, or insured any greater rights than those stated in this article.(c) The document prepared under 33-26A-19(b) of this code shall contain a clear and conspicuous disclaimer on its face. The commissioner shall establish the form and content of the disclaimer. The disclaimer shall:(1) State the name and address of the association and insurance department;(2) Prominently warn the policy owner, contract owner, certificate holder, or enrollee that the association may not cover the policy or contract or, if coverage is available, it will be subject to substantial limitations and exclusions and conditioned on continued residence in the state;(3) State the types of policies or contracts for which guaranty funds will provide coverage;(4) State that the member insurer and its agents are prohibited by law from using the existence of the association for the purpose of sales, solicitation, or inducement to purchase any form of insurance or health maintenance organization coverage;(5) Emphasize that the policy owner, contract owner, certificate holder, or enrollee should not rely on coverage under the association when selecting an insurer or health maintenance organization;(6) Explain rights available and procedures for filing a complaint to allege a violation of any provisions of this article; and(7) Provide other information as directed by the commissioner. (d) A member insurer shall retain evidence of compliance with 33-26A-19(b) of this code for so long as the policy or contract for which the notice is given remains in effect.
(a) The purpose of this article is to protect, subject to certain limitations, the persons specified in 33-26A-3(a) of this code against failure in the performance of contractual obligations, under life, health, and annuity policies, plans, or contracts specified in 33-26A-3(b) of this code, because of the impairment or insolvency of the member insurer that issued the policies, plans, or contracts.(b) To provide this protection, an association of member insurers is created to pay benefits and to continue coverages as limited by this article, and members of the association are subject to assessment to provide funds to carry out the purpose of this article.
(a) This article shall provide coverage for the policies and contracts specified in 33-26A-3(b) of this code:(1) To persons who, regardless of where they reside (except for nonresident certificate holders under group policies or contracts), are the beneficiaries, assignees, or payees, including health care providers rendering services covered under health insurance policies or certificates, of the persons covered under 33-26A-3(a)(2) of this code.(2) To persons who are owners of or certificate holders or enrollees under the policies or contracts, other than unallocated annuity contracts and structured settlement annuities, and in each case who:(A) Are residents of this state; or(B) Are not residents of this state, but only under all of the following conditions:(i) The member insurer that issued the policies or contracts is domiciled in this state;(ii) The states in which the persons reside have associations similar to the association created by this article; and(iii) The persons are not eligible for coverage by an association in any other state because the insurer or the health maintenance organization was not licensed in the state at the time specified in the states guaranty association law.(3) For unallocated annuity contracts specified in 33-26A-3(b) of this code, 33-26A-3(a)(1) and 33-26A-3(a)(2) of this code shall not apply, and this article shall, except as provided in 33-26A-3(a)(5) and 33-26A-3(a)(6) of this code, provide coverage to:(A) Persons who are the owners of the unallocated annuity contracts if the contracts are issued to or in connection with a specific benefit plan whose plan sponsor has its principal place of business in this state; and(B) Persons who are owners of unallocated annuity contracts issued to or in connection with government lotteries if the owners are residents.(4) For structured settlement annuities specified in 33-26A-3(b) of this code, 33-26A-3(a)(1) and 33-26A-3(a)(2) of this code shall not apply, and this article shall, except as provided in 33-26A-3(a)(5) and 33-26A-3(a)(6) of this code, provide coverage to a person who is a payee under a structured settlement annuity, or beneficiary of a payee if the payee is deceased, if the payee:(A) Is a resident, regardless of where the contract owner resides; or(B) Is not a resident, but only under both of the following conditions:(i) (I) The contract owner of the structured settlement annuity is a resident; or(II) The contract owner of the structured settlement annuity is not a resident, but the insurer that issued the structured settlement annuity is domiciled in this state and the state in which the contract owner resides has an association similar to the association created by this article; and(ii) Neither the payee or beneficiary nor the contract owner is eligible for coverage by the association of the state in which the payee or contract owner resides.(5) This article shall not provide coverage to:(A) A person who is a payee or beneficiary of a contract owner resident of this state, if the payee or beneficiary is afforded any coverage by the association of another state; or(B) A person covered under 33-26A-3(a)(3) of this code, if any coverage is provided by the association of another state to the person; or(C) A person who acquires rights to receive payments through a structured settlement factoring transaction as defined in 26 U.S.C.  5891, regardless of whether the transaction occurred before or after 26 U.S.C.  5891 became effective.(6) This article is intended to provide coverage to a person who is a resident of this state and, in special circumstances, to a nonresident. In order to avoid duplicate coverage, if a person who would otherwise receive coverage under this article is provided coverage under the laws of any other state, the person shall not be provided coverage under this article. In determining the application of the provisions of this subdivision in situations where a person could be covered by the association of more than one state, whether as an owner, payee, enrollee, beneficiary, or assignee, this article shall be construed in conjunction with other state laws to result in coverage by only one association.(b) Coverage provided by this article shall be as follows:(1) This article shall provide coverage to the persons specified in 33-26A-3(a) of this code for policies or contracts of direct, nongroup life insurance, health insurance (which for the purposes of this article includes health maintenance organization subscriber contracts and certificates), or annuities, and supplemental contracts to any of these, for certificates under direct group policies and contracts, and for unallocated annuity contracts issued by member insurers, except as limited by this article. Annuity contracts and certificates under group annuity contracts include, but are not limited to, guaranteed investment contracts, deposit administration contracts, unallocated funding agreements, allocated funding agreements, structured settlement annuities, annuities issued in connection with government lotteries, and any immediate or deferred annuity contracts.(2) Except as otherwise provided in 33-26A-3(b)(3) of this code, this article shall not provide coverage for:(A) A portion of a policy or contract not guaranteed by the member insurer, or under which the risk is borne by the policy or contract owner;(B) A policy or contract of reinsurance, unless assumption certificates have been issued pursuant to the reinsurance policy or contract;(C) A portion of a policy or contract to the extent that the rate of interest on which it is based, or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value:(i) Averaged over the period of four years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier, exceeds the rate of interest determined by subtracting two percentage points from Moodys Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four years before the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier; and(ii) On and after the date on which the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier, exceeds the rate of interest determined by subtracting three percentage points from Moodys Corporate Bond Yield Average as most recently available;(D) A portion of a policy or contract issued to a plan or program of an employer, association, or other person to provide life, health, or annuity benefits to its employees, members, or others, to the extent that the plan or program is self-funded or uninsured including, but not limited to, benefits payable by an employer, association, or other person under:(i) A multiple employer welfare arrangement as defined in section 514 of the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1144, as amended;(ii) A minimum premium group insurance plan;(iii) A stop-loss group insurance plan; or(iv) An administrative services only contract;(E) A portion of a policy or contract to the extent that it provides for: (i) Dividends or experience rating credits; (ii) Voting rights; or (iii) Payment of any fees or allowances to any person, including the policy or contract owner, in connection with the service to or administration of the policy or contract;(F) A policy or contract issued in this state by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue the policy or contract in this state;(G) An unallocated annuity contract issued to or in connection with a benefit plan protected under the federal pension benefit guaranty corporation, regardless of whether the federal pension benefit guaranty corporation has yet become liable to make any payments with respect to the benefit plan; (H) A portion of any unallocated annuity contract that is not issued to or in connection with a specific employee, union, or association of natural persons benefit plan or a government lottery;(I) A portion of a policy or contract to the extent that the assessments required by 33-26A-9 of this code with respect to the policy or contract are preempted by federal or state law;(J) An obligation that does not arise under the express written terms of the policy or contract issued by the member insurer to the enrollee, certificate holder, contract owner, or policy owner, including without limitation:(i) Claims based on marketing materials;(ii) Claims based on side letters, riders, or other documents that were issued by the member insurer without meeting applicable policy or contract form filing or approval requirements;(iii) Misrepresentations of or regarding policy or contract benefits;(iv) Extra-contractual claims; or(v) A claim for penalties or consequential or incidental damages;(K) A contractual agreement that establishes the member insurers obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer;(L) A portion of a policy or contract to the extent it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policy or contract owners rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier. If a policys or contracts interest or changes in value are credited less frequently than annually, then for purposes of determining the values that have been credited and are not subject to forfeiture, the interest or change in value determined by using the procedures defined in the policy or contract will be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture;(M) A policy or contract providing any hospital, medical, prescription drug, or other health care benefits pursuant to Part C or Part D of Subchapter XVIII, Chapter 7 of Title 42 of the United States Code (commonly known as Medicare Part C & D), or Subchapter XIX, Chapter 7 of Title 42 of the United States Code (commonly known as Medicaid), or any regulations issued pursuant thereto; or(N) Structured settlement annuity benefits to which a payee (or beneficiary) has transferred his or her rights in a structured settlement factoring transaction as defined in 26 U.S.C.  5891, regardless of whether the transaction occurred before or after that section became effective.(3) The exclusion from coverage referenced in 33-26A-3(b)(2)(C) of this code shall not apply to any portion of a policy or contract, including a rider, that provides long-term care or any other health insurance benefits.(c) The benefits that the association may become liable for shall in no event exceed the lesser of:(1) The contractual obligations for which the member insurer is liable or would have been liable if it were not an impaired or insolvent insurer; or(2) (A) With respect to one life, regardless of the number of policies or contracts:(i) $300,000 in life insurance death benefits, but no more than $100,000 in net cash surrender and net cash withdrawal values for life insurance;(ii) For health insurance benefits:(I) $100,000 for coverages not defined as disability income insurance or health benefit plans or long-term care insurance as defined in 33-15A-4 of this code, including any net cash surrender and net cash withdrawal values;(II) $300,000 for disability income insurance, and $300,000 for long-term care insurance as defined in 33-15A-4 of this code;(III) $500,000 for health benefit plans;(iii) $250,000 in the present value of annuity benefits, including net cash surrender and net cash withdrawal values; or(B) With respect to each individual participating in a governmental retirement plan established under section 401, 403(b), or 457 of the United States Internal Revenue Code covered by an unallocated annuity contract or the beneficiaries of each such individual if deceased, in the aggregate, $250,000 in present value annuity benefits, including net cash surrender and net cash withdrawal values;(C) With respect to each payee of a structured settlement annuity, or beneficiary or beneficiaries of the payee if deceased, $250,000 in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any;(D) However, in no event shall the association be obligated to cover more than:(i) An aggregate of $300,000 in benefits with respect to any one life under 33-26A-3(c)(2)(A), 33-26A-3(c)(2)(B), or 33-26A-3(c)(2)(C) of this code except with respect to benefits for health benefit plans under 33-26A-3(c)(2)(A)(ii) of this code, in which case the aggregate liability of the association shall not exceed $500,000 with respect to any one individual; or(ii) With respect to one owner of multiple nongroup policies of life insurance, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, more than $5 million in benefits, regardless of the number of policies and contracts held by the owner.(E) With respect to either one contract owner provided coverage under 33-26A-3(a)(3)(B) of this code, or one plan sponsor whose plans own directly or in trust one or more unallocated annuity contracts not included in 33-26A-3(c)(2)(B) of this code, $5 million in benefits, irrespective of the number of contracts with respect to the contract owner or plan sponsor. However, in the case where one or more unallocated annuity contracts are covered contracts under this article and are owned by a trust or other entity for the benefit of two or more plan sponsors, coverage shall be afforded by the association if the largest interest in the trust or entity owning the contract or contracts is held by a plan sponsor whose principal place of business is in this state. In no event shall the association be obligated to cover more than $5 million in benefits with respect to all of these unallocated contracts.(F) The limitations set forth in this subsection are limitations on the benefits for which the association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired or insolvent insurer attributable to covered policies. The costs of the associations obligations under this article may be met by the use of assets attributable to covered policies or reimbursed to the association pursuant to its subrogation and assignment rights.(G) For purposes of this article, benefits provided by a long-term care rider to a life insurance policy or annuity contract shall be considered the same type of benefits as the base life insurance policy or annuity contract to which it relates.(d) In performing its obligations to provide coverage under 33-26A-8 of this code, the association shall not be required to guarantee, assume, reinsure, reissue, or perform, or cause to be guaranteed, assumed, reinsured, reissued, or performed, the contractual obligations of the insolvent or impaired insurer under a covered policy or contract that do not materially affect the economic values or economic benefits of the covered policy or contract.
This article shall be liberally construed to effect the purpose under section two of this article which shall constitute an aid and guide to interpretation.
As used in this article:(1) Account means either of the two accounts created under 33-26A-6 of this code.(2) Association means the West Virginia Life and Health Insurance Guaranty Association created under 33-26A-6 of this code.(3) Authorized assessment or the term authorized when used in the context of assessments means a resolution by the board of directors has been passed whereby an assessment will be called immediately or in the future from member insurers for a specified amount. An assessment is authorized when the resolution is passed.(4) Benefit plan means a specific employee, union, or association of natural persons benefit plan.(5) Called assessment or the term called when used in the context of assessments means that a notice has been issued by the association to member insurers requiring that an authorized assessment be paid within the time frame set forth within the notice. An authorized assessment becomes a called assessment when notice is mailed by the association to member insurers.(6) Commissioner means the Insurance Commissioner of West Virginia.(7) Contractual obligation means any obligation under a policy or contract or certificate under a group policy or contract, or portion thereof for which coverage is provided under 33-26A-3 of this code.(8) Covered contract or covered policy means any policy or contract within the scope of this article under 33-26A-3 of this code. (9) Extra-contractual claims shall include, for example, claims relating to bad faith in the payment of claims, punitive, or exemplary damages or attorneys fees and costs.(10) Health benefit plan means any hospital or medical expense policy or certificate subject to 33-15-1 et seq. or 33-16-1 et seq. of this code and benefits provided subject to 33-24-1 et seq. or 33-25-1 et seq. of this code, or health maintenance organization subscriber contract or any other similar health contract subject to the provisions of 33-25A-1 et seq. of this code. Health benefit plan does not include:(i) Accident only insurance;(ii) Credit insurance;(iii) Dental only insurance;(iv) Vision only insurance;(v) Medicare Supplement insurance;(vi) Benefits for long-term care, home health care, community-based care, or any combination thereof;(vii) Disability income insurance;(viii) Coverage for on-site medical clinics; or(ix) Specified disease, hospital confinement indemnity, or limited benefit health insurance if the types of coverage do not provide coordination of benefits and are provided under separate policies or certificates.(11) Impaired insurer means a member insurer which, after the effective date of this article, is not an insolvent insurer, and: (1) Is deemed by the commissioner to be potentially unable to fulfill its contractual obligations: or (2) is placed under an order of rehabilitation or conservation by a court of competent jurisdiction.(12) Insolvent insurer means a member insurer which, after the effective date of this article, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency.(13) Member insurer means any insurer or health maintenance organization licensed or which holds a certificate of authority to transact in this state any kind of insurance or health maintenance organization business for which coverage is provided under 33-26A-3 of this code, and includes an insurer or health maintenance organization whose license or certificate of authority in this state may have been suspended, revoked, not renewed, or voluntarily withdrawn, and includes nonprofit service corporations as defined in 33-24-1 et seq. of this code and health care corporations as defined in 33-25-1 et seq. of this code, but does not include: (A) A fraternal benefit society;(B) A mandatory state pooling plan;(C) A mutual assessment company or any entity that operates on an assessment basis;(D) An insurance exchange;(E) An organization which has a certificate or license limited to the issuance of charitable gift annuities under 33-13B-1 et seq. of this code; or(F) Any entity similar to any of the above.(14) Moodys Corporate Bond Yield Average means the Monthly Average Corporates as published by Moodys Investors Service, Inc., or any successor thereto.(15) Owner of a policy or contract and policyholder, policy owner, and contract owner mean the person who is identified as the legal owner under the terms of the policy or contract or who is otherwise vested with legal title to the policy or contract through a valid assignment completed in accordance with the terms of the policy or contract and properly recorded as the owner on the books of the member insurer. The terms owner, contract owner, policyholder, and policy owner do not include persons with a mere beneficial interest in a policy or contract.(16) Person means any individual, corporation, limited liability company, partnership, association, or voluntary organization.(17) Plan sponsor means:(A) The employer in the case of a benefit plan established or maintained by a single employer;(B) The employee organization in the case of a benefit plan established or maintained by an employee organization; or(C) In a case of a benefit plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan.(18) Premiums means amounts or considerations (by whatever name called) received on covered policies or contracts less premiums, considerations, and deposits, and less dividends and experience credits thereon. Premiums does not include amounts or considerations received for policies or contracts or for the portions of policies or contracts for which coverage is not provided under 33-26A-3(b) of this code, except that assessable premium shall not be reduced on account of 33-26A-3(b)(2)(C) of this code relating to interest limitations and 33-26A-3(c)(2) of this code relating to limitations with respect to any one individual, one participant, and one policy or contract owner. Premiums shall not include:(A) Premiums in excess of $5 million on any unallocated annuity contract not issued under a government retirement plan or its trustee established under sections 401, 403(b), or 457 of the United States Internal Revenue Code; or(B) With respect to multiple nongroup policies of life insurance owned by one owner, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, premiums in excess of $5 million with respect to these policies or contracts, regardless of the number of policies or contracts held by the owner.(19) (A) Principal place of business of a plan sponsor or a person other than a natural person means the single state in which the natural persons who establish policy for the direction, control, and coordination of the operations of the entity as a whole primarily exercise that function, determined by the association in its reasonable judgment by considering the following factors:(i) The state in which the primary executive and administrative headquarters of the entity is located;(ii) The state in which the principal office of the chief executive officer of the entity is located;(iii) The state in which the board of directors (or similar governing person or persons) of the entity conducts the majority of its meetings;(iv) The state in which the executive or management committee of the board of directors (or similar governing person or persons) of the entity conducts the majority of its meetings; and(v) The state from which the management of the overall operations of the entity is directed;(vi) In the case of a benefit plan sponsored by affiliated companies comprising a consolidated corporation, the state in which the holding company or controlling affiliate has its principal place of business as determined using the above factors; however(vii) In the case of a plan sponsor, if more than 50 percent of the participants in the benefit plan are employed in a single state, that state shall be deemed to be the principal place of business of the plan sponsor.(B) The principal place of business of a plan sponsor of a benefit plan described in 33-26A-5(17)(C) of this code shall be deemed to be the principal place of business of the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan that, in lieu of a specific or clear designation of a principal place of business, shall be deemed to be the principal place of business of the employer or employee organization that has the largest investment in the benefit plan in question.(20) Receivership court means the court in the insolvent or impaired insurers state having jurisdiction over the conservation, rehabilitation, or liquidation of the member insurer.(21) Resident means a person to whom a contractual obligation is owed and who resides in this state on the date of entry of a court order that determines a member insurer to be an impaired insurer or a court order that determines a member insurer to be an insolvent insurer, whichever occurs first. A person may be a resident of only one state, which in the case of a person other than a natural person shall be its principal place of business. Citizens of the United States that are either residents of foreign countries or residents of United States possessions, territories, or protectorates that do not have an association similar to the association created by this article, shall be deemed residents of the state of domicile of the member insurer that issued the policies or contracts.(22) Structured settlement annuity means an annuity purchased in order to fund periodic payments for a plaintiff or other claimant in payment for or with respect to personal injury suffered by the plaintiff or other claimant.(23) Supplemental contract means a written agreement entered into for the distribution of proceeds under a life, health, or annuity policy or contract.(24) Unallocated annuity contract means any annuity contract or group annuity certificate which is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed to an individual by an insurer under such contract or certificate.
(a) There is created a nonprofit legal entity to be known as the West Virginia Life and Health Insurance Guaranty Association. All member insurers shall be and remain members of the association as a condition of their authority to transact insurance or a health maintenance organization business in this state. The association shall perform its functions under the plan of operation established and approved under 33-26A-10 of this code and shall exercise its powers through a board of directors established under 33-26A-7 of this code. For purposes of administration and assessment, the association shall maintain the following two accounts:(1) The life insurance and annuity account which includes the following subaccounts:(A) Life insurance account;(B) Annuity account which shall include annuity contracts owned by a governmental retirement plan or its trustee established under section 401, 403(b), or 457 of the United States Internal Revenue Code, but shall otherwise exclude unallocated annuities; and(C) Unallocated annuity account which shall exclude contracts owned by a governmental retirement plan or its trustee established under section 401, 403(b), or 457 of the United States Internal Revenue Code.(2) The health account.(b) The association shall come under the immediate supervision of the commissioner and shall be subject to the applicable provisions of the insurance laws of this state. Meetings or records of the association may be opened to the public upon majority vote of the board of directors of the association.
(a) The board of directors of the association shall consist of not less than seven nor more than 11 member insurers serving terms as established in the plan of operation. The members of the board shall be selected by member insurers subject to the approval of the commissioner. Vacancies on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members, subject to the approval of the commissioner.(b) To select the initial board of directors, and initially organize the association, the commissioner shall give notice to all member insurers of the time and place of the organizational meeting. In determining voting rights at the organizational meeting, each member insurer shall be entitled to one vote in person or by proxy. If the board of directors is not selected within 60 days after notice of the organizational meeting, the commissioner may appoint the initial members.(c) In approving selections or in appointing members to the board, the commissioner shall consider, among other things, whether all member insurers are fairly represented.(d) Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors but members of the board shall not otherwise be compensated by the association for their services.
(a) If a member insurer is an impaired insurer, the association may, in its discretion, and subject to any conditions imposed by the association that do not impair the contractual obligations of the impaired insurer, that are approved by the commissioner:(1) Guarantee, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, any or all of the covered policies or contracts of the impaired insurer; or(2) Provide such moneys, pledges, notes, guarantees, or other means as are proper to effectuate 33-26A-8(a)(1) of this code and assure payment of the contractual obligations of the impaired insurer pending action under said 33-26A-8(a)(1) of this code.(b) If a member insurer is an insolvent insurer, the association shall, in its discretion, either:(1) (A) (i) Guarantee, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, the policies or contracts of the insolvent insurer; or(ii) Assure payment of the contractual obligations of the insolvent insurer; and(B) Provide moneys, pledges, guarantees, or other means as are reasonably necessary to discharge such duties; or(2) Provide benefits and coverages in accordance with the following provisions:(A) With respect to policies and contracts, assure payment of benefits that would have been payable under the policies or contracts of the insolvent insurer, for claims incurred:(i) With respect to group policies and contracts, not later than the earlier of the next renewal date under such policies or contracts or 45 days, but in no event less than 30 days, after the date on which the association becomes obligated with respect to such policies and contracts;(ii) With respect to nongroup policies, contracts, and annuities, not later than the earlier of the next renewal date, if any, under these policies or contracts or one year, but in no event less than 30 days, from the date on which the association becomes obligated with respect to such policies or contracts;(B) Make diligent efforts to provide all known insureds, enrollees, or annuitants, or group policy or contract owners with respect to group policies and contracts 30-days notice of the termination (pursuant to 33-26A-8(b)(2)(A) of this code) of the benefits provided; (C) With respect to nongroup policies and contracts covered by the association, make available to each known insured, enrollee, or annuitant, or owner if other than the insured or annuitant, and with respect to an individual formerly an insured, enrollee, or annuitant under a group policy or contract who is not eligible for replacement group coverage, make available substitute coverage on an individual basis in accordance with the provisions of 33-26A-8(b)(2)(D) of this code, if the insureds, enrollees, or annuitants had a right under law or the terminated policy, contract, or annuity to convert coverage to individual coverage or to continue an individual policy, contract, or annuity in force until a specified age or for a specified time, during which the insurer or health maintenance organization had no right unilaterally to make changes in any provision of the policy, contract, or annuity or had a right only to make changes in premium by class;(D) (i) In providing the substitute coverage required under 33-26A-8(b)(2)(C) of this code, the association may offer either to reissue the terminated coverage or to issue an alternative policy or contract at actuarially justified rates, subject to the prior approval of the commissioner;(ii) Alternative or reissued policies or contracts shall be offered without requiring evidence of insurability, and shall not provide for any waiting period or exclusion that would not have applied under the terminated policy or contract;(iii) The association may reinsure any alternative or reissued policy or contract.(E) (i) Alternative policies or contracts adopted by the association shall be subject to the approval of the commissioner. The association may adopt alternative policies or contracts of various types for future issuance without regard to any particular impairment or insolvency.(ii) Alternative policies or contracts shall contain at least the minimum statutory provisions required in this state and provide benefits that shall not be unreasonable in relation to the premium charged. The association shall set the premium in accordance with a table of rates which it shall adopt. The premium shall reflect the amount of insurance to be provided and the age and class of risk of each insured, but shall not reflect any changes in the health of the insured after the original policy or contract was last underwritten.(iii) Any alternative policy or contract issued by the association shall provide coverage of a type similar to that of the policy or contract issued by the impaired or insolvent insurer, as determined by the association.(F) If the association elects to reissue terminated coverage at a premium rate different from that charged under the terminated policy or contract, the premium shall be actuarially justified and set by the association in accordance with the amount of insurance or coverage provided and the age and class of risk, subject to prior approval of the commissioner; (G) The associations obligations with respect to coverage under any policy or contract of the impaired or insolvent insurer or under any reissued or alternative policy or contract shall cease on the date that the coverage or policy or contract is replaced by another similar policy or contract by the policy or contract owner, the insured, the enrollee, or the association;(H) When proceeding under this subdivision with respect to any policy or contract carrying guaranteed minimum interest rates, the association shall assure the payment or crediting of a rate of interest consistent with 33-26A-3(b)(2)(C) of this code.(c) Nonpayment of premium within 31 days after the date required under the terms of any guaranteed, assumed, alternative, or reissued policy or contract or substitute coverage shall terminate the associations obligations under such policy, contract, or coverage under this article with respect to such policy, contract, or coverage, except with respect to any claims incurred or any net cash surrender value which may be due in accordance with the provisions of this article.(d) Premiums due for coverage after entry of an order of liquidation of an insolvent insurer shall belong to and be payable at the direction of the association. If the liquidator of an insolvent insurer requests, the association shall provide a report to the liquidator regarding such premium collected by the association. The association shall be liable for unearned premiums due to policy or contract owners arising after the entry of the order.(e) The protection provided by this article shall not apply where any guaranty protection is provided to residents of this state by the laws of the domiciliary state or jurisdiction of the impaired or insolvent insurer other than this state.(f) In carrying out its duties under 33-26A-8(b) of this code, the association may, subject to approval by a court in this state:(1) Impose permanent policy or contract liens in connection with any guarantee, assumption, or reinsurance agreement, if the association finds that the amounts which can be assessed under this article are less than the amounts needed to assure full and prompt performance of the associations duties under this article, or that the economic or financial conditions as they affect member insurers are sufficiently adverse to render the imposition of such permanent policy or contract liens, to be in the public interest;(2) Impose temporary moratoriums or liens on payments of cash values and policy loans, or any other right to withdraw funds held in conjunction with policies or contracts, in addition to any contractual provisions for deferral of cash or policy loan value. In the event of a temporary moratorium or moratorium charge imposed by the receivership court on payment of cash values or policy loans, or on any other right to withdraw funds held in conjunction with policies or contracts, out of the assets of the impaired or insolvent insurer, the association may defer the payment of cash values, policy loans, or other rights by the association for the period of the moratorium or moratorium charge imposed by the receivership court, except for claims covered by the association to be paid in accordance with a hardship procedure established by the liquidator or rehabilitator and approved by the receivership court.(g) A deposit in this state, held pursuant to law or required by the commissioner for the benefit of creditors, including policy or contract owners, not turned over to the domiciliary liquidator upon the entry of a final order of liquidation or order approving a rehabilitation plan of a member insurer domiciled in this state or in a reciprocal state, pursuant to 33-10-1 et seq. of this code, shall be promptly paid to the association. The association shall be entitled to retain a portion of any amount so paid to it equal to the percentage determined by dividing the aggregate amount of policy or contract owners claims related to that insolvency for which the association has provided statutory benefits by the aggregate amount of all policy or contract owners claims in this state related to that insolvency and shall remit to the domiciliary receiver the amount so paid to the association less the amount retained pursuant to this subsection. Any amount so paid to the association and retained by it shall be treated as a distribution of estate assets pursuant to 33-10-1 et seq. of this code.(h) If the association fails to act within a reasonable period of time with respect to an insolvent insurer as provided in 33-26A-8(b) of this code, the commissioner shall have the powers and duties of the association under this article with respect to the insolvent insurer.(i) The association may render assistance and advice to the commissioner, upon his or her request, concerning rehabilitation, payment of claims, continuance of coverage, or the performance of other contractual obligations of any impaired or insolvent insurer.(j) The association shall have standing to appear or intervene before any court in this state with jurisdiction over an impaired or insolvent insurer concerning which the association is or may become obligated under this article. Standing shall extend to all matters germane to the powers and duties of the association, including, but not limited to, proposals for reinsuring, reissuing, modifying, or guaranteeing the policies or contracts of the impaired or insolvent insurer and the determination of the policies or contracts and contractual obligations. The association shall also have the right to appear or intervene before a court or agency in another state with jurisdiction over an impaired or insolvent insurer for which the association is or may become obligated or with jurisdiction over any person or property against whom the association may have rights through subrogation or otherwise.(k) (1) Any person receiving benefits under this article shall be deemed to have assigned the rights under, and any causes of action against any person for losses arising under, resulting from, or otherwise relating to, the covered policy or contract to the association to the extent of the benefits received because of this article, whether the benefits are payments of or on account of contractual obligations, continuation of coverage, or provision of substitute or alternative policies, contracts, or coverages. The association may require an assignment to it of such rights and cause of action by any enrollee, payee, policy, or contract owner, beneficiary, insured, or annuitant as a condition precedent to the receipt of any right or benefits conferred by this article upon such person.(2) The subrogation rights of the association under this subsection shall have the same priority against the assets of the impaired or insolvent insurer as that possessed by the person entitled to receive benefits under this article.(3) In addition to 33-26A-8(k)(1) and 33-26A-8(k)(2) of this code, the association shall have all common law rights of subrogation and any other equitable or legal remedy that would have been available to the impaired or insolvent insurer or owner, beneficiary, enrollee, payee, or insured of a policy or contract with respect to such policy or contracts.(4) If the preceding provisions of this subsection are invalid or ineffective with respect to any person or claim for any reason, the amount payable by the association with respect to the related covered obligations shall be reduced by the amount realized by any other person with respect to the person or claim that is attributable to the policies or contracts, or portion thereof, covered by the association.(5) If the association has provided benefits with respect to a covered obligation and a person recovers amounts as to which the association has rights as described in this subsection, the person shall pay to the association the portion of the recovery attributable to the policies or contracts, or portion thereof, covered by the association.(l) In addition to the rights and powers elsewhere in this article, the association may:(1) Enter into such contracts as are necessary or proper to carry out the provisions and purposes of this article;(2) Sue or be sued, including taking any legal actions necessary or proper to recover any unpaid assessments under 33-26A-9 of this code and to settle claims or potential claims against it;(3) Borrow money to effect the purpose of this article; any notes or other evidence of indebtedness of the association not in default shall be legal investments for domestic member insurers and may be carried as admitted assets;(4) Employ or retain such persons as are necessary to handle the financial transactions of the association, and to perform such other functions as become necessary or proper under this article;(5) Take such legal action as may be necessary to avoid or recover payment of improper claims;(6) Exercise, for the purposes of this article and to the extent approved by the commissioner, the powers of a domestic life insurer, health insurer, or health maintenance organization, but in no case may the association issue policies or contracts other than those issued to perform its obligations under this article;(7) Organize itself as a corporation or in other legal form permitted by the laws of the state;(8) Request information from a person seeking coverage from the association in order to aid the association in determining its obligations under this article with respect to the person, and the person shall promptly comply with the request; (9) Unless prohibited by law, in accordance with the terms and conditions of the policy or contract, file for actuarially justified rate or premium increases for any policy or contract for which it provides coverage under this article; and(10) Take other necessary or appropriate action to discharge its duties and obligations under this article or to exercise its powers under this article.(m) The association may join an organization of one or more other state associations of similar purposes, to further the purposes and administer the powers and duties of the association. (n) (1) (A) At any time within 180 days of the date of the order of liquidation, the association may elect to succeed to the rights and obligations of the ceding member insurer that relate to policies, contracts, or annuities covered, in whole or in part, by the association, in each case under any one or more reinsurance contracts entered into by the insolvent insurer and its reinsurers and selected by the association. Any such assumption shall be effective as of the date of the order of liquidation. The election shall be effected by the association or the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) on its behalf sending written notice, return receipt requested, to the affected reinsurers.(B) To facilitate the earliest practicable decision about whether to assume any of the contracts of reinsurance, and in order to protect the financial position of the estate, the receiver and each reinsurer of the ceding member insurer shall make available upon request to the association or to NOLHGA on its behalf as soon as possible after commencement of formal delinquency proceedings: (i) Copies of in-force contracts of reinsurance and all related files and records relevant to the determination of whether such contracts should be assumed; and (ii) notices of any defaults under the reinsurance contacts or any known event or condition which with the passage of time could become a default under the reinsurance contracts.(C) The following subparagraphs shall apply to reinsurance contracts so assumed by the association:(i) The association shall be responsible for all unpaid premiums due under the reinsurance contracts for periods both before and after the date of the order of liquidation, and shall be responsible for the performance of all other obligations to be performed after the date of the order of liquidation, in each case which relate to policies, contracts, or annuities covered, in whole or in part, by the association. The association may charge policies, contracts, or annuities covered in part by the association, through reasonable allocation methods, the costs for reinsurance in excess of the obligations of the association and shall provide notice and an accounting of these charges to the liquidator.(ii) The association shall be entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods after the date of the order of liquidation and that relate to policies, contracts, or annuities covered, in whole or in part, by the association, provided that, upon receipt of any such amounts, the association shall be obliged to pay to the beneficiary under the policy, contract, or annuity on account of which the amounts were paid a portion of the amount equal to lesser of:(I) The amount received by the association; and(II) The excess of the amount received by the association over the amount equal to the benefits paid by the association on account of the policy, contract, or annuity less the retention of the insurer applicable to the loss or event.(iii) Within 30 days following the associations election (the election date), the association and each reinsurer under contracts assumed by the association shall calculate the net balance due to or from the association under each reinsurance contract as of the election date with respect to policies, contracts, or annuities covered, in whole or in part, by the association, which calculation shall give full credit to all items paid by either the member insurer or its receiver or the reinsurer prior to the election date. The reinsurer shall pay the receiver any amounts due for losses or events prior to the date of the order of liquidation, subject to any set-off for premiums unpaid for periods prior to the date, and the association or reinsurer shall pay any remaining balance due the other, in each case within five days of the completion of the aforementioned calculation. Any disputes over the amounts due to either the association or the reinsurer shall be resolved by arbitration pursuant to the terms of the affected reinsurance contracts or, if the contract contains no arbitration clause, as otherwise provided by law. If the receiver has received any amounts due the association pursuant to 33-26A-8(n)(1)(C)(ii) of this code, the receiver shall remit the same to the association as promptly as practicable.(iv) If the association or receiver, on the associations behalf, within 60 days of the election date, pays the unpaid premiums due for periods both before and after the election date that relate to policies, contracts, or annuities covered, in whole or in part, by the association, the reinsurer shall not be entitled to terminate the reinsurance contracts for failure to pay premium insofar as the reinsurance contracts relate to policies, contracts, or annuities covered, in whole or in part, by the association, and shall not be entitled to set off any unpaid amounts due under other contracts, or unpaid amounts due from parties other than the association, against amounts due the association.(2) During the period from the date of the order of liquidation until the election date or, if the election date does not occur, until 180 days after the date of the order of liquidation:(A) (i) Neither the association nor the reinsurer shall have any rights or obligations under reinsurance contracts that the association has the right to assume under 33-26A-8(n)(1) of this code, whether for periods prior to or after the date of the order of liquidation; and(ii) The reinsurer, the receiver, and the association shall, to the extent practicable, provide each other data and records reasonably requested;(B) Provided that once the association has elected to assume a reinsurance contract, the parties rights and obligations shall be governed by 33-26A-8(n)(1) of this code.(3) If the association does not elect to assume a reinsurance contract by the election date pursuant to 33-26A-8(n)(1) of this code, the association shall have no rights or obligations, in each case for periods both before and after the date of the order of liquidation, with respect to the reinsurance contract.(4) When policies, contracts, or annuities, or covered obligations with respect thereto, are transferred to an assuming insurer, reinsurance on the policies, contracts, or annuities may also be transferred by the association, in the case of contracts assumed under 33-26A-8(n)(1) of this code, subject to the following:(A) Unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred shall not cover any new policies of insurance, contracts, or annuities in addition to those transferred;(B) The obligations described in 33-26A-8(n)(1) of this code shall no longer apply with respect to matters arising after the effective date of the transfer; and(C) Notice shall be given in writing, return receipt requested, by the transferring party to the affected reinsurer not less than 30 days prior to the effective date of the transfer.(5) The provisions of this subsection shall supersede the provisions of any state law or of any affected reinsurance contract that provides for or requires any payment of reinsurance proceeds, on account of losses or events that occur in periods after the date of the order of liquidation, to the receiver of the insolvent insurer or any other person. The receiver shall remain entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods prior to the date of the order of liquidation, subject to applicable setoff provisions.(6) Except as otherwise provided in this subsection, nothing in this subsection shall alter or modify the terms and conditions of any reinsurance contract. Nothing in this subsection shall abrogate or limit any rights of any reinsurer to claim that it is entitled to rescind a reinsurance contract. Nothing in this subsection shall give a policyholder, contract owner, enrollee, certificate holder, or beneficiary an independent cause of action against a reinsurer that is not otherwise set forth in the reinsurance contract. Nothing in this subsection shall limit or affect the associations rights as a creditor of the estate against the assets of the estate. Nothing in this subsection shall apply to reinsurance agreements covering property or casualty risks.(o) The board of directors of the association shall have discretion and may exercise reasonable business judgment to determine the means by which the association is to provide the benefits of this article in an economical and efficient manner.(p) Where the association has arranged or offered to provide the benefits of this article to a covered person under a plan or arrangement that fulfills the associations obligations under this article, the person shall not be entitled to benefits from the association in addition to or other than those provided under the plan or arrangement.(q) Venue in a suit against the association arising under the article shall be in Kanawha County. The association shall not be required to give an appeal bond in an appeal that relates to a cause of action arising under this act.(r) In carrying out its duties in connection with guaranteeing, assuming, reissuing, or reinsuring policies or contracts under 33-26A-8(a) or 33-26A-8(b) of this code, the association may issue substitute coverage for a policy or contract that provides an interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value by issuing an alternative policy or contract in accordance with the following provisions:(1) In lieu of the index or other external reference provided in the original policy or contract, the alternative policy or contract provides for:(i) A fixed interest rate;(ii) Payment of dividends with minimum guarantees; or(iii) A different method for calculating interest or changes in value;(2) There is no requirement for evidence of insurability, waiting period, or other exclusion that would not have applied under the replaced policy or contract; and(3) The alternative policy or contract is substantially similar to the replaced policy or contract in all other material terms. 
(a) For the purpose of providing the funds necessary to carry out the powers and duties of the association, the board of directors shall assess the member insurers, separately for each account, at such time and for such amounts as the board finds necessary. Assessments shall be due not less than 30 days after prior written notice to the member insurers and shall accrue interest at 10 percent per annum on and after the due date.(b) There shall be two classes of assessments, as follows:(1) Class A assessments shall be authorized and called for the purpose of meeting administrative and legal costs and other expenses. Class A assessments may be authorized and called whether or not related to a particular impaired or insolvent insurer.(2) Class B assessments shall be authorized and called to the extent necessary to carry out the powers and duties of the association under 33-26A-8 of this code with regard to an impaired or insolvent insurer.(c) (1) The amount of any Class A assessment shall be determined by the board and may be authorized and called on a pro rata or nonpro rata basis. If pro rata, the board may provide that it be credited against future Class B assessments. (2) The amount of any Class B assessment, except for assessments related to long-term care insurance, shall be allocated for assessment purposes between the accounts and among the subaccounts of the life insurance and annuity account, pursuant to an allocation formula which may be based on the premiums or reserves of the impaired or insolvent insurer or any other standard determined by the board in its sole discretion as being fair and reasonable under the circumstances.(3) The amount of the Class B assessment for long-term care insurance written by the impaired or insolvent insurer shall be allocated according to a methodology included in the plan of operation and approved by the commissioner. The methodology shall provide for 50 percent of the assessment to be allocated to accident and health member insurers and 50 percent to be allocated to life and annuity member insurers.(4) Class B assessments against member insurers for each account and subaccount shall be in the proportion that the premiums received on business in this state by each assessed member insurer on policies or contracts covered by each account for the three most recent calendar years for which information is available preceding the year in which the member insurer became impaired or insolvent, as the case may be, bears to such premiums received on business in this state for such calendar years by all assessed member insurers.(5) Assessments for funds to meet the requirements of the association with respect to an impaired or insolvent insurer shall not be authorized or called until necessary to implement the purposes of this article. Classification of assessments under 33-26A-9(b) of this code and computation of assessments under this subsection shall be made with reasonable degree of accuracy, recognizing that exact determinations may not always be possible. The association shall notify each member insurer of its anticipated pro rata share of an authorized assessment not yet called within 180 days after the assessment is authorized.(d) The association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. If an assessment against a member insurer is abated or deferred in whole or in part, the amount by which such assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section. Once the conditions that caused a deferral have been removed or rectified, the member insurer shall pay all assessments that were deferred pursuant to a repayment plan approved by the association.(e) (1) (A) Subject to the provisions of 33-26A-9(e)(1)(B) of this code, the total of all assessments authorized by the association with respect to a member insurer for each subaccount of the life and annuity account and for the health account shall not in any one calendar year exceed two percent of such insurers average annual premiums received in this state on the policies and contracts covered by the subaccount or account during the three calendar years preceding the year in which the member insurer became an impaired or insolvent insurer.(B) If two or more assessments are authorized in one calendar year with respect to member insurers that become impaired or insolvent in different calendar years, the average annual premiums for purposes of the aggregate assessment percentage limitation referenced in 33-26A-9(e)(1)(A) of this code shall be equal and limited to the higher of the three-year average annual premiums for the applicable subaccount or account as calculated pursuant to this section.(C) If the maximum assessment, together with the other assets of the association in an account, does not provide in any one year in either account an amount sufficient to carry out the responsibilities of the association, the necessary additional funds shall be assessed as soon thereafter as permitted by this article.(2) The board may provide in the plan of operation a method of allocating funds among claims, whether relating to one or more impaired or insolvent insurers, when the maximum assessment will be insufficient to cover anticipated claims.(3) If the maximum assessment for any subaccount of the life and annuity account in any one year does not provide an amount sufficient to carry out the responsibilities of the association, then pursuant to 33-26A-9(c)(2) of this code, the board shall assess all subaccounts of the life and annuity account for the necessary additional amount, subject to the maximum stated in 33-26A-9(e)(1) of this code.(f) The board may, by an equitable method as established in the plan of operation, refund to member insurers, in proportion to the contribution of each member insurer to that account, the amount by which the assets of the account exceed the amount the board finds is necessary to carry out during the coming year the obligations of the association with regard to that account, including assets accruing from assignment, subrogation, net realized gains, and income from investments. A reasonable amount may be retained in any account to provide funds for the continuing expenses of the association and for future claims.(g) It shall be proper for any member insurer, in determining its premium rates and policy owner dividends as to any kind of insurance or health maintenance organization business within the scope of this article, to consider the amount reasonably necessary to meet its assessment obligations under this article.(h) The association shall issue to each member insurer paying an assessment under this article, other than Class A assessment, a certificate of contribution, in a form prescribed by the commissioner, for the amount of the assessment so paid. All outstanding certificates shall be of equal dignity and priority without reference to amounts or dates of issue. A certificate of contribution may be shown by the member insurer in its financial statement as an asset in such form and for such amount, if any, and period of time as the commissioner may approve.(i) (1) A member insurer that wishes to protest all or part of an assessment shall pay when due the full amount of the assessment as set forth in the notice provided by the association. The payment shall be available to meet association obligations during the pendency of the protest or any subsequent appeal. Payment shall be accompanied by a statement in writing that the payment is made under protest and setting forth a brief statement of the grounds for the protest.(2) Within 60 days following the payment of an assessment under protest by a member insurer, the association shall notify the member insurer in writing of its determination with respect to the protest unless the association notifies the member insurer that additional time is required to resolve the issues raised by the protest.(3) Within 30 days after a final decision has been made, the association shall notify the protesting member insurer in writing of that final decision. Within 60 days of receipt of notice of the final decision, the protesting member insurer may appeal that final action to the commissioner.(4) In the alternative to rendering a final decision with respect to a protest based on a question regarding the assessment base, the association may refer protests to the commissioner for a final decision, with or without a recommendation from the association.(5) If the protest or appeal on the assessment is upheld, the amount paid in error or excess shall be returned to the member insurer. Interest on a refund due a protesting member insurer shall be paid at the rate actually earned by the association.(j) The association may request information of member insurers in order to aid in the exercise of its power under this section, and member insurers shall promptly comply with a request. 
This article may be cited as the "West Virginia Insurance Holding Company Systems Act."
Whenever it appears to the commissioner that any person has committed a violation of this article which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders or the public, then the commissioner may take possession of the property of such domestic insurer and proceed as provided in article ten of this chapter.
Whenever it appears to the commissioner that any person has committed a violation of this article which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the commissioner may, after giving notice and an opportunity to be heard, determine to suspend, revoke or refuse to renew such insurer's license or authority to do business in this state for such period as he or she finds is required for the protection of policyholders or the public: Provided, That any such determination shall be accompanied by specific findings of fact and conclusions of law.
All laws and parts of laws of this state inconsistent with this article are hereby superseded with respect to matters covered by this article.
(a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under such order shall have a right to recover on behalf of the insurer, (1) from any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions (other than distributions of shares of the same class of stock) paid by the insurer on its capital stock, or (2) any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the insurer or its subsidiary or subsidiaries to a director, officer or employee, when the distribution or payment pursuant to (1) or (2) is made at any time during the one year preceding the petition for liquidation, conservation or rehabilitation, as the case may be, subject to the limitations of subsections (b), (c) and (d) of this section.(b) No such distribution may be recoverable if the parent corporation or affiliate shows that when paid such distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that such distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.(c) Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time such distributions were paid shall be liable up to the amount of distributions or payments under subsection (a) of this section that such person received. Any person who otherwise controlled the insurer at the time such distributions were declared is liable up to the amount of distributions he or she would have received if they had been paid immediately. If two or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.(d) The maximum amount recoverable under this subsection shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.(e) To the extent that any person liable under subsection (c) of this section is insolvent or otherwise fails to pay claims due from it pursuant to subsection (c), its parent corporation or holding company or person who otherwise controlled it at the time the distribution was paid, shall be jointly and severally liable for any resulting deficiency in the amount recovered from such parent corporation or holding company or person who otherwise controlled it.
The Insurance Commissioner may propose rules for legislative approval in accordance with article three, chapter twenty-nine-a of this code and may promulgate emergency rules pursuant to the provisions of section fifteen, article three, chapter twenty-nine-a of this code, as are necessary to implement the provisions of this article.
As used in this article:(a) An "affiliate" of or person "affiliated" with a specific person is a person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the person specified.(b) "Commissioner" means the West Virginia Insurance Commissioner, his or her deputies or the West Virginia offices of the Insurance Commissioner, as appropriate.(c) "Control" (including the terms "controlling", "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote or holds proxies representing ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by subsection (k), section four of this article that control does not exist in fact. The commissioner may determine after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination that control exists in fact notwithstanding the absence of a presumption to that effect.(d) "Enterprise risk" means any activity, circumstance, event or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including, but not limited to, anything that would cause the insurers risk-based capital to fall into company action level, as set forth in article forty of this chapter, or would cause the insurer to be in hazardous financial condition, as set forth in article thirty-four of this chapter.(e) "Group-wide supervisor" means the regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the commissioner under 33-27-6b of this code to have sufficient significant contacts with the internationally active insurance group.(f) "Insurance holding company system" consists of two or more affiliated persons, one or more of which is an insurer.(g) "Insurer" means any person or persons or corporation, partnership or company authorized by the laws of this state to transact the business of insurance in this state, except that it shall not include agencies, authorities or instrumentalities of the United States, its possessions and territories, the commonwealth of Puerto Rico, the District of Columbia or a state or political subdivision of a state.(h) "Internationally active insurance group" means an insurance holding company system that includes an insurer registered under 33-27-4 of this code and meets the following criteria:(1) Premiums written in at least three countries; (2) The percentage of gross premiums written outside the United States is at least 10 percent of the insurance holding company systems total gross written premiums; and(3) Based on a three-year rolling average, the total assets of the insurance holding company system are at least $50 billion or the total gross written premiums of the insurance holding company system are at least $10 billion.(i) "Person" means an individual, a corporation, a limited liability company, a partnership, an association, a joint-stock company, a trust, an unincorporated organization, a depository institution or any similar entity or any combination of the foregoing acting in concert, but does not include any joint venture partnership exclusively engaged in owning, managing, leasing or developing real or tangible personal property.(j) A "security holder" of a specified person is one who owns any security of such person, including common stock, preferred stock, debt obligations and any other security convertible into or evidencing the right to acquire any of the foregoing.(k) A "subsidiary" of a specified person is an affiliate controlled by such person directly or indirectly through one or more intermediaries.(l) "Voting security" includes any security convertible into or evidencing a right to acquire a voting security.
(a) Authorization.  Any domestic insurer, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries engaged in the following kinds of business with the commissioner's prior approval:(1) Any kind of insurance business authorized by the jurisdiction in which it is incorporated;(2) Acting as an insurance agent for its parent or for any of its parent's insurer subsidiaries;(3) Investing, reinvesting or trading in securities for its own account, that of its parent, any subsidiary of its parent, or any affiliate or subsidiary;(4) Management of any investment company subject to or registered pursuant to the Investment Company Act of 1940, as amended, including related sales and services;(5) Acting as a broker-dealer subject to or registered pursuant to the Securities Exchange Act of 1934, as amended;(6) Rendering investment advice to governments, government agencies, corporations or other organizations or groups;(7) Rendering other services related to the operations of an insurance business, including, but not limited to, actuarial, loss prevention, safety engineering, data processing, accounting, claims, appraisal and collection services;(8) Ownership and management of assets which the parent corporation could itself own or manage;(9) Acting as administrative agent for a governmental instrumentality which is performing an insurance function;(10) Financing of insurance premiums, agents and other forms of consumer financing;(11) Any other business activity determined by the commissioner to be reasonably ancillary to an insurance business; and(12) Owning a corporation or corporations engaged or organized to engage exclusively in one or more of the businesses specified in this section;(b) Additional investment authority. -- In addition to investments in common stock, preferred stock, debt obligations and other securities permitted under any other provision of this chapter, a domestic insurer may also with the commissioner's prior approval:(1) Invest in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries, amounts which do not exceed the lesser of ten percent of the insurer's assets or fifty percent of the insurer's surplus as regards policyholders: Provided, That after the investments, the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs. In calculating the amount of the investments, investments in domestic or foreign insurance subsidiaries shall be excluded and there shall be included:(A) Total net moneys or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary whether or not represented by the purchase of capital stock or issuance of other securities; and(B) All amounts expended in acquiring additional common stock, preferred stock, debt obligations and other securities, and all contributions to the capital or surplus, of a subsidiary subsequent to its acquisition or formation;(2) Invest any amount in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer: Provided, That each subsidiary agrees to limit its investments in any asset so that the investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified in subdivision (1) of this subsection or in article eight of this chapter applicable to the insurer. For the purpose of this subdivision, "the total investment of the insurer" includes:(A) Any direct investment by the insurer in an asset; and(B) The insurer's proportionate share of any investment in an asset by any subsidiary of the insurer, which shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the ownership of the subsidiary.(3) With the approval of the commissioner, invest any greater amount in common stock, preferred stock, debt obligations or other securities of one or more subsidiaries: Provided, That after investment the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.(c) Exemption from investment restrictions. -- Investments in common stock, preferred stock, debt obligations or other securities of subsidiaries made pursuant to subsection (b) of this section are not subject to any of the otherwise applicable restrictions or prohibitions contained in this chapter applicable to the investments of insurers.(d) Qualification of investment; when determined. -- Whether any investment made pursuant to subsection (b) of this section meets the applicable requirements of that subsection is to be determined before the investment is made, by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations, and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends.(e) Cessation of control. -- If an insurer ceases to control a subsidiary, it shall dispose of any investment in the subsidiary made pursuant to this section within three years from the time of the cessation of control or within any further time prescribed by the commissioner, unless at any time after the investment was made, the investment meets the requirements for investment under any other provision of this chapter and the insurer has notified the commissioner of compliance with the provisions of this chapter.
(a) Filing requirements. -- (1) No person other than the issuer may make a tender offer for or a request or invitation for tenders of, or enter into any agreement to exchange securities for, seek to acquire or acquire, in the open market or otherwise, any voting security of a domestic insurer if, after the consummation thereof, the person would, directly or indirectly (or by conversion or by exercise of any right to acquire) be in control of the insurer and a person shall not enter into an agreement to merge with or otherwise to acquire control of a domestic insurer or any person controlling a domestic insurer unless at the time the offer, request or invitation is made or the agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved, the person has filed with the commissioner and has sent to the insurer and, to the extent permitted by applicable federal laws, rules and regulations, the insurer has sent to its shareholders a statement containing the information required by this section and the offer, request, invitation, agreement or acquisition has been approved by the commissioner in the manner hereinafter prescribed.(2) For purposes of this section, any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer, in any manner, shall file with the commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least thirty days prior to the cessation of control. The commissioner shall determine those instances in which the party or parties seeking to divest or to acquire a controlling interest in an insurer will be required to file for and obtain approval of the transaction. The information shall remain confidential until the conclusion of the transaction unless the commissioner, in his or her discretion, determines that confidential treatment will interfere with enforcement of this section. If the statement referred to in subsection (a) of this section is otherwise filed, this subdivision does not apply.(3) With respect to a transaction subject to this section, the acquiring person must also file a preacquisition notification with the commissioner, which shall contain the information set forth in subdivision (1), subsection (c), section three-a of this article. A failure to file the notification may subject the person to penalties specified in subdivision (3), subsection (e), section three-a of this article.(4) For purposes of this section, a "domestic insurer" includes any person controlling a domestic insurer unless the person as determined by the commissioner is either directly or through its affiliates primarily engaged in business other than the business of insurance. For purposes of this section, "person" does not include any securities broker holding, in the usual and customary broker's function, less than twenty percent of the voting securities of an insurance company or of any person that controls an insurance company.(b) Content of statement. -- The statement to be filed with the commissioner hereunder shall be made under oath or affirmation and shall contain the following information:(1) The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in subsection (a) of this section is to be effected (hereinafter called "acquiring party"); and(A) If such person is an individual, his or her principal occupation and all offices and positions held during the past five years and any conviction of crimes other than minor traffic violations during the past ten years; or(B) If the person is not an individual, a report of the nature of its business operations during the past five years or for such lesser period as the person and any predecessors thereof shall have been in existence; an informative description of the business intended to be done by the person and the person's subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to those positions. The list shall include for each individual the information required by paragraph (2) of this subdivision;(2) The source, nature and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for any such purpose, including any pledge of the insurer's stock or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing such consideration: Provided, That where a source of the consideration is a loan made in the lender's ordinary course of business, the identity of the lender shall remain confidential if the person filing the statement so requests;(3) Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five fiscal years of each acquiring party (or for such lesser period as each acquiring party and any predecessors thereof shall have been in existence) and similar unaudited information as of a date not earlier than ninety days prior to the filing of the statement;(4) Any plans or proposals which each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person or to make any other material change in its business or corporate structure or management;(5) The number of shares of any security referred to in subsection (a) of this section which each acquiring party proposes to acquire and the terms of the offer, request, invitation, agreement or acquisition referred to in that subsection and a statement as to the method by which the fairness of the proposal was arrived at;(6) The amount of each class of any security referred to in subsection (a) of this section which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;(7) A full description of any contracts, arrangements or understanding with respect to any security referred to in subsection (a) of this section in which any acquiring party is involved, including, but not limited to, transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits or the giving or withholding of proxies. The description shall identify the persons with whom such contracts, arrangements or understandings have been entered into;(8) A description of the purchase of any security referred to in subsection (a) of this section during the twelve calendar months preceding the filing of the statement by any acquiring party, including the dates of purchase, names of the purchasers and consideration paid or agreed to be paid therefor;(9) A description of any recommendations to purchase any security referred to in subsection (a) of this section made during the twelve calendar months preceding the filing of the statement by an acquiring party or by anyone based upon interviews or at the suggestion of the acquiring party;(10) Copies of all tender offers for, requests or invitations for tenders of, exchange offers for and agreements to acquire or exchange any securities referred to in subsection (a) of this section and, if distributed, of additional soliciting material relating thereto;(11) The terms of any agreement, contract or understanding made with any broker-dealer as to solicitation of securities referred to in subsection (a) of this section for tender and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto;(12) An agreement by the person required to file the statement referred to in subsection (a) of this section that it will provide the annual report, specified in subsection (l), section four of this article, for so long as control exists;(13) An acknowledgment by the person required to file the statement referred to in subsection (a) of this section that the person and all subsidiaries within its control in the insurance holding company system will provide information to the commissioner upon request as necessary to evaluate enterprise risk to the insurer; and(14) Any additional information as the commissioner may by rule prescribe as necessary or appropriate for the protection of policyholders and security holders of the insurer or in the public interest.(c) If the person required to file the statement referred to in subsection (a) of this section is a partnership, limited partnership, syndicate or other group, the commissioner may require that the information called for by subdivisions (1) through (14), inclusive, subsection (b) of this section shall be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group and each person who controls the partner or member. If any partner, member or person is a corporation or the person required to file the statement referred to in subsection (a) of this section is a corporation, the commissioner may require that the information called for by subdivisions (1) through (14), inclusive, subsection (b) of this section shall be given with respect to the corporation and each person who is directly or indirectly the beneficial owner of more than ten percent of the outstanding voting securities of the corporation.(d) If any material change occurs in the facts set forth in the statement filed with the commissioner and sent to the insurer pursuant to this section, an amendment setting forth such change, together with copies of all documents and other material relevant to such change, shall be filed with the commissioner and sent to the insurer within two business days after the person learns of the change. The insurer shall send the amendment to its shareholders.(e) Alternative filing materials. -- If any offer, request, invitation, agreement or acquisition referred to in subsection (a) of this section is proposed to be made by means of a registration statement under the Securities Act of 1933 or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934 or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in that subsection may utilize such documents in furnishing the information called for by that statement.(f) (1) Approval by commissioner; hearings. -- The commissioner shall approve any merger or other acquisition of control referred to in subsection (a) of this section unless, after a public hearing thereon, he or she finds that:(A) After the change of control the domestic insurer referred to in subsection (a) of this section would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently authorized;(B) The effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly therein. In applying the competitive standard in this subdivision:(i) The informational requirements of subdivision (1), subsection (c), section three-a of this article and the standards of subdivision (2), subsection (d), section three-a of this article apply;(ii) The merger or other acquisition may not be disapproved if the commissioner finds that any of the situations meeting the criteria provided by subdivision (3), subsection (d), section three-a of this article exist; and(iii) The commissioner may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time.(C) The financial condition of any acquiring party is such as might jeopardize the financial stability of the insurer or prejudice the interest of its policyholders or the interests of any remaining security holders who are unaffiliated with the acquiring party;(D) The plans or proposals which the acquiring party has to liquidate the insurer, sell its assets or consolidate or merge it with any person or to make any other material change in its business or corporate structure or management are unfair and unreasonable to policyholders of the insurer and not in the public interest;(E) The competence, experience and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control; or(F) The acquisition is likely to be hazardous or prejudicial to the insurance-buying public.(2) The public hearing required by this section shall be held within thirty days after the statement required by subsection (a) of this section is filed, and at least twenty days' notice thereof shall be given by the commissioner to the person filing the statement. Not less than seven days' notice of the public hearing shall be given by the person filing the statement to the insurer and to any other persons as may be designated by the commissioner. The commissioner shall make a determination within the sixty-day period preceding the effective date of the proposed transaction. At the hearing, the person filing the statement, the insurer, any person to whom notice of hearing was sent, and any other person whose interest may be affected has the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments and in connection therewith shall be entitled to conduct discovery proceedings in the same manner as is presently allowed in the circuit courts of this state: Provided, That all discovery proceedings shall be concluded not later than three days prior to the commencement of the public hearing.(3) If the proposed acquisition of control will require the approval of more than one commissioner, a public hearing pursuant to this subsection may be held on a consolidated basis upon request of the person filing the statement referred to in subsection (a) of this section. That person shall file the statement referred to in subsection (a) of this section with the National Association of Insurance Commissioners within five days of making the request for a public hearing. A commissioner may opt out of a consolidated hearing, and shall provide notice to the applicant of the opt-out within ten days of the receipt of the statement referred to in subsection (a) of this section. A hearing conducted on a consolidated basis shall be public and shall be held within the United States before the commissioners of the states in which the insurers are domiciled. Such commissioners shall hear and receive evidence. A commissioner may attend the hearing, in person or by telecommunication.(4) In connection with a change of control of a domestic insurer, any determination by the commissioner that the person acquiring control of the insurer is required to maintain or restore the capital of the insurer to the level required by the laws of this state shall be made not later than sixty days after the date of filing the change in control submitted pursuant to subdivision (1), subsection (a) of this section.(5) The commissioner may retain at the acquiring person's expense any attorneys, actuaries, accountants and other experts not otherwise a part of the commissioner's staff as may be reasonably necessary to assist the commissioner in reviewing the proposed acquisition of control.(g) Exemptions. - The provisions of this section shall not apply to any offer, request, invitation, agreement or acquisition which the commissioner by order shall exempt therefrom as: (1) Not having been made or entered into for the purpose of, and not having the effect of, changing or influencing the control of a domestic insurer; or (2) as otherwise not comprehended within the purposes of this section.(h) The following are violations of this section:(1) The failure to file any statement, amendment or other material required to be filed pursuant to subsection (a) or (b) of this section; or(2) The effectuation or any attempt to effectuate an acquisition of control of, divestiture of, or merger with, a domestic insurer unless the commissioner has given his or her approval thereto.(i) Jurisdiction; consent to service of process. -- The courts of this state are hereby vested with jurisdiction over every person not resident, domiciled or authorized to do business in this state who files a statement with the commissioner under this section and over all actions involving such person arising out of violations of this section and each such person shall be deemed to have performed acts equivalent to and constituting an appointment by the person of the Secretary of State to be his or her true and lawful attorney upon whom may be served all lawful process in any action, suit or proceeding arising out of violations of this section. Copies of all such lawful process shall be served on the Secretary of State and transmitted by registered or certified mail by the Secretary of State to such person at his or her last known address.
(a) Definitions. -- The following definitions apply to only this section:(1) "Acquisition" means any agreement, arrangement or activity the consummation of which results in a person acquiring directly or indirectly the control of another person, and includes, but is not limited to, the acquisition of voting securities, the acquisition of assets, bulk reinsurance and mergers.(2) An "involved insurer" includes an insurer which either acquires or is acquired, is affiliated with an acquirer or acquired, or is the result of a merger.(b) Scope.  (1) Except as exempted in subdivision (2) of this subsection, this section applies to any acquisition in which there is a change in control of an insurer authorized to do business in this state.(2) This section does not apply to the following:(A) A purchase of securities solely for investment purposes so long as the securities are not used by voting or otherwise to cause or attempt to cause the substantial lessening of competition in any insurance market in this state. If a purchase of securities results in a presumption of control pursuant to subsection (c), section two of this article, it is not solely for investment purposes unless the commissioner of the insurer's state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer action or affirmative finding is communicated by the domiciliary commissioner to the commissioner of this state;(B) The acquisition of a person by another person when both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if pre-acquisition notification is filed with the commissioner pursuant to subdivision (1), subsection (c) of this section thirty days prior to the proposed effective date of the acquisition. However, such pre-acquisition notification is not required for exclusion from this section if the acquisition would otherwise be excluded from this section by any other paragraph of this subdivision;(C) The acquisition of already affiliated persons;(D) An acquisition if, as an immediate result of the acquisition:(i) In no market would the combined market share of the involved insurers exceed five percent of the total market;(ii) There would be no increase in any market share; or(iii) In no market would:(I) The combined market share of the involved insurers exceed twelve percent of the total market; and(II) The market share increase by more than two percent of the total market.For the purpose of this paragraph, a "market" means direct written insurance premium in this state for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in this state; and(E) An acquisition for which a pre-acquisition notification would be required pursuant to this section due solely to the resulting effect on the ocean marine insurance line of business;(F) An acquisition of an insurer whose domiciliary commissioner affirmatively finds that the insurer is in failing condition; there is a lack of feasible alternative to improving such condition; the public benefits of improving the insurers condition through the acquisition exceed the public benefits that would arise from not lessening competition; and the findings are communicated by the domiciliary commissioner to the commissioner of this state.(c) Pre-acquisition notification and waiting period. -- An acquisition covered by subsection (b) of this section may be subject to an order pursuant to subsection (e) of this section unless the acquiring person files a pre-acquisition notification and the waiting period has expired. The acquired person may file a pre-acquisition notification. The commissioner shall give confidential treatment to information submitted under this subsection in the same manner as provided in section seven of this article.(1) The pre-acquisition notification shall be in such form and contain such information as prescribed by the National Association of Insurance Commissioners relating to those markets that, under paragraph (D), subdivision (2), subsection (b) of this section, cause the acquisition not to be exempted from the provisions of this section. The commissioner may require such additional material and information as deemed necessary to determine whether the proposed acquisition, if consummated, would violate the competitive standard of subsection (d) of this section. The required information may include an opinion of an economist as to the competitive impact of the acquisition in this state accompanied by a summary of the education and experience of such person indicating his or her ability to render an informed opinion.(2) The waiting period required shall begin on the date of receipt of the commissioner of a pre-acquisition notification and shall end on the earlier of the thirtieth day after the date of receipt, or termination of the waiting period by the commissioner. Prior to the end of the waiting period, the commissioner on a one-time basis may require the submission of additional needed information relevant to the proposed acquisition, in which event the waiting period shall end on the earlier of the thirtieth day after receipt of the additional information by the commissioner or termination of the waiting period by the commissioner.(d) Competitive Standard. - (1) The commissioner may enter an order under subdivision (1), subsection (e) of this section, with respect to an acquisition if there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in this state or tend to create a monopoly or if the insurer fails to file adequate information in compliance with subsection (c) of this section.(2) In determining whether a proposed acquisition would violate the competitive standard of subdivision (1) of this subsection, the commissioner shall consider the following:(A) Any acquisition covered under subsection (b) of this section involving two or more insurers competing in the same market is prima facie evidence of violation of the competitive standards.(i) If the market is highly concentrated and the involved insurers possess the following shares of the market:Insurer AInsurer B 4% 4% or more10%10%15% 1% or more(ii) Or, if the market is not highly concentrated and the involved insurers possess the following shares of the market:Insurer AInsurer B 5% 5% or more10% 4% or more15%3% or more19%1% or moreA highly concentrated market is one in which the share of the four largest insurers is seventy-five percent or more of the market. Percentages not shown in the tables are interpolated proportionately to the percentages that are shown. If more than two insurers are involved, exceeding the total of the two columns in the table is prima facie evidence of violation of the competitive standard in subdivision one of this subsection. For the purpose of this item, the insurer with the largest share of the market shall be deemed to be Insurer A;(B) There is a significant trend toward increased concentration when the aggregate market share of any grouping of the largest insurers in the market, from the two largest to the eight largest, has increased by seven percent or more of the market over a period of time extending from any base year five to ten years prior to the acquisition up to the time of the acquisition. Any acquisition or merger covered under subsection (b) of this section involving two (2) or more insurers competing in the same market is prima facie evidence of violation of the competitive standard in subdivision (1) of this subsection if:(i) There is a significant trend toward increased concentration in the market;(ii) One of the insurers involved is one of the insurers in a grouping of large insurers showing the requisite increase in the market share; and(iii) Another involved insurer's market is two percent or more;(C) For the purposes of subdivision (2), subsection (d) of this section:(i) The term "insurer" includes any company or group of companies under common management, ownership or control;(ii) The term "market" means the relevant product and geographical markets. In determining the relevant product and geographical markets, the commissioner shall give due consideration to, among other things, the definitions or guidelines, if any, promulgated by the National Association of Insurance Commissioners and to information, if any, submitted by parties to the acquisition. In the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business, such line being that used in the annual statement required to be filed by insurers doing business in this state, and the relevant geographical market is assumed to be this state;(iii) The burden of showing prima facie evidence of violation of the competitive standard rests upon the commissioner.(D) Even though an acquisition is not prima facie violative of the competitive standard under paragraphs (A) and (B), subdivision (2) of this subsection, the commissioner may establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition is prima facie violative of the competitive standard under paragraphs (A) and (B), subdivision (2) of this subsection, a party may establish the absence of the requisite anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under this paragraph include, but are not limited to, the following: market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry, and ease of entry and exit into the market.(3) An order may not be entered under subdivision (1), subsection (e) of this section if:(A) The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits which would arise from such economies exceed the public benefits which would arise from not lessening competition; or(B) The acquisition will substantially increase the availability of insurance, and the public benefits of the increase exceed the public benefits which would arise from not lessening competition.(e) Orders and Penalties. - (1)(A) If an acquisition violates the standards of this section, the commissioner may enter an order:(i) Requiring an involved insurer to cease and desist from doing business in this state with respect to the line or lines of insurance involved in the violation; or(ii) Denying the application of an acquired or acquiring insurer for a license to do business in this state.(B) Such an order shall not be entered unless:(i) There is a hearing;(ii) Notice of the hearing is issued prior to the end of the waiting period and not less than fifteen days prior to the hearing; and(iii) The hearing is concluded and the order is issued no later than sixty days after the date of the filing of the preacquisition notification with the commissioner.(C) Every order issued pursuant to this subsection shall be accompanied by a written decision of the commissioner setting forth findings of fact and conclusions of law.(D) An order pursuant to this subsection does not apply if the acquisition is not consummated.(2) Any person who violates a cease and desist order of the commissioner under subdivision one of this subsection and while the order is in effect may, after notice and hearing and upon order of the commissioner, be subject at the discretion of the commissioner to one or more of the following:(A) A monetary penalty of not more than $10,000 for every day of violation; or(B) Suspension or revocation of the person's license.(3) Any insurer or other person who fails to make any filing required by this section, and who also fails to demonstrate a good faith effort to comply with any filing requirement, shall be subject to a fine of not more than $50,000.(f) Inapplicable Provisions. Subsections (b) and (c), section eight of this article and section ten of this article do not apply to acquisitions covered under subsection (b) of this section.
(a) Registration. -- (1) Every insurer which is authorized to do business in this state and which is a member of an insurance holding company system shall register with the commissioner, except a foreign insurer subject to disclosure requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those contained in this section, subsections (a), (b) and (c), section five of this article, and either subsection (d), section five of this article or has a provision such as the following: "Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions within fifteen days after the end of the month in which it learns of each change or addition."(2) Any insurer which is subject to registration under this section shall register within fifteen days after it becomes subject to registration and annually thereafter by June 1 of each year for the previous calendar year, unless the commissioner for good cause shown extends the time for registration. The commissioner may require any authorized insurer which is a member of a holding company system which is not subject to registration under this section to furnish a copy of the registration statement, the summary described in subsection (c) of this section, or other information filed by such insurance company with the insurance regulatory authority of domiciliary jurisdiction.(b) Information and form required. - Every insurer subject to registration shall file a registration statement with the commissioner on a form and in a format prescribed by the National Association of Insurance Commissioners, which shall contain the following current information:(1) The capital structure, general financial condition, ownership and management of the insurer and any person controlling the insurer.(2) The identity and relationship of every member of the insurance holding company system.(3) The following agreements in force, relationships subsisting, and transactions currently outstanding or which have occurred during the last calendar year between such insurer and its affiliates:(A) Loans, other investments, or purchases, sales or exchanges of securities of the affiliates by the insurer or of the insurer by its affiliates;(B) Purchases, sales or exchanges of assets;(C) Transactions not in the ordinary course of business;(D) Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the insurer's assets to liability, other than insurance contracts entered into in the ordinary course of the insurer's business;(E) All management and service contracts and all cost-sharing arrangements;(F) All reinsurance agreements;(G) Dividends and other distributions to shareholders; and(H) Consolidated tax allocation statements.(4) Any pledge of the insurer's stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system.(5) If requested by the commissioner, the insurer shall include financial statements of or within an insurance holding company system, including all affiliates. Financial statements may include, but are not limited to, annual audited financial statements filed with the U.S. Securities and Exchange Commission (SEC) pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. An insurer required to file financial statements pursuant to this subdivision may satisfy the request by providing the commissioner with the most recently filed parent corporation financial statements that have been filed with the SEC.(6) Other matters concerning transactions between registered insurers and any affiliates as may be included from time to time in any registration forms adopted or approved by the commissioner.(7) Statements that the insurer's board of directors oversees corporate governance and internal controls and that the insurer's officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures.(8) Any other information required by the commissioner by rule.(c) Summary of changes to registration statement. -- All registration statements shall contain a summary outlining all items in the current registration statement representing changes from the prior registration statement.(d) Materiality. -- Information need not be disclosed on the registration statement filed pursuant to subsection (b) of this section if such information is not material for the purpose of this section. Unless the commissioner by rule or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit, or investments, involving one half of one percent or less of an insurer's admitted assets as of December 31, next preceding shall not be deemed material for purposes of this section.(e) Reporting of dividends to shareholders. - Subject to subsection (c), section five of this article, each registered insurer shall report to the commissioner all dividends and other distributions to shareholders within fifteen business days following the declaration thereof.(f) Information to insurers. -- Any person within an insurance holding company system subject to registration shall be required to provide complete and accurate information to an insurer, when such information is reasonably necessary to enable the insurer to comply with the provisions of this article.(g) Termination of registration. -- The commissioner shall terminate the registration of any insurer which demonstrates that it no longer is a member of an insurance holding company system.(h) Consolidated filing. -- The commissioner may require or allow two or more affiliated insurers subject to registration hereunder to file a consolidated registration statement or consolidated reports amending their consolidated registration statement or their individual registration statements.(i) Alternative registration. - The commissioner may allow an insurer which is authorized to do business in this state and which is a part of an insurance holding company system to register on behalf of any affiliated insurer which is required to register under subsection (a) of this section and to file all information and material required to be filed under this section.(j) Exemptions. -- The provisions of this section shall not apply to any insurer, information or transaction if and to the extent that the commissioner by rule or order shall exempt the same from the provisions of this section.(k) Disclaimer. -- Any person may file with the commissioner a disclaimer of affiliation with any authorized insurer or a disclaimer may be filed by the insurer or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between the person and the insurer as well as the basis for disclaiming such affiliation. A disclaimer of affiliation shall be deemed to have been granted unless the commissioner, within thirty days following receipt of a complete disclaimer, notifies the filing party the disclaimer is disallowed. In the event of disallowance, the disclaiming party may request an administrative hearing, which shall be granted, and the commissioner shall disallow such a disclaimer only after furnishing all parties in interest with notice and opportunity to be heard and after making specific findings of fact to support such disallowance. The disclaiming party shall be relieved of its duty to register under this section if approval of the disclaimer has been granted by the commissioner, or if the disclaimer is deemed to have been approved. (l) Enterprise Risk Filing. - The ultimate controlling person of every insurer subject to registration shall also file an annual enterprise risk report. The report shall, to the best of the ultimate controlling person's knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The report shall be filed with the lead state commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.(m) Violations. - The failure to file a registration statement or enterprise risk filing thereto required by this section within the time specified for such filing shall be a violation of this section.
(a) Transactions within an insurance holding company system to which an insurer subject to registration is a party shall be subject to the following standards:(1) The terms shall be fair and reasonable;(2) Agreements for cost-sharing services and management shall include such provisions as required by rule;(3) Charges or fees for services performed shall be reasonable;(4) Expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; (5) The books, accounts and records of each party to all such transactions shall be so maintained as to clearly and accurately disclose the nature and details of the transactions, including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties; and(6) The insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.(b) Adequacy of surplus. - For purposes of this article, in determining whether an insurer's surplus as regards policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to meet its financial needs, the following factors, among others, shall be considered:(1) The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria;(2) The extent to which the insurer's business is diversified among the several lines of insurance;(3) The number and size of risks insured in each line of business;(4) The extent of the geographical dispersion of the insurer's insured risks;(5) The nature and extent of the insurer's reinsurance program;(6) The quality, diversification and liquidity of the insurer's investment portfolio;(7) The recent past and projected future trend in the size of the insurer's surplus as regards policyholders;(8) The surplus as regards policyholders maintained by other comparable insurers;(9) The adequacy of the insurer's reserves; and(10) The quality and liquidity of investments in affiliates. The commissioner may treat any such investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever in his or her judgment such investment so warrants.(c) Dividends and other distributions.  (1) No domestic insurer may pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until:(A) Thirty days after the commissioner has received notice of the declaration thereof and has not within that period disapproved such payment; or (B) The commissioner has approved that payment within the thirty-day period.(2) For purposes of this section, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property, whose fair market value together with that of other dividends or distributions made within the preceding twelve months exceeds the lesser of:(A) Ten percent of such insurer's surplus as regards policyholders as of December 31, next preceding; or (B) The net gain from operations of such insurer, if such insurer is a life insurer, or the net income, if the insurer is not a life insurer, not including realized capital gains, for the twelve-month period ending December 31, next preceding, but shall not include pro rata distributions of any class of the insurer's own securities. In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous two calendar years that has not already been paid out as dividends. This carry-forward shall be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediate preceding calendar years.(3) Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or distribution which is conditional upon the commissioner's approval, and the declaration shall confer no rights upon shareholders until:(A) The commissioner has approved the payment of such dividend or distribution; or (B) The commissioner has not disapproved such payment within the thirty-day period referred to above.(d) The following transactions involving a domestic insurer and any person in its insurance holding company system, including amendments or modifications of affiliate agreements previously filed pursuant to this section, that are subject to any materiality standards contained in subdivisions (1) through (5) of this subsection, may not be entered into unless the insurer has notified the commissioner in writing of its intention to enter into the transaction at least thirty days prior thereto, or such shorter period as the commissioner may permit, and the commissioner has not disapproved it within that period: Provided, That nothing contained in this subsection shall be deemed to authorize or permit any transactions which, in the case of an insurer not a member of the same holding company system, would be otherwise contrary to law. The notice for amendments or modifications shall include the reasons for the change and the financial impact on the domestic insurer. Informal notice shall be reported, within thirty days after a termination of a previously filed agreement, to the commissioner for determination of the type of filing required, if any.(1) Sales, purchases, exchanges, loans or extensions of credit, guarantees or investments provided such transactions are equal to or exceed:(A) With respect to nonlife insurers, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders; and(B) With respect to life insurers, three percent of the insurer's admitted assets as of December 31, next preceding;(2) Loans or extensions of credit to any person who is not an affiliate, where the insurer makes the loans or extensions of credit with the agreement or understanding that the proceeds of such transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, purchase assets of, or to make investments in, any affiliate of the insurer making such loans or extensions of credit provided the transactions are equal to or exceed:(A) With respect to nonlife insurers, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders; each as of December 31, next preceding; (B) With respect to life insurers, three percent of the insurer's admitted assets as of December 31, next preceding;(3) Reinsurance agreements or modifications thereto, including: (A) All reinsurance pooling agreements; and (B) Agreements in which the reinsurance premium or a change in the insurer's liabilities, or the projected reinsurance premium or a change in the insurer's liabilities in any of the next three years, equals or exceeds five percent of the insurer's surplus as regards policyholders, as of December 31, next preceding, including those agreements which may require as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one or more affiliates of the insurer;(4) All management agreements, service contracts, tax allocation agreements, guarantees and all cost-sharing arrangements;(5) Guarantees when made by a domestic insurer; Provided, That a guarantee that is quantifiable as to amount is not subject to the notice requirements of this subdivision unless it exceeds the lesser of one half of one percent of the insurer's admitted assets or ten percent of surplus as regards policyholders as of December 31, next preceding: Provided, however, That all guarantees that are not quantifiable as to amount are subject to the notice requirements of this subdivision.(6) Direct or indirect acquisitions or investments in a person that controls the insurer or in an affiliate of the insurer in an amount which, together with its present holdings in such investments, exceeds two and one-half percent of the insurer's surplus to policyholders. Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to section two-a of this article or authorized under any other section of this chapter, or in nonsubsidiary insurance affiliates that are subject to the provisions of this article, are exempt from this requirement; and(7) Any material transactions, specified by rule, which the commissioner determines may adversely affect the interests of the insurer's policyholders.(e) A domestic insurer may not enter into transactions which are part of a plan or series of like transactions with persons within the insurance holding company system if the purpose of those separate transactions is to avoid the statutory threshold amount and thus avoid the review that would occur otherwise. If the commissioner determines that separate transactions were entered into over any twelve-month period for that purpose, he or she may exercise his or her authority under section nine of this article.(f) The commissioner, in reviewing transactions pursuant to subsection(d) of this section, shall consider whether the transactions comply with the standards set forth in subsection (a) of this section and whether they may adversely affect the interests of policyholders.(g) The commissioner shall be notified within thirty days of any investment of the domestic insurer in any one corporation if the total investment in that corporation by the insurance holding company system exceeds ten percent of such corporation's voting securities.(h) Management of domestic insurers subject to registration. - (1) Notwithstanding the control of a domestic insurer by any person, the officers and directors of the insurer shall not thereby be relieved of any obligation or liability to which they would otherwise be subject by law, and the insurer shall be managed so as to assure its separate operating identity consistent with the provisions of this article.(2) Nothing in this section precludes a domestic insurer from having or sharing a common management or cooperatively, or jointly using personnel, property or services with one or more other persons under arrangements meeting the standards of subsection (a) of this section.(3) Not less than one third of the directors of a domestic insurer, and not less than one third of the members of each committee of the board of directors of any domestic insurer, shall be persons who are not officers or employees of the insurer or of any entity controlling, controlled by, or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or entity. At least one such person must be included in any quorum for the transaction of business at any meeting of the board of directors or any committee thereof.(4) The board of directors of a domestic insurer shall establish one or more committees comprised solely of directors who are not officers or employees of the insurer or of any entity controlling, controlled by, or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or any such entity. The committee or committees have responsibility for nominating candidates for director for election by shareholders or policyholders, evaluating the performance of officers deemed to be principal officers of the insurer and recommending to the board of directors the selection and compensation of the principal officers. (5) The provisions of subdivisions three and four of this subsection do not apply to a domestic insurer if the person controlling the insurer, such as an insurer, a mutual insurance holding company, or a publicly held corporation, has a board of directors and committees thereof that meet the requirements of such subdivisions with respect to such controlling entity.(6) An insurer may make application to the commissioner for a waiver from the requirements of this subsection, if the insurer's annual direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, is less than $300 million. An insurer may also make application to the commissioner for a waiver from the requirements of this subsection based upon unique circumstances. The commissioner may consider various factors including, but not limited to, the type of business entity, volume of business written, availability of qualified board members, or the ownership or organizational structure of the entity.
(a) Power of commissioner. -- Subject to the limitation contained in this section and in addition to the powers which the commissioner has under other provisions of this chapter relating to the examination of insurers, the commissioner has the power to examine any insurer registered under section four of this article and its affiliates to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by the ultimate controlling party, or by any entity or combination of entities within the insurance holding company system, or by the insurance holding company system on a consolidated basis.(b) Access to books and records.  (1) The commissioner may order any insurer registered under section four of this article to produce such records, books or other information papers in the possession of the insurer or its affiliates as are reasonably necessary to determine compliance with this chapter.(2) To determine compliance with this chapter, the commissioner may order any insurer registered under section four of this article to produce information not in the possession of the insurer if the insurer can obtain access to such information pursuant to contractual relationships, statutory obligations, or other method. In the event the insurer cannot obtain the information requested by the commissioner, the insurer shall provide the commissioner a detailed explanation of the reason that the insurer cannot obtain the information and the identity of the holder of information. Whenever it appears to the commissioner that the detailed explanation is without merit, the commissioner may, after notice and hearing, require the insurer to pay a penalty of up to $10,000 for each day's delay, may suspend or revoke the insurer's license, or both impose a penalty and revoke or suspend the insurer's license. (c) Use of consultants. -- The commissioner may retain at the registered insurer's expense such attorneys, actuaries, accountants and other experts not otherwise a part of the commissioner's staff as shall be reasonably necessary to assist in the conduct of the examination under subsection (a) of this section. Any person so retained shall be under the direction and control of the commissioner and shall act in a purely advisory capacity.(d) Expenses. -- Each registered insurer producing for examination records, books and papers pursuant to subsection (a) of this section is liable for and shall pay the expense of such examination in accordance with applicable laws of this state.(e) Compelling Production. - In the event the insurer fails to comply with an order, the commissioner may examine the affiliates to obtain the information. The commissioner may also issue subpoenas, to administer oaths, and examine under oath any person for purposes of determining compliance with this section. Upon the failure or refusal of any person to obey a subpoena, the commissioner may petition any circuit court and, upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order is punishable as contempt of court. Every person is obliged to attend as a witness at the place specified in the subpoena, when subpoenaed, anywhere within the state. He or she is entitled to the same fees and mileage, if claimed, as a witness in the circuit court of the county in which attendance is required, which fees, mileage, and actual expense, if any, necessarily incurred in securing the attendance of witnesses, and their testimony, shall be itemized and charged against, and be paid by, the company being examined.
(a) Power of Commissioner. - With respect to any insurer registered under section four of this article, and in accordance with subsection (c) of this section, the commissioner may participate in a supervisory college for any domestic insurer that is part of an insurance holding company system with international operations in order to determine compliance by the insurer with this chapter. The powers of the commissioner with respect to supervisory colleges include, but are not limited to, the following:(1) Initiating the establishment of a supervisory college;(2) Clarifying the membership and participation of other supervisors in the supervisory college;(3) Clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor;(4) Coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and(5) Establishing a crisis management plan.(b) Supervisory College. - In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management and governance processes, and as part of the examination of individual insurers in accordance with section six of this article, the commissioner may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including other state, federal and international regulatory agencies. The commissioner may enter into agreements in accordance with subsection (c), section seven of this article providing the basis for cooperation between the commissioner and the other regulatory agencies, and the activities of the supervisory college: Provided, That this section may not be construed as delegating to the supervisory college the authority of the commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.
(a) The commissioner is authorized to act as the group-wide supervisor for any internationally active insurance group in accordance with the provisions of this section. However, the commissioner may otherwise acknowledge another regulatory official as the group-wide supervisor where the internationally active insurance group:(1) Does not have substantial insurance operations in the United States;(2) Has substantial insurance operations in the United States, but not in this state; or(3) Has substantial insurance operations in the United States and this state, but the commissioner has determined pursuant to the factors set forth in subsections (c) and (g) of this section that the other regulatory official is the appropriate group-wide supervisor.(b) An insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the commissioner make a determination or acknowledgment as to a group-wide supervisor pursuant to this section.(c) In cooperation with other state, federal and international regulatory agencies, the commissioner will identify a single group-wide supervisor for an internationally active insurance group. The commissioner may determine that the commissioner is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state. However, the commissioner may acknowledge that a regulatory official from another jurisdiction is the appropriate group-wide supervisor for the internationally active insurance group. The commissioner shall consider the following factors when making a determination or acknowledgment under this subsection:(1) The place of domicile of the insurers within the internationally active insurance group that hold the largest share of the groups written premiums, assets or liabilities;(2) The place of domicile of the top-tiered insurer(s) in the insurance holding company system of the internationally active insurance group; (3) The location of the executive offices or largest operational offices of the internationally active insurance group;(4) Whether another regulatory official is acting or is seeking to act as the group-wide supervisor under a regulatory system that the commissioner determines to be:(A) Substantially similar to the system of regulation provided under the laws of this state; or (B) Otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and(5) Whether another regulatory official acting or seeking to act as the group-wide supervisor provides the commissioner with reasonably reciprocal recognition and cooperation.However, a commissioner identified under this section as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor. The acknowledgment of the group-wide supervisor shall be made after consideration of the factors listed in subdivisions (1) through (5) of this subsection, and shall be made in cooperation with and subject to the acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group, and in consultation with the internationally active insurance group.(d) Notwithstanding any other provision of law, when another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the commissioner shall acknowledge that regulatory official as the group-wide supervisor. However, the commissioner shall make a determination or acknowledgment as to the appropriate group-wide supervisor for such an internationally active insurance group pursuant to subsection (c) of this section in the event of a material change in the internationally active insurance group that results in:(1) The internationally active insurance groups insurers domiciled in this state holding the largest share of the groups premiums, assets or liabilities; or (2) This state being the place of domicile of the top-tiered insurer(s) in the insurance holding company system of the internationally active insurance group.(e) Pursuant to 33-27-6 of this code, the commissioner is authorized to collect from any insurer registered pursuant to 33-27-4 of this code all information necessary to determine whether the commissioner may act as the group-wide supervisor of an internationally active insurance group or if the commissioner may acknowledge another regulatory official to act as the group-wide supervisor. Prior to issuing a determination that an internationally active insurance group is subject to group-wide supervision by the commissioner, the commissioner shall notify the insurer registered pursuant to 33-27-4 of this code and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group shall have not less than 30 days to provide the commissioner with additional information pertinent to the pending determination. The commissioner shall publish on the agencys internet website the identity of internationally active insurance groups that the commissioner has determined are subject to group-wide supervision by the commissioner.(f) If the commissioner is the group-wide supervisor for an internationally active insurance group, the commissioner is authorized to engage in any of the following group-wide supervision activities:(1) Assess the enterprise risks within the internationally active insurance group to ensure that:(A) The material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and(B) Reasonable and effective mitigation measures are in place; (2) Request from any member of an internationally active insurance group subject to the commissioners supervision information necessary and appropriate to assess enterprise risk, including, but not limited to, information about the members of the internationally active insurance group regarding:(A) Governance, risk assessment and management;(B) Capital adequacy; and(C) Material intercompany transactions;(3) Coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of such internationally active insurance group that are engaged in the business of insurance;(4) Communicate with other state, federal and international regulatory agencies for members within the internationally active insurance group and share relevant information subject to the confidentiality provisions of section seven of this article, through supervisory colleges as set forth in 33-27-6 of this code or otherwise; (5) Enter into agreements with or obtain documentation from any insurer registered under 33-27-4 of this code, any member of the internationally active insurance group, and any other state, federal and international regulatory agencies for members of the internationally active insurance group, providing the basis for or otherwise clarifying the commissioners role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials. Such agreements or documentation shall not serve as evidence in any proceeding that any insurer or person within an insurance holding company system not domiciled or incorporated in this state is doing business in this state or is otherwise subject to jurisdiction in this state; and (6) Other group-wide supervision activities, consistent with the authorities and purposes enumerated above, as considered necessary by the commissioner.(g) If the commissioner acknowledges that another regulatory official from a jurisdiction that is not accredited by the National Association of Insurance Commissioners is the group-wide supervisor, the commissioner is authorized to reasonably cooperate, through supervisory colleges or otherwise, with group-wide supervision undertaken by the group-wide supervisor: Provided, That:(1) The commissioners cooperation is in compliance with the laws of this state; and (2) The regulatory official acknowledged as the group-wide supervisor also recognizes and cooperates with the commissioners activities as a group-wide supervisor for other internationally active insurance groups where applicable. Where such recognition and cooperation is not reasonably reciprocal, the commissioner is authorized to refuse recognition and cooperation.(h) The commissioner is authorized to enter into agreements with or obtain documentation from any insurer registered under 33-27-4 of this code, any affiliate of the insurer, and other state, federal and international regulatory agencies for members of the internationally active insurance group, that provide the basis for or otherwise clarify a regulatory officials role as group-wide supervisor.(i) A registered insurer subject to this section shall be liable for and shall pay the reasonable expenses of the commissioners participation in the administration of this section, including the engagement of attorneys, actuaries and any other professionals and all reasonable travel expenses. 
(a) Documents, materials or other information in the possession or control of the commissioner that are obtained by or disclosed to the commissioner or any other person in the course of an examination or investigation made pursuant to 33-27-6 of this code and all information reported or provided to the commissioner pursuant to 33-27-3(b) (12) or 33-27-3(b) (13) of this code; 33-27-4 of this code; 33-27-5 of this code; or 33-27-6b of this code is confidential by law and privileged, is exempt from disclosure pursuant to chapter 29-b of this code, is not open to public inspection, is not subject to subpoena, is not subject to discovery or admissible in evidence in any criminal, private civil or administrative action and is not subject to production pursuant to court order: Provided, That the commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as part of the commissioners official duties. The commissioner may not otherwise make the documents, materials or other information public without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer and its affiliates who would be affected thereby notice and opportunity to be heard, determines that the interests of policyholders, shareholders or the public will be served by the publication thereof, in which event he or she may publish all or any part thereof in any manner as he or she may consider appropriate.(b) Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner or with whom such documents, materials or other information are shared pursuant to this article may be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (a) of this section.(c) In order to assist in the performance of the commissioners duties, the commissioner:(1) May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (a) of this section, with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities, including members of any supervisory college described in 33-27-6a of this code, if the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material or other information, and has verified in writing the legal authority to maintain confidentiality;(2) Notwithstanding subdivision (1) of this subsection, the commissioner may only share confidential and privileged documents, material, or information reported pursuant to 33-27-4(l) of this code, with commissioners of states having statutes or regulations substantially similar to subdivision (1) of this subsection and who have agreed in writing not to disclose such information;(3) May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information from the National Association of Insurance Commissioners and its affiliates and subsidiaries and from regulatory and law-enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and (4) Shall enter into written agreements with the National Association of Insurance Commissioners governing sharing and use of information provided pursuant to this article consistent with this subsection that:(A) Specify procedures and protocols regarding the confidentiality and security of information shared with the National Association of Insurance Commissioners and its affiliates and subsidiaries pursuant to this article, including procedures and protocols for sharing by the National Association of Insurance Commissioners with other state, federal or international regulators;(B) Specify that ownership of information shared with the National Association of Insurance Commissioners and its affiliates and subsidiaries pursuant to this article remains with the commissioner, and the National Association of Insurance Commissioners" use of the information is subject to the direction of the commissioner;(C) Require prompt notice to be given to an insurer whose confidential information in the possession of the National Association of Insurance Commissioners pursuant to this article is subject to a request or subpoena to the National Association of Insurance Commissioners for disclosure or production; and (D) Require the National Association of Insurance Commissioners and its affiliates and subsidiaries to consent to intervention by an insurer in any judicial or administrative action in which the National Association of Insurance Commissioners and its affiliates and subsidiaries may be required to disclose confidential information about the insurer shared with the National Association of Insurance Commissioners and its affiliates and subsidiaries pursuant to this article.(d) The sharing of information by the commissioner pursuant to this article does not constitute a delegation of regulatory authority, and the commissioner is solely responsible for the administration, execution and enforcement of the provisions of this article.(e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information occurs as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (c) of this section.(f) Documents, materials or other information in the possession or control of the National Association of Insurance Commissioners pursuant to this article is confidential by law and privileged, is exempt from disclosure pursuant to chapter 29B of this code, is not subject to subpoena, and is not subject to discovery or admissible in evidence in any private civil action.
 (a) Injunctions. -- Whenever it appears to the commissioner that any person or any director, officer, employee or agent thereof has committed or is about to commit a violation of this article or of any rule, regulation or order issued by the commissioner hereunder, the commissioner may apply to the circuit court for an order enjoining such person or such director, officer, employee or agent thereof from violating or continuing to violate this chapter or any such rule, regulation or order, and for such other equitable relief as the nature of the case and the interests of the insurer's policyholders, creditors and shareholders or the public may require. (b) Voting of securities: when prohibited. -- No security which is the subject of any agreement or arrangement regarding acquisition, or which is acquired or to be acquired, in contravention of the provisions of this article or of any rule, regulation or order issued by the commissioner hereunder may be voted at any shareholders' meeting, or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though such securities were not issued and outstanding; but no action taken at any such meeting shall be invalidated by the voting of such securities, unless the action would materially affect control of the insurer or unless the courts of this state have so ordered. If an insurer or the commissioner has reason to believe that any security of the insurer has been or is about to be acquired in contravention of the provisions of this article or of any rule, regulation or order issued by the commissioner hereunder the insurer or the commissioner may apply to the circuit court to enjoin any offer, request, invitation, agreement or acquisition made in contravention of section four of this article, or any rule, regulation or order issued by the commissioner thereunder to enjoin the voting of any security so acquired, to void any vote of such security already cast at any meeting of shareholders, and for such other equitable relief as the nature of the case and the interests of the insurer's policyholders, creditors and shareholders or the public may require. (c) Sequestration of voting securities. -- In any case where a person has acquired or is proposing to acquire any voting securities in violation of this article or any rule, regulation or order issued by the commissioner hereunder, the circuit court may, on such notice as the court deems appropriate, upon the application of the insurer or the commissioner seize or sequester any voting securities of the insurer owned directly or indirectly by such person, and issue such orders with respect thereto as may be appropriate to effectuate the provisions of this article. Notwithstanding any other provisions of law, for the purposes of this article, the situs of the ownership of the securities of domestic insurers shall be deemed to be in this state.
(a) Any insurer failing, without just cause, to file any registration statement as required by this article shall be required, after notice and hearing, to pay a penalty of up to one thousand dollars for each day's delay, to be recovered by the commissioner. Any penalty so recovered shall be paid into the General Revenue Fund of this state. The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.(b) Every director or officer of an insurance holding company system who knowingly violates, participates in, or assents to, or who knowingly permits any of the officers or agents of the insurer to engage in transactions or make investments which have not been properly reported or submitted pursuant to subsection (a), section four of this article and subsections (c) and (d), section five of this article, or which violate any other provision of this article, shall pay, in his or her individual capacity, a civil forfeiture of not more than $5,000 per violation, after notice and hearing before the commissioner. In determining the amount of the civil forfeiture, the commissioner shall take into account the appropriateness of the forfeiture with respect to the gravity of the violation, the history of previous violations, and such other matters as justice may require.(c) Whenever it appears to the commissioner that any insurer subject to this article or any director, officer, employee or agent thereof has engaged in any transaction or entered into a contract which is subject to section five of this article and which would not have been approved had such approval been requested, the commissioner may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing the commissioner may also order the insurer to void any such contracts and restore the status quo if the action is in the best interest of the policyholders, creditors or the public.(d) Whenever it appears to the commissioner that any person or any director, officer, employee or agent thereof has committed a willful violation of this article, the commissioner may cause criminal proceedings to be instituted against such person or the responsible director, officer, employee or agent thereof. Any insurer who willfully violates this article is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than ten thousand dollars. Any individual who willfully violates this article is guilty of a misdemeanor and, upon conviction thereof, shall be fined in his or her individual capacity not more than ten thousand dollars or, if such willful violation involves the deliberate perpetration of a fraud upon the commissioner, is guilty of a felony and, upon conviction thereof, shall be imprisoned not less than one year nor more than three years, or both fined and imprisoned.(e) Any officer, director or employee of an insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the intent to deceive the commissioner in the performance of his or her duties under this article, is guilty of a felony and, upon conviction thereof, shall be fined not more than ten thousand dollars, or imprisoned not less than one year nor more than three years, or both fined and imprisoned. Any fines imposed pursuant to this subsection shall be paid by the officer, director or employee in his or her individual capacity.(f) Whenever it appears to the commissioner that any person has committed a violation of section three of this article which prevents the full understanding of the enterprise risk to the insurer by affiliates or by the insurance holding company system, the violation may serve as an independent basis for disapproving dividends or distributions and for placing the insurer under an order of supervision in accordance with article thirty-four of this chapter.
This article may be cited as the West Virginia Mutual to Mutual Insurance Holding Company Act.
A membership interest in a mutual insurance holding company is not a security under the laws of this state. No member of a mutual insurance holding company may transfer membership in the mutual insurance holding company or any right arising from membership.
(a) The provisions of 33-5-24 of this code shall apply to a mutual insurance holding company as if the mutual insurance holding company were a domestic mutual insurance company. The members of the mutual insurance holding company are deemed to be members of a domestic mutual insurance company for all purposes of all such sections.(b) For a period of five years following the effective date of a reorganization under this article, no person shall acquire control of a reorganized stock company without compliance with the provisions of 33-27-1 et seq. of this code. For purposes of this subdivision, "control" has the same meaning as set out in 33-27-2 of this code, except that control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing 5 percent or more of the voting securities of any other person. (c) An intermediate holding company or if there is no such company, a reorganized stock company shall not issue shares of stock, in addition to the shares issued pursuant to the reorganization plan under which the company was formed, without the prior approval of the mutual insurance holding company as its majority shareholder. The prior approval of the mutual insurance holding company must be evidenced by a resolution of the board of directors of the mutual insurance holding company delivered to the board of directors in the intermediate holding company or the reorganized stock company prior to the issuance of the additional shares. (d) A mutual insurance holding company, and an intermediate holding company, if any, are deemed to be insurers subject to the provisions of this chapter.
(a) A mutual insurance holding company, and, if applicable, its intermediate holding company, are deemed to be insurers subject to the provisions of 33-10-1 et seq. of this code. A mutual insurance holding company and the intermediate holding company accordingly are deemed to be parties to any proceeding under such article involving an insurance company of the subsidiary of the mutual insurance holding company or of the intermediate holding company as a result of a reorganization under this article. (b) In any proceeding under 33-10-1 et seq. of this code involving a reorganized stock company, the assets of the mutual insurance holding company, and if applicable, its intermediate holding company, are deemed to be assets of the reorganization stock company for purposes of satisfying claims of the policyholders of the reorganized stock company. (c) A mutual insurance holding company, and, if applicable, its intermediate holding company, shall not be dissolved or liquidated without compliance with the provisions of 33-10-1 et seq. of this code. Such companies are deemed to be domestic insurance companies for purposes of a dissolution or liquidation. 
Any action challenging the validity of, or arising out of, actions taken or proposed to be taken in connection with a reorganization under this article shall be commenced no later than 30 days after the effective date of the reorganization. 
The West Virginia Insurance Commissioner may adopt rules as he or she deems necessary to carry out the purposes of this article.
As used in this article:"Intermediate holding company" means a stock corporation that owns all of the shares of voting stock of one or more recognized stock companies after a reorganization pursuant to this article. "Intermediate holding company" also means a stock company that is the parent or subsidiary of another intermediate holding company. "Mutual insurance company" means a domestic or foreign mutual Insurance company. "Mutual insurance holding company" means a domestic mutual insurance holding company incorporated pursuant to a reorganization plan adopted pursuant to this article, which company is the parent company of a reorganized stock company or of an intermediate holding company."Policyholder" means the person, group of persons, association, corporation, partnership, member or other entity named as the insured under a mutual policy of insurance. "Reorganization plan" means a reorganization plan adopted by a mutual insurance companys board of directors in accordance with the provisions of this article."Reorganized stock company" means the domestic or foreign stock insurance company resulting from a domestic or foreign mutual insurance companys reorganization under this article. "Voting Stock" means securities of any class or any ownership interests having voting power for the election of directors, trustees, or management of a person, other than securities having voting power only as a result of the occurrence of a contingency. 
(a) A mutual insurance company, by itself or together with one or more mutual insurance companies acting pursuant to a joint reorganization plan, may reorganize in accordance with the requirements of this article, notwithstanding other provisions of this chapter or the provisions of 23-2C-3 of this code. (b) (1) Such a reorganization plan may only be adopted by the affirmative vote of not less than two-thirds of the mutual insurance companys board of directors. (2) At any time prior to the mailing of the notice to policyholders required pursuant to 33-27A-4 of this code, a mutual insurance companys board of directors may amend the reorganization plan by affirmative vote of not less than two-thirds of the board of directors. At any time before a reorganization plan has received approval of the Insurance Commissioner, a mutual insurance companys board of directors may withdraw the reorganization plan by the affirmative vote of not less than two-thirds of the board of directors. (c) A reorganization plan shall provide for the incorporation of a mutual insurance holding company, and shall provide for the continuation of the corporate existence of the mutual insurance company as a stock insurance company. (d) A reorganization plan shall provide that all of the initial shares of voting stock of a reorganized stock company shall be issued to its parent mutual insurance holding company or to an intermediate holding company. Nothing in this article shall be construed as limiting or restricting the authority of a reorganized stock company or of an intermediate holding company to issue securities other than voting stock. (e) A reorganization plan shall provide that the membership interests of the policyholders of a mutual insurance company shall become membership interests in the mutual insurance holding company, and that concurrently the policyholders membership interests in the mutual insurance company shall be extinguished.(f) A reorganization plan shall provide that the policyholders of the reorganized stock company shall become members of the mutual insurance holding company in accordance with the articles of the incorporation and of the mutual holding company. (g) A reorganization plan shall provide that the mutual insurance holding company shall at all times own a majority of the voting stock of the reorganized stock company. Alternatively, a reorganization plan shall provide that the mutual insurance holding company shall at all times own a majority of the voting stock of an intermediate holding company, which intermediate holding companies shall at all times own all of the voting stock of the reorganized stock company. The shares of voting stock required to be owned by the mutual insurance holding company, and by the intermediate holding company, if any, shall not be pledged, hypothecated, or in any way incumbered with regard to any obligation, guarantee or commitment undertaken by or on behalf of the mutual insurance holding company, or the intermediate holding company, if any. (h) The board of directors of a mutual insurance company shall file all of the following with the Insurance Commissioner within 90 days after adopting a reorganization plan: (1) The reorganization plan; (2) The forms of notices to be provided to policyholders;(3) The form of proxy, if any, to be solicited from policyholders;(4) The proposed articles of incorporation for the mutual insurance holding company and the reorganized stock company, and, if applicable, for an intermediate holding company. The articles of incorporation shall be signed by the chairperson of the board, the president or vice-president, and by the secretary or an assistant secretary of the mutual insurance company. (5) Such other documents or information as may be required by the Insurance Commissioner.(i) Nothing in this article shall limit or restrict an intermediate holding companys authority to form or acquire the control of other corporations, whether domestic or foreign, profit or nonprofit. 
(a) A reorganization plan adopted by a mutual insurance companys board of directors shall be voted upon by the mutual insurance companys policyholders at a policyholders meeting. A policyholder is entitled to cast only one vote, in person or by proxy, on the reorganization plan regardless of the number of policies or contracts that the policyholder may own or hold. Only proxies specifically related to the reorganization plan shall be used in determining whether the reorganization plan is approved. (b) All policyholders shall be given notice of the policyholders meeting to vote upon the reorganization plan at least 30 days prior to the date fixed for the policyholders meeting. Notice of the time and place of such meeting shall be sent by mail to each policyholder at the policyholders post office address as it appears on the books and records of the company. The notice shall include a summary of the reorganization plan adopted by the board of directors, including an analysis of the material financial aspects and potential for dissolution of the policyholders interests in the mutual insurance company under the reorganization plan, a uniform ballot for voting on the question of the reorganization plan, and a statement informing the policyholders that the Insurance Commissioner may fix a time and place for a public hearing on the reorganization plan, to be held within 30 days after the Insurance Commissioners receipt of written notice from the of the policyholders approval of the reorganization plan. (c) A reorganization plan shall be approved upon receiving the affirmative vote of at least a majority of the votes cast by policyholders. (d) If a reorganization plan is approved at the policyholders meeting: (1) The board of directors of the mutual insurance company shall provide the Insurance Commissioner with written notice of that approval within 10 days after the policyholders meeting. (2) The Insurance Commissioner may within 10 days after receiving notice from the board of directors, provide written notice to the mutual insurance company of the commissioners intent to conduct one or more public hearings on the reorganization plan. At a minimum, the Insurance Commissioners notice to the mutual insurance company shall include a time and a place for the first public hearing which shall be held within 30 days after the commissioners receipt from the board of directors. (3) Within 10 days after the mutual insurance companys receipt of a notice from the Insurance Commissioner of his or her intent to conduct one or more public hearings on the reorganization plan, if such notice is provided, the mutual insurance company shall provide notice of the time and place of such hearing by causing this information to be published once each week for two consecutive weeks in a newspaper with statewide circulation and in the county of the state in which the mutual insurance company has its principle office. (e) The proposed articles of incorporation for the mutual insurance holding company and a reorganized stock company and if applicable, for the intermediate holding company, as filed with the Insurance Commissioner, shall also be voted on by the mutual insurance companys policyholders at the policyholder meeting held pursuant to this section. The articles of incorporation shall be adopted upon receiving the affirmative vote of at least a majority of those casts by policyholders.(f) At all public hearings conducted by the Insurance Commissioner pursuant to this article, the commissioner may summon and compel attendance and testimony of witnesses and the production of books and papers. The Insurance Commissioner shall hear the testimony of the person that is claiming to be adversely affected by the reorganization plan, and of others wishing to comment on the reorganization plan. Such persons may present a position and offer comments concerning the reorganization plan, including a position and comments concerning whether the reorganization plan is fair and equitable to the mutual insurance company policyholders and whether it complies with the provisions of this article. (g) A mutual insurance companys failure to provide a member or members with notice required by this section shall not impair the validity of any action taken under this article, if the mutual insurance company has complied substantially and in good faith with all those requirements. The determination as to such compliance shall be made by the Insurance Commissioner. 
(a) A mutual insurance company shall not proceed with a reorganization plan approved by the mutual insurance companys policyholders until the reorganization plan has been reviewed by and has received the approval of the Insurance Commissioner and the articles of incorporation for the mutual insurance holding company and reorganized stock company, if any, for an intermediate holding company, have also been examined and approved by the Insurance Commissioner.(b) The Insurance Commissioner shall approve a reorganization plan if upon review, he or she finds all of the following:(1) The adoption, approval and contents of the reorganization plan comply with the provisions of this article, (2) The mutual insurance company has properly filed all documents, forms, and other information required by this article;(3) The reorganization plan is fair and equitable to the mutual insurance companys policyholders. (c) The Insurance Commissioner may retain qualified experts, at the mutual insurance companys expense, to assist in reviewing the reorganization plan. (d) The Insurance Commissioner shall approve or reject the reorganization plan not later than 60 days after the latter of the approval of the reorganization plan by the mutual insurance companys policyholders or the completion of public hearings held in accordance with this article. The Insurance Commissioner may extend this time period by an additional 60 days by providing written agreement to the mutual insurance company. (e) Upon deciding to approve or reject a reorganization plan, the Insurance Commissioner shall notify the mutual insurance company of the decision by regular mail. If the Insurance Commissioner rejects a reorganization plan, the commissioners notice shall detail the reasons for the rejection. (f) A mutual insurance company shall file the following documents with the Insurance Commissioner within 30 days after receiving notice from the commissioner of his or her approval of a reorganization plan:(1) The minutes of the policyholders meeting at which the reorganization plan was approved;(2) The articles of incorporation for the mutual insurance holding company and the reorganized stock company, and if applicable, for an intermediate holding company, as adopted by the mutual insurance companys policyholders under this article. (g) Upon obtaining the approval of the Insurance Commissioner, the mutual insurance companys board of directors shall file the following with the Secretary of State:(1) A Certificate of Reorganization, signed by the chairperson of the board, the president or a vice-president, and a secretary or an assistant secretary of the mutual insurance company. The articles of incorporation for the mutual insurance holding company and the reorganized stock company, and, if applicable, for an intermediate holding company as adopted by the mutual insurance companys policyholders pursuant to this article, shall accompany the Certificate of Reorganization.(2) A statement signed by the chairperson of the board, the president or a vice-president, and the secretary and an assistant secretary, of the mutual insurance company, of the manner of the adoption of the articles of the incorporation for the mutual insurance holding company and the reorganized stock company, and, if factual, for an intermediate holding company;(3) Copies of the approval obtained from the Insurance Commissioner under this article. (4) Reorganization plan shall be effective upon the filing of all of the documents and statements required above or at such later date as the Certificate of Reorganization may provide. (5) After a reorganization plan takes effect, the Insurance Commissioner shall have jurisdiction over the mutual insurance holding company, and if applicable, over an intermediate holding company, in order to ensure that the interests of the mutual insurance companys policyholders are protected. 
Proposed amendments to the articles of incorporation of a mutual insurance holding company may be adopted at any members meeting. The board of directors of a mutual insurance holding company shall provide notice of any members meeting conducting a vote on the adoption of the amendment to the articles of incorporation by publication in a newspaper of general circulation, published in the county where the companys principle place of business is located, at least 30 days prior to the members meeting. Where the amendment is not inconsistent with the Constitution and laws of the State of West Virginia and of the United States, the amendment may be adopted by the affirmative vote of at least three-fifths of the members present and voting at the meeting.
(a) Upon a reorganization plan taking effect in accordance with this article, the corporate existence of the mutual insurance company shall continue in the reorganized stock company. On the effective date of the reorganization, all of the assets, rights, franchises and interests of the mutual insurance company in and to every species of property whether real, personal, or mixed and in any accompanying causes of action shall be vested in the reorganized stock company without any deed or transfer, and a reorganized stock company shall assume all of the obligations and liabilities of the mutual insurance company. (b) Unless otherwise specified in a reorganization plan, those persons who are the directors and officers of a mutual insurance company on the effective date of the reorganization shall serve as the directors and officers of the reorganized stock company until new directors and officers are elected pursuant to the recognized stock companys articles of incorporation. 
All costs and expenses for the process of a reorganization under this article shall be paid for or reimbursed by the mutual insurance company, the reorganized stock company, or an intermediate holding company.
(a) A mutual insurance company may reorganize by merging its policyholders members interests into a domestic or foreign mutual insurance holding company and continuing the corporate existence of the mutual insurance company as a reorganized stock company. A mutual company reorganizing under this article shall comply with all applicable laws of this state and of foreign jurisdictions, to affect the reorganization.(b) A domestic or foreign mutual insurance holding company may reorganize by merging or consolidating its membership interests into another domestic or foreign mutual insurance holding company. A domestic or foreign mutual insurance holding company reorganizing under this subdivision shall comply with all applicable provisions of this article and all applicable laws of foreign jurisdictions, to affect the reorganization.
This article shall be known and cited as the "West Virginia Individual Accident and Sickness Insurance Minimum Standards Act."
The purpose of this article is to provide reasonable standardization and simplification of terms and coverages of individual accident and sickness insurance policies and subscriber contracts of hospital and medical service corporations in order to facilitate public understanding and comparison and to eliminate provisions contained in individual accident and sickness insurance policies and subscriber contracts of hospital and medical service corporations which may be misleading or confusing in connection either with the purchase of such coverages or with the settlement of claims and to provide for full disclosure in the sale of such coverages.
As used in this article, unless used in a context that clearly requires a different meaning, the term:(a) "Form" means a policy, contract, rider, endorsement or application as provided in section eight, article six of this chapter when used to describe an individual accident and sickness policy form, and means a contract, application, rider or endorsement as provided in section six, article twenty-four of this chapter when used to describe a hospital or medical service corporation subscriber's contract.(b) "Accident and sickness insurance" means insurance written under article fifteen of this chapter, other than credit accident and sickness insurance, and coverages written under article twenty-four of this chapter. For purposes of this article, hospital, medical and dental service corporations shall be deemed to be engaged in the business of insurance.(c) "Policy" means the entire contract between an insurer and an individual insured, including the policy, riders, endorsements and the application, if attached. The term "policy" shall not include coverages issued pursuant to a conversion privilege under a policy or contract of group insurance.(d) "Subscriber contract" means the entire subscriber contract issued by a hospital, medical or dental service corporation to an individual subscriber, including the contract, riders, endorsements and the application, if attached. The term "subscriber contract" shall not include coverages issued pursuant to a conversion privilege under a policy or contract of group insurance.(e) "Direct response insurance product" means an individual policy of accident and sickness insurance or a subscriber contract of a hospital, medical or dental service corporation, the sale of which is effected through direct contact between an insurer and an individual insured or between a hospital, medical or dental service corporation and a subscriber, without employing the intermediary services of an agent, broker or solicitor.
(a) The commissioner shall promulgate rules and regulations, in accordance with chapter twenty-nine-a of the code, to establish specific standards, including standards of full and fair disclosure, that set forth the manner, content and required disclosure for the sale of individual policies of accident and sickness insurance and subscriber contracts of hospital, medical and dental service corporations which shall be in addition to, and in accordance with, applicable laws of this state. Such rules and regulations may cover, but shall not be limited to:(1) Terms of renewability;(2) Initial and subsequent conditions of eligibility;(3) Nonduplication of coverage provisions;(4) Coverage of dependents;(5) Preexisting conditions;(6) Termination of insurance;(7) Probationary periods;(8) Limitations;(9) Exceptions;(10) Reductions;(11) Elimination periods;(12) Requirements for replacement;(13) Recurrent conditions; and(14) The definition of terms including, but not limited to, hospital, accident, sickness, injury, physician, accidental means, total disability, permanent disability, partial disability, nervous disorder, guaranteed renewable and noncancelable.(b) The commissioner may promulgate rules and regulations, in accordance with chapter twenty-nine-a of the code, specifying prohibited provisions of policies and subscriber contracts not otherwise specifically authorized by statute which in the opinion of the commissioner are unjust, unfair or unfairly discriminatory either to the policyholder, subscriber, beneficiary or any person insured under the policy.
(a) The commissioner shall promulgate rules and regulations, in accordance with chapter twenty-nine-a of the code, to establish minimum standards for benefits under each of the following categories of coverage in individual policies of accident and sickness insurance and subscriber contracts of hospital, medical, dental and service corporations:(1) Basic hospital expense coverage;(2) Basic medical-surgical expense coverage;(3) Hospital confinement indemnity coverage;(4) Major medical expense coverage;(5) Disability income protection coverage;(6) Accident only coverage; and(7) Specified disease or specified accident coverage.(b) Nothing in this section shall preclude the issuance of any policy or subscriber contract which combines two or more of the categories of coverage enumerated in subdivisions (1) through (6) of subsection (a) of this section.(c) No policy or subscriber contract shall be delivered or issued for delivery in this state which does not meet the prescribed minimum standards for the categories of coverage listed in subdivisions (1) through (7) of subsection (a) of this section unless the commissioner finds that such policy or subscriber contract will be in the public interest and that such policy or subscriber contract contains benefits which are reasonable in relation to the premium charged.(d) The commissioner shall prescribe the method of identification of policies and subscriber contracts based upon coverages provided.
(a) Any insurer who, on or after January 1, 1981, delivers or issues for delivery in this state individual basic hospital expense or major medical expense coverage shall make available to the policyholder home health care coverage consistent with the provisions of this section. For purposes of this section, "home health care" means health services provided by a home health agency certified in the state in which the home health services are delivered or under Title XVIII of the Social Security Act.(b) Home health care coverage offered shall include:(1) Services provided by a registered nurse or a licensed practical nurse;(2) Health services provided by physical, occupational, respiratory and speech therapists;(3) Health services provided by a home health aide to the extent that such services would be covered if provided to the insured on an inpatient basis;(4) Medical supplies, drugs, medicines and laboratory services to the extent that they would be covered if provided to the insured on an inpatient basis; and(5) Services provided by a licensed midwife or a licensed nurse midwife as these occupations are defined in section one, article fifteen of the code.(c) Home health care coverage may be limited to:(1) Services provided on the written order of a licensed physician, provided such order is renewed at least every sixty days;(2) Services provided, directly or through contractual agreements, by a home health agency certified in the state in which the home health services are delivered or under Title XVIII of the Social Security Act; and(3) Services as set forth in subsection (b) of this section without which the insured would have to be hospitalized.(d) Coverage under this section shall be provided for at least one hundred home visits per insured per policy year, with each home visit by a member of a home health care team to be considered as one home health care visit including up to four hours of home health care services.(e) No such policy need provide such coverage to persons eligible for Medicare.
(a) Definitions. --(1) "Applicant" means, in the case of an individual Medicare supplement policy or subscriber contract, the person who seeks to contract for insurance benefits.(2) "Medicare supplement policy" means an individual policy of accident and sickness insurance or a subscriber contract (of hospital and medical service corporations or health maintenance organizations), other than a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. Section 1395 et seq.), or an issued policy under a demonstration project specified in 42 U.S.C. 1395ss(g)1), which is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expenses of persons eligible for Medicare. Such term does not include:(A) A policy or contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees, or combination thereof, or for members or former members, or combination thereof, of the labor organizations; or(B) A policy or contract of any professional, trade or occupational association for its members or former or retired members, or combination thereof, if such association is composed of individuals all of whom are actively engaged in the same profession, trade or occupation; has been maintained in good faith for purposes other than obtaining insurance; and has been in existence for at least two years prior to the date of its initial offering of such policy or plan to its members; or(C) Individual policies or contracts issued pursuant to a conversion privilege under a policy or contract of group or individual insurance when such group or individual policy or contract includes provisions which are inconsistent with the requirements of this section.(3) "Medicare" means the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as then constituted or later amended.(b) Standards for policy provisions. --(1) The commissioner shall issue reasonable rules to establish specific standards for policy provisions of Medicare supplement policies. Such standards shall be in addition to and in accordance with the applicable laws of this state and may cover, but shall not be limited to:(A) Terms of renewability;(B) Initial and subsequent conditions of eligibility;(C) Nonduplication of coverage;(D) Probationary period;(E) Benefit limitations, exceptions and reductions;(F) Elimination period;(G) Requirements for replacement;(H) Recurrent conditions; and(I) Definitions of terms.(2) The commissioner may issue reasonable rules that specify prohibited policy provisions not otherwise specifically authorized by statute which, in the opinion of the commissioner, are unjust, unfair or unfairly discriminatory to any person insured or proposed for coverage under a Medicare supplement policy.(3) Notwithstanding any other provisions of the law, a Medicare supplement policy may not deny a claim for losses incurred more than six months from the effective date of coverage for a preexisting condition. The policy may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.(c) Minimum standards for benefits. -- The commissioner shall issue reasonable rules to establish minimum standards for benefits under Medicare supplement policies.(d) Loss ratio standards. -- Medicare supplement policies shall be expected to return to policyholders benefits which are reasonable in relation to the premium charge. The commissioner shall issue reasonable rules to establish minimum standards for loss ratios for Medicare supplement policies on the basis of incurred claims experience and earned premiums for the entire period for which rates are computed to provide coverage and in accordance with accepted actuarial principles and practices. For purposes of rules issued pursuant to this subsection, Medicare supplement policies issued as a result of solicitations of individuals through the mail or mass media advertising, including both print and broadcast advertising, shall be treated as individual policies.(e) Disclosure standards. --(1) In order to provide for full and fair disclosure in the sale of accident and sickness policies, to persons eligible for Medicare, the commissioner may require by rule that no policy of accident and sickness insurance may be issued for delivery in this state and no certificate may be delivered pursuant to such a policy unless an outline of coverage is delivered to the applicant at the time application is made.(2) The commissioner shall prescribe the format and content of the outline of coverage required by subdivision (1) of this subsection. For purposes of this subdivision, "format" means style, arrangements and overall appearance, including such items as size, color and prominence of type and the arrangement of text and captions. Such outline of coverage shall include:(A) A description of the principal benefits and coverage provided in the policy;(B) A statement of the exceptions, reductions and limitations contained in the policy;(C) A statement of the renewal provisions including any reservation by the insurer of the right to change premiums and disclosure of the existence of any automatic renewal premium increases based on the policyholder's age;(D) A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions.(3) The commissioner may prescribe by rule a standard form and the contents of an informational brochure for persons eligible for Medicare, which is intended to improve the buyer's ability to select the most appropriate coverage and improve the buyer's understanding of Medicare. Except in the case of direct response insurance policies, the commissioner may require by rule that the information brochure be provided to any prospective insureds eligible for Medicare concurrently with delivery of the outline of coverage. With respect to direct response insurance policies, the commissioner may require by rule that the prescribed brochure be provided upon request to any prospective insureds eligible for Medicare, but in no event later than the time of policy delivery.(4) The commissioner may further promulgate reasonable rules to govern the full and fair disclosure of the information in connection with the replacement of accident and sickness policies, subscriber contracts or certificates by persons eligible for Medicare.(f) Notice of free examination. -- Medicare supplement policies or certificates, other than those issued pursuant to direct response solicitation, shall have a notice prominently printed on the first page of the policy or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within thirty days from its delivery and have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Any refund made pursuant to this section shall be paid directly to the applicant by the issuer in a timely manner. Medicare supplement policies or certificates issued pursuant to a direct response solicitation to persons eligible for Medicare shall have a notice prominently printed on the first page or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within thirty days of its delivery and to have the premium refunded if, after examination, the applicant is not satisfied for any reason. Any refund made pursuant to this section shall be paid directly to the applicant by the issuer in a timely manner.(g) Administrative procedures. -- Rules promulgated pursuant to this section shall be subject to the provisions of chapter twenty-nine-a (the West Virginia Administrative Procedures Act) of this code.(h) Severability. -- If any provision of this section or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the section and the application of such provision to other persons or circumstances shall not be affected thereby.
(a) In order to provide for full and fair disclosure in the sale of individual accident and sickness insurance policies or subscriber contracts of hospital, medical and dental service corporations, no such policy or subscriber contract shall be delivered or issued for delivery in this state unless:(1) In the case of a direct response insurance product, the outline of coverage described in subsection (b) of this section accompanies the policy or subscriber contract; and(2) In all other cases, the outline of coverage described in subsection (b) of this section is delivered to the applicant at the time application is made and an acknowledgment of receipt or certificate of delivery of such outline is provided the insurer or hospital, medical or dental service corporation with the application. In the event the policy or subscriber contract is issued on a basis other than that applied for, the outline of coverage properly describing the policy or subscriber contract must accompany the policy or subscriber contract when it is delivered and clearly state that it is not the policy or subscriber contract for which application was made.(b) The commissioner shall, by promulgation of appropriate rules and regulations in accordance with chapter twenty-nine-a of the code, prescribe the format and content of the outline of coverage required by subsection (a) of this section. "Format" means style, arrangement and overall appearance, including such items as the size, color and prominence of type and the arrangement of text and captions. Such outline of coverage shall include:(1) A statement identifying the applicable category or categories of coverage provided by the policy or subscriber contract as prescribed in section five of this article;(2) A description of the principal benefits and coverage provided in the policy or subscriber contract;(3) A statement of the exceptions, reductions and limitations contained in the policy or subscriber contract;(4) A statement of the renewal provisions, including any reservation by the insurer or hospital, medical or dental service corporation of a right to change premiums; and(5) A statement that the outline of coverage is a summary of the policy or subscriber contract issued or applied for and that the terms of the policy or subscriber contract should be consulted to determine governing contractual provisions.
Notwithstanding the provisions of section four, article fifteen of this chapter if an insurer or a hospital, medical or dental service corporation elects to use a simplified application form containing no questions concerning the applicant's health history or medical treatment history, the policy or contract applied for must cover any loss occurring after twelve months from the inception date of coverage which loss is traceable to a preexisting condition not specifically excluded from coverage by the terms of the policy, and, except as so provided, the policy or contract shall not include wording which would permit a defense based upon preexisting conditions.
This article may be cited as the Life and Accident and Sickness Insurance Policy Language Simplification Act.
The purpose of this article is to establish minimum standards for language used in policies, contracts and certificates of life insurance, accident and sickness insurance, credit life insurance and credit accident and sickness insurance delivered or issued for delivery in this state to facilitate ease of reading by insureds.This article is not intended to increase the risk assumed by insurance companies or other entities subject to this article or to supersede their obligation to comply with the substance of other insurance legislation applicable to life, accident and sickness, credit life or credit accident and sickness insurance policies. This article is not intended to impede flexibility and innovation in the development of policy forms or content or to lead to the standardization of policy forms or content.
(a) "Policy" or "policy form" means any policy, contract, plan or agreement of life or accident and sickness insurance, including credit life insurance and credit accident and sickness insurance, delivered or issued for delivery in this state by any company subject to this article; any certificate, contract or policy issued by a fraternal benefit society; and any certificate issued pursuant to a group insurance policy delivered or issued for delivery in this state.(b) "Company" or "insurer" means any life or accident and sickness insurance company, fraternal benefit society, nonprofit health service corporation, nonprofit hospital service corporation, nonprofit medical service corporation, prepaid health plan, dental care plan, vision care plan, pharmaceutical plan, health maintenance organization, and all similar type organizations.
(a) This article shall apply to all policies delivered or issued for delivery in this state by any company on or after the date such forms must be approved under this article, but nothing in this article shall apply to:(1) Any policy which is a security subject to federal jurisdiction;(2) Any group policy covering a group of one thousand or more lives at date of issue, other than a group credit life insurance policy or a group credit accident and sickness insurance policy; however, this shall not exempt any certificate issued pursuant to a group policy delivered or issued for delivery in this state;(3) Any group annuity contract which serves as a funding vehicle for pension, profit sharing, or deferred compensation plans;(4) Any form used in connection with, as a conversion from, as an addition to, or in exchange pursuant to a contractual provision for, a policy delivered or issued for delivery on a form approved or permitted to be issued prior to the dates such forms must be approved under this article; or(5) The renewal of a policy delivered or issued for delivery prior to the dates such forms must be approved under this article.(b) No other statute of this state setting language simplification standards shall apply to any policy forms.
(a) In addition to any other requirements of law, no policy forms, except as stated in section four of this article, shall be delivered or issued for delivery in this state on or after the dates such forms must be approved under this article unless:(1) The text achieves a minimum score of forty on the Flesch reading ease test or an equivalent score on any other comparable test as provided in subsection (c) of this section;(2) It is printed, except for specification pages, schedules and tables, in not less than ten point type, one point leaded;(3) The style, arrangement and overall appearance of the policy give no undue prominence to any portion of the text of the policy or to any endorsements or riders; and(4) It contains a table of contents or an index of the principal sections of the policy, if the policy has more than three thousand words printed on three or fewer pages of text, or if the policy has more than three pages regardless of the number of words.(b) For the purposes of this section, a Flesch reading ease test score shall be measured by the following method:(1) For policy forms containing ten thousand words or less of text, the entire form shall be analyzed. For policy forms containing more than ten thousand words, the readability of two two-hundred word samples per page may be analyzed instead of the entire form. The samples shall be separated by at least twenty printed lines;(2) The number of words and sentences in the text shall be counted and the total number of words divided by the total number of sentences. The figure obtained shall be multiplied by a factor of one and fifteen one-thousandths;(3) The total number of syllables shall be counted and divided by the total number of words. The figure obtained shall be multiplied by a factor of eighty-four and six- tenths;(4) The sum of the figures computed under subdivisions (2) and (3), subsection (b) of this section, subtracted from two hundred six and eight hundred thirty-five one- thousandths equals the Flesch reading ease score for the policy form;(5) For purposes of subdivisions (2), (3) and (4), subsection (b) of this section, the following procedures shall be used:(A) A contraction, hyphenated word, or numbers and letters, when separated by spaces, shall be counted as one word;(B) A unit of words ending with a period, semicolon, or colon, but excluding headings and captions, shall be counted as a sentence; and(C) A syllable means a unit of spoken language consisting of one or more letters of a word as defined by an accepted dictionary. Where the dictionary shows two or more equally acceptable pronunciations of a word, the pronunciation containing fewer syllables may be used.(6) The term "text" as used in this section shall include all printed matter except the following:(A) The name and address of the insurer; the name, number or title of the policy; the table of contents or index; captions and subcaptions; specification pages, schedules or tables; and(B) Any policy language which is drafted to conform to the requirements of any federal law, regulation or agency interpretation; any policy language required by any collectively bargained agreement; any medical terminology; any words which are defined in the policy; and any policy language required by law or regulation: Provided, That the insurer identifies the language or terminology excepted by this paragraph and certifies, in writing, that the language or terminology is entitled to be excepted by this paragraph.(c) Any other reading test may be approved by the commissioner for use as an alternative to the Flesch reading ease test if it is comparable in result to the Flesch reading ease test.(d) Filings subject to this section shall be accompanied by a certificate signed by an officer of the insurer stating that it meets the minimum reading ease score on the test used or stating that the score is lower than the minimum required but should be approved in accordance with section seven of this article. To confirm the accuracy of any certification, the commissioner may require the submission of further information to verify the certification in question.(e) At the option of the insurer, riders, endorsements, applications, and other forms made a part of the policy may be scored as separate forms or as part of the policy with which they may be used.
Nothing in this article shall be construed to negate any law of this state permitting the issuance of any policy form after it has been on file for the time period specified.
The commissioner may authorize a lower score than the Flesch reading ease score required in subdivision (1), subsection (a), section five of this article whenever, in his sole discretion, he finds that a lower score: (a) Will provide a more accurate reflection of the readability of a policy form; (b) is warranted by the nature of a particular policy form or type or class of policy forms; or (c) is caused by certain policy language which is drafted to conform to the requirements of any state law, regulation or agency interpretation.
A policy form meeting the requirements of subsection (a), section five of this article shall be approved notwithstanding the provisions of any other laws which specify the content of policies, if the policy form provides the policyholders and claimants protection not less favorable than they would be entitled to under such laws.
(a) Except as provided in section four, this article applies to all policy forms filed on or after July 1, 1983. No policy form shall be delivered or issued for delivery in this state on or after July 1, 1986, unless approved by the commissioner or permitted to be issued under this article. Any policy form which has been approved or permitted to be issued prior to July 1, 1986, and which meets the standards set by this article need not be refiled for approval, but may continue to be lawfully delivered or issued for delivery in this state upon the filing with the commissioner of a list of such forms identified by form number and accompanied by a certificate as to each such form in the manner provided in subsection (d), section five of this article.(b) The commissioner, may, at his discretion and after notice of hearing, extend the dates in subsection (a) of this section.
(a) No person may act as an insurer and no insurer may transact insurance in West Virginia except as authorized by a valid cense issued by the commissioner, except as to the transactions as are expressly otherwise provided for in this chapter.(b) No license is required for an insurer, formerly holding a valid license, to enable it to investigate and settle losses under its policies lawfully written in West Virginia while the license was in effect and as authorized by the commissioner, to collect premiums, pay applicable servicing commissions to agents of record and otherwise service such policies, or to liquidate the assets and liabilities of the insurer as may have resulted from its former authorized operations in West Virginia: Provided, That nothing in this section allows an insurer to issue new policies or renew policies of insurance or collect premiums on those policies unless the insurer is authorized by a valid license issued by the commissioner, except as to the transactions that are otherwise allowed in this chapter.(c) An insurer not transacting new insurance business in West Virginia but collecting premiums on and servicing of policies in force as to residents of or risks located in West Virginia, and where the policies were originally issued on nonresidents of or risks located outside of this state, is transacting insurance in West Virginia for the purpose of premium and annuity tax requirements but is not required to have a license therefor.(d) A domestic insurer or a foreign insurer from offices or by personnel or facilities located in this state may not solicit insurance applications or otherwise transact insurance in another state or country unless it holds a subsisting license granted to it by the commissioner authorizing it to transact the same kind or kinds of insurance in this state.(e) Any officer, director, agent, representative or employee of any insurer who willfully authorizes, negotiates, makes or issues any insurance contract in violation of this section is subject to the provisions set forth in article forty-four of this chapter.
The commissioner after notice and hearing shall refuse to renew or shall revoke or suspend the license of any insurer:(a) If such action is required by any provision of this chapter;(b) If the insurer no longer meets the requirements for the license originally granted, because of deficiency of assets or otherwise.
(a) The commissioner may after notice and hearing refuse to renew, or may revoke or suspend the license of an insurer, in addition to other grounds therefor in this chapter, if the insurer:(1) Violates any provision of this chapter other than those as to which refusal, suspension or revocation is mandatory;(2) Fails to comply with any lawful rule, regulation or order of the commissioner;(3) Is transacting insurance in an illegal, improper or unjust manner;(4) Is found by the commissioner to be in an unsound condition or in such condition as to render its further transaction of insurance in West Virginia hazardous to its policyholders or to the people of West Virginia;(5) Compels insureds under its policies to accept less than the amount due them or to bring suit against it to secure full payment when it has no substantial defense;(6) Refuses to be examined or to produce its accounts, records and files for examination by the commissioner when required;(7) Fails to pay any final judgment rendered against it in West Virginia within thirty days after the judgment became final or time for appeal expired, whichever is later;(8) Fails to pay when due to the State of West Virginia any taxes, fees, charges or penalties required by this chapter.(b) In lieu of refusing to renew, revoking or suspending the license of an insurer in any case except where such action is mandatory, the commissioner may, by order, require the insurer to pay to the State of West Virginia a penalty in a sum not exceeding $10,000, and upon the failure of the insurer to pay such penalty within thirty days after notice thereof, the commissioner may revoke or suspend the license of such insurer.(c) When any license has been revoked or suspended or renewal thereof refused, the commissioner may reissue, terminate the suspension or renew such license when he is satisfied that the conditions causing such revocation, suspension or refusal to renew have ceased to exist and are unlikely to recur.
No insurer shall be licensed to transact insurance in West Virginia which has or uses a name so similar to that of any insurer already so licensed as to cause uncertainty or confusion or which tends to deceive or mislead as to the type of organization of the insurer; except that in case of conflict of names between two insurers the commissioner may permit or require the newly licensed insurer to use in West Virginia such supplementation or modification of its name as is reasonably necessary to avoid such conflict.
(a) Except where it is otherwise specially provided, the commissioner shall demand and receive the following fees from all insurers: For annual fee for each license, $200; for receiving and filing annual reports, $100; for valuation of policies of life insurers organized under the laws of this state, one and one-half cents for each $1,000 of insurance; for valuation of policies of life insurers organized under the laws of any other state licensed to transact insurance in this state the rate for each $1,000 of insurance valued as is imposed by the other state upon any similar insurer organized under the laws of this state licensed to transact insurance in the other state; for filing certified copy of articles of incorporation, $50; for filing copy of its charter, $50; for filing statements preliminary to admission, $100; for filing any additional paper required by law or furnishing copies thereof, $1; for every certificate of valuation, copy of report or certificate of condition of company to be filed in any other state, $15; for each licensed agent, $25. The commissioner may by regulation set reasonable charges for printed forms for the annual statements required by law. He may sell at cost publications purchased by, or printed on behalf of the commissioner.(b) Such fees and charges collected by the commissioner under the provisions of this section or elsewhere in this chapter and designated for use by the commissioner for the operation of the department of insurance or for the purposes of this section, shall be paid into a special revenue account, hereby created in the State Treasury, to be expended and used by the commissioner, upon his requisition and after appropriation by the Legislature, for the operation of the department of insurance. Notwithstanding any provisions in this code to the contrary, the commissioner may expend, in accordance with the provisions of section two-a, article twelve of this chapter, from the special revenue account established pursuant to this section, amounts necessary to establish and maintain a system of continuing education for agents as provided in section two-a, article twelve of this chapter.
(a) Every insurer transacting insurance in West Virginia shall file with the commissioner, on or before March 1, each year, a financial statement made under oath of its president or secretary and on a form prescribed by the commissioner. The insurer shall also, on or before March 1 of each year subject to the provisions of 33-3-14c of this code, under the oath of its president or secretary, make a premium tax return for the previous calendar year on a form prescribed by the commissioner showing the gross amount of direct premiums, whether designated as a premium or by some other name, collected, and received by it during the previous calendar year on policies covering risks resident, located, or to be performed in this state and compute the amount of premium tax chargeable to it in accordance with the provisions of this article, deducting the amount of quarterly payments as required to be made pursuant to the provisions of 33-3-14c of this code, if any, less any adjustments to the gross amount of the direct premiums made during the calendar year, if any, and transmit with the return to the commissioner a remittance in full for the tax due. The tax is the sum equal to two percent of the taxable premium and also includes any additional tax due under 33-3-14a of this code. All taxes, except those received on write your own federal flood insurance premium taxes or private market flood insurance premium taxes, received by the commissioner shall be paid into the insurance tax fund created in 33-3-14(b) of this code. (b) There is created in the State Treasury a special revenue fund, administered by the treasurer, designated the "insurance tax fund". This fund is not part of the General Revenue Fund of the state. It consists of all amounts deposited in the fund pursuant to 33-3-14(a), 33-3-14a, 33-3-15, and 33-3-17 of this code, any appropriations to the fund, all interest earned from investment of the fund, and any gifts, grants, or contributions received by the fund: Provided, That this subsection shall not apply to funds received on federal flood insurance premium taxes or private market flood insurance premium taxes, which are subject to 33-3-14(c) of this code. The treasurer shall, no later than the last business day of each month, transfer amounts from the insurance tax fund to the General Revenue Fund that the treasurer determines are not necessary for making premium tax refunds under this article or 33-43-1 et seq. of this code. (c) There is created in the State Treasury a special revenue fund, administered by the treasurer, designated the "flood insurance tax fund". This fund is not part of the General Revenue Fund of the state. All taxes collected pursuant to 33-3-14(a) of this code from federal flood insurance policy premium taxes or private market flood insurance premium taxes shall be deposited into the flood insurance tax fund. The flood insurance tax fund shall contain collections, any appropriations to the fund, and any gifts, grants, and contributions received. The Treasurer shall distribute funds from the flood insurance tax fund for the operations and responsibilities of the State Office of the National Flood Insurance Program, as provided in 15-5-20b of this code, for activities that promote and enhance floodplain management issues, and for subgrants to local units of government and other eligible entities after full consideration of the recommendations of the Division of Emergency Management.
For the purpose of providing additional revenue for the state General Revenue Fund, there is hereby levied and imposed, in addition to the taxes imposed by 33-3-14 of this code, an additional premium tax equal to one percent of taxable premiums. Except as otherwise provided in this section, all provisions of this article relating to the levy, imposition, and collection of the regular premium tax imposed by 33-3-14 of this code shall be applicable to the levy, imposition, and collection of the additional tax imposed by this section. All moneys received from the additional tax imposed by this section, less deductions allowed by this article or 33-43-1 et seq. of this code for refunds and for costs of administration, shall be received by the commissioner and shall be paid by him or her into the State Treasury in accordance with 33-3-14(b) of this code for the benefit of the General Revenue Fund: Provided, That moneys received pursuant to this section pertaining to federal flood insurance policy premium taxes or private market flood insurance premium taxes shall be deposited and distributed in accordance with 33-3-14(c) of this code.
(a) If the annual statement of any insurer covering a calendar year shows it to have investments at the close of the year in West Virginia securities, of at least twenty-five percent of its admitted assets, it is entitled to a credit against the premium tax levied by sections fourteen and fourteen-a of this article in an amount equal to one hundred percent of the tax for the calendar year: Provided, That the insurer proves to the satisfaction of the commissioner that it employs less than twenty full-time employees, has gross direct premiums of less than $10 million and derives a minimum of fifty percent of its gross direct premiums from insurance provided to under-served areas of West Virginia.(b) As used in this section:(1) "Full-time employees" means all elected officers, all full-time employees, all part-time employees each counted as one-half full-time employee equivalents and all full and part-time equivalent employees of affiliated companies within an insurance holding company system providing any type of service by contract or by any other arrangement;(2) "Underserved areas" means those counties of the state for which the insurer demonstrates to the satisfaction of the commissioner that consumers in that county have an inadequate choice of insurance providers;(3) "West Virginia securities" means real estate situate in this state; bonds or interest-bearing notes or obligations of this state; and bonds or interest-bearing notes or obligations of any county, district, school district or independent school district, municipality or any other political subdivision of this state; revenue bonds issued by any West Virginia state agency, board, department or commission authorized to issue such bonds by the laws of this state; and cash balances in regularly established accounts in West Virginia state banks and reflected as an asset in such annual statement; provided that the amount of such cash shall be calculated based on fifty percent of the average quarterly balance of such accounts and provided further that such cash may make up no more than forty percent of the insurer's investments in West Virginia securities.
The taxes levied hereunder shall be due and payable in quarterly installments on or before the twenty-fifth day of the month succeeding the end of the quarter in which they accrue, except for the fourth quarter, for which taxes shall be due and payable on or before March 1 of the succeeding year. The insurer subject to making the payments shall, by the due date, prepare an estimate of the tax based on the estimated amount of taxable premium during the preceding quarter, and mail the estimate together with a remittance of the amount of tax to the office of the commissioner.
(a)(1) For the purpose of providing additional revenue for municipal policemens and firemens pension and relief funds and the Teachers Retirement System Reserve Fund and for volunteer and part-volunteer fire companies and departments, there is hereby levied and imposed an additional premium tax equal to one percent of taxable premiums for fire insurance and casualty insurance policies. For purposes of this section, casualty insurance does not include insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction or insurance on a debtor to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is disabled as defined in the policy.(2) All moneys collected from this additional tax shall be received by the commissioner and paid by him or her into a special account in the State Treasury, designated the Municipal Pensions and Protection Fund: Provided, That on or after January 1, 2010, the commissioner shall pay 10 percent of the amount collected to the Teachers Retirement System Reserve Fund created in 18-7A-18 of this code, 25 percent of the amount collected to the Fire Protection Fund created in 33-3-33 of this code for allocation by the Treasurer to volunteer and part-volunteer fire companies and departments and 65 percent of the amount collected to the Municipal Pensions and Protection Fund: Provided, however, That upon notification by the Municipal Pensions Oversight Board pursuant to the provisions of 8-22-18b this code, on or after January 1, 2010, or as soon thereafter as the Municipal Pensions Oversight Board is prepared to receive the funds, 65 percent of the amount collected by the commissioner shall be deposited in the Municipal Pensions Security Fund created in 8-22-18b of this code. The net proceeds of this tax after appropriation thereof by the Legislature is distributed in accordance with the provisions of this section, except for distribution from proceeds pursuant to 8-22-18a(d) of this code.(b)(1) Before August 1 of each year, the treasurer of each municipality in which a municipal policemens or firemens pension and relief fund is established shall report to the State Treasurer the average monthly number of members who worked at least one hundred hours per month and the average monthly number of retired members of municipal policemens or firemens pension and relief fund or the Municipal Police Officers and Firefighters Retirement System during the preceding fiscal year: Provided, That beginning in the year 2010 and continuing thereafter, the report shall be made to the oversight board created in 8-22-18a of this code. These reports received by the oversight board shall be provided annually to the State Treasurer by September 1.(2) Before September 1 of each calendar year, the State Treasurer, or the Municipal Pensions Oversight Board, once in operation, shall allocate and authorize for distribution the revenues in the Municipal Pensions and Protection Fund which were collected during the preceding calendar year for the purposes set forth in this section. Before September 1 of each calendar year and after the Municipal Pensions Oversight Board has notified the Treasurer and commissioner pursuant to 8-22-18b of this code, the Municipal Pensions Oversight Board shall allocate and authorize for distribution the revenues in the Municipal Pensions Security Fund which were collected during the preceding calendar year for the purposes set forth in this section. In any year the actuarial report required by 8-22-20 of this code indicates that no actuarial deficiency exists in the municipal policemens or firemens pension and relief fund and that no pension funding revenue bonds of the building commission of such municipality remain outstanding, no revenues may be allocated from the Municipal Pensions and Protection Fund or the Municipal Pensions Security Fund to that fund. The revenues from the Municipal Pensions and Protection Fund shall then be allocated to all other pension and relief funds which have an actuarial deficiency. Pension funding revenue bonds include bonds of a municipalitys building commission the net proceeds of which were used to fund either or both of a municipalitys policemens or firemens pension and relief fund or bonds issued to refinance such bonds.(3) The Municipal Pensions Oversight Board shall annually review the investment performance of each municipal policemens or firemens pension and relief fund. If the municipal pension and relief funds board fails for three consecutive years to comply with the investment provisions established 8-22-22a of this code, the oversight board may require the municipal policemens or firemens pension and relief fund to invest with the Investment Management Board to continue to receive its allocation of funds from the premium tax. If the municipal pension and relief fund fails to move its investments to the Investment Management Fund within the 18-month drawdown period, provided in 8-22-19(e) of this code, the revenues shall be reallocated to all other municipal policemens or firemens pension and relief funds that have drawn down one hundred percent of their allocations.(4) The moneys, and the interest earned thereon, in the Municipal Pensions and Protection Fund allocated to volunteer and part-volunteer fire companies and departments shall be allocated and distributed quarterly to the volunteer fire companies and departments. Before each distribution date, the State Fire Marshal shall report to the State Treasurer the names and addresses of all volunteer and part-volunteer fire companies and departments within the state which meet the eligibility requirements established in 8-15-8A of this code.(c)(1) Each municipal pension and relief fund shall have allocated and authorized for distribution a pro rata share of the revenues allocated to municipal policemens and firemens pension and relief funds based on the corresponding municipalitys average monthly number of police officers and firefighters who worked at least one hundred hours per month during the preceding fiscal year. On and after July 1, 1997, from the growth in any moneys collected pursuant to the tax imposed by this section and interest thereon there shall be allocated and authorized for distribution to each municipal pension and relief fund, a pro rata share of the revenues allocated to municipal policemens and firemens pension and relief funds based on the corresponding municipalitys average number of police officers and firefighters who worked at least 100 hours per month and average monthly number of retired police officers and firefighters. For the purposes of this subsection, the growth in moneys collected from the tax collected pursuant to this section is determined by subtracting the amount of the tax collected during the fiscal year ending June 30, 1996, from the tax collected during the fiscal year for which the allocation is being made and interest thereon. All moneys received by municipal pension and relief funds under this section may be expended only for those purposes described in sections 16 through 28a, inclusive, article 22, chapter eight of this code. Notwithstanding the foregoing provision of this subdivision, if a municipality has outstanding pension funding revenue bonds and continues to pay the normal cost of its policemens and firemens pension and relief funds, then the allocable share of revenues to be allocated which would otherwise have been allocated to a municipal policemens or firemens pension and relief fund shall instead be allocated to the trustee of any outstanding pension funding revenue bonds. (2) Each volunteer fire company or department shall receive an equal share of the revenues allocated for volunteer and part-volunteer fire companies and departments.(3) In addition to the share allocated and distributed in accordance with subdivision (1) of this subsection, each municipal fire department composed of full-time paid members and volunteers and part-volunteer fire companies and departments shall receive a share equal to the share distributed to volunteer fire companies under subdivision (2) of this subsection reduced by an amount equal to the share multiplied by the ratio of the number of full-time paid fire department members who are also members of a municipal firemens pension and relief fund or the Municipal Police Officers and Firefighters Retirement System to the total number of members of the fire department. If a municipality has outstanding pension funding revenue bonds and continues to pay the normal cost of its policemens and firemens pension and relief funds, then the share that would otherwise be payable to the municipalitys firemens pension and relief fund pursuant to this subsection shall be paid to the trustee of such outstanding pension funding revenue bonds. (d) The allocation and distribution of revenues provided in this section are subject to the provisions of 8-22-20 of this code and 8-15-8a and 8-15-8b of this code.(e) Based upon the findings of an audit by the Treasurer, the Legislature hereby finds and declares that during the period of 1982 through April 27, 2012, allocations from the Municipal Pensions and Protection Fund were miscalculated and errors were made in amounts transferred, resulting in overpayments and underpayments to the relief and pension funds and to the Teachers Retirement System, and that the relief and pension funds and the Teachers Retirement System were not at fault for any of the overpayments and underpayments. The Legislature hereby further finds and declares that any attempt by the Municipal Pension Oversight Board or other entity to recover any of the overpayments would be unjust and create economic hardship for the entities that received overpayments. No entity, including, without limitation, the Municipal Pension Oversight Board, may seek to recover from a relief or pension fund, the Teachers Retirement System or the state any overpayments received from the Municipal Pensions and Protection Fund and the overpayments are not subject to recovery, offset or litigation. Pursuant to the audit by the Treasurer, the amount of $3,631,846.55 is determined owed to specific relief and pension funds through the period of April 27, 2012. The Treasurer is hereby authorized to transfer the amount of $3,631,846.55 from the Unclaimed Property Trust Fund to the Municipal Pensions and Protection Fund, which is hereby reopened for the sole purpose of the transfer and remittances pursuant to this subsection, and to use the amount transferred to remit the amounts due to the pension and relief funds. The payment of $3,631,846.55 to the pension and relief funds is complete satisfaction of any amounts due and no entity, including, without limitation, the Municipal Pension Oversight Board and any pension or relief fund, may seek to recover any further amounts.
(a) The Legislature recognizes that the schools of medicine, dentistry, nursing, and related programs of the Health Sciences Center of West Virginia University School of Medicine; the Medical School at Marshall University; and the West Virginia School of Osteopathic Medicine, each provide critical, medical, and related health educational and service opportunities for the significant benefit of the residents of the State of West Virginia. The Legislature finds and declares that it should dedicate a portion of the insurance tax proceeds credited to the general fund as contemplated by 33-3-14(c) of this code and 33-3-14a of this code to provide additional dedicated funds to the base of appropriation support for these schools.(b) Effective July 1, 2022, to support these schools, and in addition to the base appropriations to these schools, the Governor shall include appropriations in each annual budget bill submitted to the Legislature from the amounts sent to the credit of the General Revenue Fund pursuant to 33-3-14(c) of this code and 33-3-14a of this code, as follows:(1) To the schools of medicine, dentistry, nursing, and related programs of the Health Sciences Center of West Virginia University, $14 million;(2) To the School of Medicine at Marshall University, $5,500,000; and(3) To the West Virginia School of Osteopathic Medicine, $3,900,000.(c) These funds shall be dedicated quarterly from the collection of the insurance premium tax in the months of July, October, February, and April of each fiscal year. Each school as set forth in subsection (b) of this section shall receive their dedicated funds at the rate of one quarter of the full amount in each of those months.(d) Nothing in this section shall be construed to limit or reduce the amount of total appropriations to schools of medicine, dentistry, nursing, and related programs of the Health Sciences Center of West Virginia University, the Medical School at Marshall University, and the West Virginia School of Osteopathic Medicine to the amounts contemplated by this section.
(a) For the taxable years beginning on or after January 1, 2021, the tax imposed by this section is discontinued.(b) Every life insurer transacting insurance in West Virginia shall make a return to the commissioner annually on a form prescribed by the commissioner, on or before March 1, under the oath of its president or secretary, of the gross amount of annuity considerations collected and received by it during the previous calendar year on its annuity business transacted in this state and stating the amount of tax due under this section, together with payment in full for the tax due. The tax is the sum equal to one per centum of the gross amount of the annuity considerations, less annuity considerations returned and less termination allowances on group annuity contracts. All the taxes received by the commissioner shall be paid into the insurance tax fund created in 33-3-14(b) of this code. In the case of funds accepted by a life insurer under an agreement which provides for an accumulation of money to purchase annuities at future dates, annuity considerations may be either considered by the life insurer to be collected and received upon receipt or upon actual application to the purchase of annuities. Any earnings credited to money accumulated while under the latter alternative will also be considered annuity considerations. For purposes of this election, the alternative which the life insurer elected to file its tax return for the 2001 tax year or which it elects when it enters the state, whichever is later, shall be considered the life insurers election between these alternatives. A life insurer filing a year 2001 tax return shall provide written notice to the commissioner of its election within 90 days of the effective date of this enactment. Otherwise, a life insurer shall provide written notice to the commissioner of its election within 90 days after it enters the state. Thereafter, a life insurer may not change its election without the consent of the Insurance Commissioner. The Insurance Commissioner may develop forms to assure compliance with this subsection.
(a) When by or pursuant to the laws of any other state or foreign country any premium or income or other taxes, or any fees, fines, penalties, licenses, deposit requirements or other material obligations, prohibitions or restrictions are imposed upon West Virginia insurers doing business, or that seek to do business in such other state or country, or upon the agents of such insurers, which in the aggregate are in excess of such taxes, fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions directly imposed in the aggregate upon similar insurers of such other state or foreign country or upon the agents of such insurers under the statutes of this state, so long as such laws continue in force or are so applied, the same obligations, prohibitions and restrictions of whatever kind shall be imposed in the same manner upon similar insurers of such other state or foreign country doing business in West Virginia. Any tax, license or other obligation imposed by any city, county or other political subdivision of a state or foreign country on West Virginia insurers or their agents shall be deemed to be imposed by such state or foreign country within the meaning of this section. The provisions of this section shall not apply to ad valorem taxes on real or personal property or to personal income taxes.(b) If an insurer domiciled in West Virginia is refused authority to transact in another state insurance upon a plan and in a manner which is permitted for domestic insurers of such other state, notwithstanding that the West Virginia insurer be fully qualified for such authority in accordance with the applicable laws of such other state, and if such refusal be not accompanied by a written statement of the grounds therefor, then and thereafter, and for so long as such refusal shall continue, the commissioner may refuse to grant an initial license (but not a renewal of an existing license) to any insurer domiciled in such other state which may seek to transact in West Virginia a like kind or kinds of insurance.
(a) The minimum amount of tax payable by any insurer licensed in the State of West Virginia when considering the aggregate payments due from all of the taxes imposed by this article is $200 for any calendar year. This minimum tax is payable annually on or before March 1 and shall be calculated on a form prescribed by the commissioner. Except as otherwise provided in this section, all provisions of this article relating to the levy, imposition and collection of the regular premium tax are applicable to the levy, imposition and collection of this minimum tax. All moneys received by the commissioner from this minimum tax shall be paid into the insurance tax fund created in subsection (b), section fourteen of this article.(b) The amendment to this section enacted during the 1998 regular session of the Legislature is effective on July 1, 1998.
(a) To qualify for a license to transact insurance in West Virginia an insurer must be otherwise in compliance with the provisions of this chapter and with its charter, and must be an incorporated stock insurer, or an incorporated mutual insurer or a reciprocal insurer.(b) No foreign insurer may be authorized to transact insurance in this state if it is domiciled in a state that does not have reserve requirements that are equal to or greater than those required by article seven of this chapter, as applicable to the kind or kinds of insurance transacted by the insurer, wherever transacted in the United States of America, or which transacts business anywhere in the United States of America on the assessment plan, the stipulated premium plan or any similar plan.(c) No insurer may be authorized to transact a kind of insurance in this state unless duly authorized or qualified to transact such insurance in the state or country of its domicile.(d) No insurer may be authorized to transact in this state any kind of insurance which is not defined in section ten, article one of this chapter.(e) No authority to transact insurance may be granted or continued to any insurer that is in arrears to the state for fees, licenses, taxes, assessments, fines or penalties accrued on insurance previously transacted in this state.
The Secretary of State of this state shall not issue a certificate of incorporation to any insurer until the commissioner shall have examined the charter of such insurer and approved same in writing upon being satisfied that such insurer is in a position to comply with the provisions of this chapter and that the incorporation and licensing of such insurer is in the public interest, and unless such charter shall provide that such insurer shall maintain its principal place of business in this state.
(a)(1) For the purpose of providing additional revenue for volunteer fire departments, part-volunteer fire departments and certain retired teachers and the teachers retirement reserve fund, there is hereby authorized and imposed on and after July 1, 1992, on the policyholder of any fire insurance policy or casualty insurance policy issued by any insurer, authorized or unauthorized, or by any risk retention group, a policy surcharge equal to one percent of the taxable premium for each such policy. After June 30, 2005, the surcharge shall be imposed as specified in subdivisions (2) and (3) of this subsection.(2) After June 30, 2005, through December 31, 2005, for the purpose of providing additional revenue for volunteer fire departments, part-volunteer fire departments and to provide additional revenue to the Public Employees Insurance Agency and municipal pension plans, there is hereby authorized and imposed on and after July 1, 2005, on the policyholder of any fire insurance policy or casualty insurance policy issued by any insurer, authorized or unauthorized, or by any risk retention group, a policy surcharge equal to one percent of the taxable premium for each such policy.(3) After December 31, 2005, for the purpose of providing additional revenue for volunteer fire departments and part-volunteer fire departments, there is hereby authorized and imposed on the policyholder of any fire insurance policy or casualty insurance policy issued by any insurer, authorized or unauthorized, or by any risk retention group, a policy surcharge equal to fifty-five one hundredths of one percent of the taxable premium for each such policy.(4) For purposes of this section, casualty insurance may not include insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction or insurance on a debtor to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is disabled as defined in the policy. The policy surcharge may not be subject to premium taxes, agent commissions or any other assessment against premiums.(b) The policy surcharge shall be collected and remitted to the Commissioner by the insurer, or in the case of surplus lines coverage, by the surplus lines licensee, or if the policy is issued by a risk retention group, by the risk retention group. The amount required to be collected under this section shall be remitted to the Commissioner on a quarterly basis on or before the twenty-fifth day of the month succeeding the end of the quarter in which they are collected, except for the fourth quarter for which the surcharge shall be remitted on or before March 1 of the succeeding year.(c) Any person failing or refusing to collect and remit to the Commissioner any policy surcharge and whose surcharge payments are not postmarked by the due dates for quarterly filing is liable for a civil penalty of up to $100 for each day of delinquency, to be assessed by the Commissioner. The Commissioner may suspend the insurer, broker or risk retention group until all surcharge payments and penalties are remitted in full to the Commissioner.(d)(1) All money from the policy surcharge shall be collected by the Commissioner who shall disburse the money received from the surcharge into a special account in the state Treasury, designated the Fire Protection Fund. The net proceeds of this portion of the tax and the interest thereon, after appropriation by the Legislature, shall be distributed quarterly on the first day of the months of January, April, July and October to each volunteer fire company or department on an equal share basis by the state Treasurer. After June 30, 2005, the money received from the surcharge shall be distributed as specified in subdivisions (2) and (3) of this subsection.(2)(A) After June 30, 2005, through December 31, 2005, all money from the policy surcharge shall be collected by the Commissioner who shall disburse one half of the money received from the surcharge into the Fire Protection Fund for distribution as provided in subdivision (1) of this subsection.(B) The remaining portion of moneys collected shall be transferred into the fund in the state Treasury of the Public Employees Insurance Agency into which are deposited the proportionate shares made by agencies of this state of the Public Employees Insurance Agency costs of those agencies, until November 1, 2005. After the October 31, 2005, through December 31, 2005, the remain portion shall be transferred to the special account in the state Treasury, known as the Municipal Pensions and Protection Fund.(3) After December 31, 2005, all money from the policy surcharge shall be collected by the Commissioner who shall disburse all of the money received from the surcharge into the Fire Protection Fund for distribution as provided in subdivision (1) of this subsection.(4) Before each distribution date to volunteer fire companies or departments, the state Fire Marshal shall report to the state Treasurer the names and addresses of all volunteer and part-volunteer fire companies and departments within the state which meet the eligibility requirements established in section eight-a, article fifteen, chapter eight of this code.(e) The allocation, distribution and use of revenues provided in the Fire Protection Fund are subject to the provisions of sections eight-a and eight-b, article fifteen, chapter eight of this code.
(a) There is hereby established a special fund in the State Treasury known as the Volunteer Fire Department Workers Compensation Premium Subsidy Fund. The fund shall be administered by the State Auditor and shall consist of moneys deposited in the fund pursuant to this section, any other funds appropriated by the Legislature for volunteer fire departments for the purposes of 12-4-14a of this code, and the interest or other earnings on the moneys in the fund. The State Auditor shall administer the distribution of moneys of the fund to volunteer fire departments to help defray workers compensation insurance premium increases pursuant to said section. Balances in the fund at the end of any fiscal year may not expire but shall be expended for those purposes in ensuing fiscal years pursuant to appropriation of the Legislature.(b) Beginning July 1, 2013, and in each fiscal year thereafter until June 30, 2022, the excess of the aggregate of amounts collected by the commissioner that are otherwise required under any provision of this code to be deposited into the Fire Protection Fund over the aggregate of those amounts deposited into the Fire Protection Fund during the fiscal year ending June 30, 2013, shall be deposited into the Volunteer Fire Department Workers Compensation Premium Subsidy Fund and expended solely for the purposes established in 12-4-14a of this code.(c) On or before August 1, 2013, the commissioner shall transfer $4 million from the Fire Marshal Fees Fund created under 29-3-12b of this code to the Volunteer Fire Department Workers Compensation Premium Subsidy Fund to be expended solely for the purposes established in 12-4-14a of this code until June 30, 2022.(d) The State Fire Marshal, in consultation with the Insurance Commissioner, the State Auditor, the Secretary of Revenue and the Legislative Auditor, shall conduct a review of the needs of each volunteer or part volunteer fire company or volunteer fire department serving in the various counties of the state. On or before December 31, 2015, the State Fire Marshal shall submit to the Joint Committee on Government and Finance a comprehensive report of the review and the State Fire Marshals recommendations, substantiated by the findings of the review, of steps that may be taken to meet the needs of and sustain the volunteer and part volunteer fire companies and volunteer fire departments of this state, including, but not limited to, the following:(1) An assessment of all current funding received by the volunteer fire companies and departments, and a further assessment of the funding necessary to provide the community protections required for the areas served by the volunteer fire companies and departments, the extent to which those needs are being met, the extent to which they are not being met, and recommendations of sources of funds to meet additional needs and the amounts needed, if any;(2) An assessment of the cost of workers compensation coverage for the volunteer fire companies and departments and recommendations for any actions that may be undertaken by the volunteer fire companies and departments and others to reduce those costs;(3) An assessment of the causes of any decline in recruitment and retention of volunteer firefighters and recommendations for improvements in this area, including any recommendations for incentives that have a demonstrated record of significant increases in recruitment and retention as well as recommendations of sources of funds to provide those incentives, if funds are necessary;(4) An assessment of the level of financial accountability that should be required of volunteer fire companies and departments in order to provide the Legislature the information necessary to target future funding for their activities based upon the safety and fire protection needs of the various areas of the state;(5) An assessment of the comparative levels of funding for volunteer fire companies and departments provided by counties, municipalities and other political subdivisions and the means by which that funding is provided, including identification of those which contribute little or no funding to the volunteer fire companies and departments within their jurisdictions, together with recommendations for increasing those levels of contributions;(6) An assessment of the comparative levels of funding for volunteer fire companies and departments provided by their own efforts, and the means by which that funding is provided, including identification of those which provide little or no funding through their own efforts, together with recommendations for increasing these sources of funding;(7) An assessment of the comparative economic and other benefits provided by the various volunteer fire companies and departments to their particular counties, municipalities and other political subdivisions, as well as to citizens of the local communities they serve;(8) An assessment of the sustainability of the current model of providing fire and other protections to the citizens of rural communities through volunteer fire companies and departments and an assessment of alternative models for providing those protections; and(9) Other assessments and recommendations which the State Fire Marshal deems appropriate in the circumstances.(e) Upon the conclusion of the fiscal year ending June 30, 2022, the provisions of this section and 12-4-14a of this code shall expire and be of no further force and effect and the Volunteer Fire Department Workers Compensation Premium Subsidy Fund shall be closed. Upon closure of the fund, from any balances therein remaining, the State Auditor shall first, to the extent available, transfer to the Fire Protection Fund an amount equal to the aggregate of funds deposited into the Volunteer Fire Department Workers Compensation Premium Subsidy Fund during the fiscal years ending June 30, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021 and 2022 pursuant to subsection (b) of this section that would otherwise have been required to be deposited into the Fire Protection Fund, and any balances thereafter remaining in the Volunteer Fire Department Workers Compensation Premium Subsidy Fund shall expire to the General Revenue Fund of the state. Notwithstanding any provision of this code to the contrary, on June 30, 2020, the State Auditor shall transfer one million eight hundred thousand dollars from the Volunteer Fire Department Workers Compensation Premium Subsidy Fund to the Fire Service Equipment and Training Fund created pursuant to 29-3-5f of this code.
(a) The Insurance Commissioner, in consultation with the State Fire Marshal, the State Auditor, the Legislative Auditor, and the Board of Risk and Insurance Management, shall study the feasibility of combining the volunteer fire departments in our state under a single policy for workers compensation coverage, self-insuring workers compensation coverage for volunteer fire departments, or other workers compensation coverage options. Such study shall also include an evaluation of the benefit, necessity, and feasibility of expanding the current scope of workers compensation coverage for volunteers, including, but not limited to, presumptions for cardiovascular or pulmonary disease, occupational pneumoconiosis, or other occupational disease, as well as a comparison of those proposals to other means of supplementing workers compensation insurance through secondary insurance policies. (b) On or before July 1, 2019, the Insurance Commissioner shall submit to the Joint Committee on Government and Finance and the Joint Committee on Government Organization a comprehensive report of the review and the Insurance Commissioners recommendations, substantiated by the findings of the review, and steps that may be taken to meet the needs of and sustain the volunteer fire departments for their workers compensation coverage.
Every insurer applying for an initial license shall file with the commissioner accompanying its application:(a) A certified copy of its charter with all amendments;(b) A certified copy of its bylaws with all amendments;(c) A copy of its annual statement as of December thirty- first last preceding;(d) A copy of report of last examination, if any, made of the insurer, certified by the insurance supervisory official of the state of domicile of a foreign insurer or the state of entry into the United States of an alien insurer;(e) If a foreign or alien insurer, a certificate of the public official having supervision of insurance in the state or country of domicile of such insurer showing that it is authorized to transact the kinds of insurance proposed to be transacted in West Virginia;(f) If an alien insurer, a copy of the appointment and authority of its United States manager;(g) Certificate of deposit where deposits are required by this chapter;(h) Such other information and documents as the commissioner deems necessary for the protection of policyholders or to assure compliance with this chapter.
(a) No insurer shall hereafter be licensed to transact the business of insurance in the State of West Virginia unless it has fully paid in capital stock, if a stock insurer, or surplus, if a mutual insurer, of at least $1 million. In addition, each such insurer shall have and maintain additional surplus funds of at least $1 million: Provided, That insurers duly licensed to transact insurance in West Virginia prior to the effective date of this section whose capital and surplus requirements are increased by virtue of this section shall have until January 1, 1993, to meet such increased requirements. Such capital and surplus shall be unencumbered.(b) The commissioner may for the protection of the policyholders and the general public of this state require an insurer to maintain funds in excess of the amounts required by subsection (a) of this section, due to the amount, kind or combination of kinds of insurance transacted by the insurer. Any additional amounts required shall be based upon all the kinds of insurance transacted by the insurer in all areas in which it operates or proposes to operate, whether or not only a portion of the kinds of insurance are to be transacted in this state. Failure of an insurer to maintain funds as ordered by the commissioner is grounds for suspension, revocation, refusal or nonrenewal of the insurer's license.(c) An order issued pursuant to the provisions of this section is subject to review pursuant to applicable state administrative proceedings under article two of this chapter.
The commissioner shall not issue a license to any insurer unless it has deposited and maintained in trust with the state Treasurer, for the protection of its policyholders or its policyholders and creditors, cash or government securities eligible for the investment of capital funds of domestic insurers (of the type described in paragraph (A) or (B), subdivision (1), subsection (a), section eleven, article eight of this chapter or paragraph (A), (B) or (C), subdivision (3) of said subsection) under this chapter in the amount of $100,000; except:(a) As to foreign insurers in lieu of the deposit or part of a deposit with the state Treasurer, the commissioner may accept the current certificate of the state insurance supervisory official of any other state that a like deposit by the insurer is being maintained in public custody or in a depository approved by the supervisory official in that state in trust for the purpose of protection of all policyholders or policyholders and creditors of the insurer in the United States.(b) As to alien insurers in lieu of the deposit or part of a deposit with the state Treasurer, the commissioner may accept evidence satisfactory to him or her that the insurer maintains within the United States in public depositories, or in trust institutions within the United States approved by the commissioner, assets available for discharge of its United States insurance obligations which are in an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States, together with an amount equal to the deposit required under this section for other insurers requesting license to transact like kinds of insurance.
(a) Upon receiving the application and supporting documents required by section four of this article, if the commissioner is satisfied that an insurer has complied with the terms of its charter and the provisions of this chapter and other laws of this state and that such insurer is solvent and will transact insurance in a legal, proper and just manner, he or she may issue to such insurer a license authorizing it to transact insurance in this state. Such license may authorize an insurer which otherwise qualifies therefor to transact life and/or accident and sickness insurance or an insurer other than a life insurer to transact any of the kinds of insurance other than life for which it otherwise qualifies. However, as to any life insurer which, immediately prior to the effective date of this chapter, lawfully held a license granting to it the right to transact in West Virginia additional kinds of insurance other than life and accident and sickness, the commissioner may continue to license said insurer to transact the same kinds of insurance as those specified in such prior license so long as such insurer is otherwise in compliance with this chapter.(b) A foreign insurer that obtains a license pursuant to the provisions of this section may transact the business of insurance in this state without obtaining the certificate of authority from the Secretary of State otherwise required by the provisions of section 1501, article fifteen, chapter thirty-one-d of this code.
All licenses of insurers shall expire at midnight on the May thirty-first next following the date of issuance. The commissioner shall renew annually the licenses of all insurers who qualify and make application therefor upon a form prescribed by the commissioner.
The commissioner may refuse to license an insurer when he determines that an insurer has not complied with the laws of this state or that it is not in the best interest of the people of this state that such insurer be licensed or that such insurer would transact business in this state in an improper, illegal or unjust manner. In such event the commissioner shall enter an order refusing such license, and the applicant therefor may demand a hearing in the manner provided in article two of this chapter.
Mine subsidence in this state has resulted in great loss of home, shelter and property to the citizens of this state to the detriment of the health, safety and welfare of such citizens and programs for the alleviation of such problems constitute the carrying out a public purpose. The Legislature hereby declares that the loss of home, shelter and property constitute a detriment to the safety, health and welfare and constitute a public purpose for which this article is in response and is an attempt to alleviate the public detriment.
(a) Pursuant to the reinsurance agreements, authorized by this article, the board shall, within ninety days after receiving the loss report, pay the insurer all amounts due out of the fund.(b) No claim of an insured shall be paid by an insurer in respect of a loss covered by mine subsidence insurance prior to February 15, 1983. On and after February 15, 1983, all claims of insureds shall be paid within one hundred twenty days after proof of loss is presented to an insurer unless otherwise agreed by the insurer and claimant. Upon payment of the claim of an insured from the fund, the insured shall be deemed to have waived any cause of action for damages caused by subsidence to the extent of the payment from the fund.
Except in the case of fraud by an insurer, the board does not have any right of recourse against the insurer and the insurer may settle losses in the customary manner consistent with this article.The board may require an insurer to attempt recovery from a policyholder for the amounts paid to such policyholder if, in the judgment of the board, the policyholder was not entitled to the amounts paid because of fraud or violation of the policy conditions. The costs of such recovery attempt shall be borne by the board. Any dispute under this section shall be subject to the hearing and appeal provisions of article two of this chapter.
Each insurer issuing mine subsidence insurance policies in this state has the right of subrogation.The board may exercise the right of subrogation.
The board has the power, duty and responsibility to establish and maintain the fund and supervise in all respects, consistent with the provisions of this article, the operation and management of the mine subsidence insurance program established in this article and to do all things necessary or convenient to accomplish the purpose of this article.
The board is authorized to promulgate and adopt such rules and regulations relating to mine subsidence insurance as are necessary to effectuate the provisions of this article. Such rules and regulations shall be promulgated and adopted pursuant to the provisions of chapter twenty-nine-a of this code.
The purpose of this article is to make mine subsidence insurance available in a reasonable and equitable manner to all residents of this state through the office of the state Board of Risk and Insurance Management.
As used in this article:(1) "Board" means the state Board of Risk and Insurance Management;(2) "Mine subsidence" means loss to the structure caused by lateral or vertical movement, including collapse which results therefrom, of structures from collapse of man-made underground coal mines. It does not include loss caused by earthquake, landslide, volcanic eruption or collapse of storm and sewer drains and rapid transit tunnels;(3) "Mine subsidence insurance fund" or "fund" means the fund established by this article within the office of the state Board of Risk and Insurance Management;(4) "Policy" means a contract of insurance providing mine subsidence insurance;(5) "Premium" means the gross rate charged policyholders for insurance provided by this article; and(6) "Structure" means any dwelling, building or fixture permanently affixed to realty located in West Virginia, including basements, footings, foundations, septic systems and underground pipes directly servicing the dwelling or building. "Structure" shall not include driveways, sidewalks, parking lots, land, trees, plants, crops or agricultural field drainage tile.
(a) There is hereby established within the office of the state Board of Risk and Insurance Management a fund to be known as the "mine subsidence insurance fund." The board shall operate the fund pursuant to this article.(b) The fund shall make available insurance coverage against losses arising out of or due to mine subsidence within this state as to any structure within this state.(c) The moneys in the fund shall be derived from premiums for subsidence insurance collected on behalf of the board pursuant to this article. The board shall be empowered to invest the fund and first use the interest therefrom for claim payments and administration expenses.(d) Premiums for subsidence insurance shall be established by the board, who shall periodically review the premium level and the experience data applicable to operation of the fund and make changes as required.(e) Premiums shall be established at a rate or within a schedule of rates sufficient to satisfy all foreseeable claims upon the fund during the period of coverage, giving due consideration to relevant loss or claim experience or trends, to cover normal costs of operation of the fund by the board and provide a reasonable reserve fund for unexpected contingencies. Deviation from the premium set by the board shall not be allowed.
(a) The Legislature may appropriate to the mine subsidence insurance fund or the Governor may grant to the fund out of the Governor's civil contingency fund an amount not to exceed $500,000 to pay claims against the fund occurring prior to the accumulation of sufficient reserve to pay such claims and to provide a reasonable reserve fund for unexpected contingencies. The board shall determine adequacy and reasonableness of the reserve.(b) In the absence of appropriations from the Legislature or grants from the Governor's civil contingency fund, the board may advance from its insurance fund sufficient amounts to pay claims against the mine subsidence fund. Any funds advanced by the board shall be repaid to the insurance fund.
Beginning October 1, 1982, every insurance policy issued or renewed insuring on a direct basis a structure located in this state shall include, at a separately stated premium, insurance for loss occurring on or after October 1, 1982, caused by mine subsidence unless waived by the insured: A waiver is not required and the coverage may only be provided if requested by the insured in the following counties: Berkeley, Cabell, Calhoun, Hampshire, Hardy, Jackson, Jefferson, Monroe, Morgan, Pendleton, Pleasants, Ritchie, Roane, Wirt, and Wood: The effective date of a new policy or endorsement containing mine subsidence insurance coverage shall be on the thirtieth calendar day after the application date. The premium charged for coverage shall be set by the board. At no time may the deductible be less than $250 nor more than $500; and total insured value reinsured by the board may not exceed $200,000. In no event may the amount of mine subsidence reinsurance exceed the amount of the fire insurance on the structure.
An insurer may refuse to provide subsidence coverage (1) on a structure evidencing unrepaired subsidence damage, until necessary repairs are made; or (2) where the insurer has declined, nonrenewed or canceled all coverage under a policy for underwriting reasons unrelated to mine subsidence: Provided, That an insurer shall refuse to provide subsidence coverage on a structure which evidences a loss or damage in progress.Any dispute arising under this section shall be subject to the hearing and appeal provisions of article two of this chapter.
All companies authorized to write fire insurance in this state shall enter into a reinsurance agreement with the board in which each insurer agrees to cede to the board one hundred percent, up to $200.000, of any subsidence insurance coverage issued and, in consideration of the ceding commission retained by the insurer, agree to absorb all expenses of the insurer necessary for sale of policies and any administration duties of the mine subsidence insurance program imposed upon it pursuant to the terms of the reinsurance agreement. The board is authorized to undertake adjustment of losses and administer the fund, or it may provide in a reinsurance agreement that the insurer do so. The board shall agree to reimburse the insurer from the fund for all amounts paid policyholders for claims resulting from mine subsidence and shall pay from the fund all costs of administration incurred by the board but an insurer is not required to pay any claim for any loss insured under this article except to the extent that the amount available in the mine subsidence insurance fund, as maintained pursuant to sections four and five of this article, is sufficient to reimburse the insurer for such claim under this section, and without moral obligation.
The proportion of total subsidence insurance premiums collected by each insurer which shall be retained by the insurer as a ceding commission shall be fixed by the board. The remainder of such premiums shall be remitted by the insurer to the board within forty-five days after the end of each calendar quarter.
As used in this article, unless the context requires otherwise:(1) "Affiliated company" means any company in the same corporate system as a parent, an industrial insured or a member organization by virtue of common ownership, control, operation or management.(2) "Alien captive insurance company" means any insurance company formed to write insurance business for its parents and affiliates and licensed pursuant to the laws of a country other than the United States which imposes statutory or regulatory standards in a form acceptable to the commissioner on companies transacting the business of insurance in such jurisdiction.(3) "Association" means any legal association of individuals, corporations, limited liability companies, partnerships, associations or other entities that has been in continuous existence for at least one year, the member organizations of which, or which does itself, whether or not in conjunction with some or all of the member organizations:(A) Own, control or hold with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer;(B) Have complete voting control over an association captive insurance company incorporated as a mutual insurer; or(C) Constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer.(4) "Association captive insurance company" means any company that insures risks of the member organizations of the association, and their affiliated companies.(5) "Branch business" means any insurance business transacted by a branch captive insurance company in this state.(6) "Branch captive insurance company" means any alien captive insurance company licensed by the commissioner to transact the business of insurance in this state through a business unit with a principal place of business in this state.(7) "Branch operations" means any business operations of a branch captive insurance company in this state.(8) "Captive insurance company" means any pure captive insurance company, association captive insurance company, sponsored captive insurance company, industrial insured captive insurance company or risk retention group formed or licensed under the provisions of this article. For purposes of this article, a branch captive insurance company shall be a pure captive insurance company with respect to operations in this state, unless otherwise permitted by the commissioner.(9) Commissioner" means the Insurance Commissioner of West Virginia.(10)"Controlled unaffiliated business" means any company:(A) That is not in the corporate system of a parent and affiliated companies;(B) That has an existing contractual relationship with a parent or affiliated company; and(C) Whose risks are managed by a pure captive insurance company in accordance with section nineteen of this article.(11) "Industrial insured" means an insured:(A) Who procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer;(B )Whose aggregate annual premiums for insurance on all risks total at least $25,000; and(C) Who has at least twenty-five full-time employees.(12) "Industrial insured captive insurance company" means any company that insures risks of the industrial insureds that comprise the industrial insured group and their affiliated companies. (13 )"Industrial insured group" means any group of industrial insureds that collectively:(A) Own, control or hold with power to vote all of the outstanding voting securities of an industrial insured captive insurance company incorporated as a stock insurer;(B) Have complete voting control over an industrial insured captive insurance company incorporated as a mutual insurer; or(C) Constitute all of the subscribers of an industrial insured captive insurance company formed as a reciprocal insurer.(14) "Member organization" means any individual, corporation, limited liability company, partnership, association or other entity that belongs to an association.(15) "Mutual corporation" means a corporation organized without stockholders and includes a nonprofit corporation with members.(16) "Parent" means a corporation, limited liability company, partnership, other entity, or individual that directly or indirectly owns, controls or holds with power to vote more than fifty percent of the outstanding voting:(A) Securities of a pure captive insurance company organized as a stock corporation; or(B) Membership interests of a pure captive insurance company organized as a nonprofit corporation.(17) "Pure captive insurance company" means any company that insures risks of its parent and affiliated companies or controlled unaffiliated business.(18) "Risk retention group" means a captive insurance company organized under the laws of this state pursuant to the Liability Risk Retention Act of 1986, 15 U.S.C. 3901, et seq., as amended, as a stock or mutual corporation, a reciprocal or other limited liability entity.
(a) Association captive insurance companies and risk retention groups shall comply with the investment requirements contained in article eight of this chapter, as applicable. Subsection (b), section ten and section eleven, article seven of this chapter shall apply to association captive insurance companies and risk retention groups except to the extent it is inconsistent with approved accounting standards in use by the company. Notwithstanding any other provision of this article, the commissioner may approve the use of alternative reliable methods of valuation and rating.(b) No pure captive insurance company or industrial insured captive insurance company shall be subject to any restrictions on allowable investments whatever, including those limitations contained in article eight of this chapter: Provided, That the commissioner may prohibit or limit any investment that threatens the solvency or liquidity of any such company.(c) No pure captive insurance company may make a loan to or an investment in its parent company or affiliates without prior written approval of the commissioner, and any such loan or investment must be evidenced by documentation approved by the commissioner. Loans of minimum capital and surplus funds required by section four of this article are prohibited.
(a) Any captive insurance company may provide reinsurance, comprised in section fifteen-a, article four of this chapter, on risks ceded by any other insurer: Provided, That if the reinsurer is licensed as a risk retention group, then the ceding risk retention group or its members must qualify for membership with the reinsurer.(b) Any captive insurance company may take credit for the reinsurance of risks or portions of risks ceded to reinsurers complying with the provisions of sections fifteen-a and fifteen-b, article four of this chapter. Prior approval of the commissioner shall be required for ceding or taking credit for the reinsurance of risks or portions of risks ceded to reinsurers not complying with sections fifteen-a and fifteen-b, article four of this chapter, except for business written by an alien captive insurance company outside of the United States.(c) In addition to reinsurers authorized under the provisions of section fifteen, article four of this chapter, a captive insurance company may take credit for the reinsurance of risks or portions of risks ceded to a pool, exchange or association acting as a reinsurer which has been authorized by the commissioner. The commissioner may require any other documents, financial information or other evidence that such a pool, exchange or association will be able to provide adequate security for its financial obligations. The commissioner may deny authorization or impose any limitations on the activities of a reinsurance pool, exchange or association that, in the commissioner's judgment, are necessary and proper to provide adequate security for the ceding captive insurance company and for the protection and consequent benefit of the public at large.(d) For all purposes of this article, insurance by a captive insurance company of any workers' compensation qualified self-insured plan of its parent and affiliates shall be deemed to be reinsurance.
No captive insurance company may be required to join a rating organization.
No captive insurance company may be permitted to join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in this state, nor may any captive insurance company, or any insured or affiliate thereof, receive any benefit from any such plan, pool, association, or guaranty or insolvency fund for claims arising out of the operations of such captive insurance company.
(a) Each pure captive insurance company which maintains its principal office and principal place of business in this state shall pay to the commissioner, in the month of February of each year, a tax at the rate of five tenths of one percent on the gross amount of all premiums collected or contracted for on policies or contracts of insurance written by the pure captive insurance company during the year ending December thirty-first, next preceding, after deducting from the direct premiums, subject to the tax, the amounts paid to policyholders as return premiums which shall include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders: Provided, That no tax shall be due or payable as to considerations received for annuity contracts.(b) Except as otherwise provided in subsection (a) of this section, each captive insurance company shall pay to the commissioner in the month of February of each year, a tax at the rate of two percent on the gross amount of all premiums collected on or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending December thirty-first, next preceding, after deducting from the direct premiums, subject to the tax, the amounts paid to policyholders as return premiums which shall include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders. Each captive insurance company shall also be subject to the additional premium taxes levied by sections fourteen-a and fourteen-d, article three of this chapter and the surcharge levied by section thirty-three, article three of this chapter.(c) The tax provided for in this section shall constitute all taxes collectible under the laws of this state from any captive insurance company, and no other occupation tax or other taxes shall be levied or collected from any captive insurance company by the state or any county, city or municipality within this state, except ad valorem taxes.(d) The tax provided for in this section shall be calculated on an annual basis, notwithstanding policies or contracts of insurance or contracts of reinsurance issued on a multiyear basis. In the case of multiyear policies or contracts, the premium shall be prorated for purposes of determining the tax under this section.
The commissioner may establish and from time to time amend such rules relating to captive insurance companies as are necessary to enable the commissioner to carry out the provisions of this article.
No provisions of this chapter, other than those contained in this article or contained in specific references in this article, may apply to captive insurance companies.
In addition to the applicable provisions of this article, any captive insurance company organized as a risk retention group is subject to the following provisions of this chapter: section nine, article two (examination of insurers, agents, brokers and solicitors; access to books, records, etc.); section fourteen, article four (financial statement filings; annual and quarterly statements; required format; foreign insurers; agents of the commissioner); section fifteen-a, article four (credit for reinsurance; definitions; requirements; trust accounts; reductions from liability; security; effective date); article seven (assets and liabilities); article ten (rehabilitation and liquidation); article twenty-seven (insurance holding company systems); article thirty-three (annual audited financial report); article thirty-four (administrative supervision); article thirty-five (criminal sanctions for failure to report impairment); article thirty-six (Business Transacted with Producer Controlled Property/Casualty Insurer Act); article thirty-seven (managing general agents); article thirty-eight (Reinsurance Intermediary Act); article forty (risk-based capital for insurers); and article forty-one (Insurance Fraud Prevention Act), as well as any rules promulgated under those provisions in accordance with article three, chapter twenty-nine-a of this code, including any rule relating to property and casualty actuarial opinions.
Except as otherwise provided in this article, the terms and conditions set forth in article ten of this chapter, pertaining to insurance reorganizations, receiverships and injunctions, shall apply in full to captive insurance companies formed or licensed under this article.
The commissioner may adopt rules establishing standards to ensure that a parent or affiliated company is able to exercise control of the risk management function of any controlled unaffiliated business to be insured by the pure captive insurance company. Until such time as rules under this section are adopted, the commissioner may approve the coverage of such risks by a pure captive insurance company.
(a) An association captive insurance company, risk retention group, or industrial insured captive insurance company formed as a stock or mutual corporation may be converted to or merged with and into a reciprocal insurer in accordance with a plan therefore and the provisions of this section.(b) Any plan for such conversion or merger shall provide a fair and equitable plan for purchasing, retiring or otherwise extinguishing the interests of the stockholders and policyholders of a stock insurer and the members and policyholders of a mutual insurer, including a fair and equitable provision for the rights and remedies of dissenting stockholders, members or policyholders.(c) In the case of a conversion authorized under subsection (a) of this section:(1) Such conversion shall be accomplished under such reasonable plan and procedure as approved by the commissioner. The commissioner may not approve any plan of conversion unless the plan:(A) Satisfies the provisions of subsection (b) of this section;(B) Provides for a hearing, of which notice is given or to be given to the captive insurance company, its directors, officers and policyholders, and, in the case of a stock insurer, its stockholders, and in the case of a mutual insurer, its members, all of which persons shall be entitled to attend and appear at such hearing. If notice of a hearing is given and no director, officer, policyholder, member or stockholder requests a hearing, the commissioner may cancel such hearing;(C) Provides a fair and equitable plan for the conversion of stockholder, member or policyholder interests into subscriber interests in the resulting reciprocal insurer, substantially proportionate to the corresponding interests in the stock or mutual insurer: Provided, That this requirement shall not preclude the resulting reciprocal insurer from applying underwriting criteria that could affect ongoing ownership interests; and(D) Is approved:(i) In the case of a stock insurer, by a majority of the shares entitled to vote represented in person or by proxy at a duly called regular or special meeting at which a quorum is present; and(ii) In the case of a mutual insurer, by a majority of the voting interests of policyholders represented in person or by proxy at a duly called regular or special meeting thereof at which a quorum is present;(2) The commissioner shall approve such plan of conversion if the commissioner finds that the conversion will promote the general good of the state in conformity with those standards set forth in subdivision (2), subsection (d), section six of this article;(3) If the commissioner approves the plan, the commissioner shall amend the converting insurer's certificate of authority to reflect conversion to a reciprocal insurer and issue such amended certificate of authority to the company's attorney-in-fact;(4) Upon the issuance of an amended certificate of authority of a reciprocal insurer by the commissioner, the conversion shall be effective; and(5) Upon the effectiveness of such conversion the corporate existence of the converting insurer shall cease and the resulting reciprocal insurer shall notify the Secretary of State of such conversion.(d) A merger authorized under subsection (a) of this section shall be accomplished substantially in accordance with the procedures set forth in sections twenty-five and twenty-eight, article five of this chapter, except that, solely for purposes of such merger:(1) The plan of merger shall satisfy the provisions of subsection (b) of this section;(2) The subscribers' advisory committee of a reciprocal insurer shall be equivalent to the board of directors of a stock or mutual insurance company;(3) The subscribers of a reciprocal insurer shall be the equivalent of the policyholders of a mutual insurance company;(4) If a subscribers' advisory committee does not have a president or secretary, the officers of such committee having substantially equivalent duties shall be deemed the president or secretary of such committee;(5) The commissioner shall approve the articles of merger if the commissioner finds that the merger will promote the general good of the state in conformity with those standards set forth in subdivision (2), subsection (d), section six of this article. If the commissioner approves the articles of merger, the commissioner shall endorse the commissioner's approval thereon and the surviving insurer shall present the same to the Secretary of State at the Secretary of State's office;(6) Notwithstanding section four of this article, the commissioner may permit the formation, without surplus, of a captive insurance company organized as a reciprocal insurer, into which an existing captive insurance company may be merged for the purpose of facilitating a transaction under this section: Provided, That there shall be no more than one authorized insurance company surviving such merger; and(7) An alien insurer may be a party to a merger authorized under subsection (a) of this section: Provided, That the requirements for a merger between a domestic and a foreign insurer under section twenty-five, article five of this chapter shall apply to a merger between a domestic and an alien insurer under this subsection. Such alien insurer shall be treated as a foreign insurer under section twenty-five, article five of this chapter and such other jurisdictions shall be the equivalent of a state for purposes of section twenty-five, article five of this chapter.
(a) Any captive insurance company, when permitted by its articles of association, charter or other organizational document, may apply to the commissioner for a license to do any and all insurance comprised in section ten, article one of this chapter: Provided, That all captive insurance companies, except pure captive insurance companies, shall maintain their principal office and principal place of business in this state: Provided, however, That:(1) No pure captive insurance company may insure any risks other than those of its parent and affiliated companies or controlled unaffiliated business;(2) No association captive insurance company may insure any risks other than those of the member organizations of its association and their affiliated companies;(3) No industrial insured captive insurance company may insure any risks other than those of the industrial insureds that comprise the industrial insured group and their affiliated companies;(4) No risk retention group may insure any risks other than those of its members and owners;(5) No captive insurance company may provide personal motor vehicle or homeowner's insurance coverage or any component thereof;(6) No captive insurance company may accept or cede reinsurance except as provided in section eleven of this article;(7) No risk retention group may retain any risk on any one subject of insurance, whether located or to be performed in West Virginia or elsewhere, in an amount exceeding ten percent of the surplus required by section four of this article unless approved by the commissioner;(8) Any captive insurance company may provide excess workers' compensation insurance to its parent and affiliated companies, unless prohibited by the federal law or laws of the state having jurisdiction over the transaction. Any captive insurance company, unless prohibited by federal law, may reinsure workers' compensation of a qualified self-insured plan of its parent and affiliated companies; and(9) Any captive insurance company which insures risks described in subsections (a) and (b), section ten, article one of this chapter shall comply with all applicable state and federal laws.(10) A professional employer organization licensed pursuant to the provisions of article forty-six-a of this chapter may insure its risks for insurance coverage for accident and sickness, as such insurance coverage is defined under subsection (b), section ten, article one of this chapter, for all employees and covered employees through a captive insurance company. (b) No captive insurance company may do any insurance business in this state unless:(1) It first obtains from the commissioner a license authorizing it to do insurance business in this state;(2) Its board of directors or, in the case of a reciprocal insurer, its subscribers advisory committee, holds at least one meeting each year in this state; and(3) It appoints a registered agent to accept service of process and to otherwise act on its behalf in this state: Provided, That whenever such registered agent cannot with reasonable diligence be found at the registered office of the captive insurance company, the Secretary of State shall be an agent of such captive insurance company upon whom any process, notice or demand may be served.(c) (1) Before receiving a license, a captive insurance company shall:(A) File with the commissioner a certified copy of its organizational documents, a statement under oath of its president and secretary showing its financial condition, and any other statements or documents required by the commissioner; and(B) Submit to the commissioner for approval a description of the coverages, deductibles, coverage limits and rates, together with such additional information as the commissioner may reasonably require. In the event of any subsequent material change in any item in such description, the captive insurance company shall submit to the commissioner for approval an appropriate revision and shall not offer any additional kinds of insurance until a revision of such description is approved by the commissioner. The captive insurance company shall inform the commissioner of any material change in rates within thirty days of the adoption of such change.(2) Each applicant captive insurance company shall also file with the commissioner evidence of the following:(A) The amount and liquidity of its assets relative to the risks to be assumed;(B) The adequacy of the expertise, experience and character of the person or persons who will manage it;(C) The overall soundness of its plan of operation;(D) The adequacy of the loss prevention programs of its insureds; and(E) Such other factors deemed relevant by the commissioner in ascertaining whether the proposed captive insurance company will be able to meet its policy obligations;(3) Information submitted pursuant to this subsection shall be and remain confidential and may not be made public by the commissioner or an employee or agent of the commissioner without the written consent of the company, except that:(A) Such information may be discoverable by a party in a civil action or contested case to which the captive insurance company that submitted such information is a party, upon a showing by the party seeking to discover such information that:(i) The information sought is relevant to and necessary for the furtherance of such action or case;(ii) The information sought is unavailable from other nonconfidential sources; and(iii) A subpoena issued by a judicial or administrative officer of competent jurisdiction has been submitted to the commissioner: Provided, That the provisions of this subdivision shall not apply to any risk retention group; and(B) The commissioner may, in the commissioners discretion, disclose such information to a public officer having jurisdiction over the regulation of insurance in another state if:(i) The public official shall agree in writing to maintain the confidentiality of such information; and(ii) The laws of the state in which such public official serves require such information to be and to remain confidential.(d) Each captive insurance company shall pay to the commissioner a nonrefundable fee of $200 for examining, investigating and processing its application for license, and the commissioner is authorized to retain legal, financial and examination services from outside the department, the reasonable cost of which may be charged against the applicant. The provisions of subsection (r), section nine, article two of this chapter shall apply to examinations, investigations and processing conducted under the authority of this section. In addition, each captive insurance company shall pay a license fee for the year of registration and a renewal fee for each year thereafter of $300.(e) If the commissioner is satisfied that the documents and statements that such captive insurance company has filed comply with the provisions of this article, the commissioner may grant a license authorizing it to do insurance business in this state until May 31, thereafter, which license may be renewed.(f) A captive insurance company shall notify the commissioner in writing within thirty days of becoming aware of any material change in information previously submitted to the commissioner, including information submitted in or with the license application.
(a) A branch captive may be established in this state in accordance with the provisions of this article to write in this state only insurance or reinsurance of the employee benefit business of its parent and affiliated companies which is subject to the provisions of the federal Employee Retirement Income Security Act of 1974 and set forth in 29 U. S. C. 1001, et seq., as amended. In addition to the general provisions of this article, the provisions of sections twenty-one through twenty-five, inclusive, of this article shall apply to branch captive insurance companies.(b) No branch captive insurance company shall do any insurance business in this state unless it maintains the principal place of business for its branch operations in this state.
In the case of a branch captive insurance company, as security for the payment of liabilities attributable to the branch operations, the commissioner shall require that a trust fund, funded by an irrevocable letter of credit or other acceptable asset, be established and maintained in the United States for the benefit of United States policyholders and United States ceding insurers under insurance policies issued or reinsurance contracts issued or assumed by the branch captive insurance company through its branch operations. The amount of such security may be no less than the amount set forth in subdivision (1), subsection (a), section four of this article and the reserves on such insurance policies or such reinsurance contracts, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses and unearned premiums with regard to business written through the branch operations: Provided, That the commissioner may permit a branch captive insurance company that is required to post security for loss reserves on branch business by its reinsurer to reduce the funds in the trust account required by this section by the same amount so long as the security remains posted with the reinsurer. If the form of security selected is a letter of credit, the letter of credit must be established by, or issued or confirmed by, a bank chartered in this state or a member bank of the federal reserve system.
In the case of a captive insurance company licensed as a branch captive, the alien captive insurance company shall petition the commissioner to issue a certificate setting forth the commissioner's finding that, after considering the character, reputation, financial responsibility, insurance experience and business qualifications of the officers and directors of the alien captive insurance company, the licensing and maintenance of the branch operations will promote the general good of the state. The alien captive insurance company may register to do business in this state after the commissioner's certificate is issued.
Prior to March 1 of each year, or with the approval of the commissioner within sixty days after its fiscal year-end, a branch captive insurance company shall file with the commissioner a copy of all reports and statements required to be filed under the laws of the jurisdiction in which the alien captive insurance company is formed, verified under oath by its president and secretary. If the commissioner is satisfied that the annual report filed by the alien captive insurance company in its domiciliary jurisdiction provides adequate information concerning the financial condition of the alien captive insurance company, the commissioner may waive the requirement for completion of the captive annual statement for business written in the alien jurisdiction.
(a) The examination of a branch captive insurance company pursuant to section eight of this article shall be of branch business and branch operations only, so long as the branch captive insurance company annually provides to the commissioner a certificate of compliance, or its equivalent, issued by or filed with the licensing authority of the jurisdiction in which the branch captive insurance company is formed and demonstrates to the commissioner's satisfaction that it is operating in sound financial condition in accordance with all applicable laws and regulations of such jurisdiction.(b) As a condition of licensure, the alien captive insurance company shall grant authority to the commissioner for examination of the affairs of the alien captive insurance company in the jurisdiction in which the alien captive insurance company is formed.
In the case of a branch captive insurance company, the tax provided for in section fourteen of this article shall apply only to the branch business of such company.
No captive insurance company shall adopt a name that is the same, deceptively similar, or likely to be confused with or mistaken for any other existing business name registered in the State of West Virginia.
(a) No captive insurance company shall be issued a license unless it shall possess and thereafter maintain unimpaired paid-in capital of:(1) In the case of a pure captive insurance company, not less than $100,000;(2) In the case of an association captive insurance company, not less than 350,000;(3) In the case of an industrial insured captive insurance company, not less than $250,000;(4) In the case of a risk retention group, not less than $500,000; and(5) In the case of a sponsored captive insurance company, not less than $250,000.(b) No captive insurance company shall be issued a license unless it possesses and thereafter maintains unimpaired paid-in surplus of:(1) In the case of a pure captive insurance company, not less than $150,000;(2) In the case of an association captive insurance company, not less than $350,000;(3) In the case of an industrial insured captive insurance company, not less than $250,000;(4) In the case of a risk retention group, not less than $500,000; and(5) In the case of a sponsored captive insurance company, not less than $250,000.(c) The commissioner may prescribe additional capital and surplus based upon the type, volume, and nature of insurance business transacted.(d) Capital and surplus may be in the form of cash or an irrevocable letter of credit issued by a bank chartered by the State of West Virginia or a member bank of the federal reserve system and approved by the commissioner.
No captive insurance company may pay a dividend out of, or other distribution with respect to, capital or surplus without the prior approval of the commissioner. Approval of an ongoing plan for the payment of dividends or other distributions shall be conditioned upon the retention, at the time of each payment, of capital or surplus in excess of amounts specified by, or determined in accordance with formulas approved by, the commissioner.
(a) A pure captive insurance company may be incorporated as a stock insurer with its capital divided into shares and held by the stockholders, or as a nonprofit corporation with one or more members.(b) An association captive insurance company or an industrial insured captive insurance company may be:(1) Incorporated as a stock insurer with its capital divided into shares and held by the stockholders;(2) Incorporated as a mutual insurer without capital stock, the governing body of which is elected by its insureds; or(3) Organized as a reciprocal insurer in accordance with article twenty-one of this chapter.(c) A captive insurance company incorporated or organized in this state shall have not less than three incorporators or three organizers of whom not less than one shall be a resident of this state.(d) In the case of a captive insurance company:(1)(A) Formed as a corporation the incorporators shall petition the commissioner to issue a certificate setting forth the commissioner's finding that the establishment and maintenance of the proposed corporation will promote the general good of the state. In arriving at such a finding the commissioner shall consider:(i) The character, reputation, financial standing and purposes of the incorporators;(ii) The character, reputation, financial responsibility, insurance experience and business qualifications of the officers and directors; and(iii) Such other aspects as the commissioner shall deem advisable.(B) The articles of incorporation, such certificate, and the organization fee shall be transmitted to the Secretary of State, who shall thereupon record both the articles of incorporation and the certificate.(2) Formed as a reciprocal insurer, the organizers shall petition the commissioner to issue a certificate setting forth the commissioner's finding that the establishment and maintenance of the proposed association will promote the general good of the state. In arriving at such a finding the Commissioner shall consider the items set forth in subparagraphs (i), (ii) and (iii), paragraph (A), subdivision (1) of this subsection.(e) The capital stock of a captive insurance company incorporated as a stock insurer may be authorized with no par value.(f) In the case of a captive insurance company:(1) Formed as a corporation, at least one of the members of the board of directors shall be a resident of this state; and(2) Formed as a reciprocal insurer, at least one of the members of the subscribers' advisory committee shall be a resident of this state.(g) Other than captive insurance companies formed as nonprofit corporations under chapter thirty-one-e of this code, captive insurance companies formed as corporations under the provisions of this article shall have the privileges and be subject to the provisions of the general corporation law as well as the applicable provisions contained in this article. In the event of conflict between the provisions of said general corporation law and the provisions of this article, the latter shall control.(h) Captive insurance companies formed as nonprofit corporations under the provisions of this article shall have the privileges and be subject to the provisions of chapter thirty-one-e of this code as well as the applicable provisions contained in this article. In the event of conflict between the provisions of chapter thirty-one-e of this code and the provisions of this article, the latter shall control.(i) The provisions of sections twenty-five, twenty-seven and twenty-eight, article five of this chapter and section three, article twenty-seven of this chapter, pertaining to mergers, consolidations, conversions, mutualizations, redomestications and mutual holding companies, shall apply in determining the procedures to be followed by captive insurance companies in carrying out any of the transactions described therein, except that:(1) The commissioner may waive or modify the requirements for public notice and hearing in accordance with rules which the commissioner may adopt addressing categories of transactions. If a notice of public hearing is required, but no one requests a hearing, then the commissioner may cancel the hearing; and(2) An alien insurer may be a party to a merger authorized under this subsection: Provided, That the requirements for a merger between a captive insurance company and a foreign insurer under section twenty-five, article five of this chapter shall apply to a merger between a captive insurance company and an alien insurer under this subsection. Such alien insurer shall be treated as a foreign insurer under section twenty-five, article five of this chapter and such other jurisdictions shall be the equivalent of a state for purposes of section twenty-five, article five of this chapter.(j) Captive insurance companies formed as reciprocal insurers under the provisions of this article shall have the privileges and be subject to the provisions of article twenty-one of this chapter in addition to the applicable provisions of this article. In the event of a conflict between the provisions of article twenty-one of this chapter and the provisions of this article, the latter shall control. To the extent a reciprocal insurer is made subject to other provisions of this article pursuant to article twenty-one of this chapter, such provisions shall not be applicable to a reciprocal insurer formed under this article unless such provisions are expressly made applicable to captive insurance companies under this article.(k) The articles of incorporation or bylaws of a captive insurance company formed as a corporation may authorize a quorum of its board of directors to consist of no fewer than one third of the fixed or prescribed number of directors determined under section eight hundred twenty-four, article eight, chapter thirty-one-e of this code.(l) The subscribers' agreement or other organizing document of a captive insurance company formed as a reciprocal insurer may authorize a quorum of its subscribers' advisory committee to consist of no fewer than one third of the number of its members.
(a) Captive insurance companies shall not be required to make any annual report except as provided in this article. (b) On or before March 1 of each year, each captive insurance company shall submit to the commissioner a report of its financial condition, verified by oath of two of its executive officers. Each captive insurance company shall report using generally accepted accounting principles, unless the commissioner approves the use of statutory accounting principles, with any appropriate or necessary modifications or adaptations thereof required or approved or accepted by the commissioner for the type of insurance and kinds of insurers to be reported upon, and as supplemented by additional information required by the commissioner. Except as otherwise provided, each association captive insurance company and each risk retention group shall file its report in the form required by section fourteen, article four of this chapter, and each risk retention group shall comply with the requirements set forth in article thirty-two of this chapter. The commissioner shall by rule propose the forms in which pure captive insurance companies and industrial insured captive insurance companies shall report.(c) Any pure captive insurance company or an industrial insured captive insurance company may make written application for filing the required report on a fiscal year-end. If an alternative reporting date is granted:(1) The annual report is due sixty days after the fiscal year-end; and(2) In order to provide sufficient detail to support the premium tax return, the pure captive insurance company or industrial insured captive insurance company shall file on or before March 1 of each year for each calendar year-end, pages one, two, three, and five of the "captive annual statement; pure or industrial insured", verified by oath of two of its executive officers.
(a) At least once in five years, and whenever the commissioner determines it to be prudent, the commissioner shall personally, or by some competent person appointed by the commissioner, visit each captive insurance company and thoroughly inspect and examine its affairs to ascertain its financial condition, its ability to fulfill its obligations and whether it has complied with the provisions of this article. The captive insurance company shall be subject to the provisions of section nine, article two of this chapter in regard to the expense and conduct of the examination.(b) All examination reports, preliminary examination reports or results, working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this section are confidential and are not subject to subpoena and may not be made public by the commissioner or an employee or agent of the commissioner without the written consent of the company, except to the extent provided in this subsection. Nothing in this subsection shall prevent the commissioner from using such information in furtherance of the commissioner's regulatory authority under this title. The commissioner may, in the commissioner's discretion, grant access to such information to public officers having jurisdiction over the regulation of insurance in any other state or country, or to law-enforcement officers of this state or any other state or agency of the federal government at any time, so long as such officers receiving the information agree in writing to hold it in a manner consistent with this section.
(a) The license of a captive insurance company may be suspended or revoked by the commissioner for any of the following reasons:(1) Insolvency or impairment of capital or surplus;(2) Failure to meet the requirements of section four of this article;(3) Refusal or failure to submit an annual report, as required by section seven of this article, or any other report or statement required by law or by lawful order of the commissioner;(4) Failure to comply with the provisions of its own charter, bylaws or other organizational document;(5) Failure to submit to examination or any legal obligation relative thereto, as required by section eight of this article;(6) Refusal or failure to pay the cost of examination as required by section eight of this article;(7) Use of methods that, although not otherwise specifically prohibited by law, nevertheless render its operation detrimental or its condition unsound with respect to the public or to its policyholders; or(8) Failure otherwise to comply with the laws of this state.(b) If the commissioner finds, upon examination, hearing, or other evidence, that any captive insurance company has violated any provision of subsection (a) of this section, the commissioner may suspend or revoke such company's license if the commissioner deems it in the best interest of the public and the policyholders of such captive insurance company, notwithstanding any other provision of this title.
In addition to the provisions of article thirty-one of this chapter, the provisions of this article shall apply to all sponsored captive insurance companies.
As used in this article, unless the context requires otherwise:(1) "Participant" means associations, corporations, limited liability companies, partnerships, trusts and other business entities and any affiliates thereof that are insured by a sponsored captive insurance company where the losses of the participant are limited through a participant contract to such participant's pro rata share of the assets of one or more protected cells identified in such participant contract.(2) "Participant contract" means a contract by which a sponsored captive insurance company insures the risks of a participant and limits the losses of each such participant to its pro rata share of the assets of one or more protected cells identified in such participant contract.(3) "Protected cell" means a separate account established by a sponsored captive insurance company formed or licensed under the provisions of this chapter in which assets are maintained for one or more participants in accordance with the terms of one or more participant contracts to fund the liability of the sponsored captive insurance company assumed on behalf of such participants as set forth in such participant contracts.(4) "Sponsor" means any entity that meets the requirements of section six of this article and is approved by the commissioner to provide all or part of the capital and surplus required by applicable law and to organize and operate a sponsored captive insurance company.(5) "Sponsored captive insurance company" means any captive insurance company:(A) In which the minimum capital and surplus required by applicable law is provided by one or more sponsors;(B) That is formed or licensed under the provisions of this chapter;(C) That insures the risks only of its participants through separate participant contracts; and(D) That funds its liability to each participant through one or more protected cells and segregates the assets of each protected cell from the assets of other protected cells and from the assets of the sponsored captive insurance company's general account.
One or more sponsors may form a sponsored captive insurance company under the provisions of this article. A sponsored captive insurance company shall be incorporated as a stock insurer with its capital divided into shares and held by the stockholders.
In addition to the information required by subdivisions (1) and (2), subsection (c), section two, article thirty-one of this chapter, each applicant-sponsored captive insurance company shall file with the commissioner the following:(1) Materials demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the commissioner and how it will report such experience to the commissioner;(2) A statement acknowledging that all financial records of the sponsored captive insurance company, including records pertaining to any protected cells, shall be made available for inspection or examination by the commissioner or the commissioner's designated agent;(3) All contracts or sample contracts between the sponsored captive insurance company and any participants; and(4) Evidence that expenses shall be allocated to each protected cell in a fair and equitable manner.
A sponsored captive insurance company formed or licensed under the provisions of this article may establish and maintain one or more protected cells to insure risks of one or more participants, subject to the following conditions:(1) The shareholders of a sponsored captive insurance company shall be limited to its participants and sponsors: Provided, That a sponsored captive insurance company may issue nonvoting securities to other persons on terms approved by the commissioner;(2) Each protected cell shall be accounted for separately on the books and records of the sponsored captive insurance company to reflect the financial condition and results of operations of such protected cell, net income or loss, dividends or other distributions to participants and such other factors as may be provided in the participant contract or required by the commissioner;(3) The assets of a protected cell shall not be chargeable with liabilities arising out of any other insurance business the sponsored captive insurance company may conduct;(4) No sale, exchange or other transfer of assets may be made by such sponsored captive insurance company between or among any of its protected cells without the consent of such protected cells;(5) No sale, exchange, transfer of assets, dividend or distribution may be made from a protected cell to a sponsor or participant without the commissioner's approval and in no event shall such approval be given if the sale, exchange, transfer, dividend or distribution would result in insolvency or impairment with respect to a protected cell;(6) Each sponsored captive insurance company shall annually file with the commissioner such financial reports as the commissioner shall require, which shall include, without limitation, accounting statements detailing the financial experience of each protected cell;(7) Each sponsored captive insurance company shall notify the commissioner in writing within ten business days of any protected cell that is insolvent or otherwise unable to meet its claim or expense obligations;(8) No participant contract shall take effect without the commissioner's prior written approval and the addition of each new protected cell and withdrawal of any participant or termination of any existing protected cell shall constitute a change in the business plan requiring the commissioner's prior written approval; and(9) The business written by a sponsored captive, with respect to each cell, shall be:(A) Fronted by an insurance company licensed under the laws of any state;(B) Reinsured by a reinsurer authorized or approved by the State of West Virginia; or(C) Secured by a trust fund in the United States for the benefit of policyholders and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the commissioner. The amount of security provided shall be no less than the reserves associated with those liabilities which are neither fronted nor reinsured, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses and unearned premiums for business written through the participant's protected cell. The commissioner may require the sponsored captive to increase the funding of any security arrangement established under this subdivision. If the form of security is a letter of credit, the letter of credit must be established, issued or confirmed by a bank chartered in this state, a member of the federal reserve system or a bank chartered by another state if such state chartered bank is acceptable to the commissioner. A trust maintained pursuant to this paragraph shall be established in a form and upon such terms approved by the commissioner.
A sponsor of a sponsored captive insurance company shall be an insurer licensed under the laws of any state, a reinsurer authorized or approved under the laws of any state or a captive insurance company formed or licensed under this article. A risk retention group shall not be either a sponsor or a participant of a sponsored captive insurance company.
Associations, corporations, limited liability companies, partnerships, trusts and other business entities may be participants in any sponsored captive insurance company formed or licensed under this chapter. A sponsor may be a participant in a sponsored captive insurance company. A participant need not be a shareholder of the sponsored captive insurance company or any affiliate thereof. A participant shall insure only its own risks through a sponsored captive insurance company.
Notwithstanding the provisions of section five of this article, the assets of two or more protected cells may be combined for purposes of investment, and such combination shall not be construed as defeating the segregation of such assets for accounting or other purposes. Sponsored captive insurance companies shall comply with the investment requirements contained in article eight of this chapter, as applicable: Provided, That compliance with such investment requirements shall be waived for sponsored captive insurance companies to the extent that credit for reinsurance ceded to reinsurers is allowed pursuant to section eleven, article thirty-one of this chapter or to the extent otherwise deemed reasonable and appropriate by the commissioner. Notwithstanding any other provision of this chapter, the commissioner may approve the use of alternative reliable methods of valuation and rating.
In the case of a delinquency of a sponsored captive insurance company, the provisions of section seventeen, article thirty-one of this chapter shall apply, provided:(1) The assets of a protected cell may not be used to pay any expenses or claims other than those attributable to such protected cell; and(2) Its capital and surplus shall at all times be available to pay any expenses of or claims against the sponsored captive insurance company.
The purpose of this act is to regulate the formation and operation of risk retention groups and purchasing groups in this state formed pursuant to the provisions of the federal liability risk retention act of 1986, hereinafter referred to as "RRA 1986." This article may be referred to as the "Risk Retention Act of West Virginia."
The following acts by a risk retention group are hereby prohibited:(1) The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in such group; and (2) The solicitation or sale of insurance by, or operation of, a risk retention group that is in a hazardous financial condition or is financially impaired.
No risk retention group shall be allowed to do business in this state if an insurance company is directly or indirectly a member or owner of such risk retention group, other than in the case of a risk retention group all of whose members are insurance companies.
No risk retention group may offer insurance policy coverage prohibited by chapter thirty-three of this code or ruled unlawful by the highest court of this state.
A risk retention group not chartered in this state and doing business in this state must comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by a state Insurance Commissioner if there has been a finding of financial impairment after an examination under section four of this article.
(a) A risk retention group shall not be permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in this state, nor shall any risk retention group, or its insureds, or claimants against its insureds, receive any benefit from any such fund for claims arising out of the operations of such risk retention group.(b) When a purchasing group obtains insurance covering its members' risks from an insurer not authorized in this state or a risk retention group, such risks, wherever resident or located, shall not be covered by any insurance guaranty fund or similar mechanism in this state.(c) When a purchasing group obtains insurance covering its members' risks from an authorized insurer, only risks resident or located in this state shall be covered by the state guaranty fund subject to article twenty-six of this chapter.
A policy of insurance issued to a risk retention group or any member of that group shall not be required to be countersigned.
A purchasing group and its insurer or insurers shall be subject to all applicable laws of this state, except that a purchasing group and its insurer or insurers shall be exempt, in regard to liability insurance for the purchasing group, from any law that would:(1) Prohibit the establishment of a purchasing group;(2) Make it unlawful for an insurer to provide or offer to provide insurance on a basis providing, to a purchasing group or its members, advantages based on their loss and expense experience not afforded to other persons with respect to rates, policy forms, coverages or other matters;(3) Prohibit a purchasing group or its members from purchasing insurance on a group basis described in subsection (b) of this section;(4) Prohibit a purchasing group from obtaining insurance on a group basis because the group has not been in existence for a minimum period of time or because any member has not belonged to the group for a minimum period of time;(5) Require that a purchasing group have a minimum number of members, common ownership or affiliation, or a certain legal form;(6) Require that a certain percentage of a purchasing group obtain insurance on a group basis;(7) Otherwise discriminate against a purchasing group or any of its members; or(8) Require that any insurance policy issued to a purchasing group or any of its members be countersigned by an insurance agent or broker residing in this state.
(a) A purchasing group which intends to do business in this state shall, prior to doing business, furnish notice to the commissioner, on forms prescribed by the national association of Insurance Commissioners, which such forms shall:(1) Identify the state in which the group is domiciled;(2) Identify all other states in which the group intends to do business;(3) Specify the lines and classifications of liability insurance which the purchasing group intends to purchase;(4) Identify the insurance company or companies from which the group intends to purchase its insurance and the domicile of such company;(5) Specify the method by which, and the person or persons, if any, through whom insurance will be offered to its members whose risks are resident or located in this state;(6) Identify the principal place of business of the groups; and(7) Provide any other information as may be required by the commissioner to verify that the purchasing group is qualified under this article.(b) A purchasing group shall, within ten days, notify the commissioner of any changes in any of the items set forth in this section.(c) The purchasing group shall register with and designate the commissioner, (or other appropriate authority), as its agent solely for the purpose of receiving service of legal documents or process: Provided, That these requirements do not apply in the case of a purchasing group which:(1) Was domiciled before April 1, 1986, in any state of the United States; and (2) Is domiciled on and after October 27, 1986, in any state of the United States and which:(A) Before October 27, 1986, purchased insurance from an insurance carrier licensed in any state; and(B) Since October 27, 1986, purchased its insurance from an insurance carrier licensed in any state;(3) Which was a purchasing group under the requirements of the product liability risk retention act of 1981, before October 27, 1986; and(4) Which does not purchase insurance that was not authorized for purposes of an exemption under that act, as in effect before October 27, 1986.(d) Each purchasing group that is required to give notice pursuant to subsection (a) of this section shall also furnish such information as may be required by the commissioner to:(1) Verify that the entity qualifies as a purchasing group; (2) Determine where the purchasing group is located; and(3) Determine appropriate tax treatment.(e) The Insurance Commissioner shall promulgate rules pursuant to the provisions of chapter twenty-nine-a of this code regarding the amount of all registration or filing fees required by this section.
(a) A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not admitted in the state in which the purchasing group is located, unless the purchase is effected through a licensed agent or broker acting pursuant to the surplus lines laws and regulations of such state.(b) A purchasing group which obtains liability insurance from an insurer not admitted in this state or a risk retention group shall inform each of the members of the group which has a risk resident or located in this state that the risk is not protected by an insurance insolvency guaranty fund in this state, and that the risk retention group or insurer may not be subject to all insurance laws and regulations of this state. To give notice as required by this section, the purchasing group shall ensure that each group certificate or evidence of insurance has printed or stamped in contrasting color on the front page the following statement:THIS INSURER IS NOT LICENSED TO DO BUSINESS IN WEST VIRGINIA, AND IS NOT SUBJECT TO THE WEST VIRGINIA INSURANCE GUARANTY ACT OR TO ALL OF THE PROTECTIONS OF THE INSURANCE LAWS AND RULES OF THIS STATE.(c) A purchasing group shall not purchase insurance providing for a deductible or self-insured retention applicable to the group as a whole: Provided, That coverage may provide for a deductible or self-insured retention applicable to individual members.(d) Purchases of insurance by purchasing groups are subject to the same standards regarding aggregate limits which are applicable to all purchases of group insurance.
The commissioner is authorized to make use of any of the powers established under this chapter of this code to enforce the laws of this state so long as those powers are not specifically preempted by the national product liability risk retention act of 1981, as amended by the risk retention amendments of 1986. This includes, but is not limited to, the commissioner's administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders, and impose penalties and seek injunctive relief. With regard to any investigation, administrative proceedings, or litigation, the commissioner can rely on the law and rules of the state. The injunctive authority of the commissioner in regard to risk retention groups is restricted by the requirement that any injunction be issued by a court of competent jurisdiction.
As used in this article, the term:(a) "Commissioner" means the Insurance Commissioner of the State of West Virginia or the commissioner, director or superintendent of insurance in any other state.(b) "Completed operations liability" means liability arising out of the installation, maintenance or repair of any product at a site which is now owned or controlled by:(1) Any person who performs that work; or(2) Any person who hires an independent contractor to perform that work; but shall include liability for activities which are completed or abandoned before the date of the occurrence giving rise to the liability.(c) "Domicile" for purposes of determining the state in which a purchasing group is domiciled, means:(1) For a corporation, the state in which the purchasing group is incorporated; and(2) For an unincorporated entity, the state of its principal place of business.(d) "Hazardous financial condition" means that, based on its present or reasonably anticipated financial condition, a risk retention group, although not yet financially impaired or insolvent, is unlikely to be able:(1) To meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or(2) To pay other obligations in the normal course of business.(e) "Insurance" means primary insurance, excess insurance,reinsurance, surplus lines insurance and any other arrangement for shifting and distributing risk which is determined to be insurance under the laws of this state.(f) "Liability" means legal liability for damages (including costs of defense, legal costs and fees, and other claims expenses) because of injuries to other persons, damage to their property or other damage or loss to such other persons resulting from or arising out of:(1) Any business (whether profit or nonprofit), trade, product, services (including professional services), premises or operations;(2) Any activity of any state or local government, or any agency or political subdivision thereof; or(3) Does not include personal risk liability and an employer's liability with respect to its employees other than legal liability under the Federal Employers' Liability Act.(g) "Personal risk liability" means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from any personal, familial, or household responsibilities or activities, rather than from responsibilities or activities referred to in subsection (f);(h) "Plan of operation" or a "feasibility study" means an analysis which presents the expected activities and results of a risk retention group including at a minimum:(1) Information sufficient to verify that its members are engaged in businesses or activities similar or related with respect to the liability to which such members are exposed by virtue of any related, similar or common business, trade, product services, premises or operations;(2) For each state in which the risk retention group intends to operate, the coverages, deductibles, coverage limits, rates and rating classification systems for each line of insurance the group intends to offer;(3) Historical and expected loss experience of the proposed members and national experience of similar exposures to the extent that this experience is reasonably available;(4) Pro forma financial statements and projections;(5) Appropriate opinions by a qualified, independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition;(6) Identification of management, underwriting procedures, managerial oversight methods, investment policies and reinsurance agreements;(7) Identification of each state in which the risk retention group has obtained, or sought to obtain, a charter and license, and a description of the risk retention group's status in each such state; and(8) Such other matters as may be prescribed by the commissioner for liability insurance companies authorized by the insurance laws of the state in which the risk retention group is chartered.(i) "Product liability" means liability for damages because of any personal injury, death, emotional harm, consequential economic damage, or property damage (including damages resulting from the loss of use of property) arising out of the manufacture, design, importation, distribution, packaging, labeling, lease or sale of a product, but does not include the liability of any person for those damages if the product involved was in the possession of such a person when the incident giving rise to the claim occurred.(j) "Purchasing group" means any group which:(1) Has as one of its purposes the purchase of liability insurance on a group basis;(2) Purchases such insurance only for its group members and only to cover their similar or related liability exposure, as described in subsection (j)(3) of this section;(3) Is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises or operations; and (4) Is domiciled in any state.(k) "Risk retention group" means any corporation or otherlimited liability association formed under the laws of any state: (1) Whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members;(2) Which is organized for the primary purpose of conducting the activity described under subdivision (1), subsection (k) of this section;(3) Which: (A) Is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or(B) Before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands, and, before such date, had certified to the Insurance Commissioner of at least one state that it satisfied the capitalization requirements of such state, except that any such group shall be considered to be a risk retention group only if it has been engaged in business continuously since such date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability as such terms were defined in the product liability risk retention act of 1981 before the date of the enactment of the risk retention act of 1986;(4) Which does not exclude any person from membership in the group solely to provide for members of such a group a competitive advantage over such a person; (5) Which: (A) Has as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by such group; or(B) Has as its sole owner an organization which has as: (i) Its members only persons who comprise the membership of the risk retention group; and(ii) Its owners only persons who comprise the membership of the risk retention group and who are provided insurance by such group;(6) Whose members are engaged in businesses or activities similar or related with respect to the liability of which such members are exposed by virtue of any related, similar, or common business trade, product, services, premises or operations;(7) Whose activities do not include the provision of insurance other than:(A) Liability insurance for assuming and spreading all or any portion of the liability of its group members; and(B) Reinsurance with respect to the liability of any other risk retention group or any members of such other group which is engaged in businesses or activities so that such group or member meets the reinsurance requirement set forth herein, from membership in the risk retention group which provides such reinsurance; and(8) The name of which includes the phrase "Risk Retention Group."(l) "State" means any state of the United States or the District of Columbia.
A risk retention group which violates any provision of this Act will be subject to fines and penalties applicable to licensed insurers generally, including revocation of its license and/or the right to do business in this state.
(a) A person, or a person working for a firm, association or corporation, shall not act or aid in any manner in soliciting, negotiating or procuring liability insurance in this state from a risk retention group unless such person, or person working for a firm, association or corporation, is licensed as an insurance agent in accordance with article twelve of this chapter.(b) A person, or a person working for a firm, association or corporation, shall not act or aid in any manner in soliciting, negotiating or procuring liability insurance in this state for a purchasing group from an authorized insurer or a risk retention group chartered in a state unless such person, or person working for a firm, association or corporation, is licensed as an insurance agent in accordance with article twelve of this chapter.(c) A person, or a person working for a firm, association or corporation, shall not act or aid in any manner in soliciting, negotiating or procuring liability insurance coverage in this state for any member of a purchasing group under a purchasing group's policy unless such person, or person working for a firm, association or corporation, is licensed as an insurance agent in accordance with article twelve of this chapter.(d) A person, or a person working for a firm, association or corporation, shall not act or aid in any manner in soliciting, negotiating or procuring liability insurance from an insurer not authorized to do business in this state on behalf of a purchasing group located in this state unless such person, or person working for a firm, association or corporation, is licensed as an excess line broker in accordance with section thirteen, article twelve of this chapter.(e) For purposes of acting as an agent for a risk retention group or purchasing group pursuant to the provisions of this section, the requirement of residence in this state shall not apply.(f) Every person, or person working for a firm, association or corporation, licensed pursuant to the provisions of this chapter, on business placed with risk retention groups or written through a purchasing group, shall inform each prospective insured of the provisions of the notice required by section nine of this article in the case of a risk retention group and in the case of a purchasing group, the notice required by subsection (b), section eighteen of this article.
An order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance, or operating, in any state (or in all states or in any territory or possession of the United States) upon a finding that such a group is in a hazardous financial condition shall be enforceable in the courts of the state.
The commissioner may establish and from time to time amend such rules relating to risk retention groups as may be necessary or desirable to carry out the provisions of this article.
 (a) In addition to complying with the requirements of this article, any risk retention group operating in this state prior to enactment of the amendments made to this article in the 1992 regular session of the Legislature shall comply with the provisions of subsection (a), section four of this article before December 31, 1992.(b) Any purchasing group which was doing business in this state prior to enactment of the amendments made to this article in the 1992 regular session of the Legislature shall furnish notice to the commissioner pursuant to the provisions of section seventeen of this article before December 31, 1992.
(a) A risk retention group shall, pursuant to the provisions of article five of this chapter, be chartered and licensed to write only liability insurance pursuant to this article and, except as provided elsewhere in this article, shall comply with all of the laws, rules and requirements applicable to insurers chartered and licensed in this state and with section four of this article, to the extent such requirements are not a limitation on laws, rules or requirements of this state.(b) Notwithstanding any other provision of this chapter to the contrary, all risk retention groups chartered in this state shall file with the commissioner and the national association of Insurance Commissioners, an annual statement on a form prescribed by the national association of Insurance Commissioners and in diskette form, if required by the commissioner and completed in accordance with the national association of Insurance Commissioners' instructions and the national association of Insurance Commissioners accounting practices and procedures manual.(c) Before it may offer insurance in any state, each risk retention group shall also submit for approval by the Insurance Commissioner of this state a plan of operation or feasibility study. The risk retention group shall submit an appropriate revision of such plan or study, in the event of any subsequent material change in any item of the plan of operation or feasibility study, within ten days of any such change. The risk retention group shall not offer any additional kinds of liability insurance, in this state or in any other state, until a revision of the plan or study is approved by the commissioner.(d) At the time of filing its application for a charter, the risk retention group shall provide to the commissioner in summary form the following information: The identity of the initial members of the group, the identity of those individuals who organized the group or who will provide administrative services or otherwise influence or control the activities of the group, the amount and nature of initial capitalization, the coverages to be afforded, and the states in which the group intends to operate. Upon receipt of this information, the commissioner shall forward the information to the national association of Insurance Commissioners. Providing notification to the national association of Insurance Commissioners is in addition to and shall not be sufficient to satisfy the requirements of section four or any other sections of this article.(e) Risk retention groups are subject to the provisions of article thirty-three, article thirty-four, article thirty-seven and article thirty-nine of this chapter.
(a) Risk retention groups chartered in states other than this state and seeking to do business as a risk retention group in this state must observe and abide by the laws of this state.(b) Before offering insurance in this state, a risk retention group shall submit the following information to the commissioner on a form prescribed by the national association of Insurance Commissioners:(1) A statement identifying the state or states in which the risk retention group is chartered and licensed as a liability insurance company, date of chartering, its principal place of business, and any other information including information on its membership, as the commissioner of this state may require to verify that the risk retention group is qualified under this article;(2) A copy of its plan of operations or a feasibility study and revisions of such plan or study submitted to its state of domicile: Provided, That the provision relating to the submission of a plan of operation or a feasibility study shall not apply with respect to any line or classification of liability insurance which (A) was defined in the federal product liability risk retention act of 1981 before October 27, 1986, and (B) was offered before that date by any risk retention group which had been chartered and operating for not less than three years before such date;(3) A statement of registration which designates the commissioner as its agent for the purpose of receiving service of legal documents or process; and(4) A risk retention group that has been chartered and operating in any state and has previously filed an annual financial statement as required by this section with its state of domicile, must submit a copy of the most recent annual statement with the registration form required by this subsection.(c) The risk retention group shall submit a copy of any revision to its plan of operation or feasibility study required by section three of this article at the same time that the revision is submitted to the commissioner of its chartering state.(d) A risk retention group shall not commence offering insurance in this state prior to receiving a certificate of registration from the commissioner.(e) Any risk retention group registered in this state shall submit to the commissioner:(1) Annually a copy of the group's financial statement submitted to its state of domicile, which shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American academy of actuaries or a qualified loss reserve specialist pursuant to criteria established by the national association of Insurance Commissioners);(2) A copy of each examination of the risk retention group as certified by the commissioner or public official conducting the examination;(3) Upon request by the commissioner, a copy of any audit performed with respect to the risk retention group; and(4) Any information as may be required to verify its continuing qualification as a risk retention group under this article.(f) The commissioner shall promulgate rules pursuant to the provisions of chapter twenty-nine-a of this code regarding all fees to be submitted with the filings required by this section.
(a) Each risk retention group shall pay to the commissioner, annually on March 1, a tax at the rate of two percent of the taxable premiums on policies or contracts of insurance covering property or risks in this state and on risk and property situated elsewhere upon which no premium tax is otherwise paid during the previous year. Each risk retention group is also subject to the additional premium taxes levied by sections fourteen-a and fourteen-d, article three of this chapter. (b) The taxes provided for in this section constitute all taxes collectible under the laws of this state from any risk retention group, and no other premium tax or other taxes shall be levied or collected from any risk retention group by the state or any county, city or municipality within this state, except ad valorem taxes. Each risk retention group shall be subject to the same interests, additions, fines and penalties for nonpayment as are generally applicable to insurers.(c) To the extent that a risk retention group uses insurance agents, each agent shall keep a complete and separate record of all policies procured from each risk retention group. The record shall be open to examination by the commissioner, as provided in section nine, article two of this chapter. These records shall, for each policy and each kind of insurance provided under the policy, include the following:(1) The limit of liability;(2) The time period covered;(3) The effective date;(4) The name of the risk retention group which issued the policy;(5) The gross premium charged; and(6) The amount of return premiums, if any.
Any risk retention group, its agents and representatives, shall comply with the laws of this state, as set forth in chapter thirty-three of this code, regarding unfair claims settlement practices act of this state.
Any risk retention group shall comply with the laws of this state, as provided in chapter thirty-three of this code, regarding prohibitive, deceptive, false or fraudulent acts or practices. However, if the commissioner seeks an injunction regarding such conduct, the injunction must be obtained from a court of competent jurisdiction.
Any risk retention group must submit to an examination by the commissioner to determine its financial condition if the commissioner of the jurisdiction in which the group is chartered has not initiated an examination or does not initiate an examination within sixty days after a request by the commissioner of this state. Any such examination shall be coordinated to avoid unjustified repetition and conducted in an expeditious manner. The risk retention group shall be subject to the provisions of section nine, article two of this chapter in regard to the expense and conduct of the examination. Any such examination shall be conducted in accordance with the national association of Insurance Commissioners examiners handbook.
Every application form for insurance from a risk retention group and any policy issued by a risk retention group shall contain in ten-point type on the front page and the declaration page, the following notice:NOTICEThis policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and rules of your state. State insurance insolvency guaranty funds are not available for your risk retention group.
(a) The purpose of this article is to improve the Insurance Commissioner's surveillance of the financial condition of insurers by requiring:(1) An annual audit of financial statements reporting the financial position and the results of operations of insurers by independent certified public accountants;(2) Communication of internal control related matters noted in an audit; and(3) Management's report of internal control over financial reporting.(b) Every insurer, as defined in subdivision (7), section two of this article, shall be subject to this article. Insurers having direct premiums written in this state of less than $1 million in any calendar year and less than one thousand policyholders or certificate holders of directly written policies nationwide at the end of the calendar year shall be exempt from this article for the year, unless the commissioner makes a specific finding that compliance is necessary for the commissioner to carry out statutory responsibilities. However, insurers having assumed premiums pursuant to contracts and/or treaties of reinsurance of $1 million or more will not be so exempt.(c) Foreign or alien insurers filing audited financial reports in another state, pursuant to the other state's requirement for filing of audited financial reports which has been found by the commissioner to be substantially similar to the requirements herein, are exempt from sections three through eleven of this article if:(1) A copy of the audited financial report, communication of internal control-related matters noted in an audit, report on significant deficiencies in internal controls and the accountant's letter of qualifications which are filed with the other state are filed with the commissioner in accordance with the filing dates specified in sections three, ten and ten-a of this article, respectively. Canadian insurers may submit accountants' reports as filed with the Office of the superintendent of Financial Institutions, Canada.(2) A copy of any notification of adverse financial condition report filed with the other state is filed with the commissioner within the time specified in section nine of this article.(d) Foreign or alien insurers required to file Management's Report of Internal Control over Financial Reporting in another state are exempt from filing the report in this state provided the other state has substantially similar reporting requirements and the report is filed with the commissioner of the other state within the time specified.(e) This article shall not prohibit or preclude or in any way limit the commissioner from performing examinations of insurers as specified in section nine, article two of this chapter or any other examinations as the commissioner may be authorized by this chapter to perform.
(a) In addition to the annual audited financial report, each insurer shall furnish the commissioner with a written communication as to any unremediated material weaknesses in its internal control over financial reporting noted by the accountant during the audit. Such communication shall be prepared by the accountant within sixty days after the filing of the annual audited financial report, and shall contain a description of any unremediated material weakness, as the term material weakness is defined by Statement on Auditing Standards (SAS) No. 60, "Communication of Internal Control Related Matters Noted in an Audit" or its replacement, as of December 31 immediately preceding, so as to coincide with the audited financial report discussed in subsection (a), section three of this article, in the insurer's internal control over financial reporting noted by the accountant during the course of their audit of the financial statements. If no unremediated material weaknesses were noted, the communication should so state.(b) The insurer is required to provide a description of remedial actions taken or proposed to correct unremediated material weaknesses, if the actions are not described in the accountant's communication.
The accountant shall furnish the insurer in connection with, and for inclusion in, the filing of the annual audited financial report, a letter stating:(1) That the accountant is independent with respect to the insurer and conforms to the standards of his or her profession as contained in the code of professional ethics and pronouncements of the American Institute of Certified Public Accountants and the rules of professional conduct of the West Virginia Board of Accountancy, or similar code;(2) The background and experience in general, and the experience in audits of insurers of the staff assigned to the engagement and whether each is an independent certified public accountant. Nothing within this article shall be construed as prohibiting the accountant from utilizing such staff as he or she deems appropriate where use is consistent with the standards prescribed by generally accepted auditing standards;(3) That the accountant understands the annual audited financial report and his or her opinion thereon will be filed in compliance with this article and that the commissioner will be relying on this information in the monitoring and regulation of the financial position of insurers;(4) That the accountant consents to the requirements of section eleven of this article and that the accountant consents and agrees to make available for review by the commissioner, or the commissioner's designee or appointed agent, the workpapers, as defined in section eleven of this article;(5) A representation that the accountant is properly licensed by an appropriate state licensing authority and is a member in good standing in the American Institute of Certified Public Accountants; and(6) A representation that the accountant is in compliance with the requirements of section six of this article.
(a) Workpapers are the records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to the accountant's audit of the financial statements of an insurer. Workpapers may include audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of his or her audit of the financial statements of an insurer and which support the accountant's opinion.(b) Every insurer required to file an audited financial report pursuant to this article shall require the accountant to make available for review by the commissioner all workpapers prepared in the conduct of the accountant's audit and any communications related to the audit between the accountant and the insurer, at the offices of the insurer, at the insurance department or at any other reasonable place designated by the commissioner. The insurer shall require that the accountant retain the audit workpapers and communications until the commissioner has filed a report of examination, as required by section nine, article two of this chapter, covering the period of the audit but no longer than seven years from the date of the audit report.(c) In the conduct of the aforementioned periodic review by the commissioner, it shall be agreed that copies of pertinent audit workpapers may be made and retained by the commissioner. Reviews by the commissioner shall be considered investigations and all workpapers and communications obtained during the course of such investigations shall be afforded the same confidentiality as other examination workpapers generated by the commissioner.
This section does not apply to foreign or alien insurers licensed in this state or an insurer that is a SOX Compliant Entity or a direct or indirect wholly-owned subsidiary of a SOX Compliant Entity.(1) The audit committee is directly responsible for the appointment, compensation and oversight of the work of any accountant, including resolution of disagreements between management and the accountant regarding financial reporting, for the purpose of preparing or issuing the audited financial report or related work pursuant to this article. Each accountant shall report directly to the audit committee.(2) The audit committee of an insurer or group of insurers is responsible for overseeing the insurers internal audit function and granting the person or persons performing the function suitable authority and resources to fulfill their responsibilities as required by 33-33-12a of this code. (3) Each member of the audit committee shall be a member of the board of directors of the insurer or a member of the board of directors of an entity elected pursuant to subdivision (3), section two of this article and subdivision (6) of this section.(4) In order to be considered independent for purposes of this section, a member of the audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept any consulting, advisory or other compensatory fee from the entity or be an affiliated person of the entity or subsidiary thereof. However, if law requires board participation by otherwise nonindependent members, that law shall prevail and such members may participate in the audit committee and be designated as independent for audit committee purposes, unless they are an officer or employee of the insurer or one of its affiliates.(5) If a member of the audit committee ceases to be independent for reasons outside the members reasonable control, that person, with notice by the responsible entity to the state, may remain an audit committee member of the responsible entity until the earlier of the next annual meeting of the responsible entity or one year from the occurrence of the event that caused the member to be no longer independent.(6) To exercise the election of the controlling person to designate the audit committee for purposes of this article, the ultimate controlling person shall provide written notice to the commissioners of the affected insurers. Notification shall be made timely prior to the issuance of the statutory audit report and include a description of the basis for the election. The election can be changed through notice to the commissioner by the insurer, which shall include a description of the basis for the change. The election shall remain in effect for perpetuity, until rescinded.(7)(A) The audit committee shall require the accountant that performs for an insurer any audit required by this article to timely report to the audit committee in accordance with the requirements of Statement of Auditing Standards (SAS) No. 61, "Communication with Audit Committees" or its replacement, including:(i) All significant accounting policies and material permitted practices;(ii) All material alternative treatments of financial information within statutory accounting principles that have been discussed with management officials of the insurer, ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the accountant; and(iii) Other material written communications between the accountant and the management of the insurer, such as any management letter or schedule of unadjusted differences.(B) If an insurer is a member of an insurance holding company system, the reports required by paragraph (A) of this subdivision may be provided to the audit committee on an aggregate basis for insurers in the holding company system, provided that any substantial differences among insurers in the system are identified to the audit committee.(8) The proportion of independent audit committee members shall meet or exceed the following criteria with respect to prior calendar year, direct and assumed premiums:$0 - $300 million: No minimum requirements;Over $300 million - $500 million: Majority (50 percent or more) of members shall be independent;Over $500 million: Supermajority (75 percent or more) of members shall be independent.(A) The commissioner has authority afforded by state law to require the entitys board to enact improvements to the independence of the audit committee membership if the insurer is in a risk based capital action level event, meets one or more of the standards of an insurer deemed to be in hazardous financial condition, or otherwise exhibits qualities of a troubled insurer.(B) All insurers with less than $500 million in prior year direct written and assumed premiums are encouraged to structure their audit committees with at least a supermajority of independent audit committee members.(C) Prior calendar year direct written and assumed premiums shall be the combined total of direct premiums and assumed premiums from nonaffiliates for the reporting entities.(9) An insurer with direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500 million may make application to the commissioner for a waiver from this sections requirements based upon hardship. The insurer shall file, with its annual statement filing, the approval for relief from this section with the states that it is licensed in or doing business in and the National Association of Insurance Commissioners. If the nondomestic state accepts electronic filing with the National Association of Insurance Commissioners, the insurer shall file the approval in an electronic format acceptable to the National Association of Insurance Commissioners.
(a) An insurer is exempt from the requirements of this section if:(1) The insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500 million; and(2) If the insurer is a member of a group of insurers, the group has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1 billion.(b) The insurer or group of insurers shall establish an internal audit function providing independent, objective and reasonable assurance to the audit committee and insurer management regarding the insurers governance, risk management and internal controls. This assurance shall be provided by performing general and specific audits, reviews and tests and by employing other techniques deemed necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations.(c) In order to ensure that internal auditors remain objective, the internal audit function must be organizationally independent. Specifically, the internal audit function may not defer ultimate judgment on audit matters to others, and shall appoint an individual to head the internal audit function who will have direct and unrestricted access to the board of directors. Organizational independence does not preclude dual-reporting relationships.(d) The head of the internal audit function shall report to the audit committee regularly, but no less than annually, on the periodic audit plan, factors that may adversely impact the internal audit functions independence or effectiveness, material findings from completed audits and the appropriateness of corrective actions implemented by management as a result of audit findings.(e) If an insurer is a member of an insurance holding company system or included in a group of insurers, the insurer may satisfy the internal audit function requirements set forth in this section at the ultimate controlling parent level, an intermediate holding company level or the individual legal entity level.
(a) No director or officer of an insurer shall, directly or indirectly:(1) Make or cause to be made a materially false or misleading statement to an accountant in connection with any audit, review or communication required under this article; or(2) Omit to state, or cause another person to omit to state, any material fact necessary in order to make statements made, in light of the circumstances under which the statements were made, not misleading to an accountant in connection with any audit, review or communication required under this article.(b) No officer or director of an insurer, or any other person acting under the direction thereof, shall directly or indirectly take any action to coerce, manipulate, mislead or fraudulently influence any accountant engaged in the performance of an audit pursuant to this article if that person knew or should have known that the action, if successful, could result in rendering the insurer's financial statements materially misleading.(c) For purposes of subsection (b) of this section, actions that, "if successful, could result in rendering the insurer's financial statements materially misleading" include, but are not limited to, actions taken at any time with respect to the professional engagement period to coerce, manipulate, mislead or fraudulently influence an accountant:(1) To issue or reissue a report on an insurer's financial statements that is not warranted in the circumstances due to material violations of statutory accounting principles prescribed by the commissioner, generally accepted auditing standards, or other professional or regulatory standards;(2) Not to perform audit, review or other procedures required by generally accepted auditing standards or other professional standards;(3) Not to withdraw an issued report; or(4) Not to communicate matters to an insurer's audit committee.
(a) In the case of Canadian and British insurers, the annual audited financial report shall be defined as the annual statement of total business on the form filed by the companies with their supervision authority duly audited by an independent chartered accountant.(b) For Canadian and British insurers, the letter required in subsection (b), section five of this article shall state that the accountant is aware of the requirements relating to the annual audited financial report filed with the commissioner pursuant to section three of this article and shall affirm that the opinion expressed is in conformity with those requirements.
(a) Every insurer required to file an audited financial report pursuant to this article that has annual direct written and assumed premiums, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of $500 million, or more, shall prepare a report of the insurer's or group of insurers' internal control over financial reporting, as these terms are defined in section two of this article. The report shall be filed with the commissioner along with the communication of internal control related matters noted in an audit described under section ten of this article. Management's report of internal control over financial reporting shall be filed as of December 31 immediately preceding.(b) Notwithstanding the premium threshold in subsection (a) of this section, the commissioner may require an insurer to file management's report of internal control over financial reporting if the insurer is in any risk-based capital level event, or meets any one or more of the standards of an insurer deemed to be in hazardous financial condition as defined in article ten of this chapter.(c) An insurer or a group of insurers may file its or its parent's Section 404 Report and an addendum in satisfaction of this section's requirement provided that those internal controls of the insurer or group of insurers having a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements were included in the scope of the Section 404 Report and if the insurer or group of insurers is:(1) Directly subject to Section 404;(2) Part of a holding company system whose parent is directly subject to Section 404;(3) Not directly subject to Section 404 but is a SOX Compliant Entity; or(4) A member of a holding company system whose parent is not directly subject to Section 404 but is a SOX Compliant Entity.(d) The addendum referenced in subsection 8 of this section shall be a positive statement by management that there is no material process with respect to the preparation of the insurer's or group of insurers' audited statutory financial statements excluded from the Section 404 Report.(e) If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements and those internal controls were not included in the scope of the Section 404 Report, the insurer or group of insurers may either file:(1) A report pursuant to subsection (a) of this section; or(2) The Section 404 Report and a [Section 16] report pursuant to subsection (a) of this section for those internal controls that have a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements not covered by the Section 404 Report.(f) Management's report of internal control over financial reporting shall include:(1) A statement that management is responsible for establishing and maintaining adequate internal control over financial reporting;(2) A statement that management has established internal control over financial reporting and an assertion, to the best of management's knowledge and belief, after diligent inquiry, as to whether its internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles;(3) A statement that briefly describes the approach or processes by which management evaluated the effectiveness of its internal control over financial reporting;(4) A statement that briefly describes the scope of work that is included and whether any internal controls were excluded;(5) Disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of the December 31 immediately preceding. Management is not permitted to conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there is one or more unremediated material weaknesses in its internal control over financial reporting;(6) A statement regarding the inherent limitations of internal control systems; and(7) Signatures of the chief executive officer and the chief financial officer, or the equivalent position or title.(g) Management shall document and make available upon financial condition examination the basis upon which its assertions, required in subsection (f) of this section, are made. Management may base its assertions, in part, upon its review, monitoring and testing of internal controls undertaken in the normal course of its activities.(1) Management shall have discretion as to the nature of the internal control framework used, and the nature and extent of documentation, in order to make its assertion in a cost effective manner and, as such, may include assembly of or reference to existing documentation.(2) Management's report on internal control over financial reporting, required by subsection (a) of this section, and any documentation provided in support thereof during the course of a financial condition examination, shall be kept confidential by the commissioner.
(a) Upon written application of any insurer, the commissioner may grant an exemption from compliance with any and all provisions of this article if the commissioner finds, upon review of the application, that compliance with this article would constitute a financial or organizational hardship upon the insurer. An exemption may be granted at any time and from time to time for a specified period or periods. Within 10 days from a denial of an insurers written request for an exemption from this article, the insurer may request in writing a hearing on its application for an exemption.(b) Unless otherwise provided in this section, the provisions of this article shall become effective on January 1, 2010.(c) Domestic insurers retaining a certified public accountant on the effective date of this article who qualify as independent shall comply with this article for the year ending December 31, 2010, and each year thereafter, unless the commissioner permits otherwise.(d) Domestic insurers not retaining a certified public accountant on the effective date of this article who qualifies as independent may meet the following schedule for compliance unless the commissioner permits otherwise:(1) As of December 31, 2010, file with the commissioner an audited financial report; and(2) For the year ending December 31, 2010, and each year thereafter, such insurers shall file with the commissioner all reports and communication required by this article.(e) Foreign insurers shall comply with this article for the year ending December 31, 2010, and each year thereafter, unless the commissioner permits otherwise.(f) The requirements of subsection (d), section six of this article shall be in effect for audits of the year beginning January 1, 2010, and each year thereafter.(g) The requirements of section twelve of this article are to be in effect January 1, 2010, and each year thereafter. An insurer or group of insurers that is not required to have independent audit committee members or only a majority of independent audit committee members, as opposed to a supermajority, because the total written and assumed premium is below the threshold and subsequently becomes subject to one of the independence requirements due to changes in premium shall have one year following the year the threshold exceeded to comply with the independence requirements. An insurer that becomes subject to one of the independence requirements as a result of a business combination shall have one calendar year following the date of acquisition or combination to comply with the independence requirements.(h) The requirements of section fifteen of this article are effective beginning with the reporting period ending December 31, 2010, and each year thereafter. An insurer or group of insurers that is not required to file a report because the total written premium is below the threshold and subsequently becomes subject to the reporting requirements shall have two years following the year the threshold is exceeded to file a report. An insurer acquired in a business combination shall have two calendar years following the date of acquisition or combination to comply with the reporting requirements. (i) The requirements of 33-33-12a of this code are effective on January 1, 2020, and each year thereafter. If an insurer or group of insurers that is exempt from the requirements of 33-33-12a of this code no longer qualifies for that exemption, it shall have one year after the year the threshold is exceeded to comply with the requirements of this article.
As used in this article:(1) "Accountant" or "independent certified public accountant" means an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants and in all states in which the accountant is licensed to practice; for Canadian and British companies, the terms mean a Canadian-chartered or British-chartered accountant.(2) An "affiliate" of, or person "affiliated" with a specific person, is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.(3) "Audit committee" means a committee or equivalent body established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers, and audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers may be deemed to be the audit committee for one or more of these controlled insurers solely for the purposes of this article at the election of the controlling person. If an audit committee is not designated by the insurer, the insurers entire board of directors shall constitute the audit committee.(4) "Audited financial report" means and includes those items specified in section four of this article.(5) "Indemnification" means an agreement of indemnity or a release from liability where the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or other professional standards, whether or not resulting in part from knowing of other misrepresentations made by the insurer or its representatives.(6) "Independent board member" has the same meaning as described in subdivision (4), section 12 of this article.(7) "Insurer" means any domestic insurer as defined in section six, article one of this chapter and includes any domestic stock insurance company, mutual insurance company, reciprocal insurance company, farmers" mutual fire insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care corporation, health maintenance organization, captive insurance company or risk retention group and any licensed foreign or alien insurer defined in article one of this chapter.(8) "Group of insurers" means those licensed insurers included in the reporting requirements of article 27 of this chapter, or a set of insurers as identified by management for the purpose of assessing the effectiveness of internal control over financial reporting.(9) "Internal audit function" means a person or persons that provide independent, objective and reasonable assurance designed to add value and improve an organizations operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.(10) "Internal control over financial reporting" means a process effected by an entitys board of directors, management and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements. The process includes the requirements set forth in subdivisions (2) through (7), subsection (b), section four of this article and those policies and procedures that:(A) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;(B) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and(C) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.(11) "SEC" means the United States Securities and Exchange Commission.(12) "Section 404" means section 404 of the Sarbanes-Oxley Act of 2002 and the SECs rules and regulations promulgated thereunder.(13) "Section 404 report" means managements report on "internal control over financial reporting" as defined by the SEC and the related attestation report of the independent certified public accountant as described in subdivision (1) of this section.(14) "SOX Compliant Entity" means an entity that either is required to be compliant with, or voluntarily is compliant with, all of the following provisions of the Sarbanes-Oxley Act of 2002:(A) The preapproval requirements of Section 201, Section 10A(i) of the Securities Exchange Act of 1934;(B) The audit committee independence requirements of Section 301, Section 10A(m)(3) of the Securities Exchange Act of 1934; and(C) The internal control over financial reporting requirements of Section 404, Item 308 of SEC Regulation S-K.
(a) All insurers shall have an annual audit by an independent certified public accountant and shall file an audited financial report with the commissioner on or before June 1 for the year ending December 31 immediately preceding. The commissioner may require an insurer to file an audited financial report earlier than June 1 with ninety days advance notice to the insurer.(b) Extensions of the filing date on June 1 may be granted by the commissioner for thirty-day periods upon showing by the insurer and its independent certified public accountant the reasons for requesting the extension and determination by the commissioner of good cause for an extension. A request for extension must be submitted in writing not less than ten days prior to the due date in sufficient detail to permit the commissioner to make an informed decision with respect to the requested extension.(c) If an extension is granted in accordance with the provisions in subsection (b) of this section, a similar extension of thirty days is granted to the filing of management's report of internal control over financial reporting.(d) Every insurer required to file an annual audited financial report pursuant to this article shall designate a group of individuals as constituting its audit committee, as defined in subdivision (3), section two of this article. The audit committee of an entity that controls an insurer may be deemed to be the insurer's audit committee for purposes of this article at the election of the controlling person.
(a) The annual audited financial report shall report the financial condition of the insurer as of the end of the most recent calendar year and the results of its operations, cash flows and changes in capital and surplus for the year then ended in conformity with statutory accounting practices prescribed, or otherwise permitted, by the Insurance Commissioner of the state of domicile.(b) The annual audited financial report shall include the following:(1) Report of independent certified public accountant;(2) Balance sheet reporting admitted assets, liabilities, capital and surplus;(3) Statement of operations;(4) Statement of cash flow;(5) Statement of changes in capital and surplus;(6) Notes to financial statements. These notes shall be those required by the appropriate National Association of Insurance Commissioners annual statement instructions and accounting practices and procedures manual, as amended, including reconciliation differences, if any, between the audited statutory financial statements and the annual statement filed pursuant to section fourteen, article four of this chapter, with a written description of the nature of these differences; and(7) The financial statements included in the audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement of the insurer filed with the commissioner, andThe financial statement shall be comparative, presenting the amounts as of December 31 of the current year and the amounts as of the immediately preceding December 31. However, in the first year in which an insurer is required to file an audited financial report, the comparative data may be omitted.
(a) Each insurer required by this article to file an annual audited financial report must, within sixty days after becoming subject to the requirements, register with the commissioner in writing the name and address of the independent certified public accountant or accounting firm retained to conduct the annual audit set forth in this article. Insurers not retaining an independent certified public accountant on the effective date of this article shall register the name and address of their retained independent certified public accountant not less than six months before the date when the first audited financial report is to be filed.(b) The insurer shall obtain a letter from the accountant, and file a copy with the commissioner stating that the accountant is aware of the provisions of this code and legislative rules promulgated pursuant to article three, chapter twenty-nine-a of this code that relate to accounting and financial matters and affirming that the accountant will express his or her opinion on the financial statements in terms of his or her conformity to the statutory accounting practices prescribed or otherwise permitted by the Insurance Commissioner specifying any exceptions as he or she may believe appropriate.(c) If an accountant who was the accountant for the immediately preceding filed audited financial report is dismissed or resigns, the insurer shall within five business days notify the commissioner of this event. The insurer shall also furnish the commissioner with a separate letter within ten business days of the above notification stating whether in the twenty-four months preceding the notification there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountant, would have caused him or her to make reference to the subject matter of the disagreement in connection with his or her opinion. The disagreements required to be reported in response to this section include both those resolved to the former accountant's satisfaction and those not resolved to the former accountant's satisfaction. Disagreements contemplated by this section are those that occur at the decision-making level between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report. The insurer shall also in writing request the former accountant to furnish it a letter addressed to the insurer stating whether the accountant agrees with the statements contained in the insurer's letter and, if not, stating the reasons for which he or she does not agree; and the insurer shall furnish the responsive letter from the former accountant to the commissioner together with its own.
(a) The commissioner may not recognize any person or firm as a qualified independent certified public accountant for purposes of performing the annual audited financial report if the person or firm:(1) Is not in good standing with the American Institute of Certified Public Accountants and in all states in which the accountant is licensed to practice, or, for a Canadian or British company, that is not a chartered accountant; or(2) Has either directly or indirectly entered into an agreement of indemnification or release from liability with respect to an audit of the insurer.(b) Except as otherwise provided herein, the commissioner shall recognize an independent certified public accountant as qualified as long as he or she conforms to the standards of his or her profession, as contained in the Code of Professional Ethics of the American Institute of Certified Public Accountants and the Rules and Regulations and Code of Ethics and Rules of Professional Conduct of the West Virginia Board of Accountancy, or similar code.(c) A qualified independent certified public accountant may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration. In the event a delinquency proceeding is commenced against the insurer under article ten of this chapter, the mediation or arbitration provisions shall operate at the option of the receiver.(d) (1) The lead or coordinating audit partner having primary responsibility for the audit may not act in that capacity for more than five consecutive years. Following a period of service, the person shall be disqualified from acting in that or a similar capacity for the same company or its insurance subsidiaries or affiliates for a period of five consecutive years. An insurer may make application to the commissioner for relief from the above rotation requirement on the basis of unusual circumstances. This application should be made at least thirty days before the end of the calendar year. The commissioner may consider the following factors in determining if the relief should be granted:(A) Number of partners, expertise of the partners or the number of insurance clients in the currently registered firm;(B) Premium volume of the insurer; or(C) Number of jurisdictions in which the insurer transacts business.(2) The insurer shall file, with its annual statement filing, the approval for relief from subdivision (1) of this subsection with the states that it is licensed in or doing business in and with the National Association of Insurance Commissioners. If the nondomestic state accepts electronic filing with the National Association of Insurance Commissioners, the insurer shall file the approval in an electronic format.(e) The commissioner may not recognize as a qualified independent certified public accountant, nor accept any annual audited financial report, prepared, in whole or in part, by any natural person who:(1) Has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sections 1961-1968, or any dishonest conduct or practices under federal or state law;(2) Has been found to have violated the insurance laws of this state with respect to any previous reports submitted under this article; or(3) Has demonstrated a pattern or practice of failing to detect or disclose material information in previous reports filed under the provisions of this article.(f) The commissioner may hold a hearing to determine whether an independent certified public accountant is qualified and, considering the evidence presented, may rule that the accountant is not qualified for purposes of expressing an opinion on the financial statements in the annual audited financial report made pursuant to this article and require the insurer to replace the accountant with another whose relationship with the insurer is qualified within the meaning of this article.(g) (1) The commissioner may not recognize as a qualified independent certified public accountant, nor accept an annual audited financial report, prepared, in whole or in part, by an accountant who provides to an insurer, contemporaneously with the audit, the following nonaudit services:(A) Bookkeeping or other services related to the accounting records or financial statements of the insurer;(B) Financial information systems design and implementation;(C) Appraisal or valuation services, fairness opinions, or contribution-in-kind reports;(D) Actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements. The accountant may assist an insurer in understanding the methods, assumptions and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer's financial statements. An accountant's actuary may also issue an actuarial opinion or certification on an insurer's reserves if the following conditions have been met:(i) Neither the accountant nor the accountant's actuary has performed any management functions or made any management decisions;(ii) The insurer has competent personnel or engages a third party actuary to estimate the reserves for which management takes responsibility; and(iii) The accountant's actuary tests the reasonableness of the reserves after the insurer's management has determined the amount of the reserves;(E) Internal audit outsourcing services;(F) Management functions or human resources;(G) Broker or dealer, investment adviser, or investment banking services;(H) Legal services or expert services unrelated to the audit; or(I) Any other services that the commissioner determines, by legislative rule, are impermissible.(2) In general, the principles of independence with respect to services provided by the qualified independent certified public accountant are largely predicated on three basic principles, violations of which would impair the accountant's independence. The principles are that the accountant cannot function in the role of management, cannot audit his or her own work, and cannot serve in an advocacy role for the insurer.(h) Insurers having direct written and assumed premiums of less than $1 million in any calendar year may request an exemption from subdivision (1), subsection (g) of this section. The insurer shall file with the commissioner a written statement discussing the reasons why the insurer should be exempt from these provisions. If the commissioner finds, upon review of this statement, that compliance with subdivision (1), subsection (g) of this section would constitute a financial or organizational hardship upon the insurer, an exemption may be granted.(i) A qualified independent certified public accountant who performs the audit may engage in other nonaudit services, including tax services, that are not described in subdivision (1), subsection (g) of this section or that do not conflict with subdivision (2), subsection (g) of this section, only if the activity is approved in advance by the audit committee, in accordance with subsection (j) of this section.(j) All auditing services and nonaudit services provided to an insurer by the qualified independent certified public accountant of the insurer shall be preapproved by the audit committee. The preapproval requirement is waived with respect to nonaudit services if the insurer is a SOX Compliant Entity or a direct or indirect wholly-owned subsidiary of a SOX Compliant Entity or:(1) The aggregate amount of all such nonaudit services provided to the insurer constitutes not more than five percent of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the nonaudit services are provided;(2) The services were not recognized by the insurer at the time of the engagement to be nonaudit services; and(3) The services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit by the audit committee or by one or more members of the audit committee who are the members of the board of directors to whom authority to grant such approvals has been delegated by the audit committee.(k) The audit committee may delegate to one or more designated members of the audit committee the authority to grant the preapprovals required by subsection (j) of this section. The decisions of any member to whom this authority is delegated shall be presented to the full audit committee at each of its scheduled meetings.(l) The commissioner may not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for that insurer, was employed by the independent certified public accountant and participated in the audit of that insurer during the one-year period preceding the date that the most current statutory opinion is due. This section shall only apply to partners and senior managers involved in the audit. An insurer may make application to the commissioner for relief from the above requirement on the basis of unusual circumstances.(2) The insurer shall file, with its annual statement filing, the approval for relief from subdivision (1) of this subsection with the states that it is licensed in or doing business in and the National Association of Insurance Commissioners. If the nondomestic state accepts electronic filing with the National Association of Insurance Commissioners, the insurer shall file the approval in an electronic format acceptable to the National Association of Insurance Commissioners.
An insurer may make written application to the commissioner for approval to file audited consolidated or combined financial statements in lieu of separate annual audited financial statements if the insurer is part of a group of insurance companies which utilizes a pooling or one hundred percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer cedes all of its direct and assumed business to the pool. If an approval is granted, a columnar consolidating or combining worksheet shall be filed with the report incorporating the following:(1) Amounts shown on the consolidated or combined audited financial report shall be shown on the worksheet;(2) Amounts for each insurer subject to this section shall be stated separately;(3) Noninsurance operations may be shown on the worksheet on a combined or individual basis;(4) Explanations of consolidating and eliminating entries shall be included; and(5) A reconciliation shall be included of any differences between the amounts shown in the individual insurer columns of the worksheet and comparable amounts shown on the annual statements of the insurers.
Financial statements furnished pursuant to section four of this article shall be examined by the independent certified public accountant. The audit of the insurer's financial statements shall be conducted in accordance with generally accepted auditing standards. In accordance with AU Section 319 of the professional standards of the American Institute of Certified Public Accountants, "Consideration of Internal Control in a Financial Statement Audit" or its replacement, the independent certified public accountant should obtain an understanding of internal control sufficient to plan the audit. To the extent required by AU 319, for those insurers required to file a management's report of internal control over financial reporting pursuant to section fifteen of this article, the independent certified public accountant should consider, as that term is defined in Statement on Auditing Standards No. 102, "Defining Professional Requirements in Statements on Auditing Standards" or its replacement, the most recently available report in planning and performing the audit of the statutory financial statements. Consideration shall be given to the procedures illustrated in the Financial Condition Examiners Handbook promulgated by the National Association of Insurance Commissioners as the independent certified public accountant deems necessary.
(a) The insurer required to furnish the annual audited financial report shall require the independent certified public accountant to report, in writing, within five business days to the board of directors or its audit committee any determination by the independent certified public accountant that the insurer has materially misstated its financial condition as reported to the commissioner as of the balance sheet date currently under audit or that the insurer does not meet the minimum capital and surplus requirements of this chapter as of that date. An insurer that has received a report pursuant to this subsection shall forward a copy of the report to the commissioner within five business days of receipt of the report and shall provide the independent certified public accountant making the report with evidence of the report being furnished to the commissioner. If the independent certified public accountant fails to receive the evidence within the required five business day period, the independent certified public accountant shall furnish to the commissioner a copy of his or her report within the next five business days.(b) No independent public accountant shall be liable in any manner to any person for any statement made in connection with subsection (a) of this section if the statement is made in good faith in compliance with said subsection.(c) If the accountant, subsequent to the date of the audited financial report filed pursuant to this article, becomes aware of facts which might have affected the report, the commissioner notes the obligation of the accountant to take action as prescribed in volume 1, section AU 561 of the professional standards of the American Institute of Certified Public Accountants.
For the purposes of this article the following definitions shall apply:(a) "Insurer" means and includes every person engaged as indemnitor, surety or contractor in the business of entering into contracts of insurance or of annuities as limited to:Any insurer who is doing an insurer business, or has transacted insurance in this state, and against whom claims arising from that transaction may exist now or in the future;This shall include, but not be limited to, any domestic insurer as defined in section six, article one of chapter thirty-three and any foreign insurer as defined in section seven, article one of said chapter thirty-three including any stock insurer, mutual insurer, reciprocal insurer, farmers' mutual fire insurance company, fraternal benefit society, hospital service corporation, medical service corporation, dental service corporation, health service corporation, health care corporation, health maintenance organization, captive insurance company or risk retention group.(b) "Exceeded its powers" means the following conditions:(1) The insurer has refused to permit examination of its books, papers, accounts, records or affairs by the commissioner, his deputy, employees, or duly commissioned examiners;(2) A domestic insurer has unlawfully removed from this state books, papers, accounts or records necessary for an examination of the insurer;(3) The insurer has failed to promptly comply with the applicable financial reporting statutes or rules and departmental requests relating thereto;(4) The insurer has neglected or refused to observe an order of the commissioner to make good, within the time prescribed by law, any prohibited deficiency in its capital, capital stock or surplus;(5) The insurer is continuing to transact business or write insurance after its license has been revoked or suspended by the commissioner;(6) The insurer, by contract or otherwise, has unlawfully or has in violation of an order of the commissioner or has without first having obtained written approval of the commissioner if approval is required by law;(A) Totally reinsured its entire outstanding business; or(B) Merged or consolidated substantially its entire property or business with another insurer.(7) The insurer engaged in any transaction in which it is not authorized to engage under the laws of this state; or(8) The insurer refused to comply with a lawful order of the commissioner.(c) "Consent" means agreement to administrative supervision by the insurer.
There shall be no liability on the part of, and no cause of action of any nature shall arise against, the Insurance Commissioner or the division or its employees or agents thereof for any action taken by them in the performance of their powers and duties under this article.
The provisions of this article shall only apply to:(a) All domestic insurers; and(b) Any other insurer doing business in this state whose state of domicile has asked the commissioner to apply the provisions of this article as regards such insurer.
(a) An insurer may be subject to administrative supervision by the commissioner if upon examination or at any other time it appears in the commissioner's discretion that:(1) The insurer's condition renders the continuance of its business hazardous to the public, to its insureds or to its creditors;(2) The insurer has or appears to have exceeded its powers granted under its certificate of authority and applicable law;(3) The insurer has failed to comply with the applicable provisions of this chapter or chapter twenty-three of this code;(4) The business of the insurer is being conducted fraudulently; or(5) The insurer gives its consent.(b) If the commissioner determines that one or more of the conditions set forth in subsection (a) of this section exist, the commissioner shall enter an order placing the insurer under administrative supervision of the commissioner. The order shall:(1) Notify the insurer of the commissioner's determination and set forth the conduct, conditions and grounds upon which the commissioner based the determination;(2) Set forth all requirements necessary to abate the determination; and(3) Notify the insurer that it is under the supervision of the commissioner and that the commissioner is applying and effectuating the provisions of the article.(c) (1) If placed under administrative supervision, the insurer shall have sixty days, or another period of time as designated by the commissioner, to comply with the requirements of the commissioner subject to the provisions of this article.(2) If it is determined after notice and hearing that conditions giving rise to the supervision still exist at the end of the supervision period specified above, the commissioner may enter an order to extend such period.(3) If it is determined by the commissioner that conditions giving rise to the supervision have been corrected, the commissioner shall enter an order to release the insurer from supervision.(d) (1) An insurer subject to an order placing the insurer under administrative supervision may contest and seek review of the order, or any extensions or modifications thereof, pursuant to the provisions of section thirteen, article two of this chapter. Every notice of hearing shall state the time and place of the hearing and the conduct, condition or ground upon which the commissioner based the order. Unless mutually agreed between the commissioner and the insurer, the hearing shall occur not less than ten days nor more than thirty days after notice is served.(2) A hearing upon an order of the commissioner in which the commissioner is alleging, pursuant to subdivision (1), subsection (a) of this section that the insurer's condition renders the continuance of its business hazardous to the public, its insureds or its creditors shall be held privately unless the insurer requests a public hearing, in which case the hearing shall be public.(3) During the period of supervision, the insurer may contest an action taken or proposed to be taken by the supervisor specifying the manner wherein the action being complained of would not result in improving the condition of the insurer.
(a) Standards. -- In making a determination pursuant to subdivision (1), subsection (a), section three of this chapter as to whether the continued operation of an insurer transacting an insurance business in this state might be deemed to be hazardous to the public, to its insureds or to its creditors, the commissioner may consider the following standards either singly or in combination:(1) Adverse findings reported in financial condition and market conduct examination reports, audit reports and actuarial opinions, reports or summaries;(2) The National Association of Insurance Commissioners' insurance regulatory information system and its other financial analysis solvency tools and reports;(3) Whether the insurer has made adequate provision, according to presently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the insurer, when considered in light of the assets held by the insurer with respect to such reserves and related actuarial items including, but not limited to, the investment earnings on such assets and the considerations anticipated to be received and retained under such policies and contracts;(4) The ability of an assuming reinsurer to perform and whether the insurer's reinsurance program provides sufficient protection for the insurer's remaining surplus, after taking into account the insurer's cash flow and the classes of business written as well as the financial condition of the assuming reinsurer;(5) Whether the insurer's operating loss in the last twelve-month period or any shorter period of time, including but not limited to net capital gain or loss, change in nonadmitted assets and cash dividends paid to shareholders, is greater than fifty percent of such insurer's remaining surplus as regards policyholders in excess of the minimum required;(6) Whether the insurer's operating loss in the last twelve-month period or any shorter period of time, excluding net capital gains, is greater than twenty percent of the insurer's remaining surplus as regards policyholders in excess of the minimum required;(7) Whether a reinsurer, obligor or any entity within the insurer's insurance holding company system is insolvent, threatened with insolvency or delinquent in payment of its monetary or other obligations and which in the opinion of the commissioner may affect the solvency of the insurer;(8) Contingent liabilities, pledges or guaranties which either individually or collectively involve a total amount which in the opinion of the commissioner may affect the solvency of the insurer;(9) Whether any controlling person of an insurer is delinquent in the transmitting to, or payment of, net premiums to such insurer;(10) The age and collectability of receivables;(11) Whether the management of an insurer, including officers, directors or any other person who directly or indirectly controls the operation of such insurer, fails to possess and demonstrate the competence, fitness and reputation deemed necessary to serve the insurer in such position;(12) Whether management of an insurer has failed to respond to inquiries relative to the condition of the insurer or has furnished false and misleading information concerning an inquiry;(13) Whether the insurer has failed to meet financial and holding company filing requirements in the absence of a reason satisfactory to the commissioner;(14) Whether management of an insurer has filed any false or misleading sworn financial statement, released a false or misleading financial statement to lending institutions or to the general public, or made a false or misleading entry or omitted an entry of material amount in the books of the insurer;(15) Whether the insurer has grown so rapidly and to such an extent that it lacks adequate financial and administrative capacity to meet its obligations in a timely manner;(16) Whether the insurer has experienced or will experience in the foreseeable future cash flow or liquidity problems;(17) Whether management has established reserves that do not comply with minimum standards established by this chapter or the rules promulgated thereunder, statutory accounting standards, sound actuarial principles and standards of practice;(18) Whether management persistently engages in material under-reserving that results in adverse development;(19) Whether transactions among affiliates, subsidiaries or controlling persons for which the insurer receives assets or capital gains, or both, do not provide sufficient value, liquidity or diversity to assure the insurer's ability to meet its outstanding obligations as they mature; and(20) Any other finding determined by the commissioner to be hazardous to the insurer's insureds, creditors or the general public.(b) Commissioner's authority. -- For the purposes of making a determination of an insurer's financial condition under this section, the commissioner may:(1) Disregard any credit or amount receivable resulting from transactions with a reinsurer that is insolvent, impaired or otherwise subject to a delinquency proceeding;(2) Make appropriate adjustments, including disallowance, to asset values attributable to investments in or transactions with parents, subsidiaries or affiliates consistent with the NAIC Accounting Policies And Procedures Manual, state laws and rules;(3) Refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor; or(4) Increase the insurer's liability in an amount equal to any contingent liability, pledge or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next twelve-month period.(c) Order. -- If the commissioner determines that the continued operation of the insurer may be hazardous to its insureds, creditors or the general public, then the commissioner may order the insurer to do one or more of the following: Provided, That if the insurer is a foreign insurer, the commissioner's order may be limited to the extent provided by statute:(1) Reduce the total amount of present and potential liability for policy benefits by reinsurance;(2) Reduce, suspend or limit the volume of business being accepted or renewed;(3) Reduce general insurance and commission expenses by specified methods;(4) Increase the insurer's capital and surplus;(5) Suspend or limit the declaration and payment of dividend by an insurer to its stockholders or to its policyholders;(6) File reports in a form acceptable to the commissioner concerning the market value of an insurer's assets;(7) Limit or withdraw from certain investments or discontinue certain investment practices to the extent the commissioner deems necessary;(8) Document the adequacy of premium rates in relation to the risks insured;(9) File, in addition to regular annual statements, interim financial reports on the form adopted by the National Association of Insurance Commissioners or in such format as promulgated by the commissioner;(10) Correct corporate governance practice deficiencies, and adopt and utilize governance practices acceptable to the commissioner;(11) Provide a business plan to the commissioner in order to continue to transact business in the state; or(12) Notwithstanding any other provision of law limiting the frequency or amount of premium rate adjustments, adjust rates for any nonlife insurance product written by the insurer that the commissioner considers necessary to improve the financial condition of the insurer.
(a) Notwithstanding any other provision of law and except as set forth in this section, proceedings, hearings, notices, correspondence, reports, records and other information in the possession of the commissioner relating to the supervision of any insurer shall not be subject to disclosure as provided in article one, chapter twenty-nine-b of this code, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action, except as provided by this section. However, the commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as part of the commissioner's official duties.(b) The personnel of the offices of the Insurance Commissioner shall have access to these proceedings, hearings, notices, correspondence, reports, records or information as permitted by the commissioner. Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any such documents, materials or information.(c) The commissioner may share the notices, correspondence, reports, records or information with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities, if the commissioner determines that the disclosure is necessary or proper for the enforcement of the laws of this or another state of the United States, and provided that the recipient agrees to maintain the confidentiality of the documents, material or other information. No waiver of any applicable privilege or claim of confidentiality shall occur as a result of the sharing of documents, materials or other information pursuant to this subsection.(d) The commissioner may open the proceedings or hearings or make public the notices, correspondence, reports, records or other information if the commissioner deems that it is in the best interest of the public, the insurer, its insureds, creditors or the general public.(e) This section does not apply to hearings, notices, correspondence, reports, records or other information obtained upon the appointment of a receiver for the insurer by a court of competent jurisdiction.
An insurer may not engage in the following actions during the period of supervision, without the prior approval of the commissioner or his or her special deputy supervisor:(1) Dispose of, convey, or encumber any of its assets or its business in force;(2) Withdraw any of its bank accounts;(3) Lend any of its funds;(4) Invest any of its funds;(5) Transfer any of its property;(6) Incur any debt, obligation or liability;(7) Merge or consolidate with another company;(8) Approve new premiums or renew any policies;(9) Enter into any new reinsurance contract or treaty;(10) Terminate, surrender, forfeit, convert or lapse any insurance policy, certificate or contract, except for nonpayment of premiums due;(11) Release, pay or refund premium deposits, accrued cash or loan values, unearned premiums, or other reserves on any insurance policy, certificate or contract;(12) Make any material change in management; or(13) Increase salaries and benefits of officers or directors or the preferential payment of bonuses, dividends, or other payments deemed preferential.
Nothing contained in this article shall preclude the commissioner from initiating judicial proceedings to place an insurer in rehabilitation or liquidation proceedings or other delinquency proceedings, however designated under the laws of this state, regardless of whether the commissioner has previously initiated administrative supervision proceedings under this article against the insurer.
The division is empowered to adopt reasonable rules pursuant to chapter twenty-nine-a of this code deemed necessary for the implementation of this article.
Notwithstanding any other provision of this code to the contrary, the commissioner may meet with a special deputy supervisor appointed under this article and with the attorney or other representative of the special deputy supervisor, without the presence of any other person, at the time of any proceeding or during the pendency of any proceeding held under authority of this article to carry out the commissioner's responsibilities as provided in this article or for the special deputy supervisor to carry out his or her duties as provided in this article.
(1) During the period of supervision the division by contract or otherwise may appoint a special deputy supervisor to supervise the insurer. In the event that a special deputy supervisor is not appointed, the commissioner shall serve in such capacity. (2) Each insurer which is subject to administrative supervision by the department shall pay to the division the expenses of its administrative supervision at the rates established by the division. Expenses shall include actual travel expenses, a reasonable living expense allowance, compensation of the special deputy supervisor or other persons employed or appointed by the division for purposes of the supervision, and necessary attendant administrative cost of the division directly related to the supervision. The travel expense and living expense allowance shall be limited to those expenses necessarily incurred in the performance of official duties relating to the administrative supervision and shall be paid by the insurer together with compensation upon presentation by the division to the insurer of a detailed account of the charges and expenses after a detailed statement has been filed by the special deputy supervisor or other person employed or appointed by the division and approved by the division.(3) All moneys collected from insurers for the expenses of administrative supervision shall be deposited into an account created in the State Treasury designated the "Insurance Commissioner's Regulatory Trust Fund", and the division is authorized to make deposits when required into this fund from moneys collected in the commissioner's "Operating-Additional Fees" account.(4) The division is authorized to pay to the special deputy supervisor or person employed or appointed by the division for purposes of the supervision out of such trust fund,as created in subsection three of this section, the actual travel expenses, reasonable living expense allowance, and compensation in accordance with the statement filed with the division by the special deputy supervisor or other person, as provided in subsection (2), upon approval by the division.(5) The division may in whole or in part defer payment of expenses due from the insurer pursuant to this section upon a showing that payment would adversely impact the financial condition of the insurer and jeopardize its rehabilitation. The payment shall be made by the insurer when the condition is removed and the payment would no longer jeopardize the insurer's financial condition.
For the purposes of this article, the following words shall mean:(a) "Insurer" means any insurance company or other insurer licensed to do business in this state. This includes, but is not limited to, any domestic insurer as defined in section six, article one of this chapter and includes any domestic stock insurance company, mutual insurance company, reciprocal insurance company, farmers' mutual fire insurance company, fraternal benefit society, hospital service corporation, medical service corporation, dental service corporation, health service corporation, health care corporation, health maintenance organization, captive insurance company or risk retention group.(b) "Impaired" means a financial situation in which, based upon the requirements of this chapter for the preparation of the insurer's annual statement, the insurer's assets are less than the insurer's liabilities and the required reserves together with the insurer's minimum required capital and minimum required surplus as required by this chapter to be maintained to transact the type of business for which the insurer is authorized by this chapter to transact.(c) "Chief executive officer" means the person, irrespective of their title, designated by the board of directors or board of trustees or other similar governing body of an insurer as the person charged with the responsibility and authority of administering and implementing the insurer's policies and procedures.
(a) Whenever an insurer is impaired, its chief executive officer shall immediately notify the commissioner in writing of such impairment and shall also immediately notify in writing all of the members of the board of directors, board of trustees or other similar governing body of the insurer.(b) Any officer, director or trustee of an insurer shall immediately notify the person serving as chief executive officer of the impairment of such insurer in the event such officer, director, or trustee knows or has reason to know that the insurer is impaired.
(a) Any person who knowingly violates section two of this article is guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than $50,000 or be imprisoned in the county jail not more than one year, or both fined and imprisoned.(b) Any person who knowingly:(1) Conceals any property belonging to an insurer;(2) Transfers or conceals in contemplation of a state insolvency proceeding his own property or property belonging to an insurer;(3) Conceals, destroys, mutilates, alters or makes a false entry in any document which affects or relates to the property of an insurer or withholds any such document from a receiver, trustee or other officer of a court entitled to its possession; or(4) Gives, obtains or receives a thing of value for acting or forbearing to act in any court proceeding, and any such act results in or contributes to an insurer becoming impaired or insolvent, is guilty of a felony, and, upon conviction thereof, shall be imprisoned in the penitentiary not more than five years.
This article may be cited as the "Business Transacted with Producer Controlled Insurer Act."
As used in this article:(a) "Accredited state" means a state in which the insurance department or regulatory agency has qualified as meeting the minimum financial regulatory standards promulgated and established from time to time by the national association of insurance commissioners.(b) "Control" or "controlled" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person or controls or appoints a majority of the board of directors, voting members or similar governing body of any other person. This presumption may be rebutted by a showing made in the manner provided by subsection (l), section four, article twenty-seven of this chapter that control does not exist in fact. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.(c) "Controlled insurer" means a licensed insurer which is controlled, directly or indirectly, by a producer.(d) "Controlling producer" means a producer who, directly or indirectly, controls an insurer.(e) "Licensed insurer" or "insurer" means any person, firm, association or corporation duly licensed to transact a property or casualty insurance business, or both property and casualty insurance, in this state: Provided, That the following are not licensed insurers for the purposes of this article:(1) All residual market pools and joint underwriting authorities or associations; and(2) All captive insurance companies as defined in article thirty-one of this chapter: Provided, That a captive insurance company organized as a risk retention group shall be considered a licensed insurer for the purposes of this article.(f) "Producer" means an insurance broker or brokers or any other person, firm, association or corporation, when, for any compensation, commission or other thing of value, the person, firm, association or corporation acts or aids in any manner in soliciting, negotiating or procuring the making of any insurance contract on behalf of an insured other than the person, firm, association or corporation: Provided, That the designation of any individual or entity as a producer does not expand upon or provide for activities beyond those permitted by article twelve of this chapter.
This article applies to licensed insurers as defined in section two of this article, either domiciled in this state or domiciled in a state that does not have in effect a substantially similar law. All provisions of article twenty-seven of this chapter, to the extent they are not superseded by this article, shall continue to apply to all parties within holding company systems subject to this article.
(a) The provisions of this section apply if, in any calendar year, the aggregate amount of gross written premium on business placed with a controlled insurer by a controlling producer is equal to or greater than five percent of the admitted assets of the controlled insurer, as reported in the controlled insurers' quarterly statement filed as of September 30, of the prior year: Provided, That the provisions of this section shall not apply if:(1) The controlling producer:(A) Places insurance only with the controlled insurer or only with the controlled insurer and a member or members of the controlled insurer's holding company system or the controlled insurer's parent, affiliate or subsidiary and receives no compensation based upon the amount of premiums written in connection with such insurance; and(B) Accepts insurance placements only from nonaffiliated subproducers, and not directly from insureds; and(2) The controlled insurer accepts insurance business only from a controlling producer, a producer controlled by the controlled insurer, or a producer that is a subsidiary of the controlled insurer: Provided, That the provisions of this subdivision do not apply to insurance business written through a residual market facility such as the "West Virginia Essential Property Insurance Association" or the "West Virginia Automobile Insurance Plan."(b) A controlled insurer may not accept business from a controlling producer and a controlling producer may not place business with a controlled insurer unless there is a written contract between the controlling producer and the insurer specifying the responsibilities of each party, which contract has been approved by the board of directors of the insurer and contains the following minimum provisions:(1) The controlled insurer may terminate the contract for cause, upon written notice to the controlling producer. The controlled insurer shall suspend the authority of the controlling producer to write business during the pendency of any dispute regarding the cause for the termination;(2) The controlling producer shall render accounts to the controlled insurer detailing all material transactions, including information necessary to support all commissions, charges and other fees received by, or owing to, the controlling producer;(3) The controlling producer shall remit all funds due under the terms of the contract to the controlled insurer on at least a monthly basis. The due date shall be fixed so that premiums or installments thereof collected shall be remitted no later than ninety days after the effective date of any policy placed with the controlled insurer under this contract;(4) All funds collected for the controlled insurer's account shall be held by the controlling producer in a fiduciary capacity, in one or more appropriately identified bank accounts in banks that are members of the federal reserve system, in accordance with the applicable provisions of this chapter. However, funds of a controlling producer not required to be licensed in this state shall be maintained in compliance with the requirements of the controlling producer's domiciliary jurisdiction;(5) The controlling producer shall maintain separately identifiable records of business written for the controlled insurer;(6) The contract may not be assigned in whole or in part by the controlling producer;(7) The controlled insurer shall provide the controlling producer with its underwriting standards, rules and procedures manuals setting forth the rates to be charged and the conditions for the acceptance or rejection of risks. The controlling producer shall adhere to the standards, rules, procedures, rates and conditions. The standards, rules, procedures, rates and conditions shall be the same as those applicable to comparable business placed with the controlled insurer by a producer other than the controlling producer;(8) The rates and terms of the controlling producer's commissions, charges or other fees and the purposes for those charges or fees. The rates of the commissions, charges and other fees may be no greater than those applicable to comparable business placed with the controlled insurer by producers other than controlling producers. For purposes of this subdivision and subdivision (7) of this subsection, examples of "comparable business" includes the same lines of insurance, same kinds of insurance, same kinds of risks, similar policy limits and similar quality of business;(9) If the contract provides that the controlling producer, on insurance business placed with the insurer, is to be compensated contingent upon the insurer's profits on that business, then the compensation may not be determined and paid until at least five years after the premiums on liability insurance are earned and at least one year after the premiums are earned on any other insurance. In no event may the commissions be paid until the adequacy of the controlled insurer's reserves on remaining claims has been independently verified pursuant to subdivision (1), subsection (d) of this section;(10) A limit on the controlling producer's writings in relation to the controlled insurer's surplus and total writings. The insurer may establish a different limit for each line or subline of business. The controlled insurer shall notify the controlling producer when the applicable limit is approached and shall not accept business from the controlling producer if the limit is reached. The controlling producer may not place business with the controlled insurer if it has been notified by the controlled insurer that the limit has been reached; and(11) The controlling producer may negotiate but may not bind reinsurance on behalf of the controlled insurer on business the controlling producer places with the controlled insurer, except that the controlling producer may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the controlled insurer contains underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which the automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured and commission schedules.(c) Every controlled insurer shall have an audit committee of the board of directors composed of independent directors. The audit committee shall annually meet with management, the insurer's independent certified public accountants, and an independent casualty actuary or other independent loss reserve specialist acceptable to the commissioner to review the adequacy of the insurer's loss reserves.(d) In addition to any other required loss reserve certification, the controlled insurer shall annually, on April 1 of each year, file with the commissioner the following:(1) An opinion of an independent casualty actuary or any other independent loss reserve specialist acceptable to the commissioner, reporting loss ratios for each line of business written and attesting to the adequacy of loss reserves established for losses incurred and outstanding as of year-end, including incurred but not reported losses, on business placed by the producer; and(2) A report and summary of the amount of commissions paid to the producer, the percentage such amount represents of the net premiums written and comparable amounts and percentage paid to noncontrolling producers for placements of the same kinds of insurance.
The producer, prior to the effective date of the policy, shall deliver written notice to the prospective insured disclosing the relationship between the producer and the controlled insurer. If the business is placed through a subproducer who is not a controlling producer, the controlling producer shall retain in his records a signed commitment from the subproducer that the subproducer is aware of the relationship between the insurer and the producer and that the subproducer has or will notify the insured.
(a) If the commissioner believes that the controlling producer or any other person has not materially complied with this article, or any rule or order promulgated hereunder, after notice and opportunity to be heard, the commissioner may order the controlling producer to cease placing business with the controlled insurer.(b) If it is found that because of any material noncompliance that the controlled insurer or any policyholder thereof has suffered any loss or damage, the commissioner may maintain a civil action or intervene in an action brought by or on behalf of the insurer or policyholder for recovery of compensatory damages for the benefit of the insurer or policyholder or other appropriate relief.(c) If an order for liquidation or rehabilitation of the controlled insurer has been entered pursuant to article ten of this chapter and the receiver appointed under that order believes that the controlling producer or any other person has not materially complied with this article or any rule or order promulgated hereunder, and the insurer suffered any loss or damage therefrom, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer.(d) Nothing contained in this section may affect the right of the commissioner to impose any other penalties provided for in this chapter.(e) Nothing contained in this section is intended to or may in any manner alter or affect the rights of policyholders, claimants, creditors or other third parties.
Controlled insurers and controlling producers who are not in compliance with section four of this article on its effective date have sixty days to come into compliance. The controlled insurers and controlling producers have sixty days after the effective date of this article to comply with section five of this article.
For the purposes of this article:(a) "Actuary" means a person who is a member in good standing of the American academy of actuaries.(b) "Home state" means the District of Columbia or any state or territory of the United States in which a managing general agent is incorporated or maintains its principal place of business. If neither the state in which the managing general agent is incorporated, nor the state in which the managing general agent maintains its principal place of business has adopted this article or a substantially similar law governing managing general agents, the managing general agent may declare another state in which it conducts business to be its "home state".(c) "Insurer" means any person, firm, association or corporation duly licensed in this state as an insurance company pursuant to article three of this chapter. Insurer includes, but is not limited to, any domestic insurer as defined in section six, article one of this chapter and any foreign insurer as defined in section seven of said article, including any stock insurer, mutual insurer, reciprocal insurer, farmers' mutual fire insurance company, fraternal benefit society, hospital service corporation, medical service corporation, dental service corporation, health service corporation, health care corporation, health maintenance organization, captive insurance company or risk retention group.(d) "Managing general agent" (MGA) means any person, firm, association or corporation who:(1) Manages all or part of the insurance business of an insurer (including the management of a separate division, department or underwriting office); and(2) Acts as an agent for such insurer whether known as a managing general agent, manager or other similar term who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year together with one or more of the following activities related to the business produced:(A) Adjusts or pays claims in excess of $10,000 per claim; or (B) Negotiates reinsurance on behalf of the insurer.(3) Notwithstanding the above, the following persons are not considered managing general agents for the purposes of this article:(A) An employee of the insurer;(B) A U.S. manager of the United States branch of an alien insurer;(C) An underwriting manager which, pursuant to contract, manages all or part of the insurance operations of the insurer, is under common control with the insurer, subject to the holding company regulatory act, and whose compensation is not based on the volume of premiums written; and(D) The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or interinsurance exchange under powers of attorney.(e) "Person" means an individual or a business entity.(f) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.
(a) No domestic, foreign or alien insurer may permit a person to act, and no person may act, in the capacity of a managing general agent for an insurer in this state unless the person is licensed in this state to act as a managing general agent.(b) No person may act in the capacity of a managing general agent with respect to risks located in this state for an insurer licensed in this state unless the person is a licensed insurance producer in this state.(c) The commissioner may license as a managing general agent any individual or business entity that has complied with the requirements of this article and any related rules. The commissioner may refuse to issue a license if he or she believes the applicant, any person named on the application, or any member, principal, officer or director of the applicant is not trustworthy or competent to act as a managing general agent, or that any of the foregoing persons has given cause for revocation or suspension of the license or has failed to comply with any prerequisite for issuance of the license.(d) Any person seeking a license pursuant to this section shall apply for the license in a form prescribed by the commissioner and pay a nonrefundable application fee of $500. Each license issued pursuant to this section expires on June 30 following issuance, except that a license initially issued in May or June expires on June 30 of the following year. In order to renew a license, a licensed managing general agent shall submit to the commissioner at least one month prior to expiration a renewal application in a form prescribed by the commissioner and a renewal fee of $200: Provided, That a managing general agent that fails to timely renew a license may reinstate the license, retroactive to its expiration date, upon submission of the renewal application form prior to June 1 following the expiration date and payment of a renewal fee of $400. All fees shall be paid into the State Treasury to the credit of the special revenue account created in subsection (b), section thirteen, article three of this chapter.(e) The commissioner may require a bond in an amount acceptable to him or her for the protection of the insurer.(f) The commissioner may require a managing general agent to maintain an errors and omissions policy that is acceptable to the commissioner.(g) The submission of an application for license pursuant to this section constitutes an appointment by the applicant of the Secretary of State as the agent for service of process on the applicant in any action or proceeding, including administrative actions instituted by the commissioner, arising in this state out of or in connection with the application for or exercise of the license. The appointment of the Secretary of State as agent for service of process shall be irrevocable during the period within which a cause of action against the applicant may arise out of transactions with respect to subjects of insurance in this state. Service of process on the Secretary of State shall conform to the provisions of section twelve, article four of this chapter.(h) A person seeking licensure shall provide evidence, in a form acceptable to the commissioner, of its appointments or contracts as a managing general agent. The commissioner may refuse to renew the license of a person that has not been appointed by, or otherwise authorized to act for, an insurer as a managing general agent.
No person, firm, association or corporation acting in the capacity of a managing general agent may place business with an insurer unless there is in force a written contract between the parties which sets forth the responsibilities of each party and where both parties share responsibility for a particular function, specifies the division of such responsibilities and which contains the following minimum provisions:(a) The insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination.(b) The managing general agent will render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer on not less than a monthly basis.(c) All funds collected for the account of an insurer will be held by the managing general agent in a fiduciary capacity with an FDIC-insured financial institution. This account shall be used for all payments on behalf of the insurer. The managing general agent may retain no more than three months' estimated claims payments and allocated loss adjustment expenses.(d) Separate records of business written by the managing general agent shall be maintained. The insurer shall have access and right to copy all accounts and records related to its business in a form usable by the insurer. The commissioner shall have access to all books, bank accounts and records of the managing general agent in a form usable to the commissioner.(e) The contract may not be assigned, in whole or part, by the managing general agent.(f) The contract shall contain appropriate underwriting guidelines including:(1) The maximum annual premium volume;(2) The basis of the rates to be charged;(3) The types of risks which may be written;(4) Maximum limits of liability;(5) Applicable exclusions;(6) Territorial limitations;(7) Policy cancellation provisions; and(8) The maximum policy period.The insurer shall have the right to cancel or nonrenew any policy of insurance subject to the applicable laws and rules concerning the cancellation and nonrenewal of insurance policies.(g) If the contract permits the managing general agent to settle claims on behalf of the insurer:(1) All claims must be reported to the company in a timely manner; and(2) A copy of the claim file will be sent to the insurer at its request or as soon as it becomes known that the claim:(A) Has the potential to exceed an amount determined by the commissioner or exceeds the limit set by the company, whichever is less;(B) Involves a coverage dispute;(C) May exceed the managing general agents claims settlement authority;(D) Is open for more than six months; or(E) Is closed by payment of an amount set by the commissioner or an amount set by the company, whichever is less.(3) All claims files will be the joint property of the insurer and managing general agent. However, upon an order of liquidation of the insurer, such files shall become the sole property of the insurer or its estate. The managing general agent shall have reasonable access to and the right to copy the files on a timely basis.(4) Any settlement authority granted to the managing general agent may be terminated for cause upon the insurer's written notice to the managing general agent or upon the termination of the contract. The insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination.(h) Where electronic claims files are in existence, the contract must address the timely transmission of the data contained in such files.(i) If the contract provides for a sharing of interim profits by the managing general agent and the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves or controlling claim payments, or in any other manner, interim profits will not be paid to the managing general agent until one year after they are earned for property insurance business and five years after they are earned on casualty business and not until the profits have been verified pursuant to section four of this article.(j) The managing general agent may use only advertising material pertaining to the business issued by an insurer that has been approved in writing by the insurer in advance of its use.(k) The managing general agent may not:(1) Bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which such automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured and commission schedules;(2) Commit the insurer to participate in insurance or reinsurance syndicates;(3) Appoint any individual insurance producer without assuring that the individual insurance producer is lawfully licensed to transact the type of insurance for which he or she is appointed;(4) Without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, which shall not exceed one percent of the insurer's policyholder's surplus as of December 31, of the last completed calendar year;(5) Collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer without prior approval of the insurer. If prior approval is given, a report must be promptly forwarded to the insurer;(6) Except as provided in subsection (g), section four of this article, permit its subproducer to serve on the insurer's board of directors;(7) Jointly employ an individual who is employed with the insurer; or(8) Appoint a submanaging general agent.
(a) The insurer shall have on file an independent audited financial statement or reports for the two most recent fiscal years that provide that the managing general agent has a positive net worth. If the managing general agent has been in existence for less than two fiscal years the managing general agent shall include financial statements or reports, certified by an officer of the managing general agent and prepared in accordance with generally accepted accounting procedures, for any completed fiscal years, and for any month during the current fiscal year for which financial statements or reports have been completed. An audited financial/annual report prepared on a consolidated basis shall include a columnar consolidating or combining worksheet that shall be filed with the report and include the following:(1) Amounts shown on the consolidated audited financial report shall be shown on the worksheet; (2) Amounts for each entity shall be stated separately; and (3) Explanations of consolidating and eliminating entries shall be included.(b) If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary in a form consistent with the requirements for actuarial certifications as imposed upon the insurer by statute or rule of the commissioner attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. This required actuary's opinion is in addition to any other required loss reserve certification.(c) The insurer shall at least semiannually conduct an on-site review of the underwriting and claims processing operations of the managing general agent.(d) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer who shall not be affiliated with the managing general agent.(e) Within thirty days of entering into or terminating a contract with a managing general agent, the insurer shall provide written notification to the commissioner. Notices of entering into a contract with a managing general agent shall include a statement of duties which the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act and any other information the commissioner may request.(f) An insurer shall review its books and records each quarter to determine if any producer as defined by subsection (c), section one of this article has become, by operation of subsection (d) of said section, a managing general agent as defined in that subsection. If the insurer determines that a producer has become a managing general agent pursuant to the above, the insurer shall promptly notify the producer and the commissioner of such determination and the insurer and producer must fully comply with the provisions of this article within thirty days thereafter.(g) An insurer shall not appoint to its board of directors an officer, director, employee, subproducer or controlling shareholder of its managing general agents. This subsection does not apply to relationships governed by the Insurance Holding Company Systems Regulatory Act or the Business Transacted with Producer Controlled Property/Casualty Insurer Act.
The acts of a managing general agent are considered to be the acts of the insurer on whose behalf such agent is acting. A managing general agent may be examined as if it were the insurer pursuant to the provisions of section nine, article two of this chapter.
(a) If the commissioner finds that the managing general agent or any other person has violated any provision of this article, or any rule or order promulgated thereunder, after a hearing conducted in accordance with section thirteen, article two of this chapter, the commissioner may order:(1) For each separate violation, a penalty in an amount not exceeding $10,000;(2) Revocation or suspension of the producer's license;(3) Reimbursement by the managing general agent of the insurer, the rehabilitator or liquidator of the insurer for any losses incurred by the insurer and its policyholders and creditors caused by a violation of this article committed by the managing general agent; and(4) If it was found that because of any such violation that the insurer has suffered any loss or damage, the commissioner may maintain a civil action brought by or on behalf of the insurer and its policyholders and creditors for recovery of compensatory damages for the benefit of the insurer and its policyholders and creditors or other appropriate relief.(b) If an order of rehabilitation or liquidation of the insurer has been entered pursuant to article ten of this chapter and the receiver appointed under that order determines that the managing general agent or any other person has not materially complied with this article, or any rule or order promulgated thereunder, and the insurer suffered any loss or damage therefrom, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer.(c) Nothing contained in this section shall affect the right of the commissioner to impose any other penalties provided for in this chapter.(d) Nothing contained in this article is intended to or shall in any manner limit or restrict the rights of policyholders, claimants and creditors.(e) The decision, determination or order of the commissioner pursuant to subsection (a) of this section shall be subject to judicial review pursuant to section fourteen, article two of this chapter.
The commissioner is authorized to promulgate reasonable rules for the implementation and administration of the provisions of this article pursuant to chapter twenty-nine-a of this code.
This article shall take effect on July 1, 2004. No insurer may continue to use the services of a managing general agent on and after July 1, 2004, except in compliance with this article.
This article may be cited as the "Reinsurance Intermediary Act."
(a) A reinsurance intermediary is subject to examination by the commissioner at his or her discretion. The commissioner shall have access to all books, bank accounts and records of the reinsurance intermediary in a form usable to the commissioner.(b) A reinsurance intermediary-manager may be examined as if it were the reinsurer.
(a) A reinsurance intermediary, insurer or reinsurer found by the commissioner, after a hearing conducted in accordance with section thirteen, article two of this chapter, to be in violation of any provision or provisions of this article, shall:(1) For each separate violation, pay a penalty in an amount not exceeding $5,000;(2) Be subject to revocation or suspension of its license; and(3) If a violation was committed by the reinsurance intermediary, such reinsurance intermediary shall make restitution to the insurer, reinsurer, rehabilitator or liquidator of the insurer or reinsurer for the net losses incurred by the insurer or reinsurer attributable to the violation.(b) The decision, determination or order of the commissioner pursuant to subsection (a) of this section is subject to judicial review pursuant to section fourteen, article two of this chapter.(c) Nothing contained in this section may affect the right of the commissioner to impose any other penalties provided in the insurance law.(d) Nothing contained in this article is intended to or may in any manner limit or restrict the rights of policyholders, claimants, creditors or other third parties or confer any rights to such persons.
The commissioner is hereby authorized to promulgate reasonable rules, pursuant to chapter twenty-nine-a of the West Virginia code, for the implementation and administration of the provisions of this article, these rules to include, but not be limited to, setting reasonable fees and standards for licensing.
Except where it is otherwise specially provided, the Commissioner shall demand and receive the following fees from all reinsurance intermediaries: For receiving and filing annual reports, $100; for filing certified copy of articles of incorporation, $50; for filing copy of its charter, $50; for filing statements preliminary to admission, $100; for filing of designated contract, $25; for filing of notification of termination of a contract with a reinsurance intermediary-manager by the reinsurer, $10; for filing to add or delete names on the reinsurance intermediary license, $25; for filing an address change, $25; for filing a legal name change, $75; for filing a bond or an errors and omissions policy, $25; and for filing any additional documents as required by law or furnishing copies thereof, copies of reports or certificates of condition of reinsurance intermediary to be filed in any other state, $20. All such fees shall be paid into the State Treasury and credited to the special revenue account created in section thirteen, article three of this chapter.
(a) The Commissioner may waive any requirements for a nonresident license applicant with a valid license from the applicant's home state, except the requirements imposed by sections three and three-a of this article, if the applicant's home state awards nonresident licenses to residents of this state on the same basis.(b) A nonresident reinsurance intermediary's satisfaction of his or her home state's continuing education requirements for licensed insurance producers or reinsurance intermediaries shall constitute satisfaction of this state's continuing education requirements if the nonresident's home state recognizes the satisfaction of its continuing education requirements imposed upon insurance producers or reinsurance intermediaries from this state on the same basis.
The definitions set forth in section two, article twelve of this chapter apply to this article. In addition, as used in this article:(a) "Actuary" means a person who is a member in good standing of the American academy of actuaries.(b) "Controlling person" means any person, firm, association or corporation who directly or indirectly has the power to direct or cause to be directed, the management, control or activities of the reinsurance intermediary.(c) "Commissioner" means the Insurance Commissioner of West Virginia.(d) "Insurer" means any person, firm, association or corporation duly licensed in this state pursuant to the applicable provisions of this chapter as an insurer.(e) "Firm" means an individual doing business as a sole proprietor, a partnership, limited liability company, limited liability partnership or other legal entity.(f) "Licensed producer" means an insurance producer or reinsurance intermediary licensed pursuant to the applicable provisions of this chapter.(g) "Reinsurance intermediary" means a reinsurance intermediary-broker or a reinsurance intermediary-manager as these terms are defined in subdivisions (g) and (h) of this section.(h) "Reinsurance intermediary-broker" means any person, other than an officer or employee of the ceding insurer, firm, association or corporation who solicits, negotiates or places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind reinsurance on behalf of such insurer.(i) "Reinsurance intermediary-manager" means any person, firm, association or corporation who has authority to bind or manages all or part of the assumed reinsurance business of a reinsurer, including the management of a separate division, department or underwriting office, and acts as an agent for such reinsurer, whether known as a reinsurance intermediary-manager, manager or other similar term. Notwithstanding the above, the following persons are not considered a reinsurance intermediary-manager, with respect to such reinsurer, for the purposes of this article:(1) An employee of the reinsurer;(2) A United States manager of the United States branch of an alien reinsurer;(3) An underwriting manager who, pursuant to contract, manages all the reinsurance operations of the reinsurer, is under common control with the reinsurer, subject to article twenty-seven of this chapter, and whose compensation is not based on the volume of premiums written.(4) The manager of a group, association, pool or organization of insurers which engage in joint underwriting or joint reinsurance and who are subject to examination by the official charged with regulation of insurance in the state in which the manager's principal business office is located.(j) "Reinsurer" means any person, firm, association or corporation duly licensed or accredited in this state pursuant to the applicable provisions of this chapter as an insurer with the authority to assume reinsurance.(k) "To be in violation" means that the reinsurance intermediary, insurer or reinsurer for whom the reinsurance intermediary was acting failed to substantially comply with the provisions of this article.(l) A "qualified United States financial institution" means an institution that:(1) Is organized or, in the case of a United States office of a foreign banking organization, licensed under the laws of the United States or any state thereof;(2) Is regulated, supervised and examined by federal or state authorities having regulatory authority over banks and trust companies; and(3) Has been determined by either the Commissioner or the securities valuation office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the Commissioner.
(a) No person, firm, association or corporation may act as a reinsurance intermediary-broker in this state if the reinsurance intermediary-broker maintains an office either directly or as a member or employee of a firm or association, or an officer, director or employee of a corporation:(1) In this state, unless such reinsurance intermediary-broker is a licensed insurance producer or reinsurance intermediary in this state; or(2) In another state, unless such reinsurance intermediary-broker is a licensed insurance producer or reinsurance intermediary in this state or another state having a law substantially similar to this article or such reinsurance intermediary-broker is licensed in this state as a nonresident reinsurance intermediary.(b) No person, firm, association or corporation may act as a reinsurance intermediary-manager:(1) For a reinsurer domiciled in this state, unless such reinsurance intermediary-manager is a licensed insurance producer or reinsurance intermediary in this state;(2) In this state, if the reinsurance intermediary-manager maintains an office either directly or as a member or employee of a firm or association, or an officer, director or employee of a corporation in this state, unless such reinsurance intermediary-manager is a licensed insurance producer or reinsurance intermediary in this state;(3) In another state for a nondomestic insurer, unless such reinsurance intermediary-manager is a licensed insurance producer in this state or another state having a law substantially similar to this article or such person is licensed in this state as a nonresident reinsurance intermediary.(c) The Commissioner may require a reinsurance intermediary-manager subject to the provisions of subsection (b) of this section to:(1) File a bond in an amount from an insurer acceptable to the Commissioner for the protection of the reinsurer; and(2) Maintain an errors and omissions policy in an amount acceptable to the Commissioner.(d) Licensed attorneys at law of this state when acting in their professional capacity are exempt from this section.
(a) An applicant for a reinsurance intermediary license shall file with the Commissioner an application on the form prescribed by the Commissioner and pay a nonrefundable application fee of $500.(b) The application shall include: (1) For a firm or association, the name of each member of the firm or association and of each employee of the firm or association who will act as a reinsurance intermediary under the license; and (2) for a corporation, the name of each officer of the corporation and of each employee and director of the corporation who will act as a reinsurance intermediary under the license.(c) The Commissioner shall issue a nonresident reinsurance intermediary license if: (1) The applicant is currently licensed as a resident reinsurance intermediary or insurance producer and is in good standing in his or her home state, has submitted either the application for licensure that the person submitted to his or her home state or a completed application deemed appropriate by the Commissioner and has paid the fees required by this section; and (2) the applicant's home state awards nonresident licenses to residents of this state on the same basis.(d) Any license issued to a firm or association authorizes all the members of the firm or association and any designated employees to act as reinsurance intermediaries under the license and all of these persons shall be named in the application and any supplements thereto. Any license issued to a corporation shall authorize all of the officers, and any designated employees and directors thereof, to act as reinsurance intermediaries on behalf of such corporation and all of these persons shall be named in the application and any supplements thereto. To add a name to or delete a name from a reinsurance intermediary license, the licensee shall submit to the Commissioner the change on a form prescribed by the Commissioner.(e) The Commissioner may refuse to issue or renew a reinsurance intermediary license if the Commissioner finds that the applicant, any individual named on the application, a member, principal, officer or director of the applicant or a controlling person of the applicant is not trustworthy, as that term may be defined by the Commissioner in legislative rules promulgated pursuant to section twelve of this article, to act as a reinsurance intermediary, has given cause for revocation or suspension of a license or has failed to comply with a requirement for issuance of a license.(f) Every nonresident firm, association or corporation licensed as a reinsurance intermediary in this state or acting as a reinsurance intermediary in this state but which is not licensed shall be subject to the provisions of section twelve, article four of this chapter to the same extent as licensed insurers with regard to the service of process and payment of fees.(g) Upon written request, the Commissioner shall furnish a summary of the basis for refusal to issue or renew a license, which document shall be privileged and not subject to the provisions of article one, chapter twenty-nine-a of this code. Within ten days of receipt of the summary, if the applicant or licensee makes a written demand upon the Commissioner for a hearing to determine the reasonableness of the Commissioner's action, a hearing shall be conducted in accordance with the provisions of section thirteen, article two of this chapter.(h) Each license issued pursuant to this article expires on June 30 next following the date of issuance. Between May 1 and June 1 of the renewal year, each licensed reinsurance intermediary shall submit to the Commissioner a renewal application and a nonrefundable annual renewal fee of $200: Provided, That a reinsurance intermediary who allows the reinsurance intermediary license to lapse may, within eleven months from the expiration date, reinstate the same license upon payment of a renewal fee of $400.(i) All application and renewal fees collected by the Commissioner pursuant to the provisions of this section shall be paid into the state Treasury and credited to the special revenue account created in section thirteen, article three of this chapter.(j) Within thirty days of a change in its legal name or mailing address, a licensee shall notify the Commissioner of such change on a form prescribed by the Commissioner, and failure to timely file such form may result in a penalty pursuant to section eleven of this article.
(a) Transactions between a reinsurance intermediary-broker and the insurer it represents in that capacity may only be entered into pursuant to a written authorization, specifying the responsibilities of each party.(b) Each written authorization shall, at a minimum, provide that:(1) The insurer may terminate the reinsurance intermediary-broker's authority at any time.(2) The reinsurance intermediary-broker shall render accounts to the insurer accurately detailing all material transactions, including information necessary to support all commissions, charges and other fees received by, or owing, to the reinsurance intermediary-broker, and remit all funds due to the insurer within thirty days of receipt.(3) All funds collected for the insurer's account shall be held by the reinsurance intermediary-broker in a fiduciary capacity in a bank which is a qualified United States financial institution as defined herein.(4) The reinsurance intermediary-broker shall comply with section five of this article.(5) The reinsurance intermediary-broker shall comply with the written standards established by the insurer for the cession or retrocession of all risks.(6) The reinsurance intermediary-broker shall disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded.
(a) For at least ten years after expiration of each contract of reinsurance transacted by the reinsurance intermediary-broker, the reinsurance intermediary-broker will keep a complete record for each transaction showing:(1) The type of contract, limits, underwriting restrictions, classes or risks and territory;(2) Period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation;(3) Reporting and settlement requirements of balances;(4) Rate used to compute the reinsurance premium;(5) Names and addresses of assuming reinsurers;(6) Rates of all reInsurance Commissions, including the commissions on any retrocessions handled by the reinsurance intermediary-broker;(7) Related correspondence and memoranda;(8) Proof of placement;(9) Details regarding retrocessions handled by the reinsurance intermediary-broker including the identity of retrocessionaires and percentage of each contract assumed or ceded;(10) Financial records, including, but not limited to, premium and loss accounts; and(11) When the reinsurance intermediary-broker procures a reinsurance contract on behalf of a licensed ceding insurer:(A) Directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or(B) If placed through a representative of the assuming reinsurer, other than an employee, written evidence that such reinsurer has delegated binding authority to the representative.(b) The insurer shall have access and the right to copy and audit all accounts and records maintained by the reinsurance intermediary-broker related to its business in a form usable by the insurer.
(a) An insurer may not engage the services of any person, firm, association or corporation to act as a reinsurance intermediary-broker on its behalf unless that person is licensed as required by subsection (a), section three of this article.(b) An insurer may not employ an individual who is employed by a reinsurance intermediary-broker with which it transacts business, unless the reinsurance intermediary-broker is under common control with the insurer and subject to article twenty-seven of this chapter.(c) The insurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-broker with which it transacts business.
(a) Transactions between a reinsurance intermediary-manager and the reinsurer it represents in that capacity may only be entered into pursuant to a written contract, specifying the responsibilities of each party, which shall be approved by the reinsurer's board of directors. At least thirty days before such reinsurer assumes or cedes business through such producer, a true copy of the approved contract shall be filed with the commissioner for approval.(b) Every contract required by this section shall, at a minimum, provide, that:(1) The reinsurer may terminate the contract for cause upon written notice to the reinsurance intermediary-manager. The reinsurer may immediately suspend the authority of the reinsurance intermediary-manager to assume or cede business during the pendency of any dispute regarding the cause for termination.(2) The reinsurance intermediary-manager shall render accounts to the reinsurer accurately detailing all material transactions, including information necessary to support all commissions, charges and other fees received by, or owing to the reinsurance intermediary-manager, and remit all funds due under the contract to the reinsurer on not less than a monthly basis.(3) All funds collected for the reinsurer's account shall be held by the reinsurance intermediary-manager in a fiduciary capacity in a bank which is a qualified United States financial institution as defined herein. The reinsurance intermediary-manager may retain no more than three months estimated claims payments and allocated loss adjustment expenses. The reinsurance intermediary-manager shall maintain a separate bank account for each reinsurer that it represents.(4) For at least ten years after expiration of each contract of reinsurance transacted by the reinsurance intermediary-manager, the reinsurance intermediary-manager shall keep a complete record for each transaction showing:(A) The type of contract, limits, underwriting restrictions, classes of risks and territory;(B) Period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation, and disposition of outstanding reserves on covered risks;(C) Reporting and settlement requirements of balances;(D) Rate used to compute the reinsurance premium;(E) Names and addresses of reinsurers;(F) Rates of all reInsurance Commissions, including the commissions on any retrocessions handled by the reinsurance intermediary-manager;(G) Related correspondence and memoranda;(H) Proof of placement;(I) Details regarding retrocessions handled by the reinsurance intermediary-manager, as permitted by subsection (d), section nine of this article, including the identity of retrocessionaires and percentage of each contract assumed or ceded;(J) Financial records, including, but not limited to, premium and loss accounts; and(K) When the reinsurance intermediary-manager places a reinsurance contract on behalf of a ceding insurer:(i) Directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or(ii) If placed through a representative of the assuming reinsurer, other than an employee, written evidence that such reinsurer has delegated binding authority to the representative.(5) The reinsurer shall have access and the right to copy all accounts and records maintained by the reinsurance intermediary-manager related to its business in a form usable by the reinsurer.(6) The contract cannot be assigned in whole or in part by the reinsurance intermediary-manager.(7) The reinsurance intermediary-manager shall comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection or cession of all risks.(8) Sets forth the rates, terms and purposes of commissions, charges and other fees which the reinsurance intermediary-manager may levy against the reinsurer.(9) If the contract permits the reinsurance intermediary-manager to settle claims on behalf of the reinsurer:(A) All claims shall be reported to the reinsurer in a timely manner;(B) A copy of the claim file shall be sent to the reinsurer at its request or as soon as it becomes known that the claim:(i) Has the potential to exceed the lesser of an amount determined by the commissioner or the limit set by the reinsurer;(ii) Involves a coverage dispute;(iii) May exceed the reinsurance intermediary-manager's claims settlement authority;(iv) Is open for more than six months; or(v) Is closed by payment of the lesser of an amount set by the commissioner or an amount set by the reinsurer;(C) All claim files will be the joint property of the reinsurer and reinsurance intermediary-manager. However, upon an order of liquidation of the reinsurer these files shall become the sole property of the reinsurer or its estate. The reinsurance intermediary-manager shall have reasonable access to and the right to copy the files on a timely basis;(D) Any settlement authority granted to the reinsurance intermediary-manager may be terminated for cause upon the reinsurer's written notice to the reinsurance intermediary-manager or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination.(10) If the contract provides for a sharing of interim profits by the reinsurance intermediary-manager that these interim profits may not be paid until one year after the end of each underwriting period for property business, and five years after the end of each underwriting period for casualty business, or a later period set by the commissioner for specified lines of insurance, and not until the adequacy of reserves on remaining claims has been verified pursuant to subsection (c), section nine of this article.(11) The reinsurance intermediary-manager shall annually provide the reinsurer with a statement of its financial condition prepared by an independent certified public accountant.(12) The reinsurer shall periodically, at least multiannually, conduct an on-site review of the underwriting and claims processing operations of the reinsurance intermediary-manager.(13) The reinsurance intermediary-manager shall disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with such insurer pursuant to this contract.(14) Within the scope of its actual or apparent authority, the acts of the reinsurance intermediary-manager are deemed to be the acts of the reinsurer on whose behalf it is acting.
The reinsurance intermediary-manager may not:(a) Cede retrocessions on behalf of the reinsurer, except that the reinsurance intermediary-manager may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for the retrocessions. The guidelines shall include a list of reinsurers with which the automatic agreements are in effect, and for each reinsurer, the coverages and amounts or percentages that may be reinsured, and commission schedules.(b) Commit the reinsurer to participate in reinsurance syndicates.(c) Appoint any producer without assuring that the producer is lawfully licensed to transact the type of reinsurance for which he is appointed.(d) Without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or one percent of the reinsurer's policyholder's surplus as of December 31, next preceding.(e) Collect any payment from a retrocessionaire or commit the reinsurer to any claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior approval is given, a report must be promptly forwarded to the reinsurer.(f) Jointly employ an individual who is employed by the reinsurer unless such reinsurance intermediary-manager is under common control with the reinsurer subject to article twenty-seven of this chapter.(g) Appoint a subreinsurance intermediary-manager.
(a) A reinsurer may not engage the services of any person, firm, association or corporation to act as a reinsurance intermediary-manager on its behalf unless that person is licensed as required by subsection (b), section three of this article.(b) The reinsurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-manager which such reinsurer has engaged prepared by an independent certified public accountant in a form acceptable to the commissioner.(c) If a reinsurance intermediary-manager establishes loss reserves, the reinsurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the reinsurance intermediary-manager. This opinion shall be in addition to any other required loss reserve certification.(d) Binding authority for all retrocessional contracts or participation in reinsurance syndicates shall rest with an officer of the reinsurer who may not be affiliated with the reinsurance intermediary-manager.(e) Within thirty days of termination of a contract with a reinsurance intermediary-manager, the reinsurer shall provide written notification of such termination to the commissioner.(f) A reinsurer may not appoint to its board of directors, any officer, director, employee, controlling shareholder or subproducer of its reinsurance intermediary-manager. This subsection does not apply to relationships governed by article twenty-seven of this chapter.
(a) Every insurer domiciled in this state shall file a report with the commissioner disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance programs unless the acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance programs have been submitted to the commissioner for review, approval or information purposes pursuant to other provisions of this chapter.(b) The report required in subsection (a) of this section is due within fifteen days after the end of the calendar month in which any of the foregoing transactions occur.(c) One complete copy of the report, including any exhibits or other attachments filed as part thereof, shall be filed with:(1) The Insurance Commissioner; and(2) The national association of Insurance Commissioners.(d) All reports obtained by or disclosed to the commissioner pursuant to this article shall be given confidential treatment and shall not be subject to subpoena and shall not be made public by the commissioner, the national association of Insurance Commissioners or any other person in accordance with section nineteen, article two of this chapter without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer who would be affected thereby notice and an opportunity to be heard, determines that the interest of policyholders, shareholders or the public will be served by the publication thereof, in which event the commissioner may publish all or any part thereof in such manner as he or she may consider appropriate.
(a) No acquisitions or dispositions of assets need be reported pursuant to section one of this article if the acquisitions or dispositions are not material. For purposes of this article, a material acquisition, or the aggregate of any series of acquisitions during any thirty-day period, is one that is nonrecurring and not in the ordinary course of business and involves more than five percent of the reporting insurer's total admitted assets as reported in its most recent statutory statement filed with the Insurance Commissioner. For purposes of this article, a material disposition, or the aggregate of any series of dispositions during any thirty-day period, is one that is nonrecurring and not in the ordinary course of business and involves more than five percent of the reporting insurer's total admitted assets as reported in its most recent statutory statement filed with the Insurance Commissioner.(b) Asset acquisitions subject to this article include every purchase, lease, exchange, merger, consolidation, succession or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for such purpose.(c) Asset dispositions subject to this article include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment, whether for the benefit of creditors or otherwise, abandonment, destruction or other disposition.(d) The following information is required to be disclosed in any report of a material acquisition or disposition of assets:(1) Date of the transaction;(2) Manner of acquisition or disposition;(3) Description of the assets involved;(4) Nature and amount of the consideration given or received;(5) Purpose of, or reason for, the transaction;(6) Manner by which the amount of consideration was determined;(7) Gain or loss recognized or realized as a result of the transaction; and(8) Name(s) of the person(s) from whom the assets were acquired or to whom they were disposed.(e) Insurers are required to report material acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or a one hundred percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and such insurer ceded substantially all of its direct and assumed business to a pool. An insurer is deemed to have ceded "substantially all" of its direct and assumed business to a pool if the insurer has less than $1 million of total direct plus assumed written premiums during a calendar year that are not subject to the pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent of the insurer's capital and surplus. If a group of insurers reports on a consolidated basis as here allowed, the report should identify the individual insurers that are members of the group.
(a) No nonrenewals, cancellations or revisions of ceded reinsurance programs need be reported pursuant to section one of this article if the nonrenewals, cancellations or revisions are not material. For purposes of this article, a material nonrenewal, cancellation or revision is one that affects for property and casualty business, including accident and health business when written as such, more than fifty percent of an insurer's ceded written premium, or for life, annuity and accident and health business, more than fifty percent of the total reserve credit taken for business ceded, on an annualized basis as indicated in the insurer's most recently filed statutory statement: Provided, That no filing is required if the insurer's ceded written premium or the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent of direct plus assumed written premium or ten percent of the statutory reserve requirement prior to any cession, respectively.(b) Subject to the criteria outlined above, a report is to be filed without regard to which party has initiated the nonrenewal, cancellation or revision of ceded reinsurance whenever one or more of the following conditions exist:(1) The entire cession has been canceled, nonrenewed or revised and ceded indemnity and loss adjustment expense reserves after any nonrenewal, cancellation or revision represent less than fifty percent of the comparable reserves that would have been ceded had the nonrenewal, cancellation or revision not occurred;(2) An authorized or accredited reinsurer has been replaced on an existing cession by an unauthorized reinsurer; or(3) Collateral requirements previously established for unauthorized reinsurers have been reduced. For example, the requirement to collateralize incurred but not reported claim reserves has been waived with respect to one or more unauthorized reinsurers newly participating in an existing cession.(4) Subject to the materiality criteria, for purposes of subdivisions (2) and (3) above, a report shall be filed if the result of the revision affects more than ten percent of the cession.(c) The following information is required to be disclosed in any report of a material nonrenewal, cancellation or revision of a ceded reinsurance program:(1) Effective date of the nonrenewal, cancellation or revision;(2) The description of the transaction with an identification of the initiator thereof;(3) Purpose of, or reason for, the transaction; and(4) If applicable, the identity of the replacement reinsurers.(d) Insurers are required to report all material nonrenewals, cancellations or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or a one hundred percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to a pool. An insurer is deemed to have ceded "substantially all" of its direct and assumed business to a pool if the insurer has less than $1 million of total direct plus assumed written premiums during a calendar year that are not subject to the pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent of the insurer's capital and surplus. If a group of insurers reports on a consolidated basis as here allowed, the report shall identify the individual insurers that are members of the group.
This article shall take effect on January 1, 1996.
(a) "Non-U.S. insurer" means an insurer organized under the laws of a foreign country.(b) "United States branch" or "U.S. branch" means the business unit through which business is transacted within the United States by a non-U.S. insurer and the assets and liabilities of the insurer within the United States pertaining to such business.(c) "Home jurisdiction" means the foreign country under whose laws the non-U.S. insurer has been organized.
This article applies to a U.S. branch using this state as a state of entry to transact insurance in the United States. The U.S. branch shall also be subject to all state laws applicable to an insurer domiciled in this state unless otherwise provided.
(a) A non-U.S. insurer may use this state as a state of entry to transact insurance in the United States through a U.S. branch by:(1) Qualifying as an insurer to do business in this state; and(2) Establishing a trust account, pursuant to a trust agreement approved by the commissioner with a U.S. bank approved by the commissioner, in an amount at least equal to the minimum capital and surplus or authorized control level risk based capital, whichever is greater, required to be maintained by a domestic insurer licensed to transact the same kind of insurance.(b) Before authorizing the entry through this state of a U.S. branch of any non-U.S. insurer, the commissioner shall require the non-U.S. insurer, in addition to meeting the requirements of section five of this article and any other requirement of this chapter:(1) To submit a copy of its charter and bylaws, if any, currently in force, and any other documents necessary to show the kinds of business which it is empowered to transact in its home jurisdiction, attested to as accurate and complete by the insurance supervisory official of its home jurisdiction; and a full statement, subscribed and affirmed as true under the penalties of perjury by two officers, or equivalent responsible representatives, in a manner as the commissioner shall prescribe, of its financial conditions as of the close of its latest fiscal year, showing its assets, liabilities, income disbursements, business transacted and other facts required to be shown in its annual statement, as reported to the insurance supervisory official of its home jurisdiction; an English language translation, as necessary, of any other documents required herein; and(2) To submit to an examination of the insurer's affairs at its principal office within the United States. However, the commissioner may instead accept a report of the insurance supervisory official of the insurer's home jurisdiction.
The assets in the trust account shall be known as "trusteed assets" and shall at all times be in an amount equal to the U.S. branch's reserves and other liabilities plus the minimum capital and surplus, or authorized control level risk based capital, whichever is greater, required to be maintained by a domestic insurer licensed to do the same kind of insurance.
(a) The deed of trust and all amendments thereto shall be authenticated in a form and manner as the commissioner may prescribe and shall not be effective unless approved by the commissioner upon a finding that:(1) A deed of trust or its amendments are sufficient in form and in conformity with law;(2) The trustee or trustees are eligible as such; and(3) The deed of trust is adequate to protect the interests of the beneficiaries of the trust.(b) If at any time the commissioner finds, after reasonable notice and hearing, that the requisites for the approval no longer exist, the commissioner may withdraw approval.(c) The commissioner may from time to time approve modifications of, or variations in any deed of trust, which in the commissioner's judgment are not prejudicial to the interests of the people of this state or the United States policyholders and creditors of the U.S. branch.(d) The deed of trust shall contain provisions which:(1) Vest legal title to trusteed assets in the trustees, and their successors lawfully appointed;(2) Require that all assets deposited in the trust shall be continuously kept within the United States;(3) Provide for substitution of a new trustee or trustees in case of a vacancy by death; resignation or otherwise, subject to the approval of the commissioner;(4) Require that the trustee or trustees shall continuously maintain a record at all times sufficient to identify the assets of the fund;(5) Require that the trusteed assets shall consist of cash and/or investments eligible for investment of the funds of domestic insurers and accrued interest thereon if collectible by the trustee;(6) Require that the trust shall be for the exclusive benefit, security and protection of the policyholders, or policyholders and creditors, of the U.S. branch in the United States and that it shall be maintained as long as there is outstanding any liability of the nonU.S. insurer arising out of its insurance transactions in the United States; and(7) Provide, in substance, that no withdrawals of assets, other than income as specified in subsection (e) of this section shall be made or permitted by the trustee or trustees without the approval of the commissioner except to:(A) Make deposits required by law in any state for the security or benefit of all policyholders, or policyholders and creditors, of the U.S. branch in the United States;(B) Substitute other assets permitted by law and at least equal in value and quality to those withdrawn, upon the specific written direction of the United States manager of the U.S. branch when duly empowered and acting pursuant to either general or specific written authority previously given or delegated by the board of directors; or(C) Transfer such assets to an official liquidator or rehabilitator pursuant to an order of a court of competent jurisdiction.(e) The deed of trust may provide that income, earnings, dividends or interest accumulations of the assets of the fund may be paid over the United States manager of the U.S. branch upon request, provided that the total trusteed assets shall not thereby be less than the amount required to be maintained pursuant to section four of this article.(f) Upon withdrawal of trusteed assets deposited in another state in which the insurer is authorized to do business, it shall be sufficient if the deed of trust requires similar written approval of the insurance supervising official of that state in lieu of approval of the commissioner provided that the total trusteed assets shall not thereby be less than the amount required to be maintained pursuant to section four of this article. In all such cases the U.S. branch shall notify the commissioner in writing of the nature and extent of the withdrawal.(g) The commissioner may from time to time:(1) Make examinations of the trusteed assets of any authorized U.S. branch at the insurer's expense; and(2) Require the trustee or trustees to file a statement, in such form as the commissioner may prescribe, certifying the assets of the trust fund and the amounts thereof.(h) Refusal or neglect of any trustee to comply with the foregoing requirements shall be grounds for the revocation of the insurer's license or the liquidation of its United States branch.
(a) In addition to other requirements of this article, every authorized U.S. branch shall, not later than March 1 in each year and forty-five days after the end of each of the first three calendar-year quarters, file with the commissioner and with the National Association of Insurance Commissioners (NAIC):(1) Annual and quarterly statements of the business transacted within the U.S. and the assets held by or for it within the United States for the protection of United States policyholders and creditors within the United States, and of the liabilities incurred against the assets. The forms shall not contain any statement in regard to its assets and business elsewhere. The statements shall be in the same format required of an insurer domiciled in the U.S. branch's state of entry state and licensed to write the same kinds of insurance; and(2) A statement of trusteed surplus, in such form as the commissioner may prescribe, as of the end of the same period covered by the statement filed pursuant to subdivision (1) of this subsection. The aggregate value of the insurer's general state deposits and trusteed assets deposited with a trustee in compliance with section five of this article, plus accrued investment income thereon where the interest is collected by the states for trustees, less the aggregate net amount of all of its reserves and other liabilities in the United States, as determined in accordance with this section, shall be known as its "trusteed surplus" in the United States. In determining the net amount of the U.S. branch's liabilities in the United States to be reported in the statement of trusteed surplus, the U.S. branch shall make adjustments to total liabilities reported on the accompanying annual or quarterly statement as follows:(A) Add back liabilities used to offset admitted assets reported in the accompanying quarterly or annual statement; and(B) Deduct:(i) Unearned premiums on agent's balances or uncollected premiums not more than ninety days past due;(ii) Reinsurance on losses with authorized insurers, less unpaid reinsurance premiums;(iii) Reinsurance recoverables on paid losses from unauthorized insurers that are included as an asset in the annual statement, but only to the extent a liability for unauthorized recoverables is included in the liabilities report in the trusteed surplus statement;(iv) Special state deposits held for the exclusive benefit of policyholders, or policyholders and creditors, of any particular state not exceeding net liabilities reports for that state;(v) Secured accrued retrospective premiums; (vi) If the insurer is a life insurer:(I) The amount of its policy loans to policyholders within the United States, not exceeding the amount of legal reserve required on each policy; and (II) The net amount of uncollected and deferred premiums; and(vii) Any other nontrusteed asset which the commissioner determines secures liabilities in a substantially similar manner; and(3) Any additional information that the commissioner may require relating to the total business or assets, or any portion thereof, of the non-U.S. insurer.(b) The annual statement and trusteed surplus statement shall be signed and verified by the United States manager, attorney-in-fact, or a duly empowered assistant United States manager, of the U.S. branch. The items of securities and other property held under trust deeds shall be certified in the trusteed surplus statement by the United States trustee or trustees.(c) Every report on examination of a U.S. branch shall include a trusteed surplus statement as of the date of examination in addition to the general statement of the financial condition of the U.S. branch.
(a) Before issuing any new or renewal license to any U.S. branch, the commissioner may require satisfactory proof, either in the non-U.S. insurer's charter or by an agreement evidenced by a duly certified resolution of its board of directors, or otherwise as the commissioner may require, that the insurer will not engage in any insurance business in contravention of the provisions of this article or not authorized by its charter.(b) The commissioner shall issue a renewal license to any U.S. branch if satisfied, by proof as he or she considers satisfactory, that the insurer is not delinquent with respect to any requirement imposed by this article, and that its continuance in business in this state will not be hazardous or prejudicial to the best interests of the people of this state.(c) No U.S. branch shall be licensed to do in this state any kind of insurance business, or any combination of kinds of insurance business, which are not permitted to be done by domestic insurers licensed under the provisions of this article. No U.S. branch shall be authorized to do an insurance business in this state if it does anywhere within the United States any kind of business other than an insurance business and the business necessarily or properly incidental to the kind or kinds of insurance business which it is authorized to do in this state.(d) Except as otherwise specifically provided, no U.S. branch, entering through this state or another state, shall be or continue to be authorized to do an insurance business in this state if it fails to comply substantially with any requirement or limitation of this chapter, applicable to similar domestic insurers hereafter organized, which in the judgment of the commissioner is reasonably necessary to protect the interest of the policyholders.(e) No U.S. branch which does outside of this state any kind or combination of kinds of insurance business not permitted to be done in this state by similar domestic insurers hereafter organized, shall be or continue to be authorized to do an insurance business in this state, unless in the judgment of the commissioner the doing of such kind or combination of kinds of insurance business will not be prejudicial to the best interests of the people of this state.(f) No U.S. branch shall be or continue to be authorized to do an insurance business in this state if it fails to keep full and correct entries of its transactions, which shall at all times be open to the inspection of persons invested by law with the rights of inspection and be maintained in its principal office within this state.
Whenever it appears to the commissioner from any annual or quarterly statement or trusteed surplus statement or any other report that a U.S. branch's trusteed surplus is reduced below minimum capital and surplus, or the authorized control level risk based capital, whichever is greater, required to be maintained by a domestic insurer licensed to transact the same kinds of insurance, the commissioner may proceed against the insurer pursuant to the provisions of sections ten and eleven of article three of this chapter, and treat the insurer as one whose condition is such that its further transaction of business in the United States will be hazardous to its policyholders, its creditors or the public in the United States.
No person shall transact insurance in West Virginia or relative to a subject of insurance resident, located or to be performed in West Virginia without complying with the applicable provisions of this chapter.
If any provision of this chapter or the application of such provision to any circumstance is held to be unconstitutional or otherwise invalid, the remainder of this chapter or the application of the provisions to other circumstances shall not be affected thereby. The Legislature hereby declares that it would have passed the remainder of this chapter if it had known that such provision, or its application to any circumstances, would be declared unconstitutional or otherwise invalid.
Except as otherwise expressly stated herein, this chapter shall become effective on January 1, 1958.
The Secretary of State shall be, and is hereby constituted, the attorney-in-fact of every licensed insurer, domestic, foreign or alien, transacting insurance in this state, upon whom all legal process in any action, suit or proceeding against it shall be served and he or she may accept service of the process. The process shall be served upon the Secretary of State, or accepted by him or her, in the same manner as provided for service of process upon unlicensed insurers under subdivisions (2) and (3), subsection (b), section thirteen of this article. Each licensed insurer shall pay to the Secretary of State an annual fee of $25 for services as authorized agent for service of process, one half of which shall be deposited in the state fund, general revenue and one half of the fees in the service fees and collections account established by section two, article one, chapter fifty-nine of this code for the operation of the office of the Secretary of State.
(a) The purpose of this section is to subject certain insurers to the jurisdiction of the courts of this state in suits by or on behalf of insureds or beneficiaries under certain insurance contracts and to subject said insurers to the jurisdiction of the courts of this state in suits by or on behalf of the Insurance Commissioner of West Virginia. The Legislature declares that it is a subject of concern that certain insurers, while not licensed to transact insurance in this state, are soliciting the sale of insurance and selling insurance to residents of this state, thus presenting the Insurance Commissioner with the problem of resorting to courts of foreign jurisdictions for the purpose of enforcing the insurance laws of this state for the protection of our citizens. The Legislature declares that it is also a subject of concern that many residents of this state hold policies of insurance issued or delivered in this state by insurers not licensed to transact insurance in this state, thus presenting to such residents the often insuperable obstacle of resorting to distant fora for the purpose of asserting legal rights under such policies. In furtherance of such state interest, the Legislature herein provides a method of substituted service of process upon such insurers and declares that in so doing it exercises its powers to protect its residents and to define, for the purpose of this section, what constitutes transacting insurance in this state, and also exercises powers and privileges available to the state by virtue of public law number fifteen, seventy-ninth Congress of the United States, chapter twenty, first session, Senate number three hundred forty, as amended, which declares that the business of insurance and every person engaged therein shall be subject to the laws of the several states.(b) (1) Any of the following acts in this state, effected by mail or otherwise, by an unlicensed foreign or alien insurer: (i) The issuance or delivery of contracts of insurance to residents of this state or to corporations authorized to do business therein, (ii) the solicitation of applications for such contracts, (iii) the collection of premiums, membership fees, assessments or other considerations for such contracts, or (iv) any other transaction of business, is equivalent to and shall constitute an appointment by such insurer of the Secretary of State and his or her successor in office, to be its true and lawful attorney, upon whom may be served all lawful process in any action, suit or proceeding instituted by or on behalf of an insured or beneficiary arising out of any such contract of insurance, and in any action, suit or proceeding which may be instituted by the Insurance Commissioner in the name of any such insured or beneficiary or in the name of the State of West Virginia, and in any administrative proceeding before the commissioner, and any such act shall be signification of its agreement that such service of process is of the same legal force and validity as personal service of process in this state upon such insurer.(2) Such service of process upon any such insurer or upon an insurer pursuant to section twenty-two, article three of this chapter in any such action or proceeding in any court of competent jurisdiction of this state, or in any administrative proceeding before the commissioner, may be made by serving the Secretary of State or his or her chief clerk with two copies and an original thereof and the payment to him or her of the fee required by section two, article one, chapter fifty-nine of this code. The Secretary of State shall forward a copy of such process by registered or certified mail to the defendant at its last-known principal place of business and shall keep a record of all process so served upon him or her. Such service of process is sufficient, provided notice of such service and a copy of the process are sent within ten days thereafter by or on behalf of the plaintiff or moving party to the defendant, or responding party, at its last-known principal place of business by registered or certified mail with return receipt requested. The plaintiff or moving party shall file with the clerk of the court in which the action is pending, or with the judge or magistrate of such court in case there be no clerk, or in the official records of the commissioner if an administrative proceeding before the commissioner, an affidavit of compliance herewith, a copy of the process and either a return receipt purporting to be signed by the defendant or responding party or a person qualified to receive its registered or certified mail in accordance with the rules and customs of the post-office department; or, if acceptance was refused by the defendant or responding party or an agent thereof, the original envelope bearing a notation by the postal authorities that receipt was refused. Service of process so made shall be deemed to have been made within the territorial jurisdiction of any court in this state.(3) Service of process in any such action, suit or proceeding shall in addition to the manner provided in subdivision (2) of this subsection (b) be valid if served upon any person within this state who, in this state on behalf of such insurer, is(A) Soliciting insurance, or(B) Making, issuing or delivering any contract of insurance, or(C) Collecting or receiving any premium, membership fee, assessment or other consideration for insurance: Provided, That notice of such service and a copy of such process are sent within ten days thereafter, by or on behalf of the plaintiff or moving party to the defendant or responding party at the last-known principal place of business of the defendant or responding party, by registered or certified mail with return receipt requested. The plaintiff or moving party shall file with the clerk of the court in which the action is pending, or with the judge or magistrate of such court in case there be no clerk, or in the official records of the commissioner if an administrative proceeding before the commissioner, an affidavit of compliance herewith, a copy of the process and either a return receipt purporting to be signed by the defendant or responding party, or a person qualified to receive its registered or certified mail in accordance with the rules and customs of the post-office department; or, if acceptance was refused by the defendant or responding party, or an agent thereof, the original envelope bearing a notation by the postal authorities that receipt was refused.(4) The papers referred to in subdivisions (2) and (3) of this subsection (b) shall be filed within thirty days after the return receipt or other official proof of delivery or the original envelope bearing a notation of refusal, as the case may be, is received by the plaintiff or moving party. Service of process shall be complete ten days after such process and the accompanying papers are filed in accordance with this section.(5) Nothing in this section contained shall limit or abridge the right to serve any process, notice or demand upon any insurer in any other manner now or hereafter permitted by law.(c) (1) Before any unauthorized or unlicensed foreign or alien insurer shall file or cause to be filed any pleading in any action, suit or proceeding instituted against it, or any notice, order, pleading or process in an administrative proceeding before the commissioner instituted against such insurer, such unauthorized or unlicensed insurer shall either: (i) Deposit with the clerk of the court in which such action, suit or proceeding is pending, or with the commissioner in an administrative proceeding before the commissioner, cash or securities or file with such clerk or the commissioner a bond with good and sufficient sureties, to be approved by the court or the commissioner, in an amount to be fixed by the court or commissioner sufficient to secure the payment of any final judgment which may be rendered in such action or administrative proceeding: Provided, That the court or the commissioner may in its, his or her respective discretion make an order dispensing with such deposit or bond where the Auditor of the state shall have certified to such court or commissioner that such insurer maintains within this state funds or securities in trust or otherwise sufficient and available to satisfy any final judgment which may be entered in such action, suit or proceeding; or (ii) procure a license to transact insurance in this state.(2) The court or the commissioner in any action, suit or proceeding in which service is made in the manner provided in subdivision (2) or (3), subsection (b) of this section may, in its, his or her respective discretion, order such postponement as may be necessary to afford the defendant or responding party reasonable opportunity to comply with the provisions of subdivision (1) of this subsection (c) and to defend such action or proceeding.(3) Nothing in subdivision (1) of this subsection (c) is to be construed to prevent an unauthorized or unlicensed foreign or alien insurer from filing a motion to set aside service thereof made in the manner provided in subdivision (2) or (3), subsection (b) of this section on the grounds that such insurer has not done any of the acts enumerated in subdivision (1), subsection (b) of this section, or in section twenty-two, article three of this chapter.(d) In any action against an unauthorized or unlicensed foreign or alien insurer upon a contract of insurance issued or delivered in this state to a resident thereof or to a corporation authorized to do business therein, if the insurer has failed for thirty days after demand prior to the commencement of the action to make payment in accordance with the terms of the contract, and it appears to the court that such refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a reasonable attorney's fee and include such fee in any judgment that may be rendered in such action. Such fee shall not exceed twelve and one-half percent of the amount which the court finds the plaintiff is entitled to recover against the insurer, but in no event shall such fee be less than $25. Failure of an insurer to defend any such action shall be deemed prima facie evidence that its failure to make payment was vexatious and without reasonable cause.
(a) Each licensed insurer shall annually on or before March 1, unless the time is extended by the commissioner for good cause shown, file with the commissioner a true statement of its financial condition, transactions and affairs as of the preceding December 31. Such statement shall be on the appropriate National Association of Insurance Commissioners annual statement blank; shall be prepared in accordance with the National Association of Insurance Commissioners annual statement instructions handbook; and shall follow the accounting practices and procedures prescribed by the National Association of Insurance Commissioners accounting practices and procedures manual as amended: Provided, That each licensed insurer shall also file true statements of financial condition on a more frequent basis if the commissioner so orders. The commissioner shall establish the frequency, due date and form acceptable to him or her for such filings: Provided, however, That the statement of an alien insurer shall relate only to its transactions and affairs in the United States unless the commissioner requires otherwise.(b) Each domestic insurer shall also file with the commissioner a true quarterly statement of its financial condition, transactions and affairs as of March 31, June 30, and September 30, of each year. Quarterly statements shall be due forty-five days after the end of each quarter. All quarterly statements shall be submitted on the appropriate National Association of Insurance Commissioners quarterly statement blank; shall be prepared in accordance with the National Association of Insurance Commissioners quarterly statement instructions; and shall follow the accounting practices and procedures prescribed by the National Association of Insurance Commissioners accounting practices and procedures manual, as amended. The commissioner may subject any licensed insurer to the requirements of this section whenever the commissioner deems it necessary.(c) The commissioner may require that all or part of the information contained in the annual statement blank and the quarterly statement blanks be submitted in a computer-readable form compatible with the electronic data processing system of the department.(d) Each domestic, foreign and alien insurer, organization or corporation that is subject to the requirements of this section shall annually, on or before March 1 each year, and forty-five days after the end of the first, second and third calendar quarters, file with the National Association of Insurance Commissioners a copy of its annual statement convention blank and the quarterly statement blanks, along with such additional filings as prescribed by the commissioner and shall pay the fee established by the National Association of Insurance Commissioners for filing, review or processing of the information. The information filed with the National Association of Insurance Commissioners shall be in the same format and scope as that required by the commissioner and shall include the signed jurat page and any other required information. Any amendments and addenda to the annual statement filing and quarterly statement filings subsequently filed with the commissioner shall also be filed with the National Association of Insurance Commissioners.(e) Foreign insurers that are domiciled in a state which has a law substantially similar to subsection (a) of this section shall be deemed in compliance with this section.(f) In the absence of actual malice, members of the National Association of Insurance Commissioners, their duly authorized committees, subcommittees and task forces, their delegates, National Association of Insurance Commissioners employees and all others charged with the responsibility of collecting, reviewing, analyzing and disseminating the information developed from the filing of the annual statement convention blanks and the quarterly statement blanks shall be acting as agents of the commissioner under the authority of this article and shall not be subject to civil liability for libel, slander or any other cause of action by virtue of their collection, review, and analysis or dissemination of the data and information collected from the filings required hereunder.(g)(1) All financial analysis ratios and examination synopses concerning insurance companies that are submitted to the commissioner by the National Association of Insurance Commissioners insurance regulatory information system, and all actuarial reports, work papers and actuarial summaries submitted by insurers in conjunction with their annual financial statements is confidential by law and privileged. These documents are not subject to disclosure pursuant to chapter twenty-nine-b of this code, are not subject to subpoena and are not subject to discovery or admissible as evidence in any private civil action: Provided, That nothing in this section may be construed to limit the ability of parties in a civil action to discover such information from insurers under the Rules of Civil Procedure.(2) This subsection shall not be construed to limit the commissioner's authority to release the documents to the Actuarial Board for Counseling and Discipline (ABCD), so long as the material is required for the purpose of professional disciplinary proceedings and the ABCD establishes procedures satisfactory to the commissioner for preserving the confidentiality of the documents; nor shall this section be construed to limit the commissioner's authority to use the documents, materials or other information in furtherance of any regulatory or legal action brought as part of the commissioner's official duties.(3) Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subdivision (1) of this subsection. (4) In order to assist in the performance of the commissioner's duties, the commissioner:(A) May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subparagraph (1) of this subsection with other state, federal and international regulatory agencies, and with state, federal and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information and has the legal authority to maintain confidentiality; and(B) May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information.(h) The commissioner may suspend, revoke or refuse to renew the certificate of authority of any insurer failing to file its annual statement or the quarterly statement blanks, or any other statement of financial condition required by this section, when due or within any extension of time which the commissioner, for good cause, may have granted.(i) Any variance to the requirements of this section shall require the express authorization of the commissioner.(j) The commissioner shall propose rules for legislative approval in accordance with article three, chapter twenty-nine-a of this code to effectuate the requirements of this article.
(a) For purposes of this section, an "assumption reinsurance agreement" means any contract which:(1) Transfers insurance obligations and/or risks of existing or in-force contracts of insurance from a transferring insurer to an assuming insurer; and(2) Is intended to effect a novation of the transferred contract of insurance with the result that the assuming insurer becomes directly liable to the policyholders of the transferring insurer and the transferring insurer's insurance obligations and/or risks under the contracts are extinguished.(b) An insurer shall reinsure its risks, or any part thereof, only in solvent insurers complying with the capital and surplus requirements of section five-b, article three of this chapter.(c) Credit for reinsurance shall be governed by the provisions of sections fifteen-a and fifteen-b of this article.(1) No credit shall be allowed, as an admitted asset or deduction from liability, to any ceding insurer for reinsurance, unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance shall be payable under a contract reinsured by the assuming insurer on the basis of reported claims allowed by the liquidation court, without diminution because of the insolvency of the ceding insurer. Payments shall be made directly to the ceding insurer or to its domiciliary liquidator except: (A) Where the contract or other written agreement specifically provides another payee of the reinsurance in the event of the insolvency of the ceding insurer; or (B) where the assuming insurer, with the consent of the direct insured, has assumed the policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under the policies and in substitution for the obligations of the ceding insurer to payees.(2) The reinsurance agreement may provide that the domiciliary liquidator of an insolvent ceding insurer shall give written notice to the assuming insurer of the pendency of a claim against the ceding insurer on the contract reinsured within a reasonable time after the claim is filed in the liquidation proceeding. During the pendency of the claim, any assuming insurer may investigate the claim and interpose, at its own expense, in the proceeding where the claim is to be adjudicated any defenses which it deems available to the ceding insurer or its liquidator. The expense may be filed as a claim against the insolvent ceding insurer to the extent of a proportionate share of the benefit which may accrue to the ceding insurer solely as a result of the defense undertaken by the assuming insurer. Where two or more assuming insurers are involved in the same claim and a majority in interest elect to interpose a defense to the claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement as though the expense had been incurred by the ceding insurer.(d) Any licensed insurer may accept reinsurance for the same kinds of insurance and within the same limits as it is authorized to transact direct insurance.(e) A licensed insurer may reinsure all or substantially all of its risks on property or lives located in West Virginia, or substantially all of a major class thereof, with another insurer by an assumption reinsurance agreement: Provided, That the assumption reinsurance agreement shall not become effective unless filed in advance with and approved in writing by the Commissioner: Provided, however, That if a licensed insurer is deemed by the Commissioner to be in hazardous financial condition, as defined in article thirty-four-a of this chapter, or an administrative or judicial proceeding has been instituted against it for the purpose of liquidating, reorganizing or conserving the insurer, and the transfer of the contracts of insurance is determined by the Commissioner to be in the best interest of the policyholders, the Commissioner may by written order waive the advance filing and approval required by this section, which waiver may include a form of implied consent and adequate notification to the policyholder of the circumstances requiring the transfer.(f) The Commissioner shall approve a reinsurance agreement within one hundred twenty days after the filing of same unless he or she finds that it is inequitable to the licensed insurer, its owners or its policyholders or would substantially reduce the protection or service to its policyholders. If the Commissioner does not approve the agreement, he or she shall notify the insurer in writing specifying his or her reasons therefor. If the Commissioner does not disapprove the agreement within one hundred twenty days, the agreement shall be deemed approved.(g) A filing may not be made pursuant to this section unless the reinsurance agreement is certified under oath by responsible officers of the reinsurer and the reinsured to contain the entire agreement between the parties to the reinsurance agreement.(h) The Commissioner shall promulgate rules pursuant to chapter twenty-nine-a of this code for the implementation and administration of the provisions of this section to include, but not be limited to, the type of assumption agreements subject to the provisions of this section, their content and the standards the Commissioner may utilize in reviewing the agreements.(i) Any insurer subject to this section is also subject to the provisions of article thirty-eight of this chapter.
 (a) The purpose of this section is to protect the interest of insureds, claimants, ceding insurers, assuming insurers, and the public generally. The Legislature hereby declares its intent is to ensure adequate regulation of insurers and reinsurers, and the adequate protection for those to whom they owe obligations. In furtherance of that stated interest, it is hereby mandated that upon the insolvency of a non-United States insurer or reinsurer that provides security to fund its United States obligations in accordance with this section, the assets representing the security shall be maintained in the United States and claims shall be filed with and valued by the state Insurance Commissioner with regulatory oversight, and the assets shall be distributed, in accordance with the insurance laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic United States insurance companies. The Legislature further declares that the matters contained in this section are fundamental to the business of insurance in accordance with 15 U.S.C. 1011-1012.(b) (1) Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of 33-4-15a(b)(2)(A), 33-4-15a(b)(2)(B), 33-4-15a(b)(2)(C), 33-4-15a(b)(2)(D), 33-4-15a(b)(2)(E), 33-4-15a(b)(2)(F), or 33-4-15a(b)(2)(G) of this code: Provided, That the commissioner may adopt by rule pursuant to 33-4-15a(e)(2) of this code additional requirements relating to or setting forth: (A) The valuation of assets or reserve credits; (B) The amount and forms of security supporting reinsurance arrangements described in 33-4-15a(e)(2) of this code; and/or (C) The circumstances pursuant to which credit will be reduced or eliminated.(2) Credit shall be allowed under 33-4-15a(b)(2)(A), 33-4-15a(b)(2)(B), or 33-4-15a(b)(2)(C) of this code only with respect to cessions of those kinds or classes of business which the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance. Credit shall be allowed under 33-4-15a(b)(2)(C) or 33-4-15a(b)(2)(D) of this code only if the applicable requirements of 33-4-15a(b)(2)(H) of this code have been satisfied.(A) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in this state.(B) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is accredited by the commissioner as a reinsurer in this state. To be eligible for accreditation, a reinsurer must:(i) File with the commissioner evidence of its submission to this states jurisdiction;(ii) Submit to this states authority to examine its books and records;(iii) Be licensed to transact insurance or reinsurance in at least one state, or in the case of a United States branch of an alien assuming insurer, be entered through and licensed to transact insurance or reinsurance in at least one state;(iv) File annually with the commissioner a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement; and(v) Demonstrate to the satisfaction of the commissioner that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is considered to meet this requirement as of the time of its application if it maintains a surplus as regards policyholders in an amount not less than $20 million and its accreditation has not been denied by the commissioner within 90 days after submission of its application.(C)(i) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is domiciled in, or in the case of a United States branch of an alien assuming insurer is entered through, a state that employs standards regarding credit for reinsurance substantially similar to those applicable under this statute and the assuming insurer or United States branch of an alien assuming insurer:(I) Maintains a surplus as regards policyholders in an amount not less than $20 million; and(II) Submits to the authority of this state to examine its books and records.(ii) The requirement of 33-4-15a(b)(2)(C)(i)(I) of this code does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system.(D)(i) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified United States financial institution, as defined in 33-4-15a(d)(2) of this code, for the payment of the valid claims of its United States ceding insurers, their assigns and successors in interest. To enable the commissioner to determine the sufficiency of the trust fund, the assuming insurer shall report annually to the commissioner information substantially the same as that required to be reported on the National Association of Insurance Commissioners Annual Statement form by licensed insurers. The assuming insurer shall submit to examination of its books and records by the commissioner and bear the expense of examination.(ii)(I) Credit for reinsurance may not be granted under this paragraph unless the form of the trust and any amendments to the trust have been approved by the commissioner of the state where the trust is domiciled or the commissioner of another state who, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust. (II) The form of the trust and any trust amendments also shall be filed with the commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that contested claims shall be valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in its trustees for the benefit of the assuming insurers United States ceding insurers, their assigns, and successors in interest. The trust and the assuming insurer are subject to examination as determined by the commissioner.(III) The trust shall remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust. No later than February 28 of each year the trustee of the trust shall report to the commissioner in writing the balance of the trust and listing the trusts investments at the preceding year-end and shall certify the date of termination of the trust, if so planned, or certify that the trust will not expire prior to the following December 31.(iii) The following requirements apply to the following categories of assuming insurer:(I) The trust fund for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurers liabilities attributable to reinsurance ceded by United States ceding insurers, and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than $20 million, except as provided in 33-4-15a(b)(2)(D)(iii)(II) of this code.(II) At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least three full years, the commissioner with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of United States ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and shall consider all material risk factors, including when applicable the lines of business involved, the stability of the incurred loss estimates, and the effect of the surplus requirements on the assuming insurers liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than 30 percent of the assuming insurers liabilities attributable to reinsurance ceded by United States ceding insurers covered by the trust.(III)(a) When there is a group, including incorporated and individual unincorporated underwriters for reinsurance ceded under reinsurance agreements with an inception, amendment, or renewal date on or after January 1, 1993, the trust shall consist of a trusteed account in an amount not less than the respective underwriters several liabilities attributable to business ceded by United States domiciled ceding insurers to any underwriter of the group.(b) When there is a group, including incorporated and individual unincorporated underwriters for reinsurance ceded under reinsurance agreements with an inception date on or before December 31, 1992, and not amended or renewed after that date, notwithstanding the other provisions of this section, the trust shall consist of a trusteed account in an amount not less than the respective underwriters several insurance and reinsurance liabilities attributable to business written in the United States. (c) In addition to the trusts described in 33-4-15a(b)(2)(D)(iii)(III)(a) and 33-4-15a(b)(2)(D)(iii)(III)(b) of this code, the group shall maintain in trust a trusteed surplus of which $100 million shall be held jointly for the benefit of the United States domiciled ceding insurers of any member of the group for all years of account.(d) The incorporated members of the group may not be engaged in any business other than underwriting as a member of the group and are subject to the same level of regulation and solvency control by the groups domiciliary regulator as are the unincorporated members.(e) Within 90 days after its financial statements are due to be filed with the groups domiciliary regulator, the group shall provide to the commissioner an annual certification by the groups domiciliary regulator of the solvency of each underwriter member; or if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the group.(IV) When there is a group of incorporated underwriters under common administration, the group shall: (a) Have continuously transacted an insurance business outside the United States for at least three years immediately prior to making application for accreditation;(b) Maintain aggregate policyholders surplus of at least $10 billion;(c) Maintain a trust fund in an amount not less than the groups several liabilities attributable to business ceded by United States domiciled ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group;(d) In addition, maintain a joint trusteed surplus of which $100 million shall be held jointly for the benefit of United States domiciled ceding insurers of any member of the group as additional security for these liabilities; and(e) Within 90 days after its financial statements are due to be filed with the groups domiciliary regulator, make available to the commissioner an annual certification of each underwriter members solvency by the members domiciliary regulator and financial statements of each underwriter member of the group prepared by its independent public accountant.(E) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that has been certified by the commissioner as a reinsurer in this state and secures its obligations in accordance with the requirements of this paragraph.(i) In order to be eligible for certification, the assuming insurer shall meet the following requirements:(I) The assuming insurer shall be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the commissioner pursuant to 33-4-15a(b)(2)(E)(iii) of this code;(II) The assuming insurer shall maintain minimum capital and surplus, or its equivalent, in an amount to be determined by the commissioner pursuant to a rule proposed pursuant to 33-4-15a(e) of this code;(III) The assuming insurer shall maintain financial strength ratings from two or more rating agencies deemed acceptable by the commissioner pursuant to a rule proposed pursuant to 33-4-15a(e) of this code;(IV) The assuming insurer shall agree to submit to the jurisdiction of this state, appoint the commissioner as its agent for service of process in this state, and agree to provide security for 100 percent of the assuming insurers liabilities attributable to reinsurance ceded by United States ceding insurers if it resists enforcement of a final United States judgment;(V) The assuming insurer shall agree to meet applicable information filing requirements as determined by the commissioner, both with respect to an initial application for certification and on an ongoing basis; and(VI) The assuming insurer shall satisfy any other requirements for certification deemed relevant by the commissioner.(ii) An association including incorporated and individual unincorporated underwriters may be a certified reinsurer. In order to be eligible for certification, in addition to satisfying requirements of 33-4-15a(b)(2)(E)(i) of this code:(I) The association shall satisfy its minimum capital and surplus requirements through the capital and surplus equivalents (net of liabilities) of the association and its members, which shall include a joint central fund that may be applied to any unsatisfied obligation of the association or any of its members, in an amount determined by the commissioner to provide adequate protection;(II) The incorporated members of the association may not be engaged in any business other than underwriting as a member of the association and shall be subject to the same level of regulation and solvency control by the associations domiciliary regulator as are the unincorporated members; and(III) Within 90 days after its financial statements are due to be filed with the associations domiciliary regulator, the association shall provide to the commissioner an annual certification by the associations domiciliary regulator of the solvency of each underwriter member; or if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the association.(iii) The commissioner shall create and publish a list of qualified jurisdictions, under which an assuming insurer licensed and domiciled in such jurisdiction is eligible to be considered for certification by the commissioner as a certified reinsurer.(I) In order to determine whether the domiciliary jurisdiction of a non-United States assuming insurer is eligible to be recognized as a qualified jurisdiction, the commissioner shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits, and the extent of reciprocal recognition afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the United States. A qualified jurisdiction shall agree to share information and cooperate with the commissioner with respect to all certified reinsurers domiciled within that jurisdiction. A jurisdiction may not be recognized as a qualified jurisdiction if the commissioner has determined that the jurisdiction does not adequately and promptly enforce final United States judgments and arbitration awards. Additional factors may be considered in the discretion of the commissioner.(II) A list of qualified jurisdictions shall be published through the National Association of Insurance Commissioners Committee Process. The commissioner shall consider this list in determining qualified jurisdictions. If the commissioner approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the commissioner shall provide thoroughly documented justification in accordance with criteria to be developed by rules proposed pursuant to 33-4-15a(e) of this code.(III) United States jurisdictions that meet the requirement for accreditation under the National Association of Insurance Commissioners financial standards and accreditation program shall be recognized as qualified jurisdictions.(IV) If a certified reinsurers domiciliary jurisdiction ceases to be a qualified jurisdiction, the commissioner may suspend the reinsurers certification indefinitely, in lieu of revocation.(iv) The commissioner shall assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings that have been assigned by rating agencies considered acceptable to the commissioner as developed by rules proposed pursuant to 33-4-15a(e) of this code. The commissioner shall publish a list of all certified reinsurers and their ratings.(v) A certified reinsurer shall secure obligations assumed from United States ceding insurers under this paragraph at a level consistent with its rating, as specified in rules proposed pursuant to 33-4-15a(e) of this code.(I) In order for a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the commissioner and consistent with the provisions of 33-4-15a(c) of this code, or in a multibeneficiary trust in accordance with 33-4-15a(b)(2)(D) of this code, except as otherwise provided in this paragraph.(II) If a certified reinsurer maintains a trust to fully secure its obligations subject to 33-4-15a(b)(2)(D) of this code, and chooses to secure its obligations incurred as a certified reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this paragraph or comparable laws of other United States jurisdictions and for its obligations subject to 33-4-15a(b)(2)(D) of this code. It shall be a condition to the grant of certification under this paragraph that the certified reinsurer shall have bound itself, by the language of the trust and agreement with the commissioner with principal regulatory oversight of each such trust account, to fund, upon termination of any such trust account, out of the remaining surplus of such trust any deficiency of any other such trust account.(III) The minimum trusteed surplus requirements provided in 33-4-15a(b)(2)(D) of this code are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred under this paragraph, except that such trust shall maintain a minimum trusteed surplus of $10 million.(IV) With respect to obligations incurred by a certified reinsurer under this paragraph, if the security is insufficient, the commissioner shall reduce the allowable credit by an amount proportionate to the deficiency, and has the discretion to impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurers obligations may not be paid in full when due.(V) For purposes of this paragraph, a certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure 100 percent of its obligations. If the commissioner continues to assign a higher rating as permitted by other provisions of this section, this requirement does not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended. As used in this paragraph, the term "terminated" refers to revocation, suspension, voluntary surrender, and inactive status.(vi) If an applicant for certification has been certified as a reinsurer in a National Association of Insurance Commissioners accredited jurisdiction, the commissioner may defer to that jurisdictions certification, and may defer to the rating assigned by that jurisdiction, and such assuming insurer shall be considered to be a certified reinsurer in this state.(vii) A certified reinsurer that ceases to assume new business in this state may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of this paragraph, and the commissioner shall assign a rating that takes into account, if relevant, the reasons why the reinsurer is not assuming new business.(F)(i) Credit shall be allowed when the reinsurance is ceded to an assuming insurer meeting each of the conditions set forth in this paragraph. (I) The assuming insurer shall have its head office or be domiciled in, as applicable, and be licensed in a reciprocal jurisdiction. A "reciprocal jurisdiction" is a jurisdiction that meets one of the following:(a) A non-United States jurisdiction that is subject to an in-force covered agreement with the United States, each within its legal authority, or, where there is a covered agreement between the United States and European Union, is a member state of the European Union. For purposes of this paragraph, a "covered agreement" is an agreement entered into pursuant to Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C. 313 and 314, that is currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit for reinsurance;(b) A United States jurisdiction that meets the requirements for accreditation under the National Association of Insurance Commissioners financial standards and accreditation program; or(c) A qualified jurisdiction, as determined by the commissioner pursuant to 33-4-15a(b)(2)(E)(iii) of this code, which is not otherwise described in 33-4-15a(b)(2)(F)(i)(I)(a) or 33-4-15a(b)(2)(F)(i)(I)(b) of this code and which meets certain additional requirements, consistent with the terms and conditions of in-force covered agreements, as specified in rules proposed pursuant to 33-4-15a(e) of this code.(II) The assuming insurer shall have and maintain, on an ongoing basis, minimum capital and surplus, or its equivalent, calculated according to the methodology of its domiciliary jurisdiction, in an amount to be set forth in rules proposed pursuant to 33-4-15a(e) of this code. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, it must have and maintain, on an ongoing basis, minimum capital and surplus equivalents (net of liabilities), calculated according to the methodology applicable in its domiciliary jurisdiction, and a central fund containing a balance in amounts to be set forth in rules proposed pursuant to 33-4-15a(e) of this code.(III) The assuming insurer shall have and maintain, on an ongoing basis, a minimum solvency or capital ratio, as applicable, which will be set forth in rules proposed pursuant to 33-4-15a(e) of this code. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, it must have and maintain, on an ongoing basis, a minimum solvency or capital ratio in the reciprocal jurisdiction where the assuming insurer has its head office or is domiciled, as applicable, and is also licensed.(IV) The assuming insurer shall agree and provide adequate assurance to the commissioner, in a form specified by the commissioner and as set forth in rules proposed pursuant to 33-4-15a(e) of this code, as follows:(a) The assuming insurer shall provide prompt written notice and explanation to the commissioner if it falls below the minimum requirements set forth in 33-4-15a(b)(2)(F)(i)(II) or 33-4-15a(b)(2)(F)(i)(III) of this code, or if any regulatory action is taken against it for serious noncompliance with applicable law;(b) The assuming insurer shall consent in writing to the jurisdiction of the courts of this state and to the appointment of the commissioner as agent for service of process. The commissioner may require that consent for service of process be provided to the commissioner and included in each reinsurance agreement. Nothing in this provision may limit, or in any way alter, the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent such agreements are unenforceable under applicable insolvency or delinquency laws;(c) The assuming insurer shall consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer or its legal successor, that have been declared enforceable in the jurisdiction where the judgment was obtained;(d) Each reinsurance agreement shall include a provision requiring the assuming insurer to provide security in an amount equal to 100 percent of the assuming insurers liabilities attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its resolution estate; and(e) The assuming insurer shall confirm that it is not presently participating in any solvent scheme of arrangement which involves this states ceding insurers, and agree to notify the ceding insurer and the commissioner and to provide security in an amount equal to 100 percent of the assuming insurers liabilities to the ceding insurer, should the assuming insurer enter into such a solvent scheme of arrangement. The security shall be in a form consistent with the provisions of 33-4-15a(b)(2)(E) and 33-4-15a(c) of this code and as specified by the commissioner in rules proposed pursuant to 33-4-15a(e) of this code.(V) The assuming insurer or its legal successor shall provide, if requested by the commissioner, on behalf of itself and any legal predecessors, certain documentation to the commissioner, as specified by the commissioner in rules proposed pursuant to 33-4-15a(e) of this code.(VI) The assuming insurer shall maintain a practice of prompt payment of claims under reinsurance agreements, pursuant to criteria set forth by the commissioner in rules proposed pursuant to 33-4-15a(e) of this code. (VII) The assuming insurers supervisory authority shall confirm to the commissioner on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements set forth in 33-4-15a(b)(2)(F)(i)(II) and 33-4-15a(b)(2)(F)(i)(III) of this code.(VIII) Nothing in this subparagraph precludes an assuming insurer from providing the commissioner with information on a voluntary basis.(ii) In addition to the list of reciprocal jurisdictions published through the National Association of Insurance Commissioners committee process, the commissioner shall timely create and publish a list of reciprocal jurisdictions. (I) The commissioners list shall include any reciprocal jurisdiction as defined under 33-4-15a(b)(2)(F)(i)(I)(a) and 33-4-15a(b)(2)(F)(i)(I)(b) of this code and shall consider any other reciprocal jurisdiction included on the National Association of Insurance Commissioners list. The commissioner may approve a jurisdiction that does not appear on the National Association of Insurance Commissioners list of reciprocal jurisdictions in accordance with criteria to be developed by the commissioner in rules proposed pursuant to 33-4-15a(e) of this code.(II) The commissioner may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets the requirements of a reciprocal jurisdiction, in accordance with a process set forth by the commissioner in rules proposed pursuant to 33-4-15a(e) of this code, except that the commissioner may not remove from the list a reciprocal jurisdiction as defined under 33-4-15a(b)(2)(F)(i)(I)(a) and 33-4-15a(b)(2)(F)(i)(I)(b) of this code. Upon removal of a reciprocal jurisdiction from the list, credit for reinsurance ceded to an assuming insurer which has its home office or is domiciled in that jurisdiction shall be allowed, if otherwise allowed pursuant to this section.(iii) The commissioner shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this paragraph and to which cessions shall be granted credit in accordance with this paragraph. The commissioner may add an assuming insurer to the list if a National Association of Insurance Commissioners accredited jurisdiction has added the assuming insurer to a list of such assuming insurers or if, upon initial eligibility, the assuming insurer submits the information to the commissioner as required under 33-4-15a(b)(2)(F)(i)(IV) of this code and complies with any additional requirements that the commissioner may impose by rules proposed pursuant to 33-4-15a(e) of this code, except to the extent that they conflict with an applicable covered agreement.(iv) If the commissioner determines that an assuming insurer no longer meets one or more of the requirements under this paragraph, the commissioner may revoke or suspend the eligibility of the assuming insurer for recognition under this paragraph in accordance with procedures set forth by the commissioner in rules proposed pursuant to 33-4-15a(e) of this code. (I) While an assuming insurers eligibility is suspended, no reinsurance agreement issued, amended, or renewed after the effective date of the suspension qualifies for credit except to the extent that the assuming insurers obligations under the contract are secured in accordance with 33-4-15a(c) of this code.(II) If an assuming insurers eligibility is revoked, no credit for reinsurance may be granted after the effective date of the revocation with respect to any reinsurance agreements entered into by the assuming insurer, including reinsurance agreements entered into prior to the date of revocation, except to the extent that the assuming insurers obligations under the contract are secured in a form acceptable to the commissioner and consistent with the provisions of 33-4-15a(c) of this code. (v) If subject to a legal process of rehabilitation, liquidation, or conservation, as applicable, the ceding insurer, or its representative, may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding ceded liabilities.(vi) Nothing in this paragraph may limit or in any way alter the capacity of parties to a reinsurance agreement to agree on requirements for security or other terms in that reinsurance agreement, except as expressly prohibited by this section or other applicable law or regulation.(vii) Credit may be taken under this paragraph only for reinsurance agreements entered into, amended, or renewed on or after the effective date of the statute adding this paragraph, and only with respect to losses incurred and reserves reported on or after the later of:(I) The date on which the assuming insurer has met all eligibility requirements pursuant to 33-4-15a(b)(2)(F)(i) of this code; and (II) The effective date of the new reinsurance agreement, amendment, or renewal.(a) This subparagraph does not alter or impair a ceding insurers right to take credit for reinsurance, to the extent that credit is not available under this paragraph, as long as the reinsurance qualifies for credit under any other applicable provision of this section.(b) Nothing in this paragraph may authorize an assuming insurer to withdraw or reduce the security provided under any reinsurance agreement except as permitted by the terms of the agreement.(c) Nothing in this paragraph may limit, or in any way alter, the capacity of parties to any reinsurance agreement to renegotiate the agreement.(G) Credit shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of 33-4-15a(b)(2)(A), 33-4-15a(b)(2)(B), 33-4-15a(b)(2)(C), 33-4-15a(b)(2)(D), 33-4-15a(b)(2)(E), or 33-4-15a(b)(2)(F) of this code, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction.(H)(i) If the assuming insurer is not licensed, accredited, or certified to transact insurance or reinsurance in this state, the credit permitted by 33-4-15a(b)(2)(C) and 33-4-15a(b)(2)(D) of this code may not be allowed unless the assuming insurer agrees in the reinsurance agreements:(I) If there is a failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, will comply with all requirements necessary to give the court jurisdiction, and will abide by the final decision of the court or of any appellate court upon an appeal; and(II) To designate the Secretary of State as its true and lawful attorney upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on behalf of the ceding insurer.(ii) This paragraph is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes, if this obligation is created in the agreement.(I) If the assuming insurer does not meet the requirements of 33-4-15a(b)(2)(A), 33-4-15a(b)(2)(B), 33-4-15a(b)(2)(C), or 33-4-15a(b)(2)(F) of this code, the credit permitted by 33-4-15a(b)(2)(D) or 33-4-15a(b)(2)(E) of this code may not be allowed unless the assuming insurer agrees in the trust agreements to the following conditions:(i) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by 33-4-15a(b)(2)(D)(iii) of this code, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner with regulatory oversight all of the assets of the trust fund.(ii) The assets shall be distributed by and claims shall be filed with and valued by the commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies.(iii) If the commissioner with regulatory oversight determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the assets, or part thereof shall be returned by the commissioner with regulatory oversight to the trustee for distribution in accordance with the trust agreement.(iv) The grantor shall waive any right otherwise available to it under United States law that is inconsistent with this provision.(J) If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the commissioner may suspend or revoke the reinsurers accreditation or certification.(i) The commissioner shall give the reinsurer notice and opportunity for hearing. The suspension or revocation may not take effect until after the commissioners order on hearing, unless:(I) The reinsurer waives its right to hearing;(II) The commissioners order is based on regulatory action by the reinsurers domiciliary jurisdiction or the voluntary surrender or termination of the reinsurers eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of the reinsurer under 33-4-15a(b)(2)(E)(vi) of this code; or(III) The commissioner finds that an emergency requires immediate action and a court of competent jurisdiction has not stayed the commissioners action.(ii) While a reinsurers accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit except to the extent that the reinsurers obligations under the contract are secured in accordance with 33-4-15a(c) of this code. If a reinsurers accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation except to the extent that the reinsurers obligations under the contract are secured in accordance with 33-4-15a(b)(2)(E)(v) or 33-4-15a(c) of this code.(K) Concentration Risk.(i) A ceding insurer shall take steps to manage its reinsurance recoverables proportionate to its own book of business. A domestic ceding insurer shall notify the commissioner within 30 days after reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, exceeds 50 percent of the domestic ceding insurers last reported surplus to policyholders, or after it is determined that reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.(ii) A ceding insurer shall take steps to diversify its reinsurance program. A domestic ceding insurer shall notify the commissioner within 30 days after ceding to any single assuming insurer, or group of affiliated assuming insurers, more than 20 percent of the ceding insurers gross written premium in the prior calendar year, or after it has determined that the reinsurance ceded to any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.(c) (1) An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of 33-4-15a(b) of this code shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer: Provided, That the commissioner may adopt by rule pursuant to 33-4-15a(e)(2) of this code specific additional requirements relating to or setting forth: (A) The valuation of assets or reserve credits; (B) The amount and forms of security supporting reinsurance arrangements described in 33-4-15a(e)(2) of this code; and/or (C) The circumstances pursuant to which credit will be reduced or eliminated.(2) The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder, if the security is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or, in the case of a trust, held in a qualified United States financial institution, as defined in 33-4-15a(d)(2) of this code. This security may be in the form of:(A) Cash;(B) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets;(C)(i) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution, as defined in 33-4-15a(d)(1) of this code, effective no later than December 31 of the year for which the filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement;(ii) Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance (or confirmation) shall, notwithstanding the issuing (or confirming) institutions subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or(D) Any other form of security acceptable to the commissioner.(d)(1) For purposes of 33-4-15a(c)(2)(C) of this code, a "qualified United States financial institution" means an institution that:(A) Is organized or, in the case of a United States office of a foreign banking organization, licensed, under the laws of the United States or any state thereof;(B) Is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and(C) Has been determined by either the commissioner or the Securities Valuation Office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the commissioner.(2) A "qualified United States financial institution" means, for purposes of those provisions of this section specifying those institutions that are eligible to act as a fiduciary of a trust, an institution that:(A) Is organized, or, in the case of a United States branch or agency office of a foreign banking organization, licensed, under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers; and(B) Is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies.(e)(1) The commissioner may, to implement the provisions of this section, propose rules for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code.(2) The commissioner may propose rules for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code applicable to reinsurance arrangements as described in 33-4-15a(e)(2)(A) of this code.(A) A rule adopted pursuant to 33-4-15a(e)(2) of this code may apply only to reinsurance relating to:(i) Life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits;(ii) Universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period;(iii) Variable annuities with guaranteed death or living benefits;(iv) Long-term care insurance policies; or(v) Such other life and health insurance and annuity products as to which the National Association of Insurance Commissioners adopts model regulatory requirements with respect to credit for reinsurance.(B) A rule adopted pursuant to 33-4-15a(e)(2)(A)(i) or 33-4-15a(e)(2)(A)(ii) of this code, may apply to any treaty containing: (i) Policies issued on or after January 1, 2015; and/or (ii) Policies issued prior to January 1, 2015, if risk pertaining to such pre-2015 policies is ceded in connection with the treaty, in whole or in part, on or after January 1, 2015.(C) A rule adopted pursuant to 33-4-15a(e)(2) of this code may require the ceding insurer, in calculating the amounts or forms of security required to be held under rules proposed under this authority, to use the Valuation Manual adopted by the National Association of Insurance Commissioners under Section 11B(1) of the National Association of Insurance Commissioners Standard Valuation Law, including all amendments adopted by the National Association of Insurance Commissioners and in effect on the date as of which the calculation is made, to the extent applicable.(D) A rule adopted pursuant to this 33-4-15a(e)(2) of this code shall not apply to cessions to an assuming insurer that:(i) Meets the conditions set forth in Section 2F of the National Association of Insurance Commissioners Credit for Reinsurance Model Law in this state or, if this state has not adopted provisions substantially equivalent to Section 2F of the National Association of Insurance Commissioners Credit for Reinsurance Model Law, the assuming insurer is operating in accordance with provisions substantially equivalent to Section 2F of the National Association of Insurance Commissioners Credit for Reinsurance Model Law in a minimum of five other states; or(ii) Is certified in this state or, if this state has not adopted provisions substantially equivalent to Section 2E of the National Association of Insurance Commissioners Credit for Reinsurance Model Law, certified in a minimum of five (5) other states; or(iii) Maintains at least $250 million in capital and surplus when determined in accordance with the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, including all amendments thereto adopted by the National Association of Insurance Commissioners, excluding the impact of any permitted or prescribed practices; and is(I) Licensed in at least 26 states; or(II) Licensed in at least 10 states, and licensed or accredited in a total of at least 35 states.(E) The authority to adopt rules pursuant to 33-4-15a(e)(2) of this code does not limit the commissioners general authority to adopt rules pursuant to 33-4-15a(e)(1) of this code.(f) This section shall become effective on January 1, 2019, and shall apply to all cessions under reinsurance agreements that have an inception, anniversary, or renewal date on or after January 1, 2019. The amendments to this section enacted during the regular session of the Legislature in the year 2020 shall apply to all cessions under reinsurance agreements that have an inception, anniversary, or renewal date on or after January 1, 2021.
(a) This section applies to all domestic life insurers, domestic accident and sickness insurers, and domestic property and casualty insurers with respect to their accident and sickness business. This section also applies to all other licensed life insurers, accident and sickness insurers, and property and casualty insurers with respect to their accident and sickness business who are not subject to a substantially similar law or regulation in their domiciliary state. This section does not apply to assumption reinsurance, yearly renewable term reinsurance, or certain nonproportional reinsurance such as stop loss or catastrophic reinsurance.(b) An insurer subject to this section shall not, for reinsurance ceded, reduce any liability or establish any asset in any financial statement filed with the commissioner if, by the terms of the reinsurance agreement, in substance or effect, any of the following conditions exist:(1) The primary effect of the reinsurance agreement is to transfer deficiency reserves or excess interest reserves to the books of the reinsurer for a "risk charge" and the agreement does not provide for significant participation by the reinsurer in one or more of the following risks: Mortality, morbidity, investment or surrender benefit;(2) The reserve credit taken by the ceding insurer is not in compliance with this chapter, including actuarial interpretations or standards adopted by the commissioner;(3) The reserve credit taken by the ceding insurer is greater than the underlying reserve of the ceding company supporting the policy obligation transferred under the reinsurance agreement;(4) The ceding insurer is required to reimburse the reinsurer for negative experience under the reinsurance agreement: Provided, That neither offsetting experience refunds against current and prior years' losses nor payment by the ceding insurer of an amount equal to current and prior years' losses upon voluntary termination of in-force reinsurance by that ceding insurer shall be considered such a reimbursement to the reinsurer for negative experience;(5) The ceding insurer can be deprived of surplus at the reinsurer's option or automatically upon the occurrence of some event, such as the insolvency of the ceding insurer: Provided, That termination of the reinsurance agreement by the reinsurer for nonpayment of reinsurance premiums shall not be considered to be such a deprivation of surplus;(6) The ceding insurer shall, at specific points in time scheduled in the agreement, terminate or automatically recapture all or part of the reinsurance ceded;(7) No cash payment is due from the reinsurer, throughout the lifetime of the reinsurance agreement, with all settlements prior to the termination date of the agreement made only in a "reinsurance account," and no funds in such account are available for the payment of benefits;(8) The reinsurance agreement involves the possible payment by the ceding insurer to the reinsurer of amounts other than from income reasonably expected from the reinsured policies; or(9) Any other conditions specified by rules promulgated by the commissioner pursuant to chapter twenty-nine-a of this code.(c) Notwithstanding the provisions of subsection (b) of this section, an insurer subject to this article may, with the prior approval of the commissioner, take such reserve credit as the commissioner may deem consistent with this chapter, including actuarial interpretations or standards adopted by the commissioner.(d) A reinsurance agreement or amendment to any agreement shall not be used to reduce any liability or to establish any asset in any financial statement filed with the commissioner, unless the agreement, amendment or a letter of intent has been duly executed by both parties no later than the "as of date" of the financial statement.(e) In the case of a letter of intent, a reinsurance agreement or an amendment to a reinsurance agreement shall be executed within a reasonable period of time, not exceeding ninety days from the execution date of the letter of intent, in order for credit to be granted for the reinsurance ceded.(f) Life insurers subject to this section may continue to reduce liabilities or establish assets in financial statements filed with the commissioner for reinsurance ceded under types of reinsurance agreements described in subsection (b) of this section: Provided, That:(1) The agreements were executed and in force prior to the effective date of this section;(2) No new business is ceded under the agreements after the effective date of this section;(3) The reduction of the liability or the asset established for the reinsurance ceded is reduced to zero by December 31, 1994, or such later date approved by the commissioner as a result of an application made by the ceding insurer prior to December 31, 1992;(4) The reduction of the liability or the establishment of the asset is otherwise permissible under all other applicable provisions of this chapter, including actuarial interpretations or standards adopted by the commissioner; and(5) The commissioner is notified, within ninety days after the effective date of this section, of the existence of such reinsurance agreements and all corresponding credits taken in the ceding insurer's annual statement for the year 1991.(g) Accident and sickness insurers and property and casualty insurers subject to this section shall be in compliance with the requirements of this section, with respect to their accident and sickness business, pursuant to such terms and conditions as are contained in the legislative rule to be promulgated by the commissioner.(h) The commissioner shall promulgate a rule pursuant to chapter twenty-nine-a of this code for the implementation and administration of this section on or before July 1, 1996.
(a) No insurer shall retain any risk on any one subject of insurance, whether located or to be performed in West Virginia or elsewhere, in an amount exceeding ten percent of its surplus to policyholders.(b) A "subject of insurance" for the purpose of this section, as to insurance against fire and hazards other than windstorm or earthquake, includes all properties insured by the same insurer which are customarily considered by insurers to be subject to loss or damage from the same fire or other such hazard insured against.(c) Reinsurance in licensed or approved insurers as authorized by section fifteen of this article shall be deducted in determining risk retained. As to surety risk, deduction shall also be made of the amount assumed by any established incorporated cosurety and the value and security deposited, pledged or held subject to the surety's consent and for the surety's protection.(d) "Surplus to policyholders" for the purpose of this section shall be deemed to include any voluntary reserves which are not required pursuant to law, and shall be determined from the last sworn statement of the insurer on file with the commissioner or by the last report of examination by the commissioner, whichever is the more recent at time of assumption of such risk.(e) As to alien insurers this section shall apply only to risks and surplus to policyholders of the insurer's United States branch.(f) This section shall not apply to life or accident and sickness insurance, title insurance, nor to any policy or type of coverage as to which the maximum possible loss to the insurer is not reasonably ascertainable on issuance of the policy.
(a) No director or officer of an insurer shall accept, except for and on behalf of the insurer, or be the beneficiary of any fee, commission, brokerage, gift or other emolument or thing of value in addition to his fixed salary or compensation, because of any investment, loan, deposit, purchase, sale, exchange, or other similar transaction made by or for the insurer, or be pecuniarily interested in any capacity except on behalf of the insurer.(b) No insurer shall guarantee the financial obligation of any of its officers or directors.(c) This section shall not prohibit such a director or officer from becoming a policyholder of the insurer and enjoying thereunder the rights customarily provided therein for holders of such policies, nor shall this section prohibit a director or officer of an insurer from serving as an agent or general agent of such insurer and receiving regular established agency commissions therefor: Provided, That the contract between the insurer and its officer and/or director has been approved by the board of directors of the insurer and a true copy thereof, certified to by the secretary of the board of directors of such insurer, has been filed with the commissioner of insurance; nor shall this section prohibit such a director or officer of an insurer from receiving his share of the commission earnings of a stock exchange firm of which he is a partner, or a percentage of underwriting profits under a management contract: Provided, however, That such contract is subject to review and termination by the board of directors, nor shall this section prohibit the payment to a director or officer of a fee for legal services actually rendered to any such insurer provided such compensation is not in excess of the amounts customarily charged for the same type of service; nor shall this section prohibit an officer, in connection with the relocation by the insurer of the place of employment of such officer, including any relocation in connection with the initial employment of such officer, from (i) accepting a mortgage loan made by the insurer on real property owned by such officer which is to serve as such officer's residence or (ii) selling to the insurer, at not more than the fair market value thereof, the residence of such officer.
(a) No person in West Virginia shall in any manner, directly or indirectly, represent or assist any insurer not then duly licensed to transact insurance in West Virginia, in the soliciting, procuring, placing or maintenance of any insurance coverage upon or with relation to any subject of insurance resident, located, or to be performed in West Virginia, or inspect or examine any risk or collect or receive any premium on behalf of such insurer.(b) Any person transacting insurance in violation of this section shall be personally liable to the insured for the performance of any contract between the insured and the insurer resulting from such transactions.(c) This section shall not apply to reinsurance procured in accordance with this chapter, to excess line insurance procured pursuant to the provisions of article twelve of this chapter, to transactions exempt under the provisions of section one of article three of this chapter, or to professional services of an adjuster or attorney-at-law.
No domestic insurer shall transact insurance in any "reciprocal state" in which it is not then duly and properly licensed to transact insurance.(a) A reciprocal state, as used herein, shall mean a state which has in effect a similar prohibition against insurers domiciled in that state.(b) This section shall not apply to:(1) Contracts entered into where the prospective insurant is personally present in the state in which the insurer is authorized to transact insurance when they sign the application.(2) The issuance of certificates under a lawfully transacted group life or group disability policy, where the master policy was entered into in a state in which the insurer was then authorized to transact insurance.(3) Insurance covering persons or risks located in a reciprocal state, under contracts solicited and issued in states in which the insurer is then licensed. Nor shall it prohibit insurance effectuated by the insurer as an unauthorized insurer in accordance with the laws of the reciprocal state.
(a) No provision of this chapter shall apply to:(1) Hospital service corporations and medical service corporations except as stated in 33-24-1 et seq. of this code;(2) Fraternal benefit societies except as stated in 33-23-1 et seq. of this code;(3) Farmers mutual fire insurance companies except as stated in 33-22-1 et seq. of this code;(4) Warranties;(5) Service contracts;(6) Maintenance agreements.(b) For the purposes of this article:(1) "Holder" means a resident of this state who either purchases a service agreement or is legally in possession of a service contract and is entitled to enforce the rights of the original purchaser of the service contract.(2) "Incidental costs" means expenses specified in a vehicle protection product warranty that are incurred by the warranty holder due to the failure of a vehicle protection product to perform as provided in the contract. Incidental costs may be reimbursed in either a fixed amount specified in the vehicle protection product warranty or by use of a formula itemizing specific incidental costs incurred by the warranty holder.(3) "Maintenance agreement" means a contract for a limited period that provides only for scheduled maintenance.(4) "Provider" means a person who is obligated to a holder pursuant to the terms of a service contract to repair, replace, or perform maintenance on or to indemnify the holder for the costs of repairing, replacing, or performing maintenance on goods.(5) "Road hazard" means a hazard that is encountered while driving a motor vehicle, which may include potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps.(6) "Service contract" means an agreement entered into for a separately stated consideration and for a specified term under which a provider agrees to repair, replace, or maintain a product or provide indemnification for the repair, replacement, or maintenance of a product for operational or structural failure caused by a defect in materials or workmanship or by normal wear. A service contract may additionally provide for incidental payment or indemnity under limited circumstances, including towing, rental, and emergency road service or for the repair or replacement of a product for damage resulting from power surges or accidental damage incurred in handling the product. "Service contract" includes a contract or agreement that provides for one or more of the following:(A) The repair or replacement of tires or wheels on a motor vehicle damaged as a result of coming into contact with road hazards;(B) The removal of dents, dings, or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding, or painting;(C) The repair of chips or cracks in, or the replacement of, motor vehicle windshields as a result of damage caused by road hazards;(D) The replacement of a motor vehicle key or key-fob in the event that the key or key-fob becomes inoperable or is lost or stolen; (E) The repair of damage to the interior components of a motor vehicle caused by wear and tear;(F) The cosmetic repair of minor damage such as scuffs, scratches, scrapes, or rash on exterior surfaces of a motor vehicle; or(G) In conjunction with a motor vehicle leased for use, the repair, replacement, or maintenance of property, or indemnification for repair, replacement, or maintenance, due to excess wear and use, damage for items such as tires, paint cracks or chips, interior stains, rips or scratches, exterior dents or scratches, windshield cracks or chips, missing interior or exterior parts, or excess mileage that result in a lease-end charge, or any other charge for damage that is deemed as excess wear and use by a lessor under a motor vehicle lease, provided any such payment does not exceed the purchase price of the vehicle.(7) "Vehicle protection product" means a protective chemical, substance, device, or system that: (A) is installed on or applied to a motor vehicle; (B) is designed to prevent loss or damage to a motor vehicle from a specific cause; and (C) includes a vehicle protection product warranty. "Vehicle protection product" does not include fuel additives, oil additives, or other chemical products applied to the engine, transmission, or fuel system.(8) "Vehicle protection product warranty" means a warranty that provides that if the vehicle protection product fails to prevent loss or damage to a motor vehicle from a specific cause, the warrantor will pay to or on behalf of the warranty holder specified incidental costs as a result of the failure of the vehicle protection product to perform pursuant to the terms of the vehicle protection product warranty.(9) "Warranty" means in relation to a product or service an undertaking that guarantees indemnity for defective parts, mechanical or electrical breakdown, labor costs, or other remedial measures, such as repair or replacement of the product or repetition of services, and that is made solely by the manufacturer, importer, or seller of the product or services made without payment of additional consideration, not negotiated or separated from the sale of the product or service and incidental to the sale of the product or service. "Warranty" includes a vehicle protection product warranty.
(a) For purposes of this section, the following definitions shall apply:(1) Abuse, as used in this section, means the occurrence of one or more of the following acts between family or household members:(A) Attempting to cause or intentionally, knowingly, or recklessly causing physical harm to another with or without dangerous or deadly weapons;(B) Placing another in reasonable apprehension of physical harm;(C) Creating fear of physical harm by harassment, psychological abuse, or threatening acts;(D) Committing either sexual assault or sexual abuse as those terms are defined in 61-8B-1 et seq. and 61-8D-1 et seq. of this code;(E) Holding, confining, detaining, or abducting another person against that persons will;(F) Intentionally or recklessly damaging, destroying, or taking the tangible property of another individual;(G) Insulting, taunting, or challenging another individual or engaging in a course of alarming or distressing conduct in a manner which is likely to provoke a violent or disorderly response or which is likely to cause humiliation, degradation, or fear in another individual;(H) Trespassing on or in the property of another individual, or on or in property from which the trespasser has been excluded by court order;(I) Child abuse or neglect, as defined in 49-1-201 of this code;(J) Kidnapping, concealment, or removal of a minor child from his or her custodian or from a person entitled to visitation, as set forth in 61-2-14 through 61-2-14e of this code.(2) Family or household member means current or former spouses, persons living as spouses, persons who formerly resided as spouses, parents, children and stepchildren, current or former sexual or intimate partners, other persons related by blood or marriage, persons who are presently or in the past have resided or cohabited together, or a person with whom the victim has a child in common.(3) Victim of abuse, as used in this section, means an individual who has been or is subject to abuse, including, but not limited to, an individual who seeks, has sought, or should have sought medical or psychological treatment for abuse, protection from abuse or shelter from abuse.(b) For all policies issued or renewed after the effective date of this section, a person or entity engaged in the business of providing life or health insurance, or both, in this state may not:(1) Deny, refuse to issue, refuse to renew, refuse to reissue, cancel, or otherwise terminate an insurance policy or restrict coverage on any individual because that individual is, has been, or may be the victim of abuse;(2) Add any surcharge or rating factor to a premium of an insurance policy because an individual has been or may be the victim of abuse;(3) Exclude or limit coverage for losses or deny a claim incurred because an individual has been or may be the victim of abuse; or(4) Require as part of the application process any information regarding whether that individual has been or may be the victim of abuse.(c) Nothing in this section may be construed to prohibit a person from declining to issue an insurance policy insuring the life of an individual who is or has been the victim of abuse if the perpetrator of abuse is the applicant or would be the owner of the insurance policy.(d) Nothing in this section may be construed to prohibit a person from underwriting or rating a risk on the basis of a preexisting physical or mental condition, even if the condition had been caused by abuse: Provided, That:(1) The person routinely underwrites or rates the condition in the same manner with respect to an insured or an applicant who is not a victim of abuse;(2) The fact that an individual is, has been, or may be the victim of abuse may not be considered a physical or mental condition; and(3) The underwriting or rating is not used to evade the intent of this law or any other provision of law. A person may not be held civilly or criminally liable for any cause of action which may be brought because of compliance with this section.
No person in the business of insurance may engage in dishonest or predatory insurance sales practices on federal land or facilities in this state. The commissioner may promulgate emergency rules pursuant to the provisions of section fifteen, article three, chapter twenty-nine-a of this code to identify certain false, misleading, deceptive and unfair insurance sales practices as dishonest or predatory and to protect service members of the United States Armed Forces from these practices. To the extent permitted by federal law, the commissioner may enforce this chapter and the rules promulgated pursuant to this chapter on federal land and facilities in this state.
An insurance company or managed care organization may not require an advanced practice registered nurse to participate in a collaborative agreement in order to obtain payment for his or her services.
(a) Short title.  This section may be cited as the Guaranteed Asset Protection Waiver Act.(b) Purpose.  The purpose of this section is to provide a framework within which guaranteed asset protection waivers are defined and may be offered within this state.(c) Legislative intent.  The Legislature finds that guaranteed asset protection waivers are not insurance and are not subject to the provisions of this chapter, except as provided in this section. Guaranteed asset protection waivers issued after the effective date of this section may not be construed as insurance and persons marketing, administering, selling or offering to sell guaranteed asset protection waivers are not required to comply with insurance licensing requirements.(d) Applicability.  This section does not apply to:(1) An insurance policy offered by an insurer under the insurance laws of this state; or(2) A debt cancellation or debt suspension contract being offered in compliance with 12 C.F.R. 37.1, et seq., 12 C.F.R. 721.1, et seq., or other federal law.(e) Waivers not insurance; exemption from licensing requirement.  Guaranteed asset protection waivers governed by, and issued after the effective date of this section, are not insurance and are exempt from the insurance laws of this state. Persons marketing, administering, selling or offering to sell guaranteed asset protection waivers to borrowers that comply with this section are exempt from this states insurance licensing requirement with regard to the marketing, selling or offering to sell guaranteed asset protection waivers.(f) Definitions.  The following terms are defined for purposes of this section. These terms are not intended to be used or required in guaranteed asset protection waivers.(1) Administrator means a person, other than an insurer or creditor, who performs administrative or operational functions pursuant to guaranteed asset protection waiver programs. Administrative or operational functions may include, but are not limited to:(A) Document development, processing, and support; (B) Compliance Services; (C) Waiver fee processing; (D) Benefit determination and processing; (E) Procurement and administration of the contractual liability or other insurance policy;(F) Technology support; or(G) Personnel support.(2) Borrower means a debtor, retail buyer, or lessee under a finance agreement.(3) Contractual liability means a contract or other agreement that obligates a third party to indemnify a creditor under (g)(4) of this section and is insurance under the insurance laws of this state.(4) Creditor means:(A) The lender in a loan or credit transaction;(B) The lessor in a lease transaction;(C) A retail dealer of motor vehicles licensed under 17A-6-1 et seq. of this code, that provides credit to buyers as part of a retail sale, provided the dealer complies with the requirements of this section;(D) The seller in a commercial retail installment transaction; or(E) The assignees of any of the foregoing persons to whom the credit obligation is payable.(5) Finance agreement means a loan, lease or retail installment sales contract for the purchase or lease of a motor vehicle.(6) Free look period means the period of time from the effective date of the guaranteed asset protection waiver until the date the borrower may cancel the contract without penalty, fees or costs to the borrower. This period of time may not be less than thirty days.(7) Guaranteed asset protection waiver means a contractual agreement that is part of or a separate addendum to the finance agreement in which a creditor agrees, upon payment of a separate charge, to cancel or waive all or part of amounts due to it on a borrowers finance agreement if there is a total physical damage loss or unrecovered theft of a motor vehicle. A guaranteed asset protection waiver is not insurance due to the purchase, administration or operation of the contractual liability or other insurance policy authorized under subdivision (g)(4) of this section.(8) Insurer means an insurance company required to be licensed, registered, or otherwise authorized to do business under the insurance laws of this state.(9) Motor vehicle means a self-propelled or towed vehicle designed for personal or commercial use, including, but not limited to, an automobile, truck, motorcycle, recreational vehicle, all-terrain vehicle, snowmobile, camper, boat or personal watercraft, and the trailer used to transport a motorcycle, boat, camper or personal watercraft.(10) Person includes an individual, company, association, organization, partnership, limited liability company, business trust, corporation and every form of legal entity.(g) Requirements for offering guaranteed asset protection waivers. (1) Guaranteed asset protection waivers may be offered, sold or provided to borrowers in this state in compliance with this section.(2) Guaranteed asset protection waivers may, at the option of the creditor, be sold for a single payment or may be offered with a monthly or periodic payment option.(3) Notwithstanding any other provision of law, any cost to the borrower for a guaranteed asset protection waiver entered into in compliance with the Truth in Lending Act, 15 U.S.C. 1601, et seq., must be separately stated and may not be considered a finance charge or interest.(4) A retail dealer of motor vehicles shall insure its guaranteed asset protection waiver obligations under a contractual liability or other insurance policy issued by an insurer. A creditor, other than a retail dealer of motor vehicles, may insure its guaranteed asset protection waiver obligations under a contractual liability policy or similar policy issued by an insurer. The insurance policy may be directly obtained by a creditor, a retail dealer of motor vehicles or may be procured by an administrator to cover a creditors or retail dealers obligations: Provided, That retail dealers of motor vehicles that are lessors of motor vehicles are not required to insure obligations related to guaranteed asset protection waivers on leased vehicles.(5) The guaranteed asset protection waiver remains a part of the finance agreement upon the assignment, sale, or transfer of the finance agreement by the creditor.(6) The extension of credit, the terms of credit or the terms of the related motor vehicle sale or lease may not be conditioned upon the purchase of a guaranteed asset protection waiver.(7) A creditor that offers a guaranteed asset protection waiver shall report the sale of and forward funds received on all guaranteed asset protection waivers to the designated party, if any, as prescribed in any applicable administrative services agreement, contractual liability policy, other insurance policy or other specified program document.(8) Funds received or held by a creditor or administrator and belonging to an insurer, creditor or administrator, pursuant to the terms of a written agreement must be held by the creditor or administrator in a fiduciary capacity.(h) Contractual liability or other insurance policies. (1) Contractual liability or other insurance policies insuring guaranteed asset protection waivers must state the obligation of the insurer to reimburse or pay to the creditor any sums the creditor is legally obligated to waive under the guaranteed asset protection waivers issued by the creditor and purchased or held by the borrower.(2) Coverage under a contractual liability or other insurance policy insuring a guaranteed asset protection waiver must also cover any subsequent assignee upon the assignment, sale, or transfer of the finance agreement.(3) Coverage under a contractual liability or other insurance policy insuring a guaranteed asset protection waiver must remain in effect unless canceled or terminated in compliance with applicable insurance laws of this state.(4) The cancellation or termination of a contractual liability or other insurance policy may not reduce the insurers responsibility for guaranteed asset protection waivers issued by the creditor prior to the date of cancellation or termination and for which premiums have been received by the insurer.(i) Disclosures. Guaranteed asset protection waivers must disclose, as applicable, in writing and in clear, understandable language, the following:(A) The name and address of the initial creditor and the borrower at the time of sale and the identity of any administrator if different from the creditor;(B) The purchase price and the terms of the guaranteed asset protection waiver, including without limitation the requirements for protection, conditions or exclusions associated with the guaranteed asset protection waiver;(C) That the borrower may cancel the guaranteed asset protection waiver within a free look period as specified in the waiver, and may receive a full refund of the purchase price, so long as no benefits have been provided under the waiver; or if benefits have been provided, the borrower may receive a full or partial refund pursuant to the terms of the guaranteed asset protection waiver; (D)The procedure a borrower must follow, to obtain guaranteed asset protection waiver benefits under the terms and conditions of the waiver, including a telephone number and address where the borrower may initiate activation of waiver benefits. Once activation of waiver benefits has been initiated, and until such time as the request for a benefit under the GAP waiver is resolved, the GAP waiver shall not be terminated or cancelled, nor shall a request for a benefit under the GAP waiver be denied, by the creditor, administrator or other designated party, solely due to the borrowers failure to make monthly payments owed for the GAP waiver purchase price; (E) Whether the guaranteed asset protection waiver may be canceled after the free look period and the conditions under which it may be canceled or terminated, including the procedures for requesting any refund due;(F) That in order to receive any refund due if a borrower cancels the guaranteed asset protection waiver agreement or early termination of the finance agreement after the free look period of the guaranteed asset protection waiver, the borrower, in accordance with terms of the waiver, shall provide a written request to cancel to the creditor, administrator or other party as specified in the guaranteed asset protection waiver. If a borrower is canceling the guaranteed asset protection waiver due to early termination of the finance agreement, the borrower shall provide a written request to the creditor, administrator or other party within ninety days of the occurrence of the event terminating the finance agreement;(G) The methodology for calculating any refund of the unearned purchase price of the guaranteed asset protection waiver due if there is cancellation of the guaranteed asset protection waiver or early termination of the finance agreement; and(H) That neither the extension of credit, the terms of the credit, nor the terms of the related motor vehicle sale or lease, may be conditioned upon the purchase of the guaranteed asset protection waiver.(j) Cancellation. (1) Guaranteed asset protection waiver agreements may be cancellable or non-cancellable after the free look period. Guaranteed asset protection waivers must provide that if a borrower cancels a guaranteed asset protection waiver within the free look period, so long as no benefits have been provided, the borrower is entitled to a full refund of the purchase price. If benefits have been provided, the borrower may receive a full or partial refund pursuant to the terms of the guaranteed asset protection waiver;(2) If the borrower cancels the guaranteed asset protection waiver or terminates the finance agreement early but after the agreement has been in effect beyond the free look period, the borrower may receive a refund of any unearned portion of the purchase price of the guaranteed asset protection waiver unless the guaranteed asset protection waiver provides otherwise. In order to receive a refund, the borrower, in accordance with any applicable terms of the waiver, shall provide a written request to the creditor, administrator or other party. If the borrower is canceling the guaranteed asset protection waiver due to the early termination of the finance agreement, the borrower shall provide a written request within ninety days of the event terminating the finance agreement;(3) If the cancellation of a guaranteed asset protection waiver occurs as a result of a default under the finance agreement, or the repossession of the motor vehicle associated with the finance agreement, or any other termination of the finance agreement, any refund due may be paid directly to the creditor or administrator and applied as set forth in subdivision (4) of this subsection (i), below;(4) A cancellation or termination refund under subdivision (1), (2) or (3) of this subsection (i) may be applied by the creditor as a reduction of the amount owed under the finance agreement, unless the borrower can show that the finance agreement has been paid in full.(k) Commercial transaction exempted.  Subsections (g), (h) and (i) of this section do not apply to a guaranteed asset protection waiver offered in connection with a lease or retail installment sale associated with a commercial transaction. (l) Exemption.  This section does not apply to guaranteed asset protection waivers sold and/or issued by a federally regulated depository institution.(m) Effective date.  This section shall apply to all guaranteed asset protection waivers which become effective on or after July 1, 2018.
The expiration dates of licenses in force immediately prior to the effective date of this chapter, and lawfully existing under any law repealed by this chapter, are hereby extended to midnight, March thirty-first next succeeding such effective date, at which time they shall expire. Any such license may be renewed, suspended or revoked as though originally issued under this chapter.
No provision of this chapter shall be deemed to modify or invalidate any insurance policy heretofore lawfully in force.
Every insurance form and every rate or other filing lawfully in use immediately prior to the effective date of this chapter shall continue in effect until the commissioner otherwise prescribes pursuant to this chapter.
Repeal by this chapter of any laws shall not affect or abate any right heretofore accrued, action or proceeding heretofore commenced or any unlawful act or violation heretofore committed under such laws and punishment or deprivation of license as a consequence thereof as provided by such laws. All such laws shall be deemed to continue in force to the extent made necessary by the foregoing provision.
Provisions of this chapter relative to a particular kind of insurance or a particular type of insurer or to a particular matter shall prevail over provisions relating to insurance in general or insurers in general or to such matter in general.
In addition to the refusal to renew, suspension or revocation of a license, or penalty in lieu of the foregoing, because of violation of any provision of this chapter, it is a misdemeanor for any person to violate any provision of this chapter unless the violation is declared to be a felony by this chapter or other law of this state. Unless another penalty is provided in this chapter or by the laws of this state, every person convicted of a misdemeanor for the violation of any provision of this chapter shall be fined not more than $1,000 or confined in jail not more than six months, or both fined and confined.
The provisions of all acts or parts of acts, or of this code, which are inconsistent with the provisions of this chapter are hereby repealed to the extent of such inconsistency. Repeal by this chapter or this act of any provision of any act or parts of acts or of this code shall not have the effect of reviving any prior law theretofore repealed or superseded by such repealed provision.
As used in this article, these terms have the following meanings:(a) Adjusted RBC report means an RBC report which has been adjusted by the commissioner in accordance with subsection (e), section two of this article.(b) Corrective order means an order issued by the commissioner specifying corrective actions which the commissioner has determined are required.(c) Domestic insurer means any insurance company, farmers mutual fire insurance company or HMO domiciled in this state.(d) Foreign insurer means any insurance company which is licensed to do business in this state under article three of this chapter but is not domiciled in this state. (e) NAIC means the National Association of Insurance Commissioners.(f) Life and/or health insurer means any insurance company licensed under article three of this chapter or a licensed property and casualty insurer writing only accident and health insurance.(g) Property and casualty insurer means any insurance company licensed under article three of this chapter or any farmers mutual fire insurance company licensed under article twenty-two of this chapter, but may not include monoline mortgage guaranty insurers, financial guaranty insurers and title insurers.(h) Negative trend means, with respect to a life and/or health insurer, negative trend over a period of time, as determined in accordance with the trend test calculation included in the RBC instructions.(i) RBC instructions means the RBC report, including risk-based capital instructions adopted by the NAIC, as the RBC instructions may be amended by the NAIC, from time to time, in accordance with the procedures adopted by the NAIC.(j) RBC level means an insurers company action level RBC, regulatory action level RBC, authorized control level RBC, or mandatory control level RBC where:(1) Company action level RBC means, with respect to any insurer, the product of two and its authorized control level RBC;(2) Regulatory action level RBC means the product of one and one-half and its authorized control level RBC;(3) Authorized control level RBC means the number determined under the risk-based capital formula in accordance with the RBC instructions;(4) Mandatory control level RBC means the product of seven-tenths and the authorized control level RBC.(k) RBC plan means a comprehensive financial plan containing the elements specified in subsection (b), section three of this article. If the commissioner rejects the RBC plan and it is revised by the insurer, with or without the commissioners recommendation, the plan shall be called the revised RBC plan.(l) RBC report means the report required in section two of this article.(m) Total adjusted capital means the sum of:(1) An insurers statutory capital and surplus as determined in accordance with the statutory accounting applicable to the financial statements required to be filed under section fourteen, article four of this chapter; and(2) Any other items required by the RBC instructions.
(a) Any foreign insurer shall, upon the written request of the commissioner, submit to the commissioner an RBC report as of the end of the calendar year just ended the later of:(1) The date an RBC report would be required to be filed by a domestic insurer under this act; or(2) Fifteen days after the request is received by the foreign insurer.Any foreign insurer shall, at the written request of the commissioner, promptly submit to the commissioner a copy of any RBC plan that is filed with the Insurance Commissioner of any other state.(b) In the event of a company action level event, regulatory action level event or authorized control level event with respect to any foreign insurer as determined under the RBC statute applicable in the state of domicile of the insurer (or, if no RBC statute is in force in that state, under the provisions of this article), if the Insurance Commissioner of the state of domicile of the foreign insurer fails to require the foreign insurer to file an RBC plan in the manner specified under that state's RBC statute (or, if no RBC statute is in force in that state, under section three of this article), the commissioner may require the foreign insurer to file an RBC plan with the commissioner. In such event, the failure of the foreign insurer to file an RBC plan with the commissioner shall be grounds to order the insurer to cease and desist from writing new insurance business in this state.(c) In the event of a mandatory control level event with respect to any foreign insurer, if no domiciliary receiver has been appointed with respect to the foreign insurer under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign insurer, the commissioner may make application to the circuit court of Kanawha County permitted under article ten of this chapter with respect to the liquidation of property of foreign insurers found in this state and the occurrence of the mandatory control level event shall be considered adequate grounds for the application.
There shall be no liability on the part of, and no cause of action shall arise against, the commissioner or the agency of the Insurance Commission or its employees or agents for any action taken by them in the performance of their powers and duties under this article.
All notices by the commissioner to an insurer which may result in regulatory action hereunder shall be effective upon dispatch if transmitted by registered or certified mail, or in the case of any other transmission shall be effective upon the insurer's receipt of such notice.
This article shall become effective on January 1, 1996.
(a) Every domestic insurer , on or prior to each March 1 (the filing date), shall prepare and submit to the commissioner a report of its RBC levels as of the end of the calendar year just ended, in a form and containing the information required by the RBC instructions. In addition, every domestic insurer shall file its RBC report:(1) With the NAIC in accordance with the RBC instructions; and(2) With the Insurance Commissioner in any state in which the insurer is authorized to do business, if the Insurance Commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC report not later than the later of:(A) Fifteen days from the receipt of notice to file its RBC report with that state; or(B) The filing date.(b) A life and health insurers RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take into account (and may adjust for the covariance between):(1) The risk with respect to the insurers assets;(2) The risk of adverse insurance experience with respect to the insurers liabilities and obligations;(3) The interest rate risk with respect to the insurers business; and(4) All other business risks and any other relevant risks set forth in the RBC instructions determined in each case by applying the factors in the manner set forth in the RBC instructions.(c) A property and casualty insurers RBC shall be determined in accordance with the applicable formula set forth in the RBC instructions. The formula shall take into account (and may adjust for the covariance between), determined in each case by applying the factors in the manner set forth in the RBC instructions:(1) Asset risk;(2) Credit risk;(3) Underwriting risk; and(4) All other business risks and any other relevant risks as are set forth in the RBC instructions.(d) An excess of capital over the amount produced by the risk-based capital requirements contained in this article and the formulas, schedules and instructions referenced in this article is desirable in the business of insurance. Accordingly, insurers and HMOs should seek to maintain capital above the RBC levels required by this article. Additional capital is used and useful in the insurance business and helps to secure insurers against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this article.(e) If a domestic insurer files an RBC report which, in the judgment of the commissioner is inaccurate, then the commissioner shall adjust the RBC report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC report that is adjusted is referred to as an Adjusted RBC Report.
(a) Company action level event means any of the following events:(1) The filing of an RBC report by an insurer which indicates that:(A) The insurers total adjusted capital is greater than or equal to its regulatory action level RBC, but less than its company action level RBC;(B) If a life and/or health insurer, the insurer has total adjusted capital which is greater than or equal to its company action level RBC, but less than the product of its authorized control level RBC and three and has a negative trend; or(C) If a property and casualty insurer, the insurer has total adjusted capital which is greater than or equal to its company action level RBC, but less than the product of its authorized control level RBC and three and triggers the trend test determined in accordance with the trend test calculation included in the property and casualty RBC instructions;(2) The notification by the commissioner to the insurer of an adjusted RBC report that indicates an event in subdivision (1) of this subsection, provided the insurer does not challenge the adjusted RBC report under section seven of this article; or(3) If, pursuant to section seven of this article, an insurer challenges an adjusted RBC report that indicates the event in subdivision (1) of this subsection, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurers challenge.(b) If there is a company action level event, the insurer shall prepare and submit to the commissioner an RBC plan which shall:(1) Identify the conditions which contribute to the company action level event;(2) Contain proposals of corrective actions which the insurer intends to take and would be expected to result in the elimination of the company action level event;(3) Provide projections of the insurers financial results in the current year and at least the four succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory operating income, net income, capital and/or surplus. (The projections for both new and renewal business may include separate projections for each major line of business and separately identify each significant income, expense and benefit component);(4) Identify the key assumptions impacting the insurers projections and the sensitivity of the projections to the assumptions; and(5) Identify the quality of, and problems associated with, the insurers business, including, but not limited to, its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each case. (c) The RBC plan shall be submitted: (1) Within forty-five days of the company action level event; or (2) If the insurer challenges an adjusted RBC report pursuant to section seven of this article, within forty-five days after notification to the insurer that the commissioner has, after a hearing, rejected the insurers challenge.(d) Within sixty days after the submission by an insurer of an RBC plan to the commissioner, the commissioner shall notify the insurer whether the RBC plan may be implemented or is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines the RBC plan is unsatisfactory, the notification to the insurer shall set forth the reasons for the determination and may set forth proposed revisions which will render the RBC plan satisfactory in the judgment of the commissioner. Upon notification from the commissioner, the insurer shall prepare a revised RBC plan, which may incorporate by reference any revisions proposed by the commissioner, and shall submit the revised RBC plan to the commissioner:(1) Within forty-five days after the notification from the commissioner; or(2) If the insurer challenges the notification from the commissioner under section seven of this article, within forty-five days after a notification to the insurer that the commissioner has, after a hearing, rejected the insurers challenge.(e) If there is a notification by the commissioner to an insurer that the insurers RBC plan or revised RBC plan is unsatisfactory, the commissioner may, at the commissioners discretion, subject to the insurers right to a hearing under section seven of this article, specify in the notification that the notification constitutes a regulatory action level event.(f) Every domestic insurer that files an RBC plan or revised RBC plan with the commissioner shall file a copy of the RBC plan or revised RBC plan with the Insurance Commissioner in any state in which the insurer is authorized to do business if:(1) The state has an RBC provision substantially similar to subsection (a), section eight of this article; and (2) The Insurance Commissioner of that state has notified the insurer of its request for the filing in writing, in which case the insurer shall file a copy of the RBC plan or revised RBC plan in that state no later than the later of:(A) Fifteen days after the receipt of notice to file a copy of its RBC plan or revised RBC plan with the state; or(B) The date on which the RBC plan or revised RBC plan is filed under subsections (c) and (d) of this section.
(a) "Regulatory action level event" means, with respect to any insurer, any of the following events:(1) The filing of an RBC report by the insurer which indicates that the insurer's total adjusted capital is greater than or equal to its authorized control level RBC but less than its regulatory action level RBC;(2) The notification by the commissioner to an insurer of an adjusted RBC report that indicates the event in subdivision (1) of this subsection, provided the insurer does not challenge the adjusted RBC report under section seven of this article;(3) If, pursuant to section seven of this article, the insurer challenges an adjusted RBC report that indicates the event in subdivision (1) of this subsection, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge;(4) The failure of the insurer to file an RBC report by the filing date, unless the insurer has provided an explanation for such failure which is satisfactory to the commissioner and has cured the failure within ten days after the filing date;(5) The failure of the insurer to submit an RBC plan to the commissioner within the time period set forth in subsection (c), section three of this article;(6) Notification by the commissioner to the insurer that:(A) The RBC plan or revised RBC plan submitted by the insurer is, in the judgment of the commissioner, unsatisfactory; and(B) Such notification constitutes a regulatory action level event with respect to the insurer, provided the insurer has not challenged the determination under section seven of this article;(7) If, pursuant to section seven of this article, the insurer challenges a determination by the commissioner under subdivision (6) of this subsection, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected such challenge;(8) Notification by the commissioner to the insurer that the insurer has failed to adhere to its RBC plan or revised RBC plan, but only if such failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event in accordance with its RBC plan or revised RBC plan and the commissioner has so stated in the notification, provided the insurer has not challenged the determination under section seven of this article; or(9) If, pursuant to section seven of this article, the insurer challenges a determination by the commissioner under subdivision (8) of this subsection, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the challenge.(b) In the event of a regulatory action level event the commissioner shall:(1) Require the insurer to prepare and submit an RBC plan or, if applicable, a revised RBC plan;(2) Perform such examination or analysis as the commissioner deems necessary of the assets, liabilities and operations of the insurer including a review of its RBC plan or revised RBC plan; and(3) Subsequent to the examination or analysis, issue an order specifying such corrective actions as the commissioner shall determine are required (a "corrective order").(c) In determining corrective actions, the commissioner may take into account such factors as are deemed relevant with respect to the insurer based upon the commissioner's examination or analysis of the assets, liabilities and operations of the insurer, including, but not limited to, the results of any sensitivity tests undertaken pursuant to the RBC instructions. The RBC plan or revised RBC plan shall be submitted:(1) Within forty-five days after the occurrence of the regulatory action level event;(2) If the insurer challenges an adjusted RBC report pursuant to section seven of this article and the challenge is not frivolous in the judgment of the commissioner within forty-five days after the notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge; or(3) If the insurer challenges a revised RBC plan pursuant to section seven of this article and the challenge is not frivolous in the judgment of the commissioner, within forty-five days after the notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.(d) The commissioner may retain actuaries and investment experts and other consultants as may be necessary in the judgment of the commissioner to review the insurer's RBC plan or revised RBC plan, examine or analyze the assets, liabilities and operations of the insurer and formulate the corrective order with respect to the insurer. The fees, costs and expenses relating to consultants shall be borne by the affected insurer or such other party as directed by the commissioner.
(a) "Authorized control level event" means any of the following events:(1) The filing of an RBC report by the insurer which indicates that the insurer's total adjusted capital is greater than or equal to its mandatory control level RBC but less than its authorized control level RBC;(2) The notification by the commissioner to the insurer of an adjusted RBC report that indicates the event in subdivision (1) of this subsection, provided the insurer does not challenge the adjusted RBC report under section seven of this article;(3) If, pursuant to section seven of this article, the insurer challenges an adjusted RBC report that indicates the event in subdivision (1) of this subsection, notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge;(4) The failure of the insurer to respond, in a manner satisfactory to the commissioner, to a corrective order (provided the insurer has not challenged the corrective order) under section seven of this article; or(5) If the insurer has challenged a corrective order under section seven of this article and the commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the insurer to respond, in a manner satisfactory to the commissioner, to the corrective order subsequent to rejection or modification by the commissioner.(b) In the event of an authorized control level event with respect to an insurer, the commissioner shall:(1) Take such actions as are required under section four of this article regarding an insurer with respect to which a regulatory action level event has occurred; or(2) If the commissioner deems it to be in the best interests of the policyholders and creditors of the insurer and of the public, take such actions as are necessary to cause the insurer to be placed under regulatory control under article ten of this chapter. In the event the commissioner takes such actions, the authorized control level event shall be deemed sufficient grounds for the commissioner to take action under said article, and the commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in said article. In the event the commissioner takes actions under this subdivision pursuant to an adjusted RBC report, the insurer shall be entitled to such protections as are afforded to insurers under the provisions of article ten of this chapter pertaining to summary proceedings.
(a) Mandatory control level event means any of the following events:(1) The filing of an RBC report which indicates that the insurers adjusted capital is less than its mandatory control level RBC;(2) Notification by the commissioner to the insurer of an adjusted RBC report that indicates the event in subdivision (1) of this subsection, provided the insurer does not challenge the adjusted RBC report under section seven of this article; or(3) If, pursuant to section seven of this article, the insurer challenges an adjusted RBC report that indicates the event in subdivision (1) of this subsection, notification by the commissioner to the insurer or HMO that the commissioner has, after a hearing, rejected the insurers or HMOs challenge.(b) If there is a mandatory control level event:(1) With respect to a life insurer, the commissioner shall take any actions that are necessary to place the insurer under regulatory control under article ten of this chapter. In that event, the mandatory control level event shall be considered sufficient grounds for the commissioner to take action under said article, and the commissioner has the rights, powers and duties with respect to the insurer that are set forth in said article. If the commissioner takes actions pursuant to an adjusted RBC report, the insurer is entitled to the protections of said article pertaining to summary proceedings. Notwithstanding any of the provisions of this subdivision, the commissioner may forego action for up to ninety days after the mandatory control level event if the commissioner finds there is a reasonable expectation that the mandatory control level event may be eliminated within the ninety-day period.(2) With respect to a property and casualty insurer, the commissioner shall take any actions that are necessary to place the insurer under regulatory control under article ten of this chapter or, in the case of an insurer which is writing no business and which is running-off its existing business, may allow the insurer to continue its run-off under the supervision of the commissioner. In either event, the mandatory control level event shall be considered sufficient grounds for the commissioner to take action under said article and the commissioner has the rights, powers and duties with respect to the insurer that are set forth in said article. If the commissioner takes actions pursuant to an adjusted RBC report, the insurer is entitled to the protections of said article pertaining to summary proceedings. Notwithstanding any of the provisions of this subdivision, the commissioner may forego action for up to ninety days after the mandatory control level event if the commissioner finds there is a reasonable expectation that the mandatory control level event may be eliminated within the ninety-day period.
Insurers have the right to a confidential departmental hearing, on the record, at which the insurer may challenge any determination or action by the commissioner made pursuant to the provisions of this article. The insurer shall notify the commissioner of its request for a hearing within ten days after receiving notification from the commissioner.(a) Notification to an insurer by the commissioner of an adjusted RBC report; or(b) Notification to an insurer by the commissioner that:(1) The insurers RBC plan or revised RBC plan is unsatisfactory; and(2) The notification constitutes a regulatory action level event with respect to the insurer; or(c) Notification to any insurer by the commissioner that the insurer has failed to adhere to its RBC plan or revised RBC plan and that the failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event with respect to the insurer in accordance with its RBC plan or revised RBC plan; or(d) Notification to an insurer by the commissioner of a corrective order with respect to the insurer.(e) Upon receipt of the insurers request for a hearing, the commissioner shall set a date for the hearing, which shall be no less than fifteen nor more than forty-five days after the date of the insurers request.
(a) All RBC reports (to the extent the information therein is not required to be set forth in a publicly available annual statement schedule) and RBC plans (including the results or report of any examination or analysis of an insurer performed pursuant hereto and any corrective order issued by the commissioner pursuant to examination or analysis) with respect to any domestic insurer or foreign insurer which are filed with the commissioner constitute information that might be damaging to the insurer if made available to its competitors and therefore shall be kept confidential by the commissioner. This information shall not be made public and/or be subject to subpoena, other than by the commissioner and then only for the purpose of enforcement actions taken by the commissioner pursuant to this article or any other provision of the insurance laws of this state. The information required by this article is specifically exempt from the requirements of chapter twenty-nine-b of this code.(b) It is the judgment of the Legislature that the comparison of an insurer's total adjusted capital to any of its RBC levels is a regulatory tool which may indicate the need for possible corrective action with respect to the insurer, and is not intended as a means to rank insurers generally. Therefore, except as otherwise required under the provisions of this article, the making, publishing, disseminating, circulating or placing before the public, or causing, directly or indirectly to be made, published, disseminated, circulated or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, an advertisement, announcement or statement containing an assertion, representation or statement with regard to the RBC levels of any insurer, or of any component derived in the calculation, by any insurer, agent, broker or other person engaged in any manner in the insurance business would be misleading and is therefore prohibited: Provided, That if any materially false statement with respect to the comparison regarding an insurer's total adjusted capital to its RBC levels (or any of them) or an inappropriate comparison of any other amount to the insurers RBC levels is published in any written publication and the insurer is able to demonstrate to the commissioner with substantial proof the falsity of such statement, or the inappropriateness, as the case may be, then the insurer may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false statement.(c) It is the further judgment of the Legislature that the RBC instructions, RBC reports, adjusted RBC reports, RBC plans and revised RBC plans are intended solely for use by the commissioner in monitoring the solvency of insurers and the need for possible corrective action with respect to insurers and shall not be used by the commissioner for ratemaking nor considered or introduced as evidence in any rate proceeding nor used by the commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance which an insurer or any affiliate is authorized to write.
(a) The provisions of this article are supplemental to any other provisions of the laws of this state and shall not preclude or limit any other powers or duties of the commissioner under such laws, including, but not limited to, article ten of this chapter.(b) The commissioner may adopt reasonable rules necessary for the implementation of this article.(c) The commissioner may exempt from the application of this article any domestic property and casualty insurer which:(1) Writes direct business only in this state;(2) Writes direct annual premiums of $2 million or less; and(3) Assumes no reinsurance in excess of five percent of direct premium written.(d) A domestic farmers' mutual fire insurance company is exempt from the provisions of this article when:(1) It writes direct business only in this state;(2) It writes direct annual premiums of $2 million or less; and(3) It assumes no reinsurance in excess of five percent of direct premium written.
As used in this article, these terms have the following meanings:(a) Adjusted RBC report means an RBC report which has been adjusted by the commissioner in accordance with subsection (d), section two of this article.(b) Corrective order means an order issued by the commissioner specifying corrective actions which the commissioner has determined are required.(c) Domestic health organization means a health organization domiciled in this state.(d) Foreign health organization means a health organization that is licensed to do business in this state under article twenty-five-a of this chapter but is not domiciled in this state.(e) Health organization means a health maintenance organization licensed under article twenty-five-a of this chapter, limited health service organization licensed under article twenty-five-d of this chapter, provider-sponsored network licensed under article twenty-five-g of this chapter, hospital, medical and dental indemnity or service corporation licensed under article twenty-four of this chapter or other managed care organization licensed under article twenty-five of this chapter. This definition does not include an organization that is licensed under article three of this chapter as either a life or health insurer or a property and casualty insurer and that is otherwise subject to either the life and health or property and casualty RBC requirements.(f) NAIC means the National Association of Insurance Commissioners.(g) Negative trend means a negative trend over a period of time, as determined in accordance with the trend test calculation included in the RBC instructions.(h) RBC instructions means the RBC report including risk-based capital instructions adopted by the NAIC, as these RBC instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.(i) RBC level means a health organizations company action level RBC, regulatory action level RBC, authorized control level RBC, or mandatory control level RBC where:(1) Company action level RBC means, with respect to any health organization, the product of 2.0 and its authorized control level RBC;(2) Regulatory action level RBC means the product of 1.5 and its authorized control level RBC;(3) Authorized control level RBC means the number determined under the risk-based capital formula in accordance with the RBC instructions;(4) Mandatory control level RBC means the product of .70 and the authorized control level RBC.(j) RBC plan means a comprehensive financial plan containing the elements specified in subsection (b), section three of this article. If the commissioner rejects the RBC plan, and it is revised by the health organization, with or without the commissioners recommendation, the plan shall be called the revised RBC plan.(k) RBC report means the report required in section two of this article.(l) Total adjusted capital means the sum of:(1) A health organizations statutory capital and surplus (i.e. net worth) as determined in accordance with the statutory accounting application to the annual financial statements required to be filed under:(A) Section four, article twenty-four of this chapter;(B) Section nine, article twenty-five of this chapter;(C) Section nine, article twenty-five-a of this chapter; or (D) Section twelve, article twenty-five-d of this chapter; and(2) Such other items, if any, as the RBC instructions may provide.
(a)(1) A foreign health organization, upon the written request of the commissioner, shall submit to the commissioner an RBC report as of the end of the calendar year just ended, not later than the later of:(A) The date an RBC report would be required to be filed by a domestic health organization under this article; or(B) Fifteen days after the request is received by the foreign health organization.(2) A foreign health organization, at the written request of the commissioner, shall promptly submit to the commissioner a copy of any RBC plan that is filed with the insurance commissioner of any other state.(b) If there is a company action level event, regulatory action level event or authorized control level event with respect to a foreign health organization as determined under the RBC statute applicable in the state of domicile of the health organization (or, if no RBC statute is in force in that state, under the provisions of this article), if the insurance commissioner of the state of domicile of the foreign health organization fails to require the foreign health organization to file an RBC plan in the manner specified under that states RBC statute (or, if no RBC statute is in force in that state, under section three of this article), the commissioner may require the foreign health organization to file an RBC plan with the commissioner. The failure of the foreign health organization to file an RBC plan with the commissioner is grounds to order the health organization to cease and desist from writing new insurance business in this state.(c) If there is a mandatory control level event with respect to a foreign health organization, and no domiciliary receiver has been appointed with respect to the foreign health organization under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign health organization, the commissioner may make application to the circuit court of Kanawha County permitted under section two, article ten of this chapter with respect to the liquidation of property of foreign health organizations found in this state, and the occurrence of the mandatory control level event shall be considered adequate grounds for the application.
There is no liability on the part of, and no cause of action may arise against, the commissioner or the West Virginia Office of the Insurance Commissioner or its employees or agents for any action taken by them in the performance of their powers and duties under this article.
All notices by the commissioner to a health organization that may result in regulatory action under this article are effective upon dispatch if transmitted by registered or certified mail, or in the case of any other transmission shall be effective upon the health organizations receipt of notice.
(a) A domestic health organization, on or prior to each March 1 (the filing date), shall prepare and submit to the commissioner a report of its RBC levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC instructions. In addition, a domestic health organization shall file its RBC report:(1) With the NAIC in accordance with the RBC instructions; and(2) With the Insurance Commissioner in any state in which the health organization is authorized to do business, if the Insurance Commissioner has notified the health organization of its request in writing, in which case the health organization shall file its RBC report not later than the later of:(A) Fifteen days from the receipt of notice to file its RBC report with that state; or (B) The filing date.(b) A health organizations RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take the following into account (and may adjust for the covariance between) determined in each case by applying the factors in the manner set forth in the RBC instructions.(1) Asset risk;(2) Credit risk;(3) Underwriting risk; and(4) All other business risks and such other relevant risks as are set forth in the RBC instructions.(c) An excess of capital (i.e. net worth) over the amount produced by the risk-based capital requirements contained in this article and the formulas, schedules and instructions referenced in this article is desirable in the business of health insurance. Accordingly, health organizations should seek to maintain capital above the RBC levels required by this article. Additional capital is used and useful in the insurance business and helps to secure a health organization against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this article.(d) If a domestic health organization files an RBC report that in the judgment of the commissioner is inaccurate, then the commissioner shall adjust the RBC report to correct the inaccuracy and shall notify the health organization of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC report as so adjusted is referred to as an adjusted RBC report.
(a) Company action level event means any of the following events:(1) The filing of an RBC report by a health organization that indicates that the health organizations total adjusted capital is greater than or equal to its regulatory action level RBC but less than its company action level RBC;(2) If a health organization has total adjusted capital which is greater than or equal to its company action level RBC but less than the product of its authorized control level RBC and 3.0 and triggers the trend test determined in accordance with the trend test calculation included in the health RBC instructions:(3) Notification by the commissioner to the health organization of an adjusted RBC report that indicates an event in subdivision (1) of this subsection, provided the health organization does not challenge the adjusted RBC report under section seven of this article; or(4) If, pursuant to section seven of this article, a health organization challenges an adjusted RBC report that indicates the event in subdivision (1) of this subsection, the notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the health organizations challenge.(b) If there is a company action level event, the health organization shall prepare and submit to the commissioner an RBC plan that shall:(1) Identify the conditions that contribute to the company action level event;(2) Contain proposals of corrective actions that the health organization intends to take and that would be expected to result in the elimination of the company action level event;(3) Provide projections of the health organizations financial results in the current year and at least two succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory balance sheets, operating income, net income, capital and surplus, and RBC levels. The projections for both new and renewal business might include separate projections for each major line of business and separately identify each significant income, expense and benefit component;(4) Identify the key assumptions impacting the health organizations projections and the sensitivity of the projections to the assumptions; and(5) Identify the quality of, and problems associated with, the health organizations business, including, but not limited to, its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each case.(c) The RBC plan shall be submitted:(1) Within forty-five days of the company action level event; or(2) If the health organization challenges an adjusted RBC report pursuant to section seven of this article, within forty-five days after notification to the health organization that the commissioner has, after a hearing, rejected the health organizations challenge.(d) Within sixty days after the submission by a health organization of an RBC plan to the commissioner, the commissioner shall notify the health organization whether the RBC plan shall be implemented or is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines the RBC plan is unsatisfactory, the notification to the health organization shall set forth the reasons for the determination, and may set forth proposed revisions which will render the RBC plan satisfactory, in the judgment of the commissioner. Upon notification from the commissioner, the health organization shall prepare a revised RBC plan, which may incorporate by reference any revisions proposed by the commissioner, and shall submit the revised RBC plan to the commissioner:(1) Within forty-five days after the notification from the commissioner; or(2) If the health organization challenges the notification from the commissioner under section seven of this article, within forty-five days after a notification to the health organization that the commissioner has, after a hearing, rejected the health organizations challenge.(e) If there is a notification by the commissioner to a health organization that the health organizations RBC plan or revised RBC plan is unsatisfactory, the commissioner may, subject to the health organizations right to a hearing under section seven of this article, specify in the notification that the notification constitutes a regulatory action level event.(f) Every domestic health organization that files an RBC plan or revised RBC plan with the commissioner shall file a copy of the RBC plan or revised RBC plan with the Insurance Commissioner in any state in which the health organization is authorized to do business if:(1) The state has an RBC provision substantially similar to subsection (a), section eight of this article; and(2) The Insurance Commissioner of that state has notified the health organization of its request for the filing in writing, in which case the health organization shall file a copy of the RBC plan or revised RBC plan in that state no later than the later of: (A) Fifteen days after the receipt of notice to file a copy of its RBC plan or revised RBC plan with the state; or(B) The date on which the RBC plan or revised RBC plan is filed under subsections (c) and (d) of this section.
(a) Regulatory action level event means, with respect to a health organization, any of the following events:(1) Filing of an RBC report by the health organization that indicates that the health organizations total adjusted capital is greater than or equal to its authorized control level RBC but less than its regulatory action level RBC;(2) Notification by the commissioner to a health organization of an adjusted RBC report that indicates the event in subdivision (1) of this subsection, provided the health organization does not challenge the adjusted RBC report under section seven of this article;(3) If, pursuant to section seven of this article, the health organization challenges an adjusted RBC report that indicates the event in subdivision (1) of this subsection, the notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the health organizations challenge;(4) The failure of the health organization to file an RBC report by the filing date, unless the health organization has provided an explanation for the failure that is satisfactory to the commissioner and has cured the failure within ten days after the filing date;(5) The failure of the health organization to submit an RBC plan to the commissioner within the time period set forth in subsection (c), section three of this article;(6) Notification by the commissioner to the health organization that:(A) The RBC plan or revised RBC plan submitted by the health organization is, in the judgment of the commissioner, unsatisfactory; and(B) Notification constitutes a regulatory action level event with respect to the health organization, provided the health organization has not challenged the determination under section seven of this article;(7) If, pursuant to section seven of this article, the health organization challenges a determination by the commissioner under subdivision (6) of this subsection, the notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the challenge;(8) Notification by the commissioner to the health organization that the health organization has failed to adhere to its RBC plan or revised RBC plan, but only if the failure has a substantial adverse effect on the ability of the health organization to eliminate the company action level event in accordance with its RBC plan or revised RBC plan and the commissioner has so stated in the notification, provided the health organization has not challenged the determination under section seven of this article; or(9) If, pursuant to section seven of this article, the health organization challenges a determination by the commissioner under subdivision (8) of this subsection, the notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the challenge.(b) If there is a regulatory action level event, the commissioner shall:(1) Require the health organization to prepare and submit an RBC plan or, if applicable, a revised RBC plan;(2) Perform such examination or analysis as the commissioner considers necessary of the assets, liabilities and operations of the health organization including a review of its RBC plan or revised RBC plan; and(3) Subsequent to the examination or analysis, issue an order specifying such corrective actions as the commissioner determines are required (a corrective order).(c) In determining corrective actions, the commissioner may take into account factors the commissioner deems relevant with respect to the health organization based upon the commissioners examination or analysis of the assets, liabilities and operations of the health organization, including, but not limited to, the results of any sensitivity tests undertaken pursuant to the RBC instructions. The RBC plan or revised RBC plan shall be submitted:(1) Within forty-five days after the occurrence of the regulatory action level event;(2) If the health organization challenges an adjusted RBC report pursuant to section seven of this article and the challenge is not frivolous in the judgment of the commissioner, within forty-five days after the notification to the health organization that the commissioner has, after a hearing, rejected the health organizations challenge; or(3) If the health organization challenges a revised RBC plan pursuant to section seven of this article and the challenge is not frivolous in the judgment of the commissioner, within forty-five days after the notification to the health organization that the commissioner has, after a hearing, rejected the health organizations challenge.(d) The commissioner may retain actuaries and investment experts and other consultants as may be necessary in the judgment of the commissioner to review the health organizations RBC plan or revised RBC plan, examine or analyze the assets, liabilities and operations (including contractual relationships) of the health organization and formulate the corrective order with respect to the health organization. The fees, costs and expenses relating to consultants shall be borne by the affected health organization or such other party as directed by the commissioner.
(a) Authorized control level event means any of the following events:(1) The filing of an RBC report by the health organization that indicates that the health organizations total adjusted capital is greater than or equal to its mandatory control level RBC but less than its authorized control level RBC;(2) The notification by the commissioner to the health organization of an adjusted RBC report that indicates the event in subdivision (1) of this subsection, if the health organization does not challenge the adjusted RBC report under section seven of this article;(3) If, pursuant to section seven of this article, the health organization challenges an adjusted RBC report that indicates the event in subdivision (1) of this subsection, notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the health organizations challenge;(4) The failure of the health organization to respond, in a manner satisfactory to the commissioner, to a corrective order, if the health organization has not challenged the corrective order under section seven of this article; or(5) If the health organization has challenged a corrective order under section seven of this article and the commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the health organization to respond, in a manner satisfactory to the commissioner, to the corrective order subsequent to rejection or modification by the commissioner.(b) If there is an authorized control level event with respect to a health organization, the commissioner shall:(1) Take such actions as are required under section four of this article regarding a health organization with respect to which a regulatory action level event has occurred; or(2) If the commissioner considers it to be in the best interests of the policyholders and creditors of the health organization and of the public, take such actions as are necessary to cause the health organization to be placed under regulatory control under article ten of this chapter. If the commissioner takes such actions, the authorized control level event shall be considered sufficient grounds for the commissioner to take action under article ten of this chapter, and the commissioner has the rights, powers and duties with respect to the health organization as are set forth in article ten of this chapter. If the commissioner takes actions under this subdivision pursuant to an adjusted RBC report, the health organization is entitled to such protections as are afforded to health organizations under article ten of this chapter pertaining to summary proceedings.
(a) Mandatory control level event means any of the following events:(1) The filing of an RBC report which indicates that the health organizations total adjusted capital is less than its mandatory control level RBC;(2) Notification by the commissioner to the health organization of an adjusted RBC report that indicates the event in subdivision (1) of this subsection, if the health organization does not challenge the adjusted RBC report under section seven of this article; or(3) If, pursuant to section seven of this article, the health organization challenges an adjusted RBC report that indicates the event in subdivision (1) of this subsection, notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the health organizations challenge.(b) If it is a mandatory control level event, the commissioner shall take such actions as are necessary to place the health organization under regulatory control under article ten of this chapter. In that event, the mandatory control level event is sufficient grounds for the commissioner to take action under article ten of this chapter, and the commissioner has the rights, powers and duties with respect to the health organization as are set forth in article ten of this chapter. If the commissioner takes actions pursuant to an adjusted RBC report, the health organization is entitled to the protections of article ten of this chapter pertaining to summary proceedings. Notwithstanding any of the foregoing, the commissioner may forego action for up to ninety days after the mandatory control level event if the commissioner finds there is a reasonable expectation that the mandatory control level event may be eliminated within the ninety-day period.
Upon the occurrence of any of the following events the health organization has the right to a confidential departmental hearing, on a record, at which the health organization may challenge any determination or action by the commissioner. The health organization shall notify the commissioner of its request for a hearing within five days after the notification by the commissioner under subsection (a), (b), (c) or (d) of this section. Upon receipt of the health organizations request for a hearing, the commissioner shall set a date for the hearing, which shall be no less than ten nor more than thirty days after the date of the health organizations request. The events include:(a) Notification to a health organization by the commissioner of an adjusted RBC report;(b) Notification to a health organization by the commissioner that:(1) The health organizations RBC plan or revised RBC plan is unsatisfactory; and(2) Notification constitutes a regulatory action level event with respect to the health organization;(c) Notification to a health organization by the commissioner that the health organization has failed to adhere to its RBC plan or revised RBC plan and that the failure has a substantial adverse effect on the ability of the health organization to eliminate the company action level event with respect to the health organization in accordance with its RBC plan or revised RBC plan; or(d) Notification to a health organization by the commissioner of a corrective order with respect to the health organization.
(a) All RBC reports (to the extent the information is not required to be set forth in a publicly available annual statement schedule) and RBC plans (including the results or report of any examination or analysis of a health organization performed pursuant to this statute and any corrective order issued by the commissioner pursuant to examination or analysis) with respect to a domestic health organization or foreign health organization that are in the possession or control of the commissioner are confidential by law and privileged, are not subject to the provisions of chapter twenty-nine-b of this code, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. However, the commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioners official duties.(b) Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner are permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (a) of this section.(c) In order to assist in the performance of the commissioners duties, the commissioner:(1) May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (a) of this section, with other state, federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal and international law-enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information;(2) May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law-enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and(3) May enter into agreements governing sharing and use of information consistent with this subsection.(d) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information may occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subdivision (3), subsection (c) of this section.(e) It is the finding of the Legislature that the comparison of a health organizations total adjusted capital to any of its RBC levels is a regulatory tool which may indicate the need for corrective action with respect to the health organization, and is not intended as a means to rank health organizations generally. Therefore, except as otherwise required under the provisions of this article, the making, publishing, disseminating, circulating or placing before the public, or causing, directly or indirectly to be made, published, disseminated, circulated or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over a radio or television station, or in any other way, an advertisement, announcement or statement containing an assertion, representation or statement with regard to the RBC levels of any health organization, or of any component derived in the calculation, by any health organization, agent, broker or other person engaged in any manner in the insurance business would be misleading and is therefore prohibited: Provided, That if any materially false statement with respect to the comparison regarding a health organizations total adjusted capital to its RBC levels (or any of them) or an inappropriate comparison of any other amount to the health organizations RBC levels is published in any written publication and the health organization is able to demonstrate to the commissioner with substantial proof the falsity of the statement, or the inappropriateness, as the case may be, then the health organization may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false statement.(f) It is the further finding of the Legislature that the RBC instructions, RBC reports, adjusted RBC reports, RBC plans and revised RBC plans are intended solely for use by the commissioner in monitoring the solvency of health organizations and the need for possible corrective action with respect to health organizations and shall not be used by the commissioner for ratemaking nor considered or introduced as evidence in any rate proceeding nor used by the commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance that a health organization or any affiliate is authorized to write.
(a) The provisions of this article are supplemental to any other provisions of the laws of this state, and do not preclude or limit any other powers or duties of the commissioner under such laws, including, but not limited to, article ten and article thirty-four of this chapter.(b) The commissioner may propose rules for legislative approval in accordance with article three, chapter twenty-nine-a of this code, as are necessary to effectuate the purposes of this article and to prevent circumvention and evasion thereof.(c) The commissioner may exempt from the application of this article a domestic health organization that:(1) Writes direct business only in this state;(2) Assumes no reinsurance in excess of five percent of direct premiums written; and(3) Writes direct annual premiums for comprehensive medical business of $2 million or less; or(4) Is a limited health service organization that covers less than two thousand lives.
(a) The purpose of this article is to provide requirements for maintaining a risk management framework and completing an own risk and solvency assessment (ORSA) and provide guidance and instructions for filing an ORSA summary report with the Insurance Commissioner of this state.(b) The requirements of this article apply to all insurers domiciled in this state unless exempt pursuant to section six of this article.(c) The Legislature finds and declares that the ORSA summary report shall contain confidential and sensitive information related to an insurer or insurance groups identification of risks material and relevant to the insurer or insurance group filing the report. This information shall include proprietary and trade-secret information that has the potential for harm and competitive disadvantage to the insurer or insurance group if the information is made public. It is the intent of this Legislature that the ORSA summary report shall be a confidential document filed with the commissioner, that the ORSA summary report may be shared only as stated herein and to assist the commissioner in the performance of his or her duties, and that in no event shall the ORSA summary report be subject to public disclosure.
The provisions of this article are severable and accordingly, if any part of this article is adjudged to be unconstitutional or invalid, that determination does not affect the continuing validity of the remaining provisions of this article.
The requirements of this article shall become effective on January 1, 2018. The first filing of the ORSA summary report shall be in 2018 pursuant to section five of this article.
(a) Commissioner means the Insurance Commissioner of the State of West Virginia, his or her deputies or the insurance department, as appropriate.(b) Insurance group means, for the purpose of conducting an ORSA, those insurers and affiliates included within an insurance holding company system as defined in article twenty-seven of this chapter.(c) Insurer has the same meaning as set forth in section two, article one of this chapter, except that it does not include agencies, authorities or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia or a state or political subdivision of a state.(d) NAIC means the National Association of Insurance Commissioners.(e) Own risk and solvency assessment or ORSA means a confidential internal assessment, appropriate to the nature, scale and complexity of an insurer or insurance group, conducted by that insurer or insurance group of the material and relevant risks associated with the insurer or insurance groups current business plan and the sufficiency of capital resources to support those risks.(f) ORSA Guidance Manual means the Own Risk and Solvency Assessment Guidance Manual developed and adopted by the NAIC and as amended from time to time. A change in the ORSA Guidance Manual shall be effective on the January 1 following the calendar year in which the changes have been adopted by the NAIC.(g) ORSA summary report means a confidential high-level summary of an insurer or insurance groups ORSA.
An insurer shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing and reporting on its material and relevant risks. This requirement may be satisfied if the insurance group of which the insurer is a member maintains a risk management framework applicable to the operations of the insurer.
Subject to section six of this article, an insurer, or the insurance group of which the insurer is a member, shall regularly conduct an ORSA consistent with a process comparable to the ORSA Guidance Manual. The ORSA shall be conducted no less than annually but also at any time when there are significant changes to the risk profile of the insurer or the insurance group of which the insurer is a member.
(a) Upon the commissioners request, and no more than once each year, an insurer shall submit to the commissioner an ORSA summary report or any combination of reports that together contain the information described in the ORSA Guidance Manual, applicable to the insurer and/or, the insurance group of which it is a member. Notwithstanding any request from the commissioner, if the insurer is a member of an insurance group, the insurer shall submit the report(s) required by this subsection if the commissioner is the lead state commissioner of the insurance group as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC.(b) The report(s) shall include a signature of the insurer or insurance groups chief risk officer or other executive having responsibility for the oversight of the insurers enterprise risk management process attesting to the best of his or her belief and knowledge that the insurer applies the enterprise risk management process described in the ORSA summary report and that a copy of the report has been provided to the insurers board of directors or the appropriate committee thereof.(c) An insurer may comply with subsection (a) of this section by providing the most recent and substantially similar report(s) provided by the insurer or another member of an insurance group of which the insurer is a member to the commissioner of another state or to a supervisor or regulator of a foreign jurisdiction, if that report provides information that is comparable to the information described in the ORSA Guidance Manual. Any report in a language other than English must be accompanied by a translation of that report into the English language.
(a) An insurer is exempt from the requirements of this article, if:(1) The insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500 million; and (2) The insurance group of which the insurer is a member has annual direct written and unaffiliated assumed premium including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1 billion.(b) If an insurer qualifies for exemption pursuant to subdivision (1), subsection (a) of this section, but the insurance group of which the insurer is a member does not qualify for exemption pursuant to subdivision (2), subsection (a) of this section, then the ORSA summary report that may be required pursuant to section five shall include every insurer within the insurance group. This requirement may be satisfied by the submission of more than one ORSA summary report for any combination of insurers provided any combination of reports includes every insurer within the insurance group.(c) If an insurer does not qualify for exemption pursuant to subdivision (1), subsection (a) of this section, but the insurance group of which it is a member qualifies for exemption pursuant to subdivision (2), subsection (a) of this section, then the only ORSA summary report that may be required pursuant to section five of this article is the report applicable to that insurer.(d) An insurer that does not qualify for exemption pursuant to subsection (a) of this section may apply to the commissioner for a waiver from the requirements of this article based upon unique circumstances. In deciding whether to grant the insurers request for waiver, the commissioner may consider the type and volume of business written, ownership and organizational structure, and any other factor the commissioner considers relevant to the insurer or insurance group of which the insurer is a member. If the insurer is part of an insurance group with insurers domiciled in more than one state, the commissioner shall coordinate with the lead state commissioner and with the other domiciliary commissioners in considering whether to grant the insurers request for a waiver.(e) Notwithstanding the exemptions stated in this section:(1) The commissioner may require that an insurer maintain a risk management framework, conduct an ORSA and file an ORSA summary report based on unique circumstances including, but not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests; and (2) The commissioner may require that an insurer maintain a risk management framework, conduct an ORSA and file an ORSA summary report if the insurer has risk-based capital for company action level event as set forth in section three, article forty of this chapter, meets one or more of the standards of an insurer considered to be in hazardous financial condition as defined in section three-a, article thirty-four of this chapter, or otherwise exhibits qualities of a troubled insurer as determined by the commissioner.(f) If an insurer that qualifies for an exemption pursuant to subsection (a) of this section subsequently no longer qualifies for that exemption due to changes in premium as reflected in the insurers most recent annual statement or in the most recent annual statements of the insurers within the insurance group of which the insurer is a member, the insurer has one year following the year the threshold is exceeded to comply with the requirements of this article.
(a) The ORSA summary report shall be prepared consistent with the ORSA Guidance Manual, subject to the requirements of subsection (b) of this section. Documentation and supporting information shall be maintained and made available upon examination or upon request of the commissioner.(b) The review of the ORSA summary report, and any additional requests for information, shall be made using similar procedures currently used in the analysis and examination of multistate or global insurers and insurance groups.
(a) Documents, materials or other information, including the ORSA summary report, in the possession of or control of the Insurance Commissioner that are obtained by, created by or disclosed to the commissioner or any other person under this article, is recognized by this state as being proprietary and to contain trade secrets. All such documents, materials or other information shall be confidential by law and privileged, shall not be subject to article one, chapter twenty-nine-b of this code, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioners official duties. The commissioner shall not otherwise make the documents, materials or other information public without the prior written consent of the insurer.(b) Neither the commissioner nor any person who received documents, materials or other ORSA-related information, through examination or otherwise, while acting under the authority of the commissioner or with whom the documents, materials or other information are shared pursuant to this article shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (a) of this section.(c) In order to assist in the performance of the commissioners regulatory duties, the commissioner:(1) May, upon request, share documents, materials or other ORSA-related information, including the confidential and privileged documents, materials or information subject to subsection (a) of this section, including proprietary and trade-secret documents and materials with other state, federal and international financial regulatory agencies, including members of any supervisory college as defined in section six-a, article twenty-seven of this chapter, with the NAIC and with any third-party consultants designated by the commissioner: Provided, That the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials or other information and has verified in writing the legal authority to maintain confidentiality;(2) May receive documents, materials or other ORSA-related information, including otherwise confidential and privileged documents, materials or information, including proprietary and trade-secret information or documents, from regulatory officials of other foreign or domestic jurisdictions, including members of any supervisory college as defined in section six-a, article twenty-seven of this chapter, and from the NAIC, and shall maintain as confidential or privileged any documents, materials or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information;(3) Shall enter into a written agreement with the NAIC or a third-party consultant governing sharing and use of information provided pursuant to this article, consistent with this subsection that shall:(A) Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC or a third-party consultant pursuant to this article, including procedures and protocols for sharing by the NAIC with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials or other information and has verified in writing the legal authority to maintain confidentiality;(B) Specify that ownership of information shared with the NAIC or a third-party consultant pursuant to this article remains with the commissioner and the NAICs or a third-party consultants use of the information is subject to the direction of the commissioner;(C) Prohibit the NAIC or third-party consultant from storing the information shared pursuant to this article in a permanent database after the underlying analysis is completed;(D) Require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC or a third-party consultant pursuant to this article is subject to a request or subpoena to the NAIC or a third-party consultant for disclosure or production;(E) Require the NAIC or a third-party consultant to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant pursuant to this article; and (F) If there is an agreement involving a third-party consultant, provide for the insurers written consent.(d) The sharing of information and documents by the commissioner pursuant to this article shall not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for the administration, execution and enforcement of the provisions of this article.(e) No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials or other ORSA-related information shall occur as a result of disclosure of such ORSA-related information or documents to the commissioner under this section or as a result of sharing as authorized in this article.(f) Documents, materials or other information in the possession or control of the NAIC or a third-party consultant pursuant to this article shall be confidential by law and privileged, shall not be subject to article one, chapter twenty-nine-b of this code, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action.
Any insurer failing, without just cause, to timely file the ORSA summary report as required in this article shall, after notice and hearing, pay a penalty of $2,500 for each days delay, to be recovered by the commissioner and the penalty so recovered shall be paid into the General Revenue Fund of this state. The maximum penalty under this section is $75,000. The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.
(a) This article may be cited as the "West Virginia Insurance Fraud Prevention Act."(b) The Legislature finds that the business of insurance involves many transactions of numerous types that have potential for fraud and other illegal activities. This article is intended to permit use of the expertise of the commissioner to investigate and help prosecute insurance fraud and other crimes related to the business of insurance more effectively, and to assist and receive assistance from state, local and federal law-enforcement and regulatory agencies in enforcing laws prohibiting crimes relating to the business of insurance.
The Insurance Commissioner shall, pursuant to the provisions of article three, chapter twenty-nine-a of this code, promulgate such legislative rules as are necessary or proper to carry out the purposes of this article.
 (a) A person shall not commit a fraudulent insurance act as defined in 33-41-2 of this code.(b) A person shall not knowingly or intentionally interfere with the enforcement of the provisions of this article or investigations of suspected or actual violations of this article.(c) A person convicted of a felony involving dishonesty or breach of trust, or a felony violation law reasonably related to the business of insurance, shall not participate in the business of insurance.(d) A person in the business of insurance shall not knowingly or intentionally permit a person convicted of a felony involving dishonesty or breach of trust, or of a felony reasonably related to the business of insurance, to participate in the business of insurance.
(a) Insurers shall have antifraud initiatives reasonably calculated to detect, prosecute, and prevent fraudulent insurance acts.(b) Antifraud initiatives may include:(1) Fraud investigators, who may be insurer employees or independent contractors; or(2) An antifraud plan submitted to the commissioner. Antifraud plans submitted to the commissioner are privileged and confidential, are exempt from public disclosure under the provisions of 29B-1-1 et seq. of this code, and are not subject to discovery or subpoena in a civil or criminal action.(c) The commissioner may propose legislative rules for promulgation in accordance with 29A-3-1 et seq. of this code to set forth requirements or standards for the submission of insurer antifraud plans.
(a) A person or entity engaged in the business of insurance or a person or entity making a claim against an insurer who violates any provision of this article may be subject to the following:(1) Where applicable, suspension or revocation of license or certificate of authority or a civil penalty of up to $10,000 per violation, or where applicable, both. Suspension or revocation of license or certificate of authority or imposition of civil penalties may be pursuant to an order of the commissioner issued pursuant to the provisions of 33-2-13 of this code. The commissioners order may require a person found to be in violation of this article to make reasonable restitution to persons aggrieved by violations of this article. The commissioner may assess a person sanctioned pursuant to the provisions of this section the cost of investigation;(2) Notwithstanding any other provision of law, a civil penalty imposed pursuant to the provisions of this section is mandatory and not subject to suspension;(3) A person convicted of a felony violation law reasonably related to the business of insurance shall be disqualified from engaging in the business of insurance; and(4) The commissioner may apply for a temporary or permanent injunction in any appropriate circuit court of this state seeking to enjoin and restrain a person from violating or continuing to violate the provisions of this article or rule promulgated under this article, notwithstanding the existence of other remedies at law. The circuit court shall have jurisdiction of the proceeding and have the power to make and enter an order or judgment awarding temporary or permanent injunctive relief restraining any person from violating or continuing to violate any provision of this article or rule promulgated under the article as in its judgment is proper.(b) Any person who commits a violation of the provisions of 33-41-11 of this code where the benefit sought is $1,000 or more in value is guilty of a felony and, upon conviction thereof, shall be imprisoned in a correctional facility for not less than one nor more than 10 years, fined not more than $10,000, or both fined and imprisoned, or in the discretion of the court, confined in jail for not more than one year and fined not more than $10,000, or both fined and confined.(c) Any person who commits a violation of the provisions of 33-41-11 of this code where the benefit sought is less than $1,000 in value is guilty of a misdemeanor and, upon conviction thereof, shall be confined in jail for not more than one year, or fined not more than $2,500, or both fined and confined.(d) Any person convicted of a violation of 33-41-11 of this code is subject to the restitution provisions of 61-11A-1 of this code.(e) A court may award to the unit or other law-enforcement agency investigating a violation of 33-41-11 of this code or other criminal offense related to the business of insurance its cost of investigation.(f) In addition to the provisions of this section, the offenses enumerated in 61-3-24e through 61-3-24h, inclusive, of this code are applicable to matters concerning workers compensation insurance.
As used in this article:(a) "Benefits" mean money payments, goods, services, or other thing of value paid in response to a claim filed with an insurer based upon a policy of insurance.(b) "Business of insurance" means the writing of insurance, including the writing of workers compensation insurance under the provisions of 23-1-1 et seq. of this code, self-insurance by an employer or employer group for workers compensation risk including the risk of catastrophic injuries under the provisions of 23-1-1 et seq. of this code, or the reinsuring of risks by an insurer, including acts necessary or incidental to writing insurance or reinsuring risks and the activities of persons who act as or are officers, directors, agents, or employees of insurers, or who are other persons authorized to act on their behalf.(c) "Claim" means an application or request for payment or benefits provided under the terms of a policy of insurance.(d) "Commissioner" means the Insurance Commissioner of West Virginia or his or her designee.(e) "Fraudulent insurance act" means an act or omission committed by a person who knowingly and with intent to defraud misrepresents or conceals any material information concerning one or more of the following: (1) Presenting, causing to be presented, or preparing with knowledge or belief that it will be presented to or by an insurer, a reinsurer, broker, or its agent, false information as part of, in support of, or concerning a fact material to one or more of the following:(A) An application for the issuance or renewal of an insurance policy or reinsurance contract;(B) The rating of an insurance policy or reinsurance contract;(C) A claim for payment or benefit pursuant to an insurance policy or reinsurance contract;(D) Premiums paid on an insurance policy or reinsurance contract;(E) Payments made in accordance with the terms of an insurance policy or reinsurance contract;(F) A document filed with the commissioner or the chief insurance regulatory official of another jurisdiction;(G) The financial condition of an insurer or reinsurer;(H) The formation, acquisition, merger, reconsolidation, dissolution, or withdrawal from one or more lines of insurance or reinsurance in all or part of this state by an insurer or reinsurer;(I) The issuance of written evidence of insurance; or(J) The reinstatement of an insurance policy.(2) Solicitation or acceptance of new or renewal insurance risks on behalf of an insurer, reinsurer, or other person engaged in the business of insurance by a person who knows or should know that the insurer or other person responsible for the risk is insolvent at the time of the transaction;(3) Removal, concealment, alteration, or destruction of the assets or records of an insurer, reinsurer, or other person engaged in the business of insurance;(4) Willful embezzlement, abstracting, purloining, or conversion of moneys, funds, premiums, credits, or other property of an insurer, reinsurer, or person engaged in the business of insurance;(5) Transaction of the business of insurance in violation of laws requiring a license, certificate of authority, or other legal authority for the transaction of the business of insurance; or(6) Attempt to commit, aiding, or abetting in the commission of, or conspiracy to commit the acts or omissions specified in this subdivision.(f) "Health care provider" means a person, partnership, corporation, facility, or institution licensed by, or certified in, this state or another state, to provide health care or professional health care services, including, but not limited to, a physician, osteopathic physician, hospital, dentist, registered or licensed practical nurse, optometrist, pharmacist, podiatrist, chiropractor, physical therapist, or psychologist.(g) "Insurance" means a contract or arrangement in which a person undertakes to:(1) Pay or indemnify another person as to loss from certain contingencies called "risks", including through reinsurance;(2) Pay or grant a specified amount or determinable benefit to another person in connection with ascertainable risk contingencies;(3) Pay an annuity to another person;(4) Act as surety; or(5) Self-insurance for workers compensation risk, including the risk of catastrophic injuries pursuant to the provisions of 23-1-1 et seq. of this code.(h) "Insurer" means a person entering into arrangements or contracts of insurance or reinsurance. Insurer includes, but is not limited to, any domestic or foreign stock company, mutual company, mutual protective association, farmers mutual fire companies, fraternal benefit society, reciprocal or interinsurance exchange, nonprofit medical care corporation, nonprofit health care corporation, nonprofit hospital service association, nonprofit dental care corporation, health maintenance organization, captive insurance company, risk retention group, or other insurer, regardless of the type of coverage written, including the writing of workers compensation insurance or self insurance under the provisions of this code, benefits provided, or guarantees made by each. A person is an insurer regardless of whether the person is acting in violation of laws requiring a certificate of authority or regardless of whether the person denies being an insurer.(i) "Person" means an individual, a corporation, a limited liability company, a partnership, an association, a joint stock company, a trust, trustees, an unincorporated organization, or any similar business entity, or any combination of the foregoing. "Person" also includes hospital service corporations, medical service corporations, and dental service corporations as defined in 33-24-1 et seq. of this code, health care corporations as defined in, 33-25-1 et seq. of this code, or a health maintenance organization organized pursuant to 33-25A-1 et seq. of this code.(j) "Policy" means an individual or group policy, group certificate, contract or arrangement of insurance or reinsurance, coverage by a self-insured employer or employer group for its workers compensation risk including its risk of catastrophic injuries or reinsurance, affecting the rights of a resident of this state or bearing a reasonable relation to this state, regardless of whether delivered or issued for delivery in this state.(k) "Reinsurance" means a contract, binder of coverage (including placement slip) or arrangement under which an insurer procures insurance for itself in another insurer as to all or part of an insurance risk of the originating insurer.(l) "Statement" means any written or oral representation made to any person, insurer or authorized agency. A statement includes, but is not limited to, any oral report or representation; any insurance application, policy, notice or statement; any proof of loss, bill of lading, receipt for payment, invoice, account, estimate of property damages, or other evidence of loss, injury or expense; any bill for services, diagnosis, prescription, hospital or doctor record, X-ray, test result or other evidence of treatment, services or expense; and any application, report, actuarial study, rate request or other document submitted or required to be submitted to any authorized agency. A statement also includes any written or oral representation recorded by electronic or other media.(m) "Unit" means the insurance fraud unit established pursuant to the provisions of this article acting collectively or by its duly authorized representatives.
(a) Claims forms and applications for insurance, regardless of the form of transmission, may contain the following warning or a substantially similar caveat:"Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison."(b) The lack of a warning as authorized by the provisions of subsection (a) of this section does not constitute a defense in any prosecution for a fraudulent or illegal act nor shall it constitute the basis for any type of civil cause of action.(c) Policies issued by nonadmitted insurers pursuant to article twelve-c of this chapter shall contain a statement disclosing the status of the insurer to do business in the state where the policy is delivered or issued for delivery or the state where coverage is in force. The requirement of this subsection may be satisfied by a disclosure specifically required by section five, article twelve-c of this chapter; section nine, article thirty-two of this chapter; and section eighteen, article thirty-two of this chapter.
(a) The commissioner may investigate suspected criminal acts relating to the business of insurance as authorized by the provisions of this article.(b) If the prosecuting attorney of the county in which a criminal violation relating to the business of insurance occurs determines that his or her office is unable to take appropriate action, he or she may petition the appropriate circuit court for the appointment of a special prosecutor or special assistant prosecutor from the West Virginia prosecuting attorney Institute pursuant to the provisions of section six, article four, chapter seven of this code. Notwithstanding the provisions of that section, attorneys employed by the commissioner and assigned to the insurance fraud unit created by the provisions of section eight of this article may prosecute or assist in the prosecution of violations of the criminal laws of this state related to the business of insurance and may act as special prosecutors or special assistant prosecutors in those cases if assistance is sought by the prosecuting attorney or special prosecutor assigned by the institute to prosecute those matters.(c) Funds allocated for insurance fraud prevention may be dispersed by the commissioner, at his or her discretion, for the purpose of insurance fraud enforcement as authorized by the provisions of this code.(d) The Insurance Fraud Unit authorized by the provisions of section eight of this article may assist federal law-enforcement agencies, the West Virginia state police, the State Fire Marshal, municipal police departments and the sheriffs of the counties in West Virginia in investigating crimes related to the business of insurance.(e) The commissioner may conduct public outreach, education, and awareness programs on the costs of insurance fraud to the public.
(a) The commissioner may accept proceeds of court ordered forfeiture proceedings involving the prosecution of fraudulent insurance acts. (b) Forfeiture proceeds shall be deposited into the special revenue account established in subsection (c) of this section, and the commissioner may make expenditures from the fund in order to effectuate the purposes of this article.(c) The Insurance Fraud Prevention Fund is hereby created. The fund shall be administered by the commissioner and shall consist of all moneys made available from court ordered forfeiture proceedings involving the prosecution of fraudulent insurance acts, including all interest or other return earned from investment of the fund which may be invested in the manner permitted by 12-6C-9 of this code. Expenditures from the fund shall be for the purposes set forth in this article and are not authorized from collections but are to be made only in accordance with appropriation by the Legislature and in accordance with the provisions of 12-3-1, et seq. of this code and upon the fulfillment of the provisions set forth in 11B-2-1, et seq. of this code: Provided, That for the fiscal year ending June 30, 2021, expenditures are authorized from collections rather than pursuant to an explicit appropriation by the Legislature. Any balance, including accrued interest and other returns, remaining in the fund at the end of each fiscal year shall not revert to the General Revenue Fund but shall remain in the fund and be expended as provided by this section.
 (a) A person engaged in the business of insurance having knowledge or a reasonable belief that a fraudulent insurance act or another crime related to the business of insurance is being, will be, or has been committed shall provide to the commissioner the information required by, and in a manner prescribed by, the commissioner. (b) Any other person having knowledge or a reasonable belief that a fraudulent insurance act or another crime related to the business of insurance is being, will be, or has been committed may provide to the commissioner the information requested by, and in a manner prescribed by, the commissioner.(c) The commissioner may prescribe a reporting form to facilitate reporting of possible fraudulent insurance acts or other offenses related to the business of insurance for use by persons other than those persons referred to in subsection (a) of this section.(d) Notwithstanding any other provision of this code, a person engaged in the business of insurance shall furnish and disclose any information, including documents, materials, or other information in its possession concerning a fraudulent insurance act or a suspected fraudulent insurance act to the commissioner. Disclosures provided pursuant to this section are subject to the confidentiality provisions set forth in 33-41-7 of this code.
(a) There shall be no civil liability imposed on and no cause of action shall arise from a person's furnishing information concerning suspected or anticipated fraud relating to the business of insurance, if the information is provided to or received from:(1) The commissioner or the commissioner's employees, agents or representatives;(2) Federal, state, or local law-enforcement or regulatory officials or their employees, agents or representatives;(3) A person involved in the prevention and detection of insurance fraud or that person's agents, employees or representatives; or(4) The national association of Insurance Commissioners or its employees, agents or representatives.(b) The provisions of subsection (a) of this section are not applicable to materially incorrect statements made maliciously or fraudulently by a person designated a mandated reporter pursuant to the provisions of subsection (a), section five of this article or made in reckless disregard to the truth or falsity of the statement by those not mandated to report. In an action brought against a person for filing a report or furnishing other information concerning an alleged insurance fraud, the party bringing the action shall plead with specificity any facts supporting the allegation that subsection (a) of this section does not apply because the person filing the report or furnishing the incorrect information did so maliciously in the case of a mandated reporter or in the case of a person not designated a mandated reporter, in reckless disregard for the truth or falsity of the statement.(c) Nothing in this article shall be construed to limit, abrogate or modify existing statutes or case law applicable to the duties or liabilities of insurers regarding bad faith or unfair trade practices.(d) This section does not abrogate or modify common law or statutory privileges or immunities.
(a) Documents, materials or other information in the possession or control of the office of the Insurance Commissioner that are provided pursuant to section six of this article or obtained by the commissioner in an investigation of alleged fraudulent acts related to the business of insurance shall be confidential by law and privileged, shall not be subject to the provisions of chapter twenty-nine-b of this code, shall not be open to public inspection, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties. The commissioner may use the documents, materials or other information if they are required for evidence in criminal proceedings or other action by the state or federal government and in such context may be discoverable as ordered by a court of competent jurisdiction exercising its discretion.(b) Neither the commissioner nor any person who receives documents, materials or other information while acting under the authority of the commissioner may be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (a) of this section except as ordered by a court of competent jurisdiction.(c) In order to assist in the performance of the commissioner's duties, the commissioner: (1) May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (a) of this section with other state, federal and international regulatory agencies, with the national association of Insurance Commissioners and its affiliates and subsidiaries, and with local, state, federal and international law-enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information;(2) May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the national association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law-enforcement officers of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and(3) May enter into agreements governing sharing and use of information including the furtherance of any regulatory or legal action brought as part of the recipient's official duties.(d) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (c) of this section.(e) Nothing in this section shall prohibit the commissioner from providing information to or receiving information from any local, state, federal or international law-enforcement authorities, including any prosecuting authority; or from complying with subpoenas or other lawful process in criminal actions; or as may otherwise be provided in this article.(f) Nothing in this article may be construed to abrogate or limit the attorney-client or work product privileges existing at common law or established by statute or court rule.
(a) There is established the West Virginia Insurance Fraud Unit within the offices of the commissioner. The commissioner may employ full-time supervisory, legal, and investigative personnel for the unit who shall be qualified by training and experience in the areas of detection, investigation, or prosecution of fraud within and against the insurance industry to perform the duties of their positions. The Inspector General of the unit is a full-time position and shall be appointed by the commissioner and serve at his or her will and pleasure. The commissioner shall provide office space, equipment, and supplies, and shall employ and train personnel, including legal counsel, investigators, auditors, and clerical staff necessary for the unit to carry out its duties and responsibilities under this article as the commissioner determines is necessary. (b) It is the duty of the unit to:(1) Initiate inquiries and conduct investigations when the unit has cause to believe violations of any of the following provisions of this code relating to the business of insurance have been or are being committed: 33-1-1 et seq. and 23-1-1 et seq. of this code; 61-3-1 et seq. of this code; and 61-4-5 of this code. Notwithstanding any provision of this code to the contrary, the unit may, with the agreement of the Director of the Public Employees Insurance Agency, conduct investigations related to possible fraud under 5-16-1 et seq. of this code;(2) Review reports or complaints of alleged fraud related to the business of insurance activities from federal, state, and local law-enforcement and regulatory agencies, persons engaged in the business of insurance and the general public to determine whether the reports require further investigation; (3) Conduct independent examinations of alleged fraudulent activity related to the business of insurance and undertake independent studies to determine the extent of fraudulent insurance acts; and(4) Perform any other duties related to the purposes of this article assigned to it by the commissioner. (c) The unit may:(1) Inspect, copy, or collect records and evidence;(2) Serve subpoenas issued by grand juries and trial courts in criminal matters;(3) Administer oaths and affirmations;(4) Share records and evidence with federal, state, or local law-enforcement or regulatory agencies, and enter into interagency agreements. For purposes of carrying out investigations under this article, the unit shall be considered a criminal justice agency under all federal and state laws and regulations and as such shall have access to any information that is available to other criminal justice agencies concerning violations of the insurance laws of West Virginia or related criminal laws;(5) Make criminal referrals to the county prosecutors;(6) Execute search warrants and arrest warrants for criminal violations of the insurance laws of West Virginia or related criminal laws: Provided, That those persons designated by the commissioner to do so meet the requirements of and are certified as law-enforcement officers under 30-29-5 of this code and the certification is currently active;(7) Arrest upon probable cause, without a warrant a person found in the act of violating or attempting to violate an insurance law of West Virginia or related criminal law: Provided, That those persons designated by the commissioner to do so meet the requirements of and are certified as law-enforcement officers under 30-29-5 of this code and the certification is currently active; (8) Conduct investigations outside this state. If the information the unit seeks to obtain is located outside this state, the person from whom the information is sought may make the information available to the unit to examine at the place where the information is located. The unit may designate representatives, including officials of the state in which the matter is located, to inspect the information on behalf of the unit, and may respond to similar requests from officials of other states; (9) Initiate investigations and participate in the development of, and, if necessary, the prosecution of, any health care provider, including a provider of rehabilitation services, suspected of fraudulent activity related to the business of insurance; and(10) Initiate investigations and participate in the development of, and, if necessary, the investigation, control, and prosecution of, any workers compensation fraud, as previously assigned to the Workers Compensation Fraud and Abuse Unit created pursuant to 23-1-1b of this code. (d) Specific personnel of the unit designated by the commissioner may operate vehicles owned or leased for the state displaying Class A registration plates.(e) Notwithstanding any provision of this code to the contrary, specific personnel of the unit designated by the commissioner may carry firearms in the course of their official duties after meeting specialized qualifications established by the Governors Committee on Crime, Delinquency, and Correction, which shall include the successful completion of handgun training provided to law-enforcement officers by the West Virginia State Police: Provided, That nothing in this subsection shall be construed to include any person designated by the commissioner as a law-enforcement officer as that term is defined by the provisions of 30-29-1 of this code.(f) The unit is not subject to the provisions of 6-9A-1 et seq. of this code and the investigations conducted by the unit and the materials placed in the files of the unit as a result of any such investigation are exempt from public disclosure under the provisions of 29B-1-1 et seq. of this code.
(a) The commissioner shall require any applicant for employment with the fraud unit to be fingerprinted. The commissioner is authorized to conduct a criminal records check through the Criminal Identification Bureau of the West Virginia State Police and a national criminal history check through the Federal Bureau of Investigation. The results of any criminal records or criminal history check shall be sent to the commissioner. The West Virginia State Police may exchange this fingerprint data with the Federal Bureau of Investigation. (b) The Inspector General shall not disclose information obtained pursuant to subsection (a) of this section except for purposes directly related to the employment of the applicant.
Notwithstanding any other provision of this code to the contrary, any person authorized under this article to initiate and conduct investigations may submit complaints directly to a magistrate after review and approval by the prosecuting attorney, if the complaint is related to the business of insurance and may be prosecuted as a criminal violation under this chapter; chapter twenty-three of this code; article three, chapter sixty-one of this code; or section five, article four of said chapter.The complaint shall be in the form of a written statement of the essential facts constituting the offense charged. The complaint shall be presented to and sworn before a magistrate in the county where the offense is alleged to have occurred.If it appears from the complaint, or from an affidavit or affidavits filed with the complaint, that there is probable cause to believe that an offense has been committed and that the defendant committed it, a warrant for the arrest of the defendant shall be issued to any officer authorized by law to arrest persons charged with offenses against the state.
This article does not:(1) Preempt the authority or relieve the duty of other law-enforcement or regulatory agencies to investigate, examine and prosecute suspected violations of law;(2) Prevent or prohibit a person from disclosing voluntarily information concerning insurance fraud to a law-enforcement or regulatory agency other than the insurance fraud unit; or(3) Limit the powers granted elsewhere by the laws of this state to the commissioner or his or her agents to investigate and examine possible violations of law and to take appropriate action against violators of law.
This article shall be known and may be cited as the "Women's Access To Health Care Act."
The Legislature finds and declares that adequate delivery of health care services to women requires direct access to primary and preventative obstetrical and gynecological services, which services may be provided as "well woman examinations", direct access without prior authorization to prenatal and obstetrical services for pregnant women and access to certain services essential to the physical and psychological integrity of women.
For purposes of this article:(1) "Advanced nurse practitioner" means a certified nurse-midwife, or an advanced nurse practitioner certified to practice in family practice, women's health (ob/gyn), or primary care adult, geriatric or pediatric practice, practicing within the lawful scope of that provider's practice.(2) "Health benefits policy" means any individual or group plan, policy or contract for health care services issued, delivered, issued for delivery or renewed in this state by a health care corporation, health maintenance organization, accident and sickness insurer, fraternal benefit society, nonprofit hospital service corporation, nonprofit medical service corporation or similar entity, when the policy or plan covers hospital, medical or surgical expenses.(3) "Partial-birth abortion" means an abortion in which the person performing the abortion partially vaginally delivers a living fetus before killing the fetus and completing the delivery.(4) "Physician performing a partial-birth abortion" means a doctor of medicine or osteopathy legally authorized to practice medicine and surgery in West Virginia, or any other individual who is legally authorized by the state to perform abortions: Provided, That any individual who is not a physician or not otherwise legally authorized by the state to perform abortions, but who nevertheless directly performs a partial-birth abortion, is subject to the provisions of this article.(5) "Vaginally delivers a living fetus before killing the fetus" means deliberately and intentionally delivering into the vagina a living fetus, or a substantial portion thereof, for the purpose of performing a procedure that the physician or person delivering the living fetus knows will kill the fetus, and kills the fetus.(6) "Women's health care provider" means an obstetrician/ gynecologist, advanced nurse practitioner certified to practice in women's health (ob/gyn), certified nurse-midwife or physician assistant-midwife practicing within the lawful scope of that provider's practice.
No health benefits policy may require as a condition to the coverage of basic primary and preventative obstetrical and gynecological services that a woman first obtain a referral from a primary care physician: Provided, That for a health maintenance organization authorized under article twenty-five-a of this chapter, direct access, at least annually, to a women's health care provider for purposes of a well woman examination shall satisfy the foregoing requirement. No health benefits policy may require as a condition to the coverage of prenatal or obstetrical care that a woman first obtain a referral for those services by a primary care physician. No health benefits policy providing coverage for surgical services in a hospital inpatient or outpatient setting may deny coverage for: (1) Reconstruction of the breast following mastectomy; or (2) reconstructive or cosmetic surgery required as a result of an injury caused by an act of family violence as defined in section three, article two-a, chapter forty-eight of this code, when the person inflicting the injury was convicted of a felony, a lesser included misdemeanor offense, or a charge of domestic battery for inflicting the injury.
Every health benefits policy that is issued, delivered, issued for delivery or renewed in this state on or after July 1, 1998, shall disclose in writing to enrollees, subscribers and insureds, in clear and accurate language, the female enrollee's right of direct access to a women's health care provider of her choice. The information required to be disclosed shall include, at a minimum, any specific women's health care services that are excluded from coverage and the health benefits policy's right to limit coverage to medically necessary and appropriate women's health care services.
No health benefits policy may impose additional copayments or deductibles for female enrollees' direct access to in-network, participating women's health care providers unless the same additional cost-sharing is imposed for other types of health care services not delineated in this article.
A health benefits policy may limit the number of women's health care providers in a network: Provided, That a sufficient number of providers are available to serve a defined population or geographic service area so that female enrollees will have direct and timely access to women's health care providers.
(a) Any person who knowingly performs a partial-birth abortion and thereby kills a human fetus is guilty of a felony and, shall be fined not less than $10,000, nor more than $50,000, or imprisoned not more than two years, or both fined and imprisoned. This section does not apply to a partial-birth abortion that is necessary to save the life of a mother when her life is endangered by a physical disorder, illness or injury.(b) A physician charged pursuant to this section may seek a hearing before the West Virginia Board of Medicine on the issue of whether the physicians act was necessary to save the life of a mother pursuant to the provisions of subsection (a) of this section. The findings of the Board of Medicine are admissible on this issue at the trial of the physician. Upon a motion by the defendant, the court shall delay the beginning of trial for not more than thirty days to permit the Board of Medicine hearing to take place.(c) No woman may be prosecuted under the provisions of this section for having a partial-birth abortion, nor may she be prosecuted for conspiring to violate the provisions of this section.(d) Effective from the reenactment of this section during the third extraordinary session of the Legislature, 2022, this article is of no force or effect unless any provision of 16-2R-1 et seq. of this code is judicially determined to be unconstitutional.
This article shall be known and may be referred to as the "Insurance Tax Procedures Act."
(a) This section is the sole method of receiving a refund or credit for any tax or related charge administered under this article.(b) Any taxpayer claiming to be due a refund or credit for overpayment of any tax or related charge administered under this article may, within five years from the date of the filing of the return under which the tax was imposed or within four years from the date the tax was paid, whichever term expires later, file with the commissioner a petition in writing requesting a refund of the tax or any part thereof:(1) If the petition and the proofs filed in support thereof persuades the commissioner that the payment of the tax or related charges or any part thereof was improperly required, he or she shall refund or issue a credit to the taxpayer for the improper amounts;(2) If the commissioner is in doubt as to whether or not the taxes or related charges were proper, or if the commissioner is of the opinion that the payment of the tax collected, or any part thereof was proper, then the commissioner shall within thirty days hold a hearing to determine the issue;(3) If a taxpayer is considered to be due a credit or refund, the commissioner shall, if the amount exceeds $1,000, at his or her discretion, pay the amount in equal, annual installments over not more than three years. The commissioner may issue a credit against future taxes in lieu of a refund payment, whether lump sum or installment;(4) The payment of refunds or issuance of credits to a taxpayer pursuant to this section shall constitute a complete and final settlement of all of the taxpayer's claims for which the refunds or credits are paid. No cause of action or liability, whether for damages, attorney's fees, costs or of any other nature, shall arise against the commissioner or against his or her agents for administering or litigating the Constitutionality of a tax subsequently determined to be unconstitutional.
A taxpayer shall be liable for interest on any unpaid final assessment or penalty or portion thereof: Provided, That interest may not be charged on interest. Interest shall be calculated using the annual rates which are established by the Tax Commissioner pursuant to section seventeen-a of article ten, chapter eleven of this code and shall accrue daily.
(a) Payments made by a taxpayer, other than installment payments of a tax liability which is required to be paid in installments, shall be allocated to the taxpayer's outstanding liabilities as follows:(1) First, to any assessment which has become final;(2) Next, to any fee which has not yet been assessed;(3) Next, to any tax or related charge which has not yet been assessed;(4) Finally, to any assessment which has not yet become final.
(a) Upon discovering that a taxpayer has made payments in excess of the taxpayer's outstanding liabilities, the commissioner shall give notice of the overpayment to the taxpayer.(b) Payments by a taxpayer in excess of the amounts required to satisfy the taxpayer's liabilities for taxes and related charges shall give rise to a credit against the taxpayer's future liabilities unless the taxpayer, within thirty days of receiving the notice, either requests a refund under this article and is granted the refund, or establishes to the satisfaction of the commissioner that no future liabilities will be incurred by the taxpayer.(c) Upon discovering that a taxpayer has made payments less than the taxpayer's outstanding liabilities, or that the taxpayer has made no payments, the commissioner shall give notice of the underpayment to the taxpayer, which notice will be considered an assessment of the amount due.
(a) The remedies provided by this article are exclusive and shall be in lieu of any and all remedies provided by common law or by other provisions of this code.(b) Retroactive monetary relief for an unconstitutional tax shall be granted only at the express order of a court of competent jurisdiction which appears in a final decision of that court. Notwithstanding any other provision of this code, a final decision ordering retroactive monetary relief may not be considered to override any statute of limitations contained within this article, or to require relief for any claim which is res judicata.(c) Retroactive monetary relief shall comprise only a refund of the unconstitutional tax, or of the portion thereof that the court has ordered refunded, which actually has been paid by the taxpayer, together with any penalties or interest which are based upon the taxpayer's failure to pay the unconstitutional tax and which actually have been paid by the taxpayer.(1) Except as otherwise provided in this section, retroactive monetary relief shall be paid to the taxpayer in a lump sum within one hundred eighty days of the final decision which orders the relief.(2) If the amount of retroactive monetary relief due to any individual taxpayer exceeds $1,000 or the aggregate amount of the relief due to all taxpayers exceeds $100,000, the commissioner at his or her discretion may pay all refunds issued pursuant to the final decision in equal, annual installments over not more than three years. For purposes of this subsection, a year shall be a period of twelve calendar months measured from the date upon which the final decision which orders the relief is entered.(3) With the approval of the taxpayer, the commissioner may issue a credit against future taxes in lieu of a refund payment due pursuant to this section, whether lump sum or installment.(d) The payment of refunds or issuance of credits to a taxpayer pursuant to this section shall constitute a complete and final settlement of all of the taxpayer's claims which are based upon the unconstitutional tax for which the refunds are paid or the credits issued. No cause of action or liability, whether for damages, attorney's fees, costs or of any other nature, shall arise against the commissioner or against his or her agents for administering or litigating the Constitutionality of a tax subsequently determined to be unconstitutional.
When a person is required to collect a tax or surcharge from another and remit the amount thus collected to the commissioner, the moneys collected are considered to be held by that person in trust for the State of West Virginia. With respect to the filing of returns, assessments and interest, taxes that are collected by a person to be remitted to the commissioner are treated as would a tax paid directly by that person to the commissioner. The person collecting the tax shall return to the policyholder or person paying the tax or surcharge any refund made for overpayment of the amount collected.
(a) The provisions of this article applies to all taxes, surcharges, assessments, penalties and fees, however denominated, which are remitted to the commissioner.(b) This article supersedes any provisions in this code which concern the matters addressed in this article, but only to the extent that those other provisions are inconsistent with this article.
For the purposes of this article and where not otherwise defined in this chapter:(a) "Assessment" means a written notice by the commissioner of an amount due by a taxpayer for payment of any tax, fee, penalty or related charge administered under this article.(b) "Days" means calendar days.(c) "Filing date" for a return means the date prescribed by the Legislature for the filing of a return, or if no date is prescribed, the payment date for the tax which is the subject of the return.(d) "Final decision" means a decision for which the availability of an appeal has been exhausted, either because the time for filing a petition has elapsed or because the petition has been denied.(e) "Payment date" for a tax means the date prescribed by the Legislature for the payment of the tax, or if no date is prescribed, on March 1 next following the end of the taxable year for the tax.(f) "Related charges" includes fees, and additions and interest called for by this article.(g) "Surcharge" means a tax payable by a policyholder but collected and remitted to the commissioner by the insurer.(h) "Tax" means any tax to which this article applies.(i) "Taxable premium" means the amount of the gross direct premiums, annuity considerations or dividends on participating policies applied in reduction of premiums less premiums returned to policyholders due to cancellation of policies.(j) "Taxpayer" includes any legal entity which is liable for the remittance of a tax to the commissioner in a particular taxable year, and any legal entity that is required to file a return under this article.
(a) All powers granted to the commissioner by this article are in addition to those powers granted to the commissioner elsewhere in this code, and no provision of this article may be construed to eliminate or diminish the other powers.(b) The commissioner may prescribe any forms as he or she considers necessary for the fair, uniform and efficient administration of taxes. All forms now used by the commissioner shall be prescribed until the commissioner requires otherwise.(c) The commissioner may propose rules for legislation approval in accordance with the provisions of article three, chapter twenty-nine-a of this code which he or she considers necessary for the fair, uniform and efficient administration of taxes. All currently existing rules remain in effect until amended or repealed.(d) For the purpose of ascertaining the application of this article to a taxpayer, the commissioner may:(1) Examine any books, papers, records, memoranda or property of the taxpayer, legal entity, or any other person which may be relevant in determining its tax liability, compliance or taxpayer status;(2) Require the attendance for the purpose of giving testimony of the taxpayer or legal entity, or of an employee, officer or agent of the taxpayer or legal entity who reasonably is believed to possess knowledge which may be relevant in determining its tax liability, compliance or taxpayer status;(3) Exercise any of the powers conferred by sections four through eight of article two of this chapter.(e) If the commissioner determines, after notice and hearing, that a person has failed or refused to comply with the provisions of this article, or of any legislative rule proposed by the commissioner and approved by the Legislature pursuant to this article, the commissioner may order that the person comply with the provisions and that the person take any other steps as are reasonably necessary to allow the provisions to be enforced. If the person holds a license issued by the commissioner, the commissioner may revoke that license upon the person's failure or refusal to obey an order issued under this subsection or in the commissioner's discretion may in the alternative assess a penalty against the person in an amount up to $5,000 per occurrence.(f) The commissioner has exclusive authority to bring or join suit in a court of competent jurisdiction, or to pursue any other action allowed by law, to enforce the provisions of this article, or of legislative rules proposed pursuant to this article and approved by the Legislature, or to enforce any order, subpoena or other directive issued by the commissioner pursuant to this article to best promote the fair, uniform and efficient administration of taxes.
(a) Prior to commencing any civil action, the commissioner may compromise any claim relating to the liability of a person with respect to any tax, including any surcharge, interest, additional tax, fee, fine or penalty, administered by the commissioner under this chapter for any taxable period. The following conditions apply to any agreement entered into under this subsection:The agreement must be in writing;(2) In the absence of a showing of fraud, malfeasance or misrepresentation of a material fact, then:(A) The agreement shall be final and conclusive; (B) The agreement and the matters so agreed upon shall not be reopened or the agreement modified by any officer, employee or agent of this state; and(C) In any civil action or administrative proceeding, the compromise agreement or any determination, assessment, collection, payment, abatement, refund or credit made in accordance therewith may not be annulled, modified, set aside or disregarded.(b) The commissioner may compromise all or part of any civil case arising under the provisions of this article. The following conditions apply to any agreement entered into under this subsection:(1) Any liability for tax, including any surcharge, interest, additional tax, fee, fine or penalty, may be compromised upon consideration of the terms and conditions of the compromise agreement in light of any or all of the following:(A) Doubt as to liability;(B) Doubt as to the ability to collect;(C) Strength of the taxpayer's defenses to the assessment of the tax, surcharge, interest, additional tax, fee, fine or penalty;(D) Age of the dispute;(E) The anticipated time and resources which will be required to develop the civil action for adjudication; and(F) Any other factors relevant to the determination of whether citizens of the State of West Virginia are best served by entering into a compromise agreement.(2) In all matters involving issues in respect of a tax liability in controversy of $15,000 or more for one or all of the years involved in claim or case, the commissioner shall seek the written recommendation of the Attorney General before entering into the compromise agreement. The written recommendation of the Attorney General shall be placed in the commissioner's file.(c) Whenever a compromise agreement is made by the commissioner under subsection (a) or (b) of this section, there shall be placed on file in the commissioner's office an opinion from the commissioner's legal counsel. The opinion must include the following:(1) The amount of tax, surcharge, additional tax, fee and interest assessed;(2) The anticipated fine or penalty imposed by law on the person against whom the tax, surcharge, additional tax, fee and interest was assessed; and(3) The amount actually paid in accordance with the terms of the compromise agreement;(4) The reasons underlying the decision to enter into a compromise agreement: Provided, That the requirements of this subsection do not apply with respect to any agreement in which the amount of the tax assessed, including any surcharge, interest, additional tax, fee, fine or penalty, is less than $1,000.(d) Report to Legislature. -- The commissioner shall submit to the Speaker of the House of Delegates, the President of the Senate and the Legislative Auditor a quarterly report summarizing the issues and amounts of liabilities contained in the agreements and compromises into which he or she has entered pursuant to this section. The report shall be in a form which preserves the confidentiality of the identity of the taxpayers involved in the agreements and compromises. Notwithstanding any other provision of law to the contrary, the agreements and compromises entered into pursuant to this section shall be subject to audit, in their entirety, by the Legislative Auditor.
The commissioner has exclusive authority to bring or join suit in a court of competent jurisdiction, or pursue any other action allowed by law, to obtain the payment of taxes and related charges: Provided, That the commissioner must so act within ten years following the date upon which the assessment or order establishing the taxpayer's liability becomes final.
(a) Any person who is subject to a tax in a given taxable year shall file a return for that tax and that taxable year, even if the person has no tax liability for that taxable year.(1) Each return shall be filed by the applicable filing date. The commissioner, at his or her discretion, may accept a return after the filing date.(2) Should a taxpayer file more than one return for the same tax, only the return last filed shall be effective. The commissioner, at his or her discretion, may approve the withdrawal of a return by the taxpayer.(b) Each return shall be executed by the taxpayer in a manner prescribed by the commissioner. Each return so executed shall constitute a sworn statement by the signatory that, to the best of his or her knowledge and belief, the information provided in the return or in any supporting materials which accompany the return is true and accurate.(c) All returns shall be prepared on forms prescribed by the commissioner. If no form has been prescribed for a particular tax, the return may be in a form chosen by the taxpayer but shall clearly set forth the following information: The taxpayer's name, address and telephone number; the identification number used by the taxpayer in filing federal income tax returns; the tax and taxable year to which the return applies; and all information used to calculate the tax liability of the taxpayer.(d) For purposes of this article, a return is not regarded as filed if:(1) It is not filed by the applicable filing date, unless the commissioner accepts the return; or(2) It has not been received by the commissioner; or(3) It has not been properly executed by the taxpayer; or(4) It is not in the proper form; or(5) It is incomplete or inaccurate in any material respect; or(6) It is not accompanied by supporting material required by the commissioner; or(7) It is withdrawn by the taxpayer with the approval of the commissioner; or(8) It is not accompanied by the payment for any tax due.(e) If a tax is to be paid in installments, the taxpayer shall file an appropriate return for each period for which an installment payment is calculated, even if the taxpayer is not required to make an installment payment for that period. The returns shall satisfy all requirements established for annual returns by this section except that the filing date for an installment return is the date prescribed for the installment payment for the period described by the return. Failure of a taxpayer to make quarterly payments, if required, of at least one fourth of either the total tax paid during the preceding calendar year or eighty percent of the actual tax liability for the current calendar year is considered the same as a failure or refusal to pay the estimated taxes and subjects the taxpayer to the penalties provided in this article.(f) If a taxpayer has failed to file a return by the applicable filing date or has filed a false or fraudulent return, the commissioner may use any information which is available to him or her to determine the taxpayer's tax liability: Provided, That a determination of tax liability by the commissioner pursuant to this subsection does not relieve the taxpayer of the duty to file a true, accurate and complete return and does not reduce or preclude any penalty based upon the taxpayer's failure to file.(g) A taxpayer to whom a credit has been issued may apply the credit as payment for any like tax due to be remitted by the taxpayer upon written notice to the commissioner stating the amount of the credit to be so applied.
(a) If any taxpayer fails to file a return by the applicable filing date, then for each day throughout which the taxpayer fails to file, the taxpayer is liable for a civil penalty of $25: Provided, That the Commissioner may waive or reduce this penalty if the Commissioner determines that the failure to timely file was caused by excusable neglect.(b) If a taxpayer fails to pay a tax liability in full by the applicable payment date, then for each day throughout which a portion of the liability remains unpaid, the taxpayer is liable for a civil penalty in an amount equal to one percent of the unpaid portion: Provided, That the sum of the penalties imposed under this subsection may not exceed one hundred percent of the tax liability: Provided, however, That this penalty may be waived or reduced if the taxpayer establishes, to the satisfaction of the Commissioner, that the failure upon which the penalty is based was not, in whole or in part, willful or due to the neglect of the taxpayer.(c) The assessment of a penalty under this section is automatic unless a waiver or reduction of the penalty is agreed to by the Commissioner in writing.
(a) The commissioner may issue assessments for tax liabilities and related charges, or any portions thereof, which are due and payable but unpaid. At any time before an assessment becomes final, the commissioner may amend the assessment, in whole or in part. Except as otherwise provided in this article, an assessment which is amended by the commissioner shall be regarded as a new assessment.(b) The commissioner shall give the taxpayer notice of every assessment or amendment thereto. The date upon which the notice is sent to the taxpayer shall be regarded as the date upon which the assessment is issued.(c) The notice of assessment shall specify the amount of each tax liability or related charge which is the subject of the assessment: Provided, That the notice may list interest and penalties which accrue or are imposed from the time that the assessment is issued to the time that the assessment is paid.(d) Notwithstanding any other provisions of this article, assessments may be issued only within the following time periods:(1) For tax liabilities, if the taxpayer has filed a return for the tax and taxable year at issue, within three years of the filing date for the return or the date upon which the return actually was filed, whichever comes later;(2) For fees, within three years of the date prescribed for payment of the fee;(3) For penalties based upon a failure to pay a tax, at any time.(e) The commissioner shall, within ninety days of a written request by a taxpayer, issue an assessment: Provided, That the commissioner may refuse to issue an assessment until the taxpayer has provided the commissioner with all information necessary to determine or verify the taxpayer's outstanding liabilities for taxes and related charges.(f) If the taxpayer does not timely request a hearing on an assessment pursuant to section nine of this article, the assessment shall become final. A final assessment is conclusive of the liability of the taxpayer and is not subject to either administrative or judicial review.
(a) Within sixty days of the issuance of an assessment or imposition of a penalty, a taxpayer may request a hearing before the commissioner on the amount or validity of the assessment or penalty. Except as otherwise provided in this article or in legislative rules proposed and approved by the Legislature thereto, the hearings are subject to the requirements established in sections thirteen and fourteen, article two of this chapter.(b) A request for a hearing shall be in writing and shall set forth with reasonable particularity the taxpayer's objections to the assessment or penalty and the factual basis therefore. At any time prior to the hearing, the commissioner may allow a taxpayer to amend the request.(c) The taxpayer's request shall be executed by the taxpayer in a manner prescribed by the commissioner, and a request so executed shall constitute a sworn statement by the signatory that to the best of his or her knowledge and belief, the information provided in the request is true and accurate.(d) Assessments issued by the commissioner shall be presumed correct, and the taxpayer shall bear the burden of proving, by a preponderance of the evidence, that the assessment is incorrect or contrary to law.(e) If the taxpayer does not timely appeal the commissioner's order, that order shall become final as of the expiration of the period during which the taxpayer may have brought an appeal. Upon becoming final, an order shall be conclusive of the liability of the taxpayer and is not subject to either administrative or judicial review.(f) An agreed order signed by the taxpayer and the commissioner is final and shall constitute a waiver of the taxpayer's right to a hearing or appeal under this chapter.
This article may be cited as the "Unauthorized Insurers Act".
(a) Before any unauthorized insurer shall file or cause to be filed any pleading in any action, suit or proceeding instituted against it, or any notice, order, pleading or process in an administrative proceeding before the commissioner instituted against the insurer, the unauthorized insurer shall either:(1) Deposit with the clerk of the court in which the action, suit or proceeding is pending, or with the commissioner in an administrative proceeding, cash or securities or file with the clerk or the commissioner a bond with good and sufficient sureties, to be approved by the court or the commissioner, in an amount to be fixed by the court or commissioner sufficient to secure the payment of any final judgment which may be rendered in the action or administrative proceeding; or(2) Deposit with the clerk of the court in which the action, suit or proceeding is pending, or with the commissioner in an administrative proceeding, cash or securities or file with the clerk or the commissioner a bond with good and sufficient sureties, to be approved by the court or the commissioner, in an amount required to procure a license to transact insurance in this state pursuant to the provisions contained within article three of this chapter.(b) The court or the commissioner in any action, suit or proceeding in which service is made in the manner provided in subsection (d) or (e), section five of this article, may, in its, his or her respective discretion, order the postponement as may be necessary to afford the responding party reasonable opportunity to comply with the provisions of subsection (a) of this section and thereafter to defend the action or proceeding.
(a) Any person who transacts insurance, transacts an insurance business or provides insurance coverage in this state for the cost of:(1) Medical care;(2) Surgery;(3) Chiropractic;(4) Physical therapy;(5) Speech pathology;(6) Audiology;(7) Professional care of mental health;(8) Dental care;(9) Hospital care; or(10) Ophthalmic care, whether the coverage provides for direct payment, reimbursement or any other method of payment, is subject to regulation by the commissioner and to the provisions of this code unless he or she shows that while transacting insurance, or transacting an insurance business or providing the coverage he or she is subject to regulation by an agency of the federal government.(b) A person may show that he or she is subject to regulation by an agency of the federal government by providing the commissioner with an advisory opinion issued pursuant to ERISA Procedure 76-1, 41 Federal Register 36281 (Aug. 27, 1976).
All restitution ordered by the commissioner pursuant to the authority set forth in section seven of this article and received from unauthorized insurers shall be collected by the commissioner and distributed to the affected insureds on a pro rata basis. The commissioner shall maintain a record reflecting the names of each of the insureds for which the restitution was ordered, the total amount of the unpaid claims for each of the insureds to which the restitution will be paid and the actual amount of restitution to be paid to the insured. The commissioner shall likewise maintain an account into which restitution received shall be placed until it is distributed to the affected insureds.
(a) The commissioner may proceed in the courts of this state, any reciprocal state or any other state to enforce an order or decision in any court proceeding or in any administrative proceeding before the commissioner.(b) The commissioner shall determine which states and territories qualify as reciprocal states.(c) A certified copy of any foreign decree may be filed in the office of the clerk of any circuit court of this state. The clerk of the circuit court, upon verifying with the commissioner that the decree or order qualified as a foreign decree, shall treat the foreign decree in the same manner as a decree of a circuit court of this state. A foreign decree, so filed, has the same effect and is considered as a decree of a circuit court of this state, and is subject to the same procedures, defenses and proceedings for reopening, vacating or staying a decree of a circuit court of this state and may be enforced or satisfied in like manner.(d) At the time of the filing of the foreign decree, counsel for the commissioner shall make and file with the clerk of the circuit court an affidavit setting forth the name and last known post office address of the defendant. Promptly upon the filing of the foreign decree and the affidavit, the clerk of the circuit court shall mail notice of the filing of the foreign decree to the defendant at the address given and to the commissioner and shall make a note of the mailing in the docket. In addition, counsel for the commissioner may mail a notice of the filing of the foreign decree to the defendant and to the commissioner and may file proof of mailing with the clerk of the circuit court. Lack of mailing notice of filing by the clerk of the circuit court may not affect the enforcement proceedings if proof of mailing by the counsel for the commissioner has been filed. No execution or other process for enforcement of a foreign decree filing under this section may issue until thirty days after the date the decree is filed.(e) If the defendant shows the circuit court:(1) That an appeal from the foreign decree is pending or will be taken, or that a stay of execution has been granted, the court shall stay enforcement of the foreign decree until the appeal is concluded, the time for appeal expires or the stay of execution expires or is vacated upon proof that the defendant has furnished the security for the satisfaction of the decree required by the state in which it was rendered.(2) Any ground upon which enforcement of a decree of any circuit court of this state would be stayed, the court may stay enforcement of the foreign decree.(f) Any person filing a foreign decree shall pay to the clerk of the circuit court such fees as are required by law.
The purpose of this article is to subject certain persons and insurers to the jurisdiction of the commissioner and to the courts of this state in suits by or on behalf of the state. The Legislature declares that it is concerned with the protection of residents of this state against unscrupulous acts by insurers not authorized to transact an insurance business in this state. It is the intent of the Legislature to maintain fair and honest insurance markets, to protect authorized insurers which are subject to regulation from unfair competition by unauthorized insurers, and to protect against the evasion of the insurance regulatory laws of this state. The Legislature declares that it is a subject of concern that certain insurers, while not licensed to transact insurance in this state, are soliciting the sale of insurance and selling insurance to residents of this state, thus presenting the Insurance Commissioner with the problem of resorting to courts of foreign jurisdictions for the purpose of enforcing the insurance laws of this state for the protection of our citizens. The Legislature declares that it is also a subject of concern that many residents of this state hold policies of insurance issued or delivered in this state by insurers not licensed to transact insurance in this state, thus presenting to the residents the often insurmountable obstacle of resorting to distant fora for the purpose of asserting legal rights under these policies. In furtherance of the state interest, the Legislature herein provides a method of substituted service of process upon the insurers and declares that in so doing it exercises its powers to protect its residents and to define, for the purpose of this article, what constitutes transacting insurance in this state.
(a) "Administrator" or "third-party administrator" means, as used in this article unless otherwise indicated, a person who for residents of this state, or for residents of another jurisdiction from a place of business in this state, performs administrative functions including claims administration or payment, marketing, premium accounting, premium billing, coverage verification, underwriting authority or certificate issuance in regard to insurance.(b) "Assist" means to aid, counsel, represent, opine, administer or, in any capacity, to help another.(c) "Commissioner" means the Insurance Commissioner for the State of West Virginia.(d) "Effectuating" means to bring about; to effect.(e) "Foreign decree" means any decree or order of a court located in a reciprocal state or other state including a court of the United States located therein, against any insurer incorporated or authorized to do business in this state or against any unauthorized insurer with its principal place of business located in this state.(f) "Insurance" is a contract whereby one undertakes to indemnify another or to pay a specified amount upon determinable contingencies.(g) "Insured" means, as used in this article unless otherwise indicated, any individual, member, named insured, beneficiary, subscriber or group who has obtained insurance from an unauthorized insurer or who is insured under a contract of insurance obtained from an unauthorized insurer.(h) "Insurer" means, as used in this article unless otherwise indicated, any person engaged in the transaction of insurance.(i) "Negotiation" means, as used in this article unless otherwise indicated, the deliberation, discussion or conference upon the terms of a proposed agreement; it is that which passes between parties or their agents in the course of or incident to the making of a contract; to conduct communications or conferences with a view to reaching an agreement.(j) "Person" means, as used in this article unless otherwise indicated, any natural person or entity, including, but not limited to, individuals, partnerships, associations, bona fide associations, trusts, trustees, companies, insurers, unauthorized insurers, organizations, societies, reciprocals, syndicates, administrators, third-party administrators, agents, producers, advertisers, customer service representatives, promoters, officers, directors, lawyers, incorporators or any other legal entity.(k) "Principal place of business" means the single state in which the policy for the direction, control and coordination of the operations of the insurer as a whole are primarily exercised, with consideration being given to, but not limited to:(1) The state in which the primary executive and administrative headquarters of the entity is located;(2) The state in which the principal office of the chief executive officer of the entity is located;(3) The state in which the board of directors (or similar governing body) of the entity conducts the majority of its meetings;(4) The state in which the executive or management committee of the board of directors (or similar governing body) of the entity conducts the majority of its meetings; and(5) The state from which the management of the overall operations of the entity is directed.(l) "Procure" means to cause a thing to be done, to instigate, contrive, bring about, effect or cause; to persuade, induce or prevail upon; it is the act of obtaining, attainment or acquisition.(m) "Qualified party" means a state regulatory agency acting in its capacity to enforce the insurance laws of its state.(n) "Reciprocal state" means any state or territory of the United States the laws of which contain procedures substantially similar to those specified in this section for the enforcement of decrees or orders issued by courts located in the states or territories of the United States, against any insurer incorporated or authorized to do business in such state or territory or any unauthorized insurer with its principal place of business in such state or territory.(o) "Solicitation" and "solicit" mean attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company, including without limitation, providing rate comparisons of various insurers based on information provided by the person.(p) "Transaction of insurance" means that for purposes of this article, any of the following acts in this state effected by mail or otherwise is considered to constitute the transaction of an insurance business in or from this state:(1) The making of or proposing to make an insurance contract;(2) The making of or proposing to make, as guarantor or surety, any contract of guaranty or suretyship as a vocation and not merely incidental to any other legitimate business or activity of the guarantor or surety;(3) The taking or receiving of an application for insurance;(4) The receiving or collection of any premium, commission, membership fees, assessments, dues or other consideration required for obtaining or renewing insurance;(5) The issuance or delivery in this state of certificates or contacts of insurance to residents of this state or to persons authorized to do business in this state;(6) The solicitation, negotiation, procurement or effectuation of insurance or renewals thereof;(7) The dissemination of information as to coverage or rates, or forwarding of applications, or delivery of policies or contracts, or inspection of risks, the fixing of rates or investigation or adjustment of claims or losses or the transaction of matters subsequent to effectuation of the contract and arising out of it, or any other manner of representing or assisting a person or insurer in the transaction of insurance with respect to any risk or exposure located or to be performed in this state;(8) The transaction of any kind of insurance business specifically recognized as transacting an insurance business within the meaning of the statutes relating to insurance;(9) The offering of insurance or the transacting of insurance business; or(10) Offering an agreement or contract which purports to alter, amend or void coverage of an insurance contract.(q) "Unauthorized insurer" means a person or insurer engaged in the transaction of insurance without a license in force pursuant to the laws of this state unless exempted by the insurance laws of this state, or any person assisting an unauthorized insurer.
(a) It is unlawful for any person to engage in any act which constitutes the transaction of insurance under the provisions of this article unless authorized by a license in force pursuant to the laws of this state, or unless exempted by the insurance laws of this state. Any person or insurer engaged in any act which constitutes the unauthorized transaction of insurance shall be subject to the provisions contained in chapter thirty-three of the code and the provisions and penalties set forth in this article.(b) It is unlawful for any person to, directly or indirectly, represent, aid, counsel, opine, administer, assist in any manner or capacity or otherwise act as an agent for or on behalf of an unauthorized insurer in the unauthorized transaction of insurance. Any person who represents, aids or assists, in any manner or capacity, an unauthorized insurer in violation of this article shall be subject to the provisions and penalties set forth in this article.(c) An unauthorized insurer shall be bound by the terms of the insurance contract, certificate or agreement as if the contract, certificate or agreement were legally procured under the insurance laws of this state.(d) This article does not apply to: (i) Any transaction for which a license is not required pursuant to section one, article three of this chapter, including the lawful transaction of surplus lines insurance and reinsurance by insurers; (ii) transactions in this state relative to a policy issued or to be issued outside this state involving insurance on cargo vessels, their craft or hulls, their cargoes, marine builder's risk, commercial marine protection and indemnity or other risk, including strikes and war risks commonly insured under ocean marine forms of policy; (iii) transactions in this state involving group life insurance, group accident and sickness insurance or group annuities providing coverage under policies that are recognized under articles fourteen and sixteen, respectively, of this chapter where: (1) The master policy of such groups was lawfully issued and delivered in and pursuant to the laws of a state in which the insurer was authorized to do an insurance business, to a group organized for purposes other than the procurement of insurance, and where the policyholder is domiciled or otherwise has a bona fide situs; and (2) except for group annuities, the insurer complies with section thirty-five, article six of this chapter. The commissioner may require the insurer which has issued such master policy to submit such information as the commissioner requires in order to determine if probable cause exists to convene a hearing to determine whether the total charges for the insurance to the persons insured are reasonable in relation to the benefits provided under such policy.
(a) Any act of transacting insurance by any unauthorized insurer is equivalent to and constitutes an irrevocable appointment by an unauthorized insurer, binding upon him or her, his or her executor or administrator, or successor in interest, of the Secretary of State or his or her successor in office, to be the true and lawful attorney of an unauthorized insurer upon whom may be served all lawful process in any action, suit or proceeding in any court by the commissioner, the state or an insured and upon whom may be served any notice, order, pleading or process in any proceeding before the commissioner and which arises out of transacting an insurance business in this state by such an insurer. Any act of transacting insurance in this state by any unauthorized insurer or any person acting in furtherance of an unauthorized insurer's business, signifies the agreement of the person or unauthorized insurer that any lawful process in such a court action, suit or proceeding or any notice, order, pleading or process in an administrative proceeding before the commissioner so served is of the same legal force and validity as personal service or process in this state upon an insurer.(b) Service of process in an action must be made by delivering to and leaving with the Secretary of State, or some person in apparent charge of his or her office, two copies thereof and by payment to the Secretary of State the fee prescribed by section two, article one, chapter fifty-nine of this code together with any other fees prescribed by law. Service upon the Secretary of State as attorney is service upon the principal.(c) Upon receipt by the Secretary of State of two copies of the process to be served, and the payment of all relevant fees, the Secretary of State shall cause the process to be served in the manner prescribed in subsection (d) of this section.(d) The Secretary of State shall forward a copy of the process by registered or certified mail to the unauthorized insurer or any person acting in furtherance of an unauthorized insurer's business at its last-known principal place of business and shall keep a record of all process so served upon the person or unauthorized insurer. Service of process is sufficient, provided notice of service and a copy of the process are sent within ten days thereafter by or on behalf of the moving party to the responding party, at its last-known principal place of business by registered or certified mail with return receipt requested. The moving party shall file with the clerk of the court in which the action is pending, or with the judge or magistrate of the court in case there be no clerk, or in the official records of the commissioner if an administrative proceeding before the commissioner, an affidavit of compliance herewith, a copy of the process and either a return receipt purporting to be signed by the defendant or responding party or a person qualified to receive its registered or certified mail in accordance with the rules and customs of the post-office department; or, if acceptance was refused by the defendant or responding party or an agent thereof, the original envelope bearing a notation by the postal authorities that receipt was refused. Service of process so made is considered to have been made within the territorial jurisdiction of any court in this state.(e) In addition to the manner provided in subsection (d) of this section, service of process in any action, suit or administrative proceeding shall be valid if served upon any person who engages in any act which constitutes the transaction of unauthorized insurance: Provided, That notice of service and a copy of process are sent within ten days thereafter, by or on behalf of the moving party to the responding party at the last-known principal place of business of the responding party, by registered or certified mail with return receipt requested. The moving party shall file with the clerk of the court in which the action is pending, or with the judge or magistrate of the court in case there be no clerk, or in the official records of the commissioner if an administrative proceeding before the commissioner, an affidavit of compliance herewith, a copy of the process and either a return receipt purporting to be signed by the responding party, or a person qualified to receive its registered or certified mail in accordance with the rules and customs of the post-office department; or, if acceptance was refused by the responding party or an agent thereof, the original envelope bearing a notation by the postal authorities that receipt was refused. In the instance that service of process is refused by the responding party or an agent thereof, service shall be considered sufficient to bestow jurisdiction on the tribunal in which the action was filed.(f) The papers referred to in subsections (d) and (e) of this section shall be filed within thirty days after the return receipt or other official proof of delivery or the original envelope bearing a notation of refusal, as the case may be, is received by the moving party. Service of process shall be complete ten days after the process and the accompanying papers are filed in accordance with this section.(g) Nothing contained in this section shall limit or abridge the right to serve any process, notice or demand upon any unauthorized insurer or upon any person engaged in the transaction of insurance in any other manner now or hereafter permitted by law.(h) For the purposes of this section, "process" in an action in a court includes only a summons or the initial documents served in an action. The Secretary of State is not required to serve any documents in an action after the initial service of process.
(a) Whenever the commissioner believes, from evidence satisfactory to him or her, that any insurer is violating or is about to violate the provisions of this article, in addition to the administrative remedies available in this article, the commissioner may cause a complaint to be filed in any appropriate circuit court of this state seeking to enjoin and restrain the insurer from continuing the violation or engaging therein or doing any act in furtherance thereof.(b) The circuit court shall have jurisdiction of the proceeding and have the power to make and enter an order or judgment awarding preliminary or final injunctive relief as in its judgment is proper. The commissioner may elect to file a complaint in any circuit where transactions have occurred or in the circuit court of Kanawha County.
(a) Any person engaged in any act which constitutes the unauthorized transaction of insurance as set forth in this article may, after notice and hearing pursuant to section thirteen, article two of this chapter, be fined by the commissioner a sum not to exceed $20,000 for each unauthorized act or transaction of unauthorized insurance.(b) Any person engaged in any act which constitutes the unauthorized transaction of insurance as set forth in this article may be assessed restitution by the Insurance Commissioner in an amount sufficient to reimburse any and all insureds for the unpaid claims, if, after notice and hearing pursuant to section thirteen, article two of this chapter, the commissioner finds that the unauthorized insurer has failed to pay claims of its insureds in accordance with the terms of the contracts.
(a) No insurance contract entered into in violation of this article shall preclude the insured from enforcing his or her rights under the contract in accordance with the terms and provisions of the contract and the laws of this state against any unauthorized insurer or any person assisting the unauthorized insurer to the same degree those rights would have been enforceable had the contract been lawfully procured.(b) No insurance contract entered into in violation of this article shall preclude a provider of health care services from enforcing the rights of the insured under the contract in accordance with the terms and provisions of the contract and the laws of this state against any unauthorized insurer or any person assisting the unauthorized insurer pursuant to an assignment of rights executed between the insured and the health care provider.(c) In an action against an unauthorized insurer upon a contract of insurance issued or delivered to a resident of this state or to a corporation authorized to do business in this state, if the trier of fact finds by a preponderance of the evidence that the unauthorized insurer has failed to make payment in accordance with the terms of the contract, the trier of fact shall award to the insured or the health care provider:(1) Contract damages in accordance with the terms and provisions of the contract and the laws of this state to the same degree those rights would have been enforceable had the contract been lawfully procured;(2) Simple interest at a rate of prime plus one percent on the total amount awarded as restitution, accruing from the date payment was due;(3) If in addition to a finding that the unauthorized insurer has failed to make payment in accordance with the terms of the contract, the trier of fact finds by a preponderance of the evidence that failure to make payment was without reasonable cause, the trier of fact shall award the plaintiff a reasonable attorney fee and include the fee in any judgment that may be rendered in the action. The fee shall not exceed thirty-three percent of the amount that the trier of fact finds the plaintiff is entitled to recover against the unauthorized insurer;(4) If in addition to a finding that the unauthorized insurer has failed to make payment in accordance with the terms of the contract, the trier of fact further finds that failure to make payment was willful, wanton and malicious, the trier of fact may award the plaintiff punitive damages in an amount that the trier of fact finds the plaintiff is entitled to recover against the insurer.
Any unauthorized insurer who violates the provisions of this article is guilty of a felony and, upon conviction thereof, may be fined not more than $20,000 per each unauthorized act or transaction of unauthorized insurance or confined in the state correctional facility not less than one nor more than five years, or both fined and imprisoned.
As used in this article:(1) "Claim" means each individual request for reimbursement or proof of loss made by or on behalf of an insured or a provider to an insurer, or its intermediary, administrator or representative, with which the provider has a provider contract for payment for health care services under any health plan.(2) "Clean claim" means a claim: (A) That has no material defect or impropriety, including all reasonably required information and substantiating documentation, to determine eligibility or to adjudicate the claim; or (B) With respect to which an insurer has failed timely to notify the person submitting the claim of any such defect or impropriety in accordance with section two of this article.(3) "Commissioner" means the Insurance Commissioner of West Virginia.(4) "Health care services" means items or services furnished to any individual for the purpose of preventing, alleviating, curing, or healing human illness, injury or physical or mental disability.(5) "Health plan" means any individual or group health care plan, subscription contract, evidence of coverage, certificate, health services plan; medical or hospital services plan as defined in article twenty four of this chapter; accident and sickness insurance policy or certificate; managed care health insurance plan, or health maintenance organization subject to state regulation pursuant to 33-25a-1 et seq., of this code; which is offered, arranged, issued or administered in the state by an insurer authorized under this chapter, a third-party administrator or an intermediary. Health plan does not mean: (A) Coverages issued pursuant to Title XVIII of the Social Security Act, 42 U.S.C. 1395 et seq. (Medicare), Title XIX of the Social Security Act, 42 U.S.C. 1396 et seq. or Title XX of the Social Security Act, 42 U.S.C. 1397 et seq. (Medicaid), 5 U.S.C. 8901 et seq., or 10 U.S.C. 1071 et seq. (CHAMPUS); or 5-16-1 et seq., of this code (PEIA); (B) Accident only, credit or disability insurance, long-term care insurance, CHAMPUS supplement, Medicare supplement, workers compensation coverages or limited benefits policy as defined in article sixteen-e of this chapter; or (C) Any a third-party administrator or an intermediary acting on behalf of providers as denoted in 33-45-1(5)(A) or 33-45-1(5)(B) of this code.(6) "Insured" means a person who is provided health insurance coverage or other health care services coverage from an insurer under a health plan.(7) "Insurer" means any person required to be licensed under this chapter which offers or administers as a third party administrator health insurance; operates a health plan subject to this chapter; or provides or arranges for the provision of health care services through networks or provider panels which are subject to regulation as the business of insurance under this chapter. "Insurer" also includes intermediaries. "Insurer" does not include:(A) Credit accident and sickness insurance;(B) Accident and sickness policies which provide benefits for loss of income due to disability;(C) Any policy of liability of workers compensation insurance;(D) Hospital indemnity or other fixed indemnity insurance;(E) Life insurance, including endowment or annuity contracts, or contracts supplemental thereto, which contain only provisions relating to accident and sickness insurance that: (i) Provide additional benefits in cases of death by accidental means; or (ii) Operate to safeguard the contracts against lapse, in the event that the insured shall become totally and permanently disabled as defined by the contract or supplemental contract; and(F) Property and casualty insurance.(8) "Provider contract" means any contract between a provider and (A) An insurer; (B) A health plan; or (C) An intermediary, relating to the provision of health care services. (9) "Retroactive denial" means the practice of denying previously paid claims by withholding or setting off against payments, or in any other manner reducing or affecting the future claim payments to the provider, or to seek direct cash reimbursement from a provider for a payment previously made to the provider.(10) "Provider" means a person or other entity which holds a valid license or permit, including a valid temporary license or permit pursuant to chapter 30 of this code, to provide specific health care services in this state.(11) "Intermediary" means a physician, hospital, physician-hospital organization, independent provider organization, or independent provider network which receives compensation for arranging one or more health care services to be rendered by providers to insureds of a health plan or insurer. An intermediary does not include an individual provider or group practice that utilizes only its employees, partners or shareholders and their professional licenses to render services. 
(a) Every provider contract entered into, amended, extended, or renewed by an insurer on or after August 1, 2001, shall contain specific provisions which shall require the insurer to adhere to and comply with the following minimum fair business standards in the processing and payment of claims for health care services:(1) An insurer shall either pay or deny a clean claim within 40 days of receipt of the claim if submitted manually and within 30 days of receipt of the claim if submitted electronically, except in the following circumstances:(A) Another payor or party is responsible for the claim;(B) The insurer is coordinating benefits with another payor;(C) The provider has already been paid for the claim;(D) The claim was submitted fraudulently; or(E) There was a material misrepresentation in the claim.(2) Each insurer shall maintain a written or electronic record of the date of receipt of a claim. The person submitting the claim shall be entitled to inspect the record on request and to rely on that record or on any other relevant evidence as proof of the fact of receipt of the claim. If an insurer fails to maintain an electronic or written record of the date a claim is received, the claim shall be considered received three business days after the claim was submitted based upon the written or electronic record of the date of submittal by the person submitting the claim.(3) An insurer shall, within 30 days after receipt of a claim, request electronically or in writing from the person submitting the claim any information or documentation that the insurer reasonably believes will be required to process and pay the claim or to determine if the claim is a clean claim. The insurer shall use all reasonable efforts to ask for all desired information in one request, and shall if necessary, within 15 days of the receipt of the information from the first request, only request or require additional information one additional time if such additional information could not have been reasonably identified at the time of the original request or to specifically identify a material failure to provide the information requested in the initial request. Upon receipt of the information requested under this subsection which the insurer reasonably believes will be required to adjudicate the claim or to determine if the claim is a clean claim, an insurer shall either pay or deny the claim within 30 days. No insurer may refuse to pay a claim for health care services rendered pursuant to a provider contract which are covered benefits if the insurer fails to timely notify the person submitting the claim within 30 days of receipt of the claim of the additional information requested unless such failure was caused in material part by the person submitting the claims: Provided, That nothing herein shall preclude such an insurer from imposing a retroactive denial of payment of such a claim if permitted by the provider contract unless such retroactive denial of payment of the claim would violate 33-45-2(a)(7) of this code. This subsection does not require an insurer to pay a claim that is not a clean claim except as provided herein.(4) Interest, at a rate of 10 percent per annum, accruing after the 40-day period provided in 33-45-2(a)(1) of this code owing or accruing on any claim under any provider contract or under any applicable law, shall be paid and accompanied by an explanation of the assessment on each claim of interest paid, without necessity of demand, at the time the claim is paid or within 30 days thereafter.(5) Every insurer shall establish and implement reasonable policies to permit any provider with which there is a provider contract:(A) To promptly confirm in advance during normal business hours by a process agreed to between the parties whether the health care services to be provided are a covered benefit; and (B) To determine the insurer's requirements applicable to the provider (or to the type of health care services which the provider has contracted to deliver under the provider contract) for:(i) Precertification or authorization of coverage decisions;(ii) Retroactive reconsideration of a certification or authorization of coverage decision or retroactive denial of a previously paid claim;(iii) Provider-specific payment and reimbursement methodology; and(iv) Other provider-specific, applicable claims processing and payment matters necessary to meet the terms and conditions of the provider contract, including determining whether a claim is a clean claim.(C) Every insurer shall make available to the provider within 20 business days of receipt of a request, reasonable access either electronically or otherwise, to all the policies that are applicable to the particular provider or to particular health care services identified by the provider. In the event the provision of the entire policy would violate any applicable copyright law, the insurer may instead comply with this subsection by timely delivering to the provider a clear explanation of the policy as it applies to the provider and to any health care services identified by the provider. (6) Every insurer shall pay a clean claim if the insurer has previously authorized the health care service or has advised the provider or enrollee in advance of the provision of health care services that the health care services are medically necessary and a covered benefit, unless: (A) The documentation for the claim provided by the person submitting the claim clearly fails to support the claim as originally authorized; or (B) The insurer's refusal is because: (i) Another payor or party is responsible for the payment; (ii) The provider has already been paid for the health care services identified on the claim; (iii) The claim was submitted fraudulently or the authorization was based in whole or material part on erroneous information provided to the insurer by the provider, enrollee, or other person not related to the insurer;(iv) The person receiving the health care services was not eligible to receive them on the date of service and the insurer did not know, and with the exercise of reasonable care could not have known, of the person's eligibility status; (v) There is a dispute regarding the amount of charges submitted; or (vi) The service provided was not a covered benefit and the insurer did not know, and with the exercise of reasonable care could not have known, at the time of the certification that the service was not covered.(7) A previously paid claim may be retroactively denied only in accordance with this subdivision.(A) No insurance company may retroactively deny a previously paid claim unless:(i) The claim was submitted fraudulently;(ii) The claim contained material misrepresentations;(iii) The claim payment was incorrect because the provider was already paid for the health care services identified on the claim or the health care services were not delivered by the provider;(iv) The provider was not entitled to reimbursement;(v) The service provided was not covered by the health benefit plan; or(vi) The insured was not eligible for reimbursement.(B) A provider to whom a previously paid claim has been denied by a health plan in accordance with this section shall, upon receipt of notice of retroactive denial by the plan, notify the health plan within 40 days of the providers intent to pay or demand written explanation of the reasons for the denial. (i) Upon receipt of explanation for retroactive denial, the provider shall reimburse the plan within 30 days for allowing an offset against future payments or provide written notice of dispute.(ii) Disputes shall be resolved between the parties within 30 days of receipt of notice of dispute. The parties may agree to a process to resolve the disputes in a provider contract.(iii) Upon resolution of dispute, the provider shall pay any amount due or provide written authorization for an offset against future payments.(C) A health plan may retroactively deny a claim only for the reasons set forth in 33-45-2(a)(7)(A)(iii) through 33-45-2(a)(7)(A)(vi) of this code for a period of one year from the date the claim was originally paid. There shall be no time limitations for retroactively denying a claim for the reasons set forth in 33-45-2(a)(7)(A)(i) and 33-45-2(a)(7)(A)(ii) of this code.(8) No provider contract may fail to include or attach at the time it is presented to the provider for execution: (A) The fee schedule, reimbursement policy or statement as to the manner in which claims will be calculated and paid which is applicable to the provider or to the range of health care services reasonably expected to be delivered by that type of provider on a routine basis; and (B) All material addenda, schedules, and exhibits thereto applicable to the provider or to the range of health care services reasonably expected to be delivered by that type of provider under the provider contract.(9) No amendment to any provider contract or to any addenda, schedule, or exhibit, or new addenda, schedule, exhibit, applicable to the provider to the extent that any of them involve payment or delivery of care by the provider, or to the range of health care services reasonably expected to be delivered by that type of provider, is effective as to the provider, unless the provider has been provided with the applicable portion of the proposed amendment, or of the proposed new addenda, schedule, or exhibit, and has failed to notify the insurer within 20 business days of receipt of the documentation of the providers intention to terminate the provider contract at the earliest date thereafter permitted under the provider contract.(10) In the event that the insurers provision of a policy required to be provided under 33-45-2(a)(8) and 33-45-2(a)(9) of this code would violate any applicable copyright law, the insurer may instead comply with this section by providing a clear, written explanation of the policy as it applies to the provider.(11) The insurer shall complete a credential check of any new provider and accept or reject the provider within four months following the submission of the providers completed application: Provided, That time frame may be extended for an additional three months because of delays in primary source verification. The insurer shall make available to providers a list of all information required to be included in the application. A provider who provides services during the credentialing period shall be paid for the services: Provided, That nothing in this subdivision prevents an insurer from obtaining refund of overpayments to a provider when the provider fails to become credentialed after having gone through the credentialing process.(b) Without limiting the foregoing, in the processing of any payment of claims for health care services rendered by providers under provider contracts and in performing under its provider contracts, every insurer subject to regulation by this article shall adhere to and comply with the minimum fair business standards required under 33-45-2(a) of this code. The commissioner has jurisdiction to determine if an insurer has violated the standards set forth in 33-45-2(a) of this code by failing to include the requisite provisions in its provider contracts. The commissioner has jurisdiction to determine if the insurer has failed to implement the minimum fair business standards set out in 33-45-2(a)(1) and 33-45-2(a)(2) of this code in the performance of its provider contracts.(c) No insurer is in violation of this section if its failure to comply with this section is caused in material part by the person submitting the claim or if the insurers compliance is rendered impossible due to matters beyond the insurers reasonable control, such as an act of God, insurrection, strike, fire, or power outages, which are not caused in material part by the insurer
Any provider who suffers loss as the result of an insurer's violation of any provision of this article or an insurer's breach of any provider contract provision required by this article is entitled to initiate an action to recover actual damages. The commissioner shall not be deemed to be a "trier of fact" for purposes of this section.
No insurer or its network, provider panel or intermediary may terminate or fail to renew the employment or other contractual relationship with a provider, or any provider contract, or otherwise penalize any provider, for invoking any of the provider's rights under this article or under the provider contract.
The commissioner is authorized to propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code, to implement the provisions of this article.
Nothing in this article shall limit or modify the commissioner's duties and authority under article two of this chapter.
This article shall not apply to provider contracts in which payment is rendered by periodic, capitation or withhold payments.
(a) The provisions of this article do not apply to claims that are not covered under the terms of the health plan.(b) Nothing in this article shall preclude the right of a provider or insurer to pursue any other administrative, civil or criminal proceedings or remedies permitted under state or federal law.(c) The provisions of this article do not apply when there is a good faith dispute about the legitimacy of amount of the claim, or when there is a reasonable basis supported by specific information that such claim was submitted fraudulently or with material misrepresentation.(d) An insurer shall not be considered to be in violation of this article if the insurer's failure to comply is caused in material part by the person submitting the claim or the health insurer's compliance is rendered impossible due to matters beyond the insurer's reasonable control.(e) A provider shall not be considered to be in violation of this article if the failure to comply is caused in material part by the insured or the provider's compliance is rendered impossible due to matters beyond the provider's reasonable control.(f) The provisions of this article do not apply to services provided outside the state.
This article may be cited as the "Third-Party Administrator Act".
(a) When the services of an administrator are used, the administrator shall provide a written notice approved by the insurer to covered individuals advising them of the identity of, and relationship among, the administrator, the policyholder and the insurer.(b) When an administrator collects funds, the reason for collection of each item shall be identified to the insured party and each item shall be shown separately from any premium. Additional charges may not be made for services to the extent the services have been paid for by the insurer.(c) The administrator shall disclose to the insurer all charges, fees and commissions received from all services in connection with the provision of administrative services for the insurer, including any fees or commissions paid by insurers providing reinsurance.
Any policies, certificates, booklets, termination notices or other written communications delivered by the insurer to the administrator for delivery to insured parties or covered individuals shall be delivered by the administrator promptly after receipt of instructions from the insurer to deliver them.
(a) Prior to conducting business in West Virginia an administrator or third-party administrator must be licensed in accordance with the requirements of this article.(b) If West Virginia is a person's home state, then the person may apply for licensure in this state by filing a uniform application with the Insurance Commissioner. The application shall include or be accompanied by the following information and documents:(1) All basic organizational documents of the applicant, including any articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement and other applicable documents and all amendments to the documents;(2) The bylaws, rules, regulations or similar documents regulating the internal affairs of the applicant;(3) National association of Insurance Commissioners' biographical affidavits for the individuals who are responsible for the conduct of affairs of the applicant, including all members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholders or member holding directly or indirectly ten percent or more of the voting stock, voting securities or voting interest of the applicant; and any other person who exercises control or influence over the affairs of the applicant;(4) Audited annual financial statements or reports for the two most recent fiscal years that prove that the applicant has a positive net worth. If the applicant has been in existence for less than two fiscal years, the application shall include financial statements or reports, certified by an officer of the applicant and prepared in accordance with GAAP, for any completed fiscal years and for any month during the current fiscal year for which the financial statements or reports have been completed. An audited financial/annual report prepared on a consolidated basis shall include a columnar consolidating or combining worksheet that shall be filed with the report and include the following:(A) Amounts shown on the consolidated audited financial report;(B) Amounts for each entity stated separately; and(C) Explanations of consolidating and eliminating entries.The applicant shall also include any other information required by the commissioner in order to review the current financial condition of the applicant;(5) A statement describing the business plan including information on staffing levels and activities proposed in this state and nationwide. The plan shall provide details setting forth the applicant's capability for providing a sufficient number of experienced and qualified personnel in the areas of claims processing, recordkeeping and underwriting; and(6) Any other pertinent information required by the commissioner.(c) An administrator licensed or applying for licensure under this section shall make available for inspection by the commissioner copies of all contracts with insurers or other persons using the services of the administrator.(d) An administrator licensed or applying for licensure under this section shall produce its accounts, records and files for examination and make its officers available to give information with respect to its affairs as often as reasonably required by the commissioner.(e) The commissioner may refuse to issue a certificate of authority or license if the commissioner determines that the administrator, or any individual responsible for the conduct of affairs of the administrator, is not competent, trustworthy, financially responsible or of good personal and business reputation or has had an insurance or an administrator certificate of authority or license denied or revoked for cause by any jurisdiction, or if the commissioner determines that any of the grounds set forth in section seventeen of this article exists with respect to the administrator.(f) A certificate of authority or license issued under this section shall remain valid, unless surrendered, suspended or revoked by the commissioner, for as long as the administrator continues in business in this state and remains in compliance with this article.(g) An administrator licensed or applying for licensure under this section shall immediately notify the commissioner of any material change in its ownership, control or other fact or circumstance affecting its qualification for a certificate of authority or license in this state.(h) An administrator licensed or applying for a home state certificate of authority/license that administers or will administer governmental or church self-insured plans in its home state or any other state shall maintain a surety bond for the use and benefit of the home state commissioner and the insurance regulatory authority of any additional state in which the administrator is authorized to conduct business and cover individuals and persons who have remitted premiums or insurance charges or other moneys to the administrator in the course of the administrator's business in the lessor of the following amounts:(1) One hundred thousand dollars; or(2) Ten percent of the aggregate total amount of self-funded coverage under church plans or governmental plans handled in the administrator's home state and all additional states in which the administrator is authorized to conduct business.
A person who directly or indirectly underwrites, collects charges or premiums from, or adjusts or settles claims on residents of this state, in connection with life, annuity or accident and sickness coverage provided by a self-funded plan other than a governmental or church plan shall register with the commissioner annually, verifying its status as in this article described.
(a) Unless an administrator has obtained a home state license in this state under section twelve of this article, any administrator who performs administrator duties in this state shall obtain a nonresident administrator license in accordance with this section by filing with the commissioner the uniform application, accompanied by a letter of certification. In lieu of requiring an administrator to file a letter of certification with the uniform application, the commissioner may verify the nonresident administrator's home state certificate of authority or license status through an electronic database maintained by the national association of Insurance Commissioners, its affiliates or subsidiaries.(b) An administrator is not eligible for a nonresident administrator license under this section if it does not hold a certificate of authority or license as a resident in a home state that has adopted the national association of Insurance Commissioners' model third-party administrator act or a substantially similar law governing administrators.(c) Except as provided in subsections (b) and (h) of this section, the commissioner shall issue to the administrator a nonresident administrator license promptly upon receipt of a complete application and the application fee.(d) Unless notified by the commissioner that the commissioner is able to verify the nonresident administrator's home state certificate of authority or license status through an electronic database maintained by the national association of Insurance Commissioners, its affiliates or subsidiaries, each nonresident administrator shall annually file a statement that its home state administrator certificate of authority or license remains in force and has not been revoked or suspended by its home state during the preceding year.(e) At the time of filing the statement required under subsection (d) of this section or, if the commissioner has notified the nonresident administrator that the commissioner is able to verify the nonresident administrator's home state certificate of authority or license status through an electronic database, on or before October 1, the nonresident administrator shall pay the fee set forth in section fifteen of this article.(f) An administrator licensed or applying for licensure under this section shall produce its accounts, records and files for examination and make its officers available to give information with respect to its affairs as often as reasonably required by the commissioner.(g) A nonresident administrator is not required to hold a nonresident administrator license in this state if the administrator's duties in this state are limited to the administration of a group policy or plan of insurance and no more than a total of one hundred lives for all plans reside in this state. This subsection applies only to multistate administrators. The administrator must be licensed in its home state regardless of the number of lives under a group policy or plan.(h) The commissioner may refuse to issue a nonresident administrator license, or may delay the issuance of a nonresident administrator license, if the commissioner determines that, due to events or information obtained subsequent to the home state's licensure of the administrator, the nonresident administrator cannot satisfy the requirements of this article or that grounds exist for the home state's revocation or suspension of the administrator's home state certificate of authority or license. In that event, the commissioner shall give written notice of its determination to the commissioner of the home state and the commissioner may delay the issuance of a nonresident administrator license to the nonresident administrator until such time, if at all, that the commissioner determines that the administrator can satisfy the requirements of this article and that no grounds exist for the home state's revocation or suspension of the administrator's home state certificate of authority or license.
Except where it is otherwise specially provided, the commissioner shall assess third-party administrators the following fees: For annual fee for each license, $200; for receiving and filing annual reports, $100; for filing a certified copy of articles of incorporation, $50; for filing a copy of its charter, $50; for filing statements preliminary to admission, $100; for filing any additional paper required by law or furnishing copies of the additional paper, $1; and for every copy of a report or certificate of condition of administrator to be filed in any other state, $25. The commissioner may by rule set reasonable charges for printed forms for the annual statements required by law. He or she may sell at cost publications purchased by, or printed on behalf of the commissioner. All fees and moneys collected shall be used for the purposes set forth in section thirteen, article three of this chapter.
(a) Each administrator licensed under section twelve of this article shall file an annual report for the preceding calendar year with the commissioner on or before July 1, of each year or within an extension of time granted by the commissioner for good cause. The annual report shall include an audited financial statement performed by an independent certified public accountant. An audited financial/annual report prepared on a consolidated basis shall include a columnar consolidating or combining worksheet that shall be filed with the report and include the following:(1) Amounts shown on the consolidated audited financial report;(2) Amounts for each entity stated separately; and (3) Explanations of consolidating and eliminating entries.The report shall be in the form and contain any matters prescribed by the commissioner and shall be verified by at least two officers of the administrator.(b) The annual report shall include the complete names and addresses of all insurers with which the administrator had agreements during the preceding fiscal year.(c) At the time of filing its annual report, the administrator shall pay the filing fee provided in section fifteen of this article.(d) The commissioner shall review the most recently filed annual report of each administrator on or before September 1, of each year. Upon completion of its review, the commissioner shall either:(1) Issue a certification to the administrator that the annual report shows that the administrator has a positive net worth as evidenced by audited financial statements and is currently licensed and in good standing, or noting any deficiencies found in that annual report and financial statements; or(2) Update any electronic database maintained by the national association of Insurance Commissioners, its affiliates or subsidiaries, indicating the annual report shows that the administrator has a positive net worth as evidenced by audited financial statements and is in compliance with existing law, or noting any deficiencies found in the annual report.
(a) The license of an administrator shall be denied, suspended or revoked if the commissioner finds that the administrator:(1) Is in an unsound financial condition;(2) Is using methods or practices in the conduct of its business that render its further transaction of business in this state hazardous or injurious to insured persons or the public; or(3) Has failed to pay any judgment rendered against it in this state within sixty days after the judgment has become final.(b) The commissioner may deny, suspend or revoke the license of an administrator if the commissioner finds that the administrator:(1) Has violated any lawful rule or order of the commissioner or any provision of the insurance laws of this state;(2) Has refused to be examined or to produce its accounts, records and files for examination, or if any individual responsible for the conduct of affairs of the administrator, including members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholder or member holding directly or indirectly ten percent or more of the voting stock, voting securities or voting interest of the administrator; and any other person who exercises control or influence over the affairs of the administrator; has refused to give information with respect to its affairs; or has refused to perform any other legal obligation as to an examination, when required by the commissioner;(3) Has, without just cause, refused to pay proper claims or perform services arising under its contracts or has, without just cause, caused covered individuals to accept less than the amount due them or caused covered individuals to employ attorneys or bring suit against the administrator to secure full payment or settlement of their claims;(4) At any time fails to meet any qualification for which issuance of the license could have been refused had the failure then existed and been known to the commissioner;(5) Or any of the individuals responsible for the conduct of its affairs, including members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholder or member holding directly or indirectly ten percent or more of its voting stock, voting securities or voting interest; and any other person who exercises control or influence over its affairs has been convicted of, or has entered a plea of guilty or nolo contendere to, a felony without regard to whether the adjudication was withheld;(6) Is under suspension or revocation in another state; or(7) Has failed to timely file its annual report pursuant to section sixteen of this article, if a resident administrator, or its statement and filing fee, as applicable, pursuant to subsections (d) and (e), section fourteen of this article if a nonresident administrator.(c) The commissioner may, in his or her discretion and without advance notice or hearing, immediately suspend the license of an administrator if the commissioner finds that one or more of the following circumstances exist:(1) The administrator is insolvent or impaired;(2) A proceeding for receivership, conservatorship, rehabilitation or other delinquency proceeding regarding the administrator has been commenced in any state; or(3) The financial condition or business practices of the administrator otherwise pose an imminent threat to the public health, safety or welfare of the residents of this state.(d) If the commissioner finds that one or more grounds exist for the suspension or revocation of a license issued under this article, in any case except where that action is not mandatory, the commissioner may, in lieu of suspension or revocation, by order require the administrator to pay to the State of West Virginia a penalty in a sum not exceeding $10,000 and upon the failure of the administrator to pay the penalty within thirty days after notice of the penalty, the commissioner may revoke or suspend the license of the administrator.(e) When any license has been revoked or suspended or renewal of the license refused, the commissioner may reissue, terminate the suspension or renew the license when he or she is satisfied that the conditions causing the revocation, suspension or refusal to renew have ceased to exist and are unlikely to recur.
Programs supervised by the Department of Health and Human Resources, pursuant to chapter nine of this code; the Public Employees Insurance Agency, pursuant to articles sixteen and sixteen-c, chapter five of this code; and the Department of Administration, pursuant to article sixteen-b, chapter five of this code, are exempted from the provisions of this article. Third-party administrators who administer the above-referenced programs are exempt from the provisions of this article with respect to these specific programs only.
The unauthorized conduct of the business of an administrator shall be treated as unauthorized insurance business and shall be subject to the same criminal and civil penalties as provided in article forty-four for violation of the unauthorized insurers act.
(a) "Administrator" or "third-party administrator" means a person who directly or indirectly underwrites or collects charges or premiums from, or adjusts or settles claims on residents of this state, in connection with life, annuity or accident and sickness coverage offered or provided by an insurer, except any of the following:(1) An employer, or a wholly owned direct or indirect subsidiary of an employer, on behalf of its employees or the employees of one or more subsidiaries or affiliated corporations of the employer;(2) A union on behalf of its members;(3) An insurer that is licensed to transact insurance in this state with respect to a policy lawfully issued and delivered in and pursuant to the laws of this state or another state including:(A) A health service corporation licensed under article twenty-four of this chapter;(B) A health care corporation licensed under article twenty-five of this chapter;(C) A health maintenance organization licensed under article twenty-five-a of this chapter; and(D) A prepaid limited health service organization licensed under article twenty-five-d of this chapter.(4) An insurance producer licensed to sell life, annuities or health coverage in this state whose activities are limited exclusively to the sale of insurance;(5) A creditor on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors;(6) A trust and its trustees, agents and employees acting pursuant to the trust established in conformity with 29 U.S.C. Section 186;(7) A trust exempt from taxation under Section 501(a) of the Internal Revenue Code, its trustees and employees acting pursuant to the trust, or a custodian and the custodian's agents or employees acting pursuant to a custodian account which meets the requirements of Section 401(f) of the Internal Revenue Code;(8) A credit union or a financial institution that is subject to supervision or examination by federal or state banking authorities, or a mortgage lender, to the extent they collect and remit premiums to licensed insurance producers or to limited lines producers or authorized insurers in connection with loan payments;(9) A credit card issuing company that advances for and collects insurance premiums or charges from its credit card holders who have authorized collection;(10) A person who adjusts or settles claims in the normal course of that person's practice or employment as an attorney at law and who does not collect charges or premiums in connection with life, annuity or accident and sickness coverage;(11) An adjuster licensed by this state whose activities are limited to adjustment of claims;(12) A person licensed as a managing general agent in this state whose activities are limited exclusively to the scope of activities conveyed under that license; or(13) An administrator who is affiliated with an insurer and who only performs the contractual duties, between the administrator and the insurer, of an administrator for the direct and assumed business of the affiliated insurer. The insurer is responsible for the acts of the administrator and is responsible for providing all of the administrator's books and records to the Insurance Commissioner, upon a request from the Insurance Commissioner. For purposes of this subdivision, "insurer" means a licensed insurance company, prepaid hospital or medical care plan, health maintenance organization or a health care corporation.(b) "Affiliate or affiliated" means an entity or person who directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, a specified entity or person.(c) "Commissioner" means the Insurance Commissioner of this state.(d) "Control", "controlling", "controlled by" and "under common control with" mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote or holds proxies representing ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by the West Virginia insurance holding company systems act that control does not exist in fact. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination that control exists in fact, notwithstanding the absence of a presumption to that effect.(e) "GAAP" means United States generally accepted accounting principles consistently applied.(f) "Home state" means the District of Columbia and any state or territory of the United States in which an administrator is incorporated or maintains its principal place of business. If neither the state in which the administrator is incorporated, nor the state in which it maintains its principal place of business has adopted the national association of Insurance Commissioners' model third party administrator act or a substantially similar law governing administrators, the administrator may declare another state, in which it conducts business, to be its "home state".(g) "Insurance producer" means a person who sells, solicits or negotiates a contract of insurance as those terms are defined in this article.(h) "Insurer" means a person undertaking to provide life, annuity or accident and sickness coverage or self-funded coverage under a governmental plan or church plan in this state. For the purposes of this article, insurer includes an employer, a licensed insurance company, a prepaid hospital or medical care plan, health maintenance organization or a health care corporation.(i) "Negotiate" means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.(j) "Nonresident administrator" means a person who is applying for licensure or is licensed in any state other than the administrator's home state.(k) "Person" means an individual or a business entity.(l) "Sell" means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.(m) "Solicit" means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.(n) "Underwrites" or "underwriting" means, but is not limited to, the acceptance of employer or individual applications for coverage of individuals in accordance with the written rules of the insurer or self-funded plan; and the overall planning and coordinating of a benefits program.(o) "Uniform application" means the current version of the national association of Insurance Commissioners uniform application for third-party administrators.
The Insurance Commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code that are necessary to effectuate this article.
(a) No administrator may act as such without a written agreement between the administrator and the insurer and the written agreement shall be retained as part of the official records of both the insurer and the administrator for the duration of the agreement and for ten years thereafter. The agreement shall contain all provisions required by this statute, except insofar as those requirements do not apply to the functions performed by the administrator.(b) The written agreement shall include a statement of duties that the administrator is expected to perform on behalf of the insurer and the lines, classes or types of insurance which the administrator is to be authorized to administer. The agreement shall make provision with respect to underwriting or other standards pertaining to the business underwritten by the insurer.(c) The insurer or administrator may, with written notice, terminate the written agreement for cause as provided in the agreement. The insurer may suspend the underwriting authority of the administrator during the pendency of any dispute regarding the cause for termination of the written agreement. The insurer shall fulfill any lawful obligations with respect to policies affected by the written agreement, regardless of any dispute between the insurer and the administrator.
If an insurer uses the services of an administrator, the payment to the administrator of any premiums or charges for insurance by or on behalf of the insured party shall be considered to have been received by the insurer and the payment of return premiums or claim payments forwarded by the insurer to the administrator shall not be considered to have been paid to the insured party or claimant until the payments are received by the insured party or claimant. Nothing in this section limits any right of the insurer against the administrator resulting from the failure of the administrator to make payments to the insurer, insured parties or claimants.
(a) An administrator shall maintain and make available to the insurer complete books and records of all transactions performed on behalf of the insurer. The books and records shall be maintained in accordance with prudent standards of insurance recordkeeping and shall be maintained for a period of not less than ten years from the date of their creation.(b) The commissioner shall have access to books and records maintained by an administrator for the purposes of examination, audit and inspection. Any documents, materials or other information in the possession or control of the commissioner that is furnished by an administrator, insurer, insurance producer or an employee or agent thereof acting on behalf of the administrator, insurer or insurance producer, or obtained by the commissioner in an investigation is confidential by law and privileged, is not subject to chapter twenty-nine-b of this code, is not subject to subpoena and is not subject to discovery or admissible as evidence in any private civil action. However, the commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties.(c) Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (b) of this section.(d) In order to assist in the performance of his or her duties, the commissioner may:(1) Share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (b) of this section, with other state, federal and international regulatory agencies, with the national association of Insurance Commissioners, its affiliates or subsidiaries and with state, federal and international law-enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information;(2) Receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the national association of Insurance Commissioners, its affiliates or subsidiaries and from regulatory and law-enforcement officials of other foreign or domestic jurisdictions and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and(3) Enter into agreements governing the sharing and use of information consistent with this subsection.(e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (d) of this section.(f) Nothing in this article prohibits the commissioner from releasing final, adjudicated actions, including for cause terminations, that are open to public inspection pursuant to chapter twenty-nine-b of this code to a database or other clearinghouse service maintained by the national association of Insurance Commissioners, its affiliates or subsidiaries.(g) The insurer owns the records generated by the administrator pertaining to the insurer; however, the administrator shall retain the right to continuing access to books and records to permit the administrator to fulfill all of its contractual obligations to insured parties, claimants and the insurer.(h) In the event the insurer and the administrator cancel their agreement, the administrator may, by written agreement with the insurer, transfer all records to a new administrator rather than retain them for ten years notwithstanding the provisions of subsection (a) of this section. In those cases, the new administrator shall acknowledge, in writing, that it is responsible for retaining the records of the prior administrator as required in subsection (a) of this section.
An administrator may use only advertising pertaining to the business underwritten by an insurer that has been approved in writing by the insurer in advance of its use.
(a) If an insurer uses the services of an administrator, the insurer is responsible for determining the benefits, premium rates, underwriting criteria and claims payment procedures applicable to the coverage and for securing reinsurance, if any. The rules pertaining to these matters shall be provided, in writing, by the insurer to the administrator. The responsibilities of the administrator as to any of these matters shall be set forth in the written agreement between the administrator and the insurer.(b) It is the sole responsibility of the insurer to provide for competent administration of its programs.(c) In cases where an administrator administers benefits for more than one hundred certificate holders on behalf of an insurer, the insurer shall, at least semiannually, conduct a review of the operations of the administrator. At least one review shall be an on-site audit of the operations of the administrator.(d) For purposes of this section, "insurer" means a licensed insurance company, prepaid hospital or medical care plan, health maintenance organization or a health care corporation.
(a) All insurance charges or premiums collected by an administrator on behalf of or for an insurer, and the return of premiums received from that insurer, shall be held by the administrator in a fiduciary capacity. The funds shall be immediately remitted to the person entitled to them or shall be deposited promptly in a fiduciary account established and maintained by the administrator in a federally or state-insured financial institution. The written agreement between the administrator and the insurer shall provide for the administrator to periodically render an accounting to the insurer detailing all transactions performed by the administrator pertaining to the business underwritten by the insurer.(b) If charges or premiums deposited in a fiduciary account have been collected on behalf of or for one or more insurers, the administrator shall keep records clearly recording the deposits in and withdrawals from the account on behalf of each insurer. The administrator shall keep copies of all the records and, upon request of an insurer, shall furnish the insurer with copies of the records pertaining to the deposits and withdrawals.(c) The administrator shall not pay any claim by withdrawals from a fiduciary account in which premiums or charges are deposited. Withdrawals from the account shall be made as provided in the written agreement between the administrator and the insurer. The written agreement shall address, but not be limited to, the following:(1) Remittance to an insurer entitled to remittance;(2) Deposit in an account maintained in the name of the insurer;(3) Transfer to and deposit in a claims-paying account, with claims to be paid as provided for in subsection (d) of this section;(4) Payment to a group policyholder for remittance to the insurer entitled to the remittance;(5) Payment to the administrator of its commissions, fees or charges; and(6) Remittance of return premium to the person or persons entitled to the return premium.(d) All claims paid by the administrator from funds collected on behalf of or for an insurer shall be paid only on drafts or checks of and as authorized by the insurer.
(a) An administrator may not enter into an agreement or understanding with an insurer in which the effect is to make the amount of the administrator's commissions, fees or charges contingent upon savings effected in the adjustment, settlement and payment of losses covered by the insurer's obligations. This provision shall not prohibit an administrator from receiving performance-based compensation for providing hospital or other auditing services.(b) This section shall not prevent the compensation of an administrator from being based on premiums or charges collected or the number of claims paid or processed.
The Legislature hereby finds that:(1) Professional Employer Organizations (hereinafter "PEOs") provide a valuable service to commerce and the citizens of this state by increasing the opportunities of employers to develop cost-effective methods of satisfying their personnel requirements and providing employees with access to certain employment benefits which might otherwise not be available to them;(2) PEOs operating in this state should be properly recognized and regulated by the Insurance Commissioner; and(3) Any allocation of employer duties and responsibilities between a PEO and a client-employer pursuant to this article should preserve all rights to which covered employees would be entitled under a traditional employment relationship.
(a) In addition to the authority to propose rules as provided in section seven of this article, the commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code, to implement the provisions of this article, including but not limited to:(1) Requirements for the issuance and renewal of licenses;(2) Requirements for denying, suspending, revoking, reinstating or limiting the practice of a licensee;(3) Requirements for activating inactive or revoked licenses;(4) Special financial and other licensing requirements for small, start-up PEOs; and(5) A schedule of fees.(b) The commissioner may promulgate emergency rules pursuant to the provisions of section fifteen, article three, chapter twenty-nine-a of this code, for any purposes set forth for legislative rules in subsection (a) of this section.
(a) "Administrative fee" means the amount charged to a client-employer by a PEO for professional employer services. It does not include amounts paid by a client-employer to the PEO for wages and salaries, benefits, payroll taxes, withholding or assessments paid by the PEO to or on behalf of covered employees under the professional employer agreement.(b) "Client-employer" means an employer who enters into a professional employer agreement with a PEO.(c) "Covered employee" means a person employed by a client-employer for whom certain employer responsibilities are shared or allocated pursuant to a PEO agreement. Persons who are officers, directors, shareholders, partners and managers of the client-employer and who perform day-to-day operational services for the client-employer will be covered employees only to the extent expressly set forth in the professional employer agreement.(d) "PEO group" means two or more PEOs that are majority owned or commonly controlled by the same entity, parent or controlling persons.(e) "Person" means a natural person or a legal entity, including, without limitation, a sole proprietorship, firm, partnership, limited liability company, association, trust or corporation.(f) "Professional employer agreement" means a written contract by and between a client-employer and a PEO under which a PEO contracts to provide professional employer services for an administrative fee.(g) "Professional employer organization" or "PEO" means a person engaged in the business of providing professional employer services, regardless of its use of the term, or conducting business as a "staff leasing company," "registered staff leasing company," "employee leasing company," "administrative employer," or any other name. For purposes of this article, the following is not a PEO: (1) A person who shares employees with a commonly-owned company within the meaning of section 414(b) and (c) of the Internal Revenue Code of 1986, as amended;(2) A person who neither holds itself out as a PEO, nor enters into professional employer agreements as its principal business activity;(3) An independent contractor who assumes responsibility for the product produced or service performed by a person or his or her agents and who retains and exercises primary direction and control over the work performed; or(4) A person who provides temporary help services.(h) "Professional employer services" means functions that are: (1) Allocated to a PEO in a PEO agreement;(2) Customarily exercised by an employer with respect to its employees, including, but not limited to, hiring, firing and disciplining employees, paying wages, withholding and paying payroll taxes, maintaining employee benefit plans, and providing for mandatory workers' compensation coverage;(3) Exercised with respect to a majority of the employees of a client-employer; and(4) Intended to be of a continuing rather than a temporary or seasonal nature.(j) "Worksite employees" means persons employed by a PEO and not by a client-employer.
(a) Nothing in this article or in any professional employer agreement affects, modifies or amends any collective bargaining agreement, or the rights or obligations of a client-employer, PEO or covered employee under the Federal National Labor Relations Act, the Federal Railway Labor Act or article one-a, chapter twenty-one of this code.(b) Notwithstanding any other provision of this article, nothing in this article or in any professional employer agreement:(1) Diminishes, abolishes or removes rights of covered employees as to a client-employer or obligations of a client-employer to covered employees, including but not limited to rights and obligations arising from civil rights laws guaranteeing nondiscrimination in employment practices;(2) Affects, modifies, or amends any contractual relationship or restrictive covenant between a covered employee and a client-employer in effect at the time a professional employer agreement becomes effective; or(3) Prohibits or amends or any contractual relationship or restrictive covenant that is entered into subsequent to the effective date of a professional employer agreement between a client-employer and a covered employee.
(a) Except as otherwise provided in this article, no person may provide, advertise or otherwise hold himself herself or itself out as providing professional employer services to client-employers in this state, unless licensed under this article.(b) Every PEO operating within this state as of the effective date of this article must obtain a license under this article no later than July 30, 2009.(c) Each applicant for licensure under this article shall provide the commissioner with the following information:(1) The name or names under which the PEO conducts business;(2) The address of the principal place of business of the PEO and the address of each office it maintains in this state;(3) The PEO's taxpayer or employer identification number;(4) A list by jurisdiction of each name under which the PEO has operated in the preceding five years, including any alternative names, names of predecessors and, if known, successor business entities;(5) A statement of ownership, which shall include the name and evidence of the business experience of any person who, individually or acting in concert with one or more other persons, owns or controls, directly or indirectly, twenty-five percent or more of the equity interests of the PEO;(6) A statement of management, which shall include the name and evidence of the business experience of any person who serves as president, chief executive officer or otherwise has the authority to act as senior executive officer of the PEO; and(7) The PEO's most recent audited financial statement setting forth the financial condition of the PEO or PEO Group, which may not be older than thirteen months. The financial statement shall be prepared in accordance with generally accepted accounting principles, and audited by an independent certified public accountant licensed to practice in the jurisdiction in which the accountant is located, and shall be without qualification as to the going concern status of the PEO.(d) An applicant may apply to the commissioner for an extension of time for filing its financial statement. A request for an extension must be accompanied by a letter from an independent certified public accountant licensed to practice in the jurisdiction in which the accountant is located, stating the reasons for the delay and the anticipated completion date of the financial statement.(e) A PEO who has not had sufficient operating history to have an audited financial statement based upon at least twelve months of operating history must meet the financial capacity requirements set forth in subsection (h) of this section, and present financial statements reviewed by an independent certified public accountant licensed to practice in the jurisdiction in which the accountant is located.(f) PEOs in a PEO group may satisfy the reporting and financial requirements of this licensing law on a combined or consolidated basis provided that each member of the PEO Group guarantees the obligations under this article of each other member of the PEO Group. In the case of a PEO Group that submits a combined or consolidated audited financial statement including entities that are not PEOs or that are not in the PEO Group, the controlling entity of the PEO Group under the consolidated or combined statement must guarantee the obligations of the PEOs in the PEO Group.(g) Within one hundred eighty days after the end of a licensee's fiscal year, the licensee shall apply for renewal of its license by submitting its most recent audited financial statement meeting the same requirements as for initial licensure, together with any changes in the information required for initial licensure, all as set forth by subsection (c) of this section.(h) Except for limited licenses granted in accordance with the provisions of subsection (i) of this section, each PEO shall maintain a minimum of $100,000 in working capital, as defined by generally accepted accounting principles and as reflected in the financial statements submitted to the commissioner with the application for an initial or renewal license. As an alternative, each PEO may provide a bond, irrevocable letter of credit, or securities with a minimum market value of $100,000 to the commissioner; such bond shall be held by a depository designated by the commissioner, securing payment by the PEO of all taxes, wages, benefits or other entitlement due to or with respect to covered employees if the PEO does not make such payments when due. For any PEO whose annual financial statements do not indicate positive working capital, the amount of the bond shall be $100,000 plus an amount sufficient to cover the deficit in working capital.(i) Upon such terms and for such periods as he or she deems appropriate, the commissioner may grant a PEO a limited license. Application for such a license must be submitted on forms prescribed by the commissioner and must demonstrate at a minimum that the applicant:(1) Is licensed or registered as a PEO in another state under terms that are substantially similar to the requirements of this article;(2) Does not maintain an office in this state or directly solicit client-employers located within this state; and(3) Does not have more than fifty covered employees employed in this state on any given day.(j) Except where it is otherwise specially provided, the commissioner shall assess PEOs the following fees: For filing an application pursuant to subsection (b) or (c) of this section and an application to renew a license pursuant to subsection (g) of this section, $200; and for receiving and filing annual reports, $100.
(a) Any person who operates a PEO without a license issued in accordance with this article is subject to the all of the injunctive, criminal, civil and administrative relief and criminal penalties as provided in article forty-four of this chapter for the unauthorized transaction of insurance.(b) In addition to the other investigative authority granted to the commissioner in this chapter, the insurance fraud unit created pursuant to the provisions of section eight, article forty-one of this chapter may investigate suspected violations of this article.
(a) The commissioner may examine or investigate the business and affairs of any PEO plan he or she considers necessary. The examination or investigation is subject to and shall be performed in accordance with the provisions of section nine, article two of this chapter.(b) The commissioner shall assess the costs of an examination to the PEO.(c) All working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this section are subject to the confidentiality provisions of subdivision (4), subsection (l), section nine, article two of this chapter.
(a) Each professional employer agreement shall, at a minimum, allocate the responsibility to:(1) Arrange for the payment of wages to covered employees;(2) Withhold, collect, report and remit payroll-related and unemployment taxes;(3) Make payments for employee benefits on behalf of covered employees; and(4) Provide for mandatory workers' compensation coverage.(b) Each professional employer agreement shall provide that the client-employer shall retain the right to hire, discipline, and terminate a covered employee: Provided, That every professional employment agreement may provide that the PEO has the right to terminate the professional employment agreement if a client-employer refuses without good cause a request from the PEO that the client-employer discipline or terminate a covered employee as may be necessary to fulfill the PEO's responsibilities under this article and the professional employer agreement.(c) Except as otherwise provided by law:(1) A client-employer is solely responsible for the quality, adequacy or safety of the goods or services produced or sold in client-employer's business;(2) A client-employer is solely responsible for directing, supervising, training and controlling the work of a covered employee, and is solely responsible for the acts, errors or omissions of a covered employee, when the covered employee is engaged in the business activities of the client-employer;(3) A PEO is not liable for the acts, errors or omissions of a client-employer or of a covered employee of the client-employer when the covered employee is acting under the express direction and control of the client-employer.(d) Within twenty days of its execution, every professional services agreement shall be filed with the commissioner. Such agreements are confidential by law and privileged, are not subject to the provisions of chapter twenty-nine-b of this code, and are not open to public inspection.(e) A covered employee is not, solely as the result of being a covered employee, an employee of the PEO for purposes of general liability insurance, fidelity bonds, surety bonds, wage bonds or liquor liability insurance carried by the PEO, unless the covered employee is included by specific reference in the professional employer agreement and applicable prearranged employment contract, insurance contract or bond.
(a) The responsibility to obtain workers' compensation coverage for covered employees in compliance with all applicable law shall be specifically allocated in the professional employer agreement to either the client-employer or the PEO.(b) If the responsibility is allocated to the PEO under the agreement:(1) The agreement shall require that the PEO maintain and provide workers' compensation coverage for the covered employees from a carrier authorized to do business in this state: Provided, That the provisions of section seven, article two, chapter twenty-three of this chapter may not be abrogated by a PEO agreement and the client-employer shall at all times remain ultimately liable under chapter twenty-three of this code to provide workers' compensation coverage for its covered employees;(2) The insurer shall report:(A) Payroll and claims data for each client-employer to the commissioner or his or her designated advisory organization in a manner that identifies both the client-employer and PEO; and(B) Coverage status with respect to each client-employer in accordance with the proof of coverage requirements provided for in statute and rules.(c) Workers' compensation coverage may be provided:(1) On a master policy basis, under which a single policy issued to the PEO provides coverage for more than one client-employer, and may also provide coverage to the PEO with respect to its worksite employees: Provided, That on or before July 1, 2008, the commissioner shall promulgate an emergency legislative rule in accordance with the provisions of section fifteen, article three, chapter twenty-nine of this code, and shall also propose an exempt legislative rule for adoption by the industrial council in accordance with the provisions of subdivision (2), subsection (j), section one-a, article one, chapter twenty-three of this code, establishing standards for the reporting of client-employer experience in sufficient detail to enable the assignment of an experience modifier upon termination of the professional employer agreement: Provided, however, That no mandatory workers' compensation coverage may be provided through a PEO arrangement to any client-employers on a master policy basis other than through coverage in the voluntary market, as that term is defined in subsection (u), section two, article two-c, chapter twenty-three of this code.(2) On a multiple coordinated policy basis, under which a separate policy is issued to or on behalf of each client-employer or group of affiliated client-employers with certain payment obligations and policy communications coordinated through the PEO; or(3) On any other basis approved by the commissioner.(d) This article does not prohibit grouping together the client-employers of a PEO for the purposes of offering dividend eligibility, applying a discount to the premium charged, applying a retrospective rating option arrangement or the use of any other loss sensitive rating options or large deductible policies as allowed under state law.(e) The protection of the exclusive remedy provision of section six, article two, chapter twenty-three of this code, shall apply to the PEO, the client-employer, and to all covered employees and other employees of the client-employer irrespective of whether the PEO or the client-employer obtains the workers' compensation coverage.(f) The commissioner shall propose rules in accordance with the provisions of subsection (c), section five, article two-c, chapter twenty-three of this code, for adoption by the Industrial Council, to effectuate the purposes of this section, including the manner in which notice of default of a master policy must be given to client-employers.
(a) No person may offer or provide professional employer services or use the names PEO, Professional Employer Organization, staff leasing, employee leasing, administrative employer or other title representing professional employer services without holding a license issued under the provisions of this article.(b) The commissioner shall deny, suspend or revoke the license of a PEO if he or she finds that the PEO:(1) Is in an unsound financial condition;(2) Is using methods or practices in the conduct of its business that render its transaction of business in this state hazardous or injurious to its client-employers or the public; or(3) Has failed to pay a judgment rendered against it in this state within sixty days after the judgment has become final.(c) The commissioner may, after notice and opportunity for a hearing in accordance with the provisions of article two, chapter thirty-three of this code, deny, suspend or revoke the license of a PEO if the commissioner finds that the PEO:(1) Has violated any lawful rule or order of the commissioner or any provision of the laws of this state;(2) Has refused to be examined or to produce its accounts, records and files for examination, or if any person responsible for the conduct of affairs of the PEO has refused to give information with respect to its affairs, or has refused to perform any other legal obligation as to an examination, when required by the commissioner. For purposes of this section, persons responsible for the conduct of affairs of the PEO include, but are not limited to, members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholder or member holding directly or indirectly ten percent or more of the voting stock, voting securities or voting interest of the administrator; and any other person who exercises control or influence over the affairs of the PEO;(3) Has, without just cause, refused to pay proper claims or perform services arising under its contracts or has, without just cause, caused covered employees to accept less than the amount due them or caused covered employees to employ attorneys or bring suit against the PEO to secure full payment or settlement of their claims;(4) At any time fails to meet any qualification for which issuance of the license could have been refused;(5) Has been convicted of, or has entered a plea of guilty or no contest to, a felony without regard to whether the adjudication was withheld; or(6) Is under suspension or revocation in another state.(d) Every PEO licensed under this article is under a continuing duty to notify the commissioner within ten days of any of the events set forth in subdivisions (5) and (6) of subsection (c) or subdivision (3) of subsection (b) of this section.(e) The commissioner may, in his or her discretion and without advance notice or hearing, immediately suspend the license of a PEO if the commissioner finds that one or more of the following circumstances exist:(1) The PEO is insolvent or impaired;(2) A proceeding for receivership, conservatorship, rehabilitation or other delinquency proceeding regarding the PEO has been commenced in any state; or(3) The financial condition or business practices of the PEO otherwise pose an imminent threat to the public health, safety or welfare of the residents of this state.(f) If the commissioner finds that one or more grounds exist for the suspension or revocation of a license issued under this article, the commissioner may, in lieu of suspension or revocation, order the PEO to pay to the State of West Virginia a penalty in a sum not exceeding $10,000; upon the failure of the PEO to pay the penalty within thirty days after notice of the penalty, the commissioner may revoke or suspend the license of the PEO.(g) When a license has been revoked or suspended or renewal of the license refused, the commissioner may reissue, terminate the suspension or renew the license when he or she is satisfied that the conditions causing the revocation, suspension or refusal to renew have ceased to exist and are unlikely to recur.
(a) A professional employer organization that sponsors a health benefit plan shall be considered the employer of all of its covered employees, and all covered employees of one or more client employers participating in a health benefit plan sponsored by a single professional employer organization shall be considered employees of that professional employer organization. For purposes of state law, such health benefit plans shall be treated as a single employer welfare benefit plan.(b) If a professional employer organization offers to its covered employees any health benefit plan which is not fully insured by an authorized insurer, the professional employer organization must comply with the provisions of article thirty-one of this chapter. The Insurance Commissioner of West Virginia is authorized to promulgate and adopt rules with respect to professional employer organizations sponsoring health benefit plans in accordance with this section.
Pursuant to terms and conditions of this article, the State of West Virginia seeks to join with other states and establish the interstate insurance product regulation compact and thus become a member of the interstate insurance product regulation commission. The Insurance Commissioner is hereby designated to serve as the representative of this state to the commission.The purposes of this compact are, through means of joint and cooperative action among the compacting states:(1) To promote and protect the interest of consumers of individual and group annuity, life insurance, disability income and long-term care insurance products;(2) To develop uniform standards for insurance products covered under the compact;(3) To establish a central clearinghouse to receive and provide prompt review of insurance products covered under the compact and, in certain cases, advertisements related thereto, submitted by insurers authorized to do business in one or more compacting states;(4) To give appropriate regulatory approval to those product filings and advertisements satisfying the applicable uniform standard;(5) To improve coordination of regulatory resources and expertise between state insurance departments regarding the setting of uniform standards and review of insurance products covered under the compact;(6) To create the interstate insurance product regulation commission; and(7) To perform these and such other related functions as may be consistent with the state regulation of the business of insurance.
(a) Insurers and third-party filers seeking to have a product approved by the commission shall file the product with, and pay applicable filing fees to, the commission. Nothing in this article shall be construed to restrict or otherwise prevent an insurer from filing its product with the insurance department in any state wherein the insurer is licensed to conduct the business of insurance, and such filing shall be subject to the laws of the states where filed.(b) The commission shall establish appropriate filing and review processes and procedures pursuant to commission rules and operating procedures. Notwithstanding any provision herein to the contrary, the commission shall promulgate rules to establish conditions and procedures under which the commission will provide public access to product filing information. In establishing such rules, the commission shall consider the interests of the public in having access to such information, as well as protection of personal, medical and financial information and trade secrets, that may be contained in a product filing or supporting information.(c) Any product approved by the commission may be sold or otherwise issued in those compacting states for which the insurer is legally authorized to do business.
(a) Not later than thirty days after the commission has given notice of a disapproved product or advertisement filed with the commission, the insurer or third-party filer whose filing was disapproved may appeal the determination to a review panel appointed by the commission. The commission shall promulgate rules to establish procedures for appointing such review panels and provide for notice and hearing. An allegation that the commission, in disapproving a product or advertisement filed with the commission, acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise not in accordance with the law, is subject to judicial review in accordance with subsection (d), section three of this article.(b) The commission shall have authority to monitor, review and reconsider products and advertisements subsequent to their filing or approval upon a finding that the product does not meet the relevant uniform standard. Where appropriate, the commission may withdraw or modify its approval after proper notice and hearing, subject to the appeal process in subsection (a) of this section.
(a) The commission shall pay or provide for the payment of the reasonable expenses of its establishment and organization. To fund the cost of its initial operations, the commission may accept contributions and other forms of funding from the national association of Insurance Commissioners, compacting states and other sources. Contributions and other forms of funding from other sources shall be of such a nature that the independence of the commission concerning the performance of its duties shall not be compromised.(b) The commission shall collect a filing fee from each insurer and third party filer filing a product with the commission to cover the cost of the operations and activities of the commission and its staff in a total amount sufficient to cover the commission's annual budget.(c) The commission's budget for a fiscal year shall not be approved until it has been subject to notice and comment as set forth in section seven of this article.(d) The commission shall be exempt from all taxation in and by the compacting states.(e) The commission shall not pledge the credit of any compacting state, except by and with the appropriate legal authority of that compacting state.(f) The commission shall keep complete and accurate accounts of all its internal receipts, including grants and donations, and disbursements of all funds under its control. The internal financial accounts of the commission shall be subject to the accounting procedures established under its bylaws. The financial accounts and reports including the system of internal controls and procedures of the commission shall be audited annually by an independent certified public accountant. Upon the determination of the commission, but no less frequently than every three years, the review of the independent Auditor shall include a management and performance audit of the commission. The commission shall make an annual report to the Governor and Legislature of the compacting states, which shall include a report of the independent audit. The commission's internal accounts shall not be confidential and such materials may be shared with the commissioner of any compacting state upon request: Provided, That any work papers related to any internal or independent audit and any information regarding the privacy of individuals and insurers' proprietary information, including trade secrets, shall remain confidential.(g) No compacting state shall have any claim to or ownership of any property held by or vested in the commission or to any commission funds held pursuant to the provisions of this compact.
(a) Any state is eligible to become a compacting state.(b) The compact shall become effective and binding upon legislative enactment of the compact into law by two compacting states: Provided, That the commission shall become effective for purposes of adopting uniform standards for, reviewing and giving approval or disapproval of, products filed with the commission that satisfy applicable uniform standards only after twenty-six states are compacting states or, alternatively, by states representing greater than forty percent of the premium volume for life insurance, annuity, disability income and long-term care insurance products, based on records of the national association of Insurance Commissioners for the prior year. Thereafter, it shall become effective and binding as to any other compacting state upon enactment of the compact into law by that state.(c) Amendments to the compact may be proposed by the commission for enactment by the compacting states. No amendment shall become effective and binding upon the commission and the compacting states unless and until all compacting states enact the amendment into law.
(a) Withdrawal. --(1) Once effective, the compact shall continue in force and remain binding upon each and every compacting state: Provided, That a compacting state may withdraw from the compact by enacting a statute specifically repealing the statute which enacted the compact into law.(2) The effective date of withdrawal is the effective date of the repealing statute. However, the withdrawal shall not apply to any product filings approved or self-certified, or any advertisement of such products, on the date the repealing statute becomes effective, except by mutual agreement of the commission and the withdrawing state unless the approval is rescinded by the withdrawing state as provided in subdivision (5) of this subsection.(3) The commissioner of the withdrawing state shall immediately notify the management committee in writing upon the introduction of legislation repealing this compact in the withdrawing state.(4) The commission shall notify the other compacting states of the introduction of such legislation within ten days after its receipt of notice thereof.(5) The withdrawing state is responsible for all obligations, duties and liabilities incurred through the effective date of withdrawal, including any obligations, the performance of which extend beyond the effective date of withdrawal, except to the extent those obligations may have been released or relinquished by mutual agreement of the commission and the withdrawing state. The commission's approval of products and advertisement prior to the effective date of withdrawal shall continue to be effective and be given full force and effect in the withdrawing state, unless formally rescinded by the withdrawing state in the same manner as provided by the laws of the withdrawing state for the prospective disapproval of products or advertisement previously approved under state law.(6) Reinstatement following withdrawal of any compacting state shall occur upon the effective date of the withdrawing state reenacting the compact.(b) Default. --(1) If the commission determines that any compacting state has at any time defaulted in the performance of any of its obligations or responsibilities under this compact, the bylaws or duly promulgated rules or operating procedures, then, after notice and hearing as set forth in the bylaws, all rights, privileges and benefits conferred by this compact on the defaulting state shall be suspended from the effective date of default as fixed by the commission. The grounds for default include, but are not limited to, failure of a compacting state to perform its obligations or responsibilities, and any other grounds designated in commission rules. The commission shall immediately notify the defaulting state in writing of the defaulting state's suspension pending a cure of the default. The commission shall stipulate the conditions and the time period within which the defaulting state must cure its default. If the defaulting state fails to cure the default within the time period specified by the commission, the defaulting state shall be terminated from the compact and all rights, privileges and benefits conferred by this compact shall be terminated from the effective date of termination.(2) Product approvals by the commission or product self-certifications, or any advertisement in connection with such product, that are in force on the effective date of termination shall remain in force in the defaulting state in the same manner as if the defaulting state had withdrawn voluntarily pursuant to subsection (a) of this section.(3) Reinstatement following termination of any compacting state requires a reenactment of the compact.(c) Dissolution of compact. --(1) The compact dissolves effective upon the date of the withdrawal or default of the compacting state which reduces membership in the compact to one compacting state.(2) Upon the dissolution of this compact, the compact becomes null and void and shall be of no further force or effect, and the business and affairs of the commission shall be wound up and any surplus funds shall be distributed in accordance with the bylaws.
(a) The provisions of this compact shall be severable; and if any phrase, clause, sentence or provision is deemed unenforceable, the remaining provisions of the compact shall be enforceable.(b) The provisions of this compact shall be liberally construed to effectuate its purposes.
(a) Other laws. --(1) Nothing herein prevents the enforcement of any other law of a compacting state, except as provided in subdivision (2) of this subsection.(2) For any product approved or certified to the commission, the rules, uniform standards and any other requirements of the commission shall constitute the exclusive provisions applicable to the content, approval and certification of such products. For advertisements that are subject to the commission's authority, any rule, uniform standard or other requirement of the commission which governs the content of the advertisements shall constitute the exclusive provision that a commissioner may apply to the content of the advertisement. Notwithstanding the foregoing, no action taken by the commission shall abrogate or restrict: (i) The access of any person to state courts; (ii) remedies available under state law related to breach of contract, tort or other laws not specifically directed to the content of the product; (iii) state law relating to the construction of insurance contracts; or (iv) the authority of the Attorney General of the state, including, but not limited to, maintaining any actions or proceedings, as authorized by law.(3) All insurance products filed with individual states shall be subject to the laws of those states.(b) Binding effect of this compact. --(1) All lawful actions of the commission, including all rules and operating procedures promulgated by the commission, are binding upon the compacting states.(2) All agreements between the commission and the compacting states are binding in accordance with their terms.(3) Upon the request of a party to a conflict over the meaning or interpretation of commission actions and upon a majority vote of the compacting states, the commission may issue advisory opinions regarding the meaning or interpretation in dispute.(4) In the event any provision of this compact exceeds the Constitutional limits imposed on the Legislature of any compacting state, the obligations, duties, powers or jurisdiction sought to be conferred by that provision upon the commission shall be ineffective as to that compacting state and those obligations, duties, powers or jurisdiction shall remain in the compacting state and shall be exercised by the agency thereof to which those obligations, duties, powers or jurisdiction are delegated by law in effect at the time this compact becomes effective.
The Insurance Commissioner shall, pursuant to the provisions of section four, article three, chapter twenty-nine-a of this code, file in the state register any rules or uniform standards which have been adopted by the commission and have become effective in this state.
For purposes of this compact:(a) "Advertisement" means any material designed to create public interest in a product, or induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain a policy as more specifically defined in the rules and operating procedures of the commission.(b) "Bylaws" mean those bylaws established by the commission for its governance or for directing or controlling the commission's actions or conduct.(c) "Compacting state" means any state which has enacted this compact legislation and which has not withdrawn pursuant to subsection (a), section fourteen of this article or been terminated pursuant to subsection (b) of said section.(d) "Commission" means the "interstate insurance product regulation commission" established by this compact.(e) "Commissioner" means the Insurance Commissioner of the State of West Virginia.(f) "Domiciliary state" means the state in which an insurer is incorporated or organized; or, in the case of an alien insurer, its state of entry.(g) "Insurer" means any entity licensed by a state to issue contracts of insurance for any of the lines of insurance covered by this article.(h) "Member" means the person chosen by a compacting state as its representative to the commission or his or her designee.(i) "Noncompacting state" means any state which is not at the time a compacting state.(j) "Operating procedures" mean procedures promulgated by the commission implementing a rule, uniform standard or a provision of this compact.(k) "Product" means the form of a policy or contract, including any application, endorsement or related form which is attached to and made a part of the policy or contract and any evidence of coverage or certificate, for an individual or group annuity, life insurance, disability income or long-term care insurance product that an insurer is authorized to issue.(l) "Rule" means a statement of general or particular applicability and future effect promulgated by the commission, including a uniform standard developed pursuant to section seven of this article, designed to implement, interpret or prescribe law or policy or describing the organization, procedure or practice requirements of the commission, which shall have the force and effect of law in the compacting states.(m) "State" means any state, district or territory of the United States of America.(n) "Third-party filer" means an entity that submits a product filing to the commission on behalf of an insurer.(o) "Uniform standard" means a standard adopted by the commission for a product line, pursuant to section seven of this article and shall include all of the product requirements in aggregate: Provided, That each uniform standard shall be construed, whether express or implied, to prohibit the use of any inconsistent, misleading or ambiguous provisions in a product and the form of the product made available to the public shall not be unfair, inequitable or against public policy as determined by the commission.
(a) The compacting states hereby create and establish a joint public agency known as the "Interstate Insurance Product Regulation Commission." Pursuant to section four of this article, the commission will have the power to develop uniform standards for product lines, receive and provide prompt review of products filed therewith and give approval to those product filings satisfying applicable uniform standards: Provided, That it is not intended for the commission to be the exclusive entity for receipt and review of insurance product filings. Nothing herein shall prohibit any insurer from filing its product in any state wherein the insurer is licensed to conduct the business of insurance; and any such filing shall be subject to the laws of the state where filed.(b) The commission is a body corporate and politic and an instrumentality of the compacting states.(c) The commission is solely responsible for its liabilities except as otherwise specifically provided in this article.(d) Venue is proper and judicial proceedings by or against the commission shall be brought solely and exclusively in a court of competent jurisdiction where the principal office of the commission is located.
The commission shall have the following powers:(a) To promulgate rules, pursuant to section seven of this article, which shall have the force and effect of law and shall be binding in the compacting states to the extent and in the manner provided in this article;(b) To exercise its rule-making authority and establish reasonable uniform standards for products covered under the compact, and advertisement related thereto, which shall have the force and effect of law and shall be binding in the compacting states, but only for those products filed with the commission: Provided, That a compacting state shall have the right to opt out of any uniform standard pursuant to section seven of this article, to the extent and in the manner provided in this article: Provided, however, That any uniform standard established by the commission for long-term care insurance products may provide the same or greater protections for consumers as, but shall not provide less than, those protections set forth in the national association of Insurance Commissioners' long-term care insurance model act and long-term care insurance model regulation, respectively, adopted as of two thousand one. The commission shall consider whether any subsequent amendments to the national association of Insurance Commissioners' long-term care insurance model act or the long-term care insurance model regulation adopted by the national association of Insurance Commissioners require the commissioner to amend the uniform standards established by the commission for long-term care insurance products;(c) To receive and review in an expeditious manner products filed with the commission and rate filings for disability income and long-term care insurance products and give approval of those products and rate filings that satisfy the applicable uniform standard, where such approval shall have the force and effect of law and be binding on the compacting states to the extent and in the manner provided in the compact;(d) To receive and review in an expeditious manner advertisement relating to long-term care insurance products for which uniform standards have been adopted by the commission, and give approval to all advertisement that satisfies the applicable uniform standard. For any product covered under this compact, other than long-term care insurance products, the commission shall have the authority to require an insurer to submit all or any part of its advertisement with respect to that product for review or approval prior to use, if the commission determines that the nature of the product is such that an advertisement of the product could have the capacity or tendency to mislead the public. The actions of the commission as provided in this subsection shall have the force and effect of law and shall be binding in the compacting states to the extent and in the manner provided in the compact;(e) To exercise its rule-making authority and designate products and advertisement that may be subject to a self-certification process without the need for prior approval by the commission;(f) To promulgate operating procedures, pursuant to section seven of this article, which shall be binding in the compacting states to the extent and in the manner provided in this article;(g) To bring and prosecute legal proceedings or actions in its name as the commission: Provided, That the standing of any state insurance department to sue or be sued under applicable law shall not be affected;(h) To issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence;(i) To establish and maintain offices;(j) To purchase and maintain insurance and bonds;(k) To borrow, accept or contract for services of personnel, including, but not limited to, employees of a compacting state;(l) To hire employees, professionals or specialists and elect or appoint officers and to fix their compensation, define their duties and give them appropriate authority to carry out the purposes of the compact and determine their qualifications; and to establish the commission's personnel policies and programs relating to, among other things, conflicts of interest, rates of compensation and qualifications of personnel;(m) To accept any and all appropriate donations and grants of money, equipment, supplies, materials and services and to receive, utilize and dispose of the same: Provided, That at all times the commission shall strive to avoid any appearance of impropriety;(n) To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, hold, improve or use, any property, real, personal or mixed: Provided, That at all times the commission shall strive to avoid any appearance of impropriety;(o) To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise dispose of any property, real, personal or mixed;(p) To remit filing fees to compacting states as may be set forth in the bylaws, rules or operating procedures;(q) To enforce compliance by compacting states with rules, uniform standards, operating procedures and bylaws;(r) To provide for dispute resolution among compacting states;(s) To advise compacting states on issues relating to insurers domiciled or doing business in noncompacting jurisdictions, consistent with the purposes of this compact;(t) To provide advice and training to those personnel in state insurance departments responsible for product review and to be a resource for state insurance departments;(u) To establish a budget and make expenditures;(v) To borrow money;(w) To appoint committees, including advisory committees comprising members, state insurance regulators, state legislators or their representatives, insurance industry and consumer representatives and any other interested persons as may be designated in the bylaws;(x) To provide and receive information from, and to cooperate with, law-enforcement agencies;(y) To adopt and use a corporate seal; and(z) To perform such other functions as may be necessary or appropriate to achieve the purposes of this compact consistent with the state regulation of the business of insurance.
(a) Membership, voting and bylaws of the commission shall be as follows:(1) Each compacting state shall have and be limited to one member. Each member shall be qualified to serve in that capacity pursuant to applicable law of the compacting state. Any member may be removed or suspended from office as provided by the law of the state from which he or she is appointed. Any vacancy occurring in the commission shall be filled in accordance with the laws of the compacting state wherein the vacancy exists. Nothing herein may be construed to affect the manner in which a compacting state determines the election or appointment and qualification of its own commissioner.(2) Each member shall be entitled to one vote and shall have an opportunity to participate in the governance of the commission in accordance with the bylaws. Notwithstanding any provision herein to the contrary, no action of the commission with respect to the promulgation of a uniform standard shall be effective unless two thirds of the members vote in favor thereof.(3) The commission shall, by a majority of the members, prescribe bylaws to govern its conduct as may be necessary or appropriate to carry out the purposes, and exercise the powers, of the compact, including, but not limited to:(A) Establishing the fiscal year of the commission;(B) Providing reasonable procedures for appointing and electing members, as well as holding meetings, of the management committee;(C) Providing reasonable standards and procedures for the establishment and meetings of other committees, and providing standards and procedures governing any general or specific delegation of any authority or function of the commission;(D) Providing reasonable procedures for calling and conducting meetings of the commission that consist of a majority of commission members, ensuring reasonable advance notice of each such meeting and providing for the right of citizens to attend each such meeting with enumerated exceptions designed to protect the public's interest, the privacy of individuals, and insurers' proprietary information, including trade secrets. The commission may meet in camera only after a majority of the entire membership votes to close a meeting en toto or in part. As soon as practicable, the commission must make public a copy of the vote to close the meeting revealing the vote of each member with no proxy votes allowed, and the votes taken during such meeting;(E) Establishing the titles, duties and authority and reasonable procedures for the election of the officers of the commission;(F) Providing reasonable standards and procedures for the establishment of the personnel policies and programs of the commission. Notwithstanding any civil service or other similar laws of any compacting state, the bylaws shall exclusively govern the personnel policies and programs of the commission;(G) Promulgating a code of ethics to address permissible and prohibited activities of commission members and employees; and(H) Providing a mechanism for winding up the operations of the commission and the equitable disposition of any surplus funds that may exist after the termination of the compact after the payment and reserving of all of its debts and obligations.(4) The commission shall publish its bylaws in a convenient form and file a copy thereof and a copy of any amendment thereto, with the appropriate agency or officer in each of the compacting states.(b) Management committee, officers and personnel.(1) A management committee comprising no more than fourteen members shall be established as follows:(A) One member from each of the six compacting states with the largest premium volume for individual and group annuities, life, disability income and long-term care insurance products, determined from the records of the NAIC for the prior year;(B) Four members from those compacting states with at least two percent of the market based on the premium volume described above, other than the six compacting states with the largest premium volume, selected on a rotating basis as provided in the bylaws; and(C) Four members from those compacting states with less than two percent of the market, based on the premium volume described above, with one selected from each of the four zone regions of the NAIC as provided in the bylaws.(2) The management committee shall have such authority and duties as may be set forth in the bylaws, including, but not limited to:(A) Managing the affairs of the commission in a manner consistent with the bylaws and purposes of the commission;(B) Establishing and overseeing an organizational structure within, and appropriate procedures for, the commission to provide for the creation of uniform standards and other rules, receipt and review of product filings, administrative and technical support functions, review of decisions regarding the disapproval of a product filing, and the review of elections made by a compacting state to opt out of a uniform standard: Provided, That a uniform standard shall not be submitted to the compacting states for adoption unless approved by two thirds of the members of the management committee;(C) Overseeing the offices of the commission; and(D) Planning, implementing and coordinating communications and activities with other state, federal and local government organizations in order to advance the goals of the commission.(3) The commission shall elect annually officers from the management committee, with each having such authority and duties, as may be specified in the bylaws.(4) The management committee may, subject to the approval of the commission, appoint or retain an executive director for such period, upon such terms and conditions and for such compensation as the commission may deem appropriate. The executive director shall serve as secretary to the commission, but shall not be a member of the commission. The executive director shall hire and supervise such other staff as may be authorized by the commission.(c) Legislative and advisory committees.(1) A legislative committee comprising state legislators or their designees shall be established to monitor the operations of, and make recommendations to, the commission, including the management committee: Provided, That the manner of selection and term of any legislative committee member shall be as set forth in the bylaws. Prior to the adoption by the commission of any uniform standard, revision to the bylaws, annual budget or other significant matter as may be provided in the bylaws, the management committee shall consult with and report to the legislative committee.(2) The commission shall establish two advisory committees, one of which shall comprise consumer representatives independent of the insurance industry, and the other comprising insurance industry representatives.(3) The commission may establish additional advisory committees as its bylaws may provide for the carrying out of its functions.(d) Corporate records of the commission.The commission shall maintain its corporate books and records in accordance with the bylaws.(e) Qualified immunity, defense and indemnification.(1) The members, officers, executive director, employees and representatives of the commission shall be immune from suit and liability, either personally or in their official capacity, for any claim for damage to or loss of property or personal injury or other civil liability caused by or arising out of any actual or alleged act, error or omission that occurred, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of commission employment, duties or responsibilities: Provided, That nothing in this subdivision shall be construed to protect any such person from suit or liability for any damage, loss, injury or liability caused by the intentional or willful and wanton misconduct of that person.(2) The commission shall defend any member, officer, executive director, employee or representative of the commission in any civil action seeking to impose liability arising out of any actual or alleged act, error or omission that occurred within the scope of commission employment, duties or responsibilities, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of commission employment, duties or responsibilities: Provided, That nothing herein shall be construed to prohibit that person from retaining his or her own counsel: Provided, however, That the actual or alleged act, error or omission did not result from that person's intentional or willful and wanton misconduct.(3) The commission shall indemnify and hold harmless any member, officer, executive director, employee or representative of the commission for the amount of any settlement or judgment obtained against that person arising out of any actual or alleged act, error or omission that occurred within the scope of commission employment, duties or responsibilities or that such person had a reasonable basis for believing occurred within the scope of commission employment, duties or responsibilities: Provided, That the actual or alleged act, error or omission did not result from the intentional or willful and wanton misconduct of that person.
(a) The commission shall meet and take such actions as are consistent with the provisions of this compact and the bylaws.(b) Each member of the commission shall have the right and power to cast a vote to which that compacting state is entitled and to participate in the business and affairs of the commission. A member shall vote in person or by such other means as provided in the bylaws. The bylaws may provide for members' participation in meetings by telephone or other means of communication.(c) The commission shall meet at least once during each calendar year. Additional meetings shall be held as set forth in the bylaws.
(a) Rule-making authority. -- The commission shall promulgate reasonable rules, including uniform standards, and operating procedures in order to effectively and efficiently achieve the purposes of this compact. Notwithstanding the foregoing, in the event the commission exercises its rule-making authority in a manner that is beyond the scope of the purposes of this article, or the powers granted hereunder, then such an action by the commission shall be invalid and have no force and effect.(b) Rule-making procedure. -- Rules and operating procedures shall be made pursuant to a rule-making process that conforms to the model state administrative procedure act of 1981, as amended, as may be appropriate to the operations of the commission. Before the commission adopts a uniform standard, the commission shall give written notice to the relevant state legislative committee or committees in each compacting state responsible for insurance issues of its intention to adopt the uniform standard. The commission in adopting a uniform standard shall consider fully all submitted materials and issue a concise explanation of its decision. Notwithstanding any provision of this code to the contrary, the commission is authorized to promulgate rules in the manner set forth in this section. Rules promulgated by the commission pursuant to this section are not subject to the provisions of article three, chapter twenty-nine-a of this code and will become effective pursuant to the procedures set forth in this section notwithstanding any provisions of article three, chapter twenty-nine-a of this code to the contrary.(c) Effective date and opt out of a uniform standard. -- A uniform standard shall become effective ninety (90) days after its promulgation by the commission or such later date as the commission may determine: Provided, That a compacting state may opt out of a uniform standard as provided in this section. "Opt out" is defined as any action by a compacting state to decline to adopt or participate in a promulgated uniform standard. All other rules and operating procedures, and amendments thereto, shall become effective as of the date specified in each rule, operating procedure or amendment.(d) Opt out procedure. -- A compacting state may opt out of a uniform standard, either by legislation or regulation duly promulgated by the insurance department under the compacting state's administrative procedure act. If a compacting state elects to opt out of a uniform standard by regulation, it must: (a) Give written notice to the commission no later than ten business days after the uniform standard is promulgated, or at the time the state becomes a compacting state; and (b) find that the uniform standard does not provide reasonable protections to the citizens of the state, given the conditions in the state. The commissioner shall make specific findings of fact and conclusions of law, based on a preponderance of the evidence, detailing the conditions in the state which warrant a departure from the uniform standard and determining that the uniform standard would not reasonably protect the citizens of the state. The commissioner must consider and balance the following factors and find that the conditions in the state and needs of the citizens of the state outweigh: (i) The intent of the Legislature to participate in, and the benefits of, an interstate agreement to establish national uniform consumer protections for the products subject to this article; and (ii) the presumption that a uniform standard adopted by the commission provides reasonable protections to consumers of the relevant product.Notwithstanding the foregoing, a compacting state may, at the time of its enactment of this compact, prospectively opt out of all uniform standards involving long-term care insurance products by expressly providing for such opt out in the enacted compact, and such an opt out shall not be treated as a material variance in the offer or acceptance of any state to participate in this compact. Such an opt out shall be effective at the time of enactment of this compact by the compacting state and shall apply to all existing uniform standards involving long-term care insurance products and those subsequently promulgated.(e) Effect of opt out. -- If a compacting state elects to opt out of a uniform standard, the uniform standard shall remain applicable in the compacting state electing to opt out until such time as the opt out legislation is enacted into law or the regulation opting out becomes effective.Once the opt out of a uniform standard by a compacting state becomes effective as provided under the laws of that state, the uniform standard shall have no further force and effect in that state unless and until the legislation or regulation implementing the opt out is repealed or otherwise becomes ineffective under the laws of the state. If a compacting state opts out of a uniform standard after the uniform standard has been made effective in that state, the opt out shall have the same prospective effect as provided under section fourteen of this article for withdrawals.(f) Stay of uniform standard. -- If a compacting state has formally initiated the process of opting out of a uniform standard by regulation, and while the regulatory opt out is pending, the compacting state may petition the commission, at least fifteen days before the effective date of the uniform standard, to stay the effectiveness of the uniform standard in that state. The commission may grant a stay if it determines the regulatory opt out is being pursued in a reasonable manner and there is a likelihood of success. If a stay is granted or extended by the commission, the stay or extension thereof may postpone the effective date by up to ninety days, unless affirmatively extended by the commission: Provided, That a stay may not be permitted to remain in effect for more than one year unless the compacting state can show extraordinary circumstances which warrant a continuance of the stay, including, but not limited to, the existence of a legal challenge which prevents the compacting state from opting out. A stay may be terminated by the commission upon notice that the rule-making process has been terminated.(g) Not later than thirty days after a rule or operating procedure is promulgated, any person may file a petition for judicial review of the rule or operating procedure: Provided, That the filing of such a petition shall not stay or otherwise prevent the rule or operating procedure from becoming effective unless the court finds that the petitioner has a substantial likelihood of success. The court shall give deference to the actions of the commission consistent with applicable law and shall not find the rule or operating procedure to be unlawful if the rule or operating procedure represents a reasonable exercise of the commission's authority.
(a) The commission shall promulgate rules establishing conditions and procedures for public inspection and copying of its information and official records, except such information and records involving the privacy of individuals and insurers' trade secrets. The commission may promulgate additional rules under which it may make available to federal and state agencies, including law-enforcement agencies, records and information otherwise exempt from disclosure, and may enter into agreements with such agencies to receive or exchange information or records subject to nondisclosure and confidentiality provisions.(b) Except as to privileged records, data and information, the laws of any compacting state pertaining to confidentiality or nondisclosure shall not relieve any compacting state commissioner of the duty to disclose any relevant records, data or information to the commission: Provided, That disclosure to the commission shall not be deemed to waive or otherwise affect any confidentiality requirement: Provided, however, That, except as otherwise expressly provided in this article, the commission shall not be subject to the compacting state's laws pertaining to confidentiality and nondisclosure with respect to records, data and information in its possession. Confidential information of the commission shall remain confidential after such information is provided to any commissioner.(c) The commission shall monitor compacting states for compliance with duly adopted bylaws, rules, including uniform standards, and operating procedures. The commission shall notify any noncomplying compacting state in writing of its noncompliance with commission bylaws, rules or operating procedures. If a noncomplying compacting state fails to remedy its noncompliance within the time specified in the notice of noncompliance, the compacting state shall be deemed to be in default as set forth in section fourteen of this article.(d) The commissioner of any state in which an insurer is authorized to do business, or is conducting the business of insurance, shall continue to exercise his or her authority to oversee the market regulation of the activities of the insurer in accordance with the provisions of the state's law. The commissioner's enforcement of compliance with the compact is governed by the following provisions:(1) With respect to the commissioner's market regulation of a product or advertisement that is approved or certified to the commission, the content of the product or advertisement shall not constitute a violation of the provisions, standards or requirements of the compact except upon a final order of the commission, issued at the request of a commissioner after prior notice to the insurer and an opportunity for hearing before the commission.(2) Before a commissioner may bring an action for violation of any provision, standard or requirement of the compact relating to the content of an advertisement not approved or certified to the commission, the commission, or an authorized commission officer or employee, must authorize the action. However, authorization pursuant to this subdivision does not require notice to the insurer, opportunity for hearing or disclosure of requests for authorization or records of the commission's action on such requests.
The commission shall attempt, upon the request of a member, to resolve any disputes or other issues that are subject to this compact and which may arise between two or more compacting states, or between compacting states and noncompacting states, and the commission shall promulgate an operating procedure providing for resolution of such disputes.
For purposes of this article:(a) "Board" means the board of directors of the plan.(b) "Church plan" has the meaning given such term under Section 3(33) of the federal Employee Retirement Income Security Act of 1974.(c) "Commissioner" means the Insurance Commissioner of this state.(d)(1) "Creditable coverage" means, with respect to an individual, coverage of the individual provided under any of the following:(A) A group health plan;(B) Health insurance coverage;(C) Part A or Part B of Title XVIII of the Social Security Act;(D) Title XIX of the Social Security Act, other than coverage consisting solely of benefits under section 1928;(E) Chapter 55 of Title 10, U.S.C.;(F) A medical care program of the federal Indian health service or of a tribal organization;(G) A state health benefits risk pool;(H) A health plan offered under Chapter 89 of Title 5, U.S.C.;(I) A public health plan as defined in federal regulations; or(J) A health benefit plan under Section 5(e) of the federal Peace Corps Act (22 U.S.C. 2504 (e)).(2) A period of creditable coverage shall not be counted, with respect to the enrollment of an individual who seeks coverage under this article, if, after such period and before the enrollment date, the individual experiences a significant break in coverage.(e) "Department" means the Insurance Commissioner of West Virginia.(f) "Dependent" means a resident spouse or resident unmarried child under the age of nineteen years, a child who is a student under the age of twenty-three years and who is financially dependent upon the parent or a child of any age who is disabled and dependent upon the parent.(g) "Federally defined eligible individual" means an individual:(1) For whom, as of the date on which the individual seeks coverage under this article, the aggregate of the periods of creditable coverage as defined in subsection (d) of this section is eighteen or more months;(2) Whose most recent prior creditable coverage was under a group health plan, governmental plan, church plan or health insurance coverage offered in connection with such a plan;(3) Who is not eligible for coverage under a group health plan, Part A or Part B of Title XVIII of the Social Security Act (Medicare), or a state plan under Title XIX of Act (Medicaid) or any successor program and who does not have other health insurance coverage;(4) With respect to whom the most recent coverage within the period of aggregate creditable coverage was not terminated based on a factor relating to nonpayment of premiums or fraud;(5) Who, if offered the option of continuation coverage under a COBRA continuation provision or under a similar state program, elected this coverage; and(6) Who has exhausted the continuation coverage under this provision or program, if the individual elected the continuation coverage described in subdivision (5) of this subsection.(h) "Governmental plan" has the meaning given such term under Section 3(32) of the federal Employee Retirement Income Security Act of 1974 and any federal government plan.(i) "Group health plan" means an employee welfare benefit plan as defined in Section 3(1) of the federal Employee Retirement Income Security Act of 1974 to the extent that the plan provides medical care as defined in subsection (m) of this section and including items and services paid for as medical care to employees or their dependents as defined under the terms of the plan directly or through insurance, reimbursement or otherwise.(j)(1) "Health insurance coverage" means any hospital and medical expense incurred policy, nonprofit health care service plan contract, health maintenance organization subscriber contract, or any other health care plan or arrangement that pays for or furnishes medical or healthcare services whether by insurance or otherwise.(2) "Health insurance coverage" shall not include one or more, or any combination of, the following:(A) Coverage only for accident or disability income insurance, or any combination thereof;(B) Coverage issued as a supplement to liability insurance;(C) Liability insurance, including general liability insurance and automobile liability insurance;(D) Workers' compensation or similar insurance;(E) Automobile medical payment insurance;(F) Credit-only insurance;(G) Coverage for on-site medical clinics; and(H) Other similar insurance coverage, specified in federal regulations issued pursuant to PL 104-191, under which benefits for medical care are secondary or incidental to other insurance benefits.(3) "Health insurance coverage" shall not include the following benefits if they are provided under a separate policy, certificate or contract of insurance or are otherwise not an integral part of the coverage:(A) Limited scope dental or vision benefits;(B) Benefits for long-term care, nursing home care, home health care, community-based care or any combination thereof; or(C) Other similar, limited benefits specified in federal regulations issued pursuant to PL 104-191.(4) "Health insurance coverage" shall not include the following benefits if the benefits are provided under a separate policy, certificate or contract of insurance, there is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor and the benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor:(A) Coverage only for a specified disease or illness; or(B) Hospital indemnity or other fixed indemnity insurance.(5) "Health insurance coverage" shall not include the following if offered as a separate policy, certificate or contract of insurance:(A) Medicare supplemental health insurance as defined under Section 1882(g)(1) of the Social Security Act;(B) Coverage supplemental to the coverage provided under Chapter 55 of Title 10, U.S.C. (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)); or(C) Similar supplemental coverage provided to coverage under a group health plan.(k) "Health maintenance organization" means an organization licensed in this state pursuant to the provisions of article twenty-five-a of this chapter. (l) "Insurer" means any entity that provides health insurance coverage in this state. For the purposes of this article, insurer includes an insurance company, a prepaid limited health service organization as operating under a certificate of authority pursuant to article twenty-five-d of this chapter, a fraternal benefit society, a health maintenance organization and any other entity providing a plan of health insurance coverage or health benefits subject to state insurance regulation.(m) "Medical care" means amounts paid for:(1) The diagnosis, care, mitigation, treatment or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body;(2) Transportation primarily for and essential to medical care referred to in subdivision (1) of this subsection; and(3) Insurance covering medical referred to in subdivisions (1) and (2) of this subsection.(n) "Medicare" means coverage under both Parts A and B of Title XVIII of the Social Security Act, 42 U.S.C. 1395, et seq., as amended.(o) "Participating insurer" means any insurer providing health insurance coverage to residents of this state.(p) "Plan" means the West Virginia health insurance plan as created in section two of this article.(q) "Plan of operation" means the articles, bylaws and operating rules and procedures adopted by the board pursuant to section two of this article.(r) "Resident" means an individual who has been legally domiciled in this state for a period of at least thirty days, except that for a federally defined eligible individual, there shall not be a thirty-day requirement. "Resident" also means an individual who is legally domiciled in this state on the date of application to the plan and is eligible for the credit for health insurance costs under Section 35 of the Internal Revenue Code of 1986.(s) "Significant break in coverage" means a period of sixty-three consecutive days during all of which the individual does not have any creditable coverage, except that neither a waiting period nor an affiliation period is taken into account in determining a significant break in coverage.Terms within this article with meaning ascribed by federal law shall have the meaning as in effect in federal law December 31, 2003.
The plan established pursuant to this article shall be exempt from the premium taxes assessed under sections fourteen and fourteen-a, article three of this chapter.
The provisions of this article shall become effective on July 1, 2004.
(a) The following persons are eligible for plan coverage:(1) Any individual who is and continues to be a resident of this state if evidence is provided; of a notice of rejection or refusal to issue substantially similar insurance for health reasons by one insurer or of a refusal by an insurer to issue insurance except at a rate exceeding the plan rate, except that a rejection or refusal by an insurer offering only stop loss, excess of loss or reinsurance coverage shall not be sufficient evidence under this subdivision;(2) Any individual who is legally domiciled in this state and is eligible for the credit for health insurance costs under Section 35 of the Internal Revenue Code of 1986; and(3) Any federally defined eligible individual who has not experienced a significant break in coverage and who is and continues to be a resident of this state.(b) The board shall promulgate a list of medical or health conditions for which a person is eligible for plan coverage without applying for health insurance coverage pursuant to subdivision (1), subsection (a) of this section. Persons who can demonstrate the existence or history of any medical or health conditions on the list promulgated by the board are not required to prove the evidence specified in said subdivision. The list shall be effective on the first day of the operation of the plan and may be amended, from time to time, as may be appropriate.(c) Each dependent of a person who is eligible for plan coverage is also eligible for plan coverage.(d) A person is not eligible for coverage under the plan if:(1) The person has or obtains health insurance coverage substantially similar to or more comprehensive than a plan policy or would be eligible to have coverage if the person elected to obtain it, except that:(A) A person may maintain other coverage for the period of time the person is satisfying any preexisting condition waiting period under a plan policy; and(B) A person may maintain plan coverage for the period of time the person is satisfying a preexisting condition waiting period under another health insurance policy intended to replace the plan policy;(2) The person is determined to be eligible for health care benefits under the state Medicaid law or the West Virginia Children's Health Insurance Program;(3) The person has previously terminated plan coverage unless twelve months have lapsed since such terminations, except that this subdivision does not apply with respect to an applicant who is a federally defined eligible individual or with respect to an applicant who has exhausted annual benefits under the West Virginia Children's Health Insurance Program;(4) The plan has paid out $1 million in benefits on behalf of the person;(5) The person is an inmate or resident of a public institution, except that this subdivision does not apply with respect to an applicant who is a federally defined eligible individual; or(6) The person's premiums are paid for or reimbursed under any government sponsored program or by any government agency or health care provider, except as an otherwise qualifying full-time employee, or dependent thereof, of a government agency or health care provider.(e) Coverage shall cease:(1) On the date a person is no longer a resident of this state;(2) On the date a person requests coverage to end;(3) Upon the death of the covered person;(4) On the date state law requires cancellation of the policy; or(5) At the option of the plan, thirty days after the plan makes any inquiry concerning the person's eligibility or place of residence to which the person does not reply.(f) Except under the circumstance described in subsection (d) of this section, a person who ceases to meet the eligibility requirements of this section may be terminated at the end of the policy period for which the necessary premiums have been paid.
It shall constitute an unfair trade practice for the purposes of article eleven of this chapter for an insurer, insurance agent or insurance broker to refer an individual employee to the plan, or arrange for an individual employee to apply to the plan, for the purpose of separating that employee from group health insurance coverage provided in connection with the employee's employment.
(a) The board shall select a plan administrator through a competitive bidding process to administer the plan. The board shall evaluate bids submitted based on criteria established by the board which shall include:(1) The plan administrator's proven ability to handle health insurance coverage to individuals;(2) The efficiency and timeliness of the plan administrator's claim processing procedures;(3) An estimate of total charges for administering the plan;(4) The plan administrator's ability to apply effective cost containment programs and procedures and to administer the plan in a cost efficient manner; and(5) The financial condition and stability of the plan administrator.(b) (1) The plan administrator shall serve for a period specified in the contract between the plan and the plan administrator subject to removal for cause and subject to any terms, conditions and limitations of the contract between the plan and the plan administrator.(2) At least one year prior to the expiration of each period of service by a plan administrator, the board shall invite eligible entities, including the current plan administrator to submit bids to serve as the plan administrator. Selection of the plan administrator for the succeeding period shall be made at least six months prior to the end of the current period.(c) The plan administrator shall perform such functions relating to the plan as may be assigned to it, including:(1) Determination of eligibility;(2) Payment of claims;(3) Establishment of a premium billing procedure for collection of premium from persons covered under the plan; and(4) Other necessary functions to assure timely payment of benefits to covered persons under the plan.(d) The plan administrator shall submit regular reports to the board regarding the operation of the plan. The frequency, content and form of the report shall be specified in the contract between the board and the plan administrator.(e) Following the close of each calendar year, the plan administrator shall determine net written and earned premiums, the expense of administration and the paid and incurred losses for the year and report this information to the board and the commission on a form prescribed by the commissioner.(f) Notwithstanding any other provision in this section to the contrary, the board may elect to designate the Public Employees Insurance Agency as the plan administrator. If so designated, the Public Employees Insurance Agency shall provide the services set forth in subsection (c) of this section and shall be subject to the reporting requirements of subsections (d) and (e) of this section. The plan shall, if the Public Employees Insurance Agency is designated by the board as the plan administrator, reimburse health care providers at the same health care reimbursement rates then in effect for the West Virginia Public Employees Insurance Agency and health care providers are subject to the same prohibition against balance billing of plan participants as set forth in section four, article twenty-nine-d, chapter sixteen of this code.
(a) Premiums. --(1) The plan shall establish premium rates for plan coverage as provided in subdivision (2) of this subsection. Separate schedules of premium rates based on age, sex and geographical location may apply for individual risks. Premium rates and schedules shall be submitted to the commissioner for approval prior to use.(2) The plan, with the assistance of the commissioner, shall determine a standard risk rate by considering the premium rates charged by other insurers offering health insurance coverage to individuals. The standard risk rate shall be established using reasonable actuarial techniques and shall reflect anticipated experience and expenses for such coverage. Initial rates for plan coverage shall not be less than one hundred twenty-five percent of rates established as applicable for individual standard risks. Subject to the limits provided in this subdivision, subsequent rates shall be established to provide fully for the expected costs of claims including recovery of prior losses, expenses of operation, investment income of claim reserves and any other cost factors subject to the limitations described herein. In no event shall plan rates exceed one hundred fifty percent of rates applicable to individual standard risks.(b) Notwithstanding the provisions of subsection (c), section eight, article twenty-nine-b, chapter sixteen of this code and not to be construed as in conflict therewith, the Health Care Authority is authorized to increase the assessment obligation of hospitals in an amount not to exceed a maximum of twenty-five percent above the one tenth of one percent specified in said subsection and the entire assessment, including the additional assessment, shall be collected as specified in said subsection. Upon receipt of the additional assessment, the Health Care Authority shall transfer all proceeds generated from the additional assessment collected to the special revenue account established in section seven-a of this article. (c) The plan is authorized to receive and expend any federal grant.(d) With the consent of the board, the commissioner is authorized to utilize his or her administrative staff and resources in administering this article. The board shall reimburse the commissioner for all costs of administrative and actuarial services, supplies and other costs incurred by the commissioner in implementing the provisions of this article.
(a) There is hereby created a special revenue account in the state Treasury, designated the "West Virginia Health Insurance Plan Fund", which shall be an interest-bearing account and may be invested in the manner permitted by article six, chapter twelve of this code, with the interest income a proper credit to the fund, unless otherwise designated in law. The fund shall be administered by the commissioner, under the supervision and control of the board, and used to pay all proper costs incurred in implementing the provisions of this article, all administrative costs of the plan, all claims and all proper ongoing costs of the plan. Moneys deposited into this account are available for expenditure as the commissioner may direct in accordance with the provisions of this article.(b) The following funds shall be paid into this account:(1) All premium payments received from individuals insured by the plan;(2) All other payments, gifts or income from any source; and(3) Transfers from the Health Care Authority of all proceeds generated from the additional assessment collected pursuant to subsection (b), section seven of this article at any time after July 1, 2004.
Whenever the board determines that the account created pursuant to section seven-a of this article contains a surplus above those amounts necessary to provide fully for the expected costs of claims and other expenses listed in subsection (a), section seven of this article, the plan may use such surpluses to subsidize the premium of enrollees with an annual average household income at or below four hundred percent of the federal poverty level. The board may propose emergency rules and shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to establish eligibility criteria for enrollees who are eligible for premium subsidy pursuant to this section.
(a) The plan shall offer health care coverage consistent with comprehensive coverage to every eligible person who is not eligible for Medicare. The coverage to be issued by the plan, its schedule of benefits, exclusions and other limitations shall be established by the board and subject to the approval of the commissioner. (b) In establishing the plan coverage, the board shall take into consideration the levels of health insurance coverage provided in the state and medical economic factors as may be deemed appropriate; and promulgate benefit levels, deductibles, coinsurance factors, exclusions and limitations determined to be generally reflective of and commensurate with health insurance coverage provided through a representative number of large employers in the state.(c) The board may adjust any deductibles and coinsurance factors annually according to the medical component of the consumer price index.(d) Preexisting conditions. -- (1) Plan coverage shall exclude charges or expenses incurred during the first six months following the effective date of coverage as to any condition for which medical advice, care or treatment was recommended or received as to such conditions during the six-month period immediately preceding the effective date of coverage, except that no preexisting condition exclusion shall be applied to a federally defined eligible individual. The board may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to propose any other additional class of eligible individuals to which the preexisting condition exclusion may not apply.(2) Subject to subdivision (1) of this subsection, the preexisting condition exclusions shall be waived to the extent that similar exclusions, if any, have been satisfied under any prior health insurance coverage which was involuntarily terminated: Provided, That:(A) Application for pool coverage is made not later than sixty-three days following such involuntary termination and, in such case, coverage in the plan shall be effective from the date on which such prior coverage was terminated; and(B) The applicant is not eligible for continuation or conversion rights that would provide coverage substantially similar to plan coverage.(e) Nonduplication of benefits. --(1) The plan shall be payer of last resort of benefits whenever any other benefit or source of third-party payment is available. Benefits otherwise payable under plan coverage shall be reduced by all amounts paid or payable through any other health insurance coverage and by all hospital and medical expense benefits paid or payable under any workers' compensation coverage, automobile medical payment or liability insurance, whether provided on the basis of fault or nonfault, and by any hospital or medical benefits paid or payable under or provided pursuant to any state or federal law or program.(2) The plan shall have a cause of action against an eligible person for the recovery of the amount of benefits paid that are not for covered expenses. Benefits due from the plan may be reduced or refused as a set-off against any amount recoverable under this subdivision.
Neither the participation in the plan as participating insurers, the establishment of rates, forms or procedures nor any other joint or collective action required by this article shall be the basis of any legal action, criminal or civil liability or penalty against the plan or any participating insurer.
(a) The Legislature finds that:(1) The National Flood Insurance Program is a federal program that enables property owners in participating communities to purchase flood insurance. A community participates in the federal program by adopting and enforcing flood plain management regulations that meet or exceed federal flood plain management criteria designed to reduce future flood risk to new construction in flood plains. The program was created by Congress in 1968 because insurance covering the peril of flood was often unavailable in the private insurance market and was intended to reduce the amount of financial aid paid by the federal government in the aftermath of flood-related disasters. After the creation of the National Flood Insurance Program (NFIP), flood insurance coverage continued to be generally unavailable for purchase from private market insurance companies.(2) The Biggert-Waters Flood Insurance Reform Act of 2012 reauthorized and revised the National Flood Insurance Program. The act increases flood insurance premiums purchased through the program for second homes, business properties, severe repetitive loss properties and substantially improved damaged properties by requiring premium increases of twenty-five percent per year until premiums meet the full actuarial cost. Most residences lose their subsidized rates if the property is sold, the policy lapses, repeated and severe flood losses occur or a new policy is purchased. Policyholders whose communities adopt a new, updated Flood Insurance Rate Map (FIRM) that results in higher rates will experience a five-year phase in of rate increases to achieve required rate levels.(3) The Biggert-Waters Flood Insurance Reform Act of 2012 also encourages the use and acceptance of private market flood insurance. The Legislature finds that there is no adequate private flood insurance market available in West Virginia. Such historic and current inadequacy suggests that the private market in this state is unlikely to expand unless the Legislature provides multiple options for the regulation of flood insurance. The Legislature also finds that the consumers of this state would benefit from the availability of competitively priced private market flood insurance due to the continued availability of NFIP flood insurance, the likely availability of alternative private market flood insurance coverage options and the oversight of the Insurance Commissioner of West Virginia.(4) The National Flood Insurance Program, as amended by the Biggert-Waters Flood Insurance Reform Act of 2012, will prevent many property owners from obtaining affordable flood insurance coverage in this state. The absence of affordable flood insurance threatens the public health, safety and welfare and the economic health of West Virginia. Therefore, the state has a compelling public purpose and interest in providing alternatives to coverage from the National Flood Insurance Program by promoting the availability of flood insurance from private market insurers at potentially lower premium rates so as to facilitate the remediation, reconstruction and replacement of damaged or destroyed property in order to reduce or avoid harm to the public health, safety and welfare, to the economy of this state and to the revenues of state and local governments which are needed to provide for the public welfare.
(a) The commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to implement the provisions of this article, including but not limited to:(1) Establishing and refining definitions;(2) Requirements for ratemaking, forms and other requirements under this chapter;(3) Clarifying minimum coverage requirements for flood insurance policies;(4) Determining whether a policy meets the definition of "private flood insurance" or other certain standards and requirements; and(5) Solvency and market conduct operations.(b) The commissioner may promulgate emergency rules pursuant to the provisions of section fifteen, article three, chapter twenty-nine-a of this code for any purposes set forth for legislative rules in subsection (a) of this section.
(a) As used in this article, the term "flood" means a general and temporary condition of partial or complete inundation of two acres or more of normally dry land area or of two or more properties, at least one of which is the policyholder's property, from:(1) Overflow of waters;(2) Unusual and rapid accumulation or runoff of surface waters from any source;(3) Mudflow; or(4) Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels which result in a flood.(b) As used in this article, the term "insurer" means an insurer that is subject to the provisions of this chapter and is offering flood insurance pursuant to this article: Provided, That a surplus lines insurer offering flood insurance pursuant to this article is exempt from the requirements of this chapter but subject to laws and rules applicable to surplus lines insurers.
(a) Subject to the requirements of this article, an insurer may issue an insurance policy, contract or endorsement providing coverage for the peril of flood on any structure or on the contents of personal property on a form that has been filed with and approved by the commissioner pursuant to section eight, article six of this chapter and that may be substantially similar to the form used by the National Flood Insurance Program (NFIP).(b) A surplus lines agent may export a contract or endorsement providing flood coverage of $1 million or more to an eligible surplus lines insurer without making a diligent effort to seek such coverage from three or more authorized insurers as provided in article twelve-c of this chapter. This subsection expires on July 1, 2019.
(a) At a minimum, coverage for the peril of flood must cover a flood as defined in this article. Coverage for the peril of flood may also include water intrusion, as defined by the policy, which originates from outside the structure and is not otherwise covered under the definition of flood.(b) An insurer may offer a flood coverage policy, contract or endorsement:(1) That has a flood deductible based on a stated dollar amount or a percentage of the coverage amount. At a minimum, an insurer must offer deductible amounts applicable to flood losses that equal the standard deductibles offered under the National Flood Insurance Program;(2) That provides that any flood loss will be adjusted on the basis of:(A) The actual cash value of the property; or(B) Replacement costs up to the policy limits in the same manner as provided under section nine, article seventeen of this chapter;(3) That restricts flood coverage to the principal building, as defined in the applicable policy;(4) In an agreed-upon amount, including coverage limited to the amount of all outstanding mortgages applicable to the covered property. However, if a policy, contract or endorsement does not limit flood coverage to the replacement cost of the covered property, the contract or endorsement may not include a provision penalizing the policyholder for not insuring the covered property up to replacement cost; or(5) That, as to the peril of flood, does not cover:(A) Additional living expenses;(B) Personal property or contents; or(C) Law and ordinance coverage. However, an insurer must offer law and ordinance coverage that is comparable to the law and ordinance coverage offered in the standard National Flood Insurance Program policy. A policy, endorsement, or contract that includes the law and ordinance coverage that must be offered under this paragraph must include the following disclosure in uppercase bold lettering of at least 12-point type:"LAW AND ORDINANCE COVERAGE UNDER THIS POLICY MIGHT HAVE LIMITATIONS ON WHAT IS COVERED IN THE EVENT OF A LOSS. YOU SHOULD CONSULT WITH YOUR AGENT IF YOU HAVE QUESTIONS ABOUT THE COVERAGE OFFERED UNDER THIS POLICY."
(a) A policy, endorsement or contract providing coverage for the peril of flood must provide notice that flood insurance coverage is available from the National Flood Insurance Program.(b) Any limitations on flood coverage or policy limits as to the peril of flood, including, but not limited to, flood deductibles or flood coverage limited to the amount of all outstanding mortgages, must be prominently disclosed on the declarations page or face page of the policy in uppercase bold lettering of at least 12-point type and be sufficiently clear so as to be readily understandable by both the agent and the property owner.(c) A policy that limits flood coverage to an amount less than the full replacement cost of the property must include the statement: "THIS POLICY LIMITS FLOOD COVERAGE TO LESS THAN THE FULL COST OF REPLACEMENT FOR THE PROPERTY, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU AND MAY PUT YOUR EQUITY IN THIS PROPERTY AT RISK."(d) A policy that insures a dwelling on the basis of actual cash value must include the statement: "THIS POLICY PAYS YOU THE DEPRECIATED VALUE OF YOUR PROPERTY THAT IS DAMAGED BY FLOOD, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU IF YOUR PROPERTY NEEDS TO BE REPAIRED OR REPLACED."
A policy, endorsement or contract providing coverage for the peril of flood must require the insurer to give 45-days' prior written notice of cancellation or nonrenewal to the insured and any regulated lending institution or federal agency that is a mortgagee. An insurer or insured may cancel during the term of the policy or upon renewal if the cancellation is for a valid reason under the National Flood Insurance Program.
(a) In addition to any other applicable requirements, an insurer providing flood coverage in this state must:(1) Notify the office at least thirty days before writing flood insurance in this state; and(2) File a plan of operation and financial projections or revisions to such plan, as applicable, with the commissioner.
With respect to the regulation of flood insurance coverage written in this state by private insurers, this article supersedes any other provision in this chapter in the event of a conflict.
If federal law or rule requires a certification by a state insurance regulatory official as a condition of qualifying for private flood insurance or disaster assistance, the commissioner shall provide the certification, and the certification is not subject to review under section fourteen, article two of this chapter.
(a) "All-payer claims database" or "APCD" means the program authorized by this article that collects, retains, uses, and discloses information concerning the claims and administrative expenses of health care payers.(b) "Commissioner" means the West Virginia Insurance Commissioner.(c) "Data" means the data elements from enrollment and eligibility files, specified types of claims, and reference files for data elements not maintained in formats consistent with national coding standards. (d) "Health care payer" means any entity that pays or administers the payment of health insurance claims or medical claims under workers compensation insurance to providers in this state, including workers compensation insurers; accident and sickness insurers; nonprofit hospital service corporations, medical service corporations, and dental service organizations; nonprofit health service corporations; prepaid limited health service organizations; health maintenance organizations; and government payers, including, but not limited to, Medicaid, Medicare, and the Public Employees Insurance Agency; the term also includes any third-party administrator, including any pharmacy benefits manager, that administers a fully funded plan: A "health insurance claim" does not include: (1) Any claim paid under an individual or group policy providing coverage only for accident or disability income insurance or any combination thereof; coverage issued as a supplement to liability insurance; liability insurance, including general liability insurance and automobile liability; credit-only insurance; coverage for on-site medical clinics; other similar insurance coverage, which may be specified by rule, under which benefits for medical care are secondary or incidental to other insurance benefits; or (2) Any of the following if provided under a separate policy, certificate, or contract of insurance: Limited scope dental or vision benefits; benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; coverage for only a specified disease or illness; or hospital indemnity or other fixed indemnity insurance."Health insurance claims" shall only include information from Medicare supplemental policies if the same information is obtained with respect to Medicare.(e) "Personal identifiers" means information relating to an individual member or insured that identifies, or can be used to identify, locate, or contact a particular individual member or insured, including, but not limited to, the individuals name, street address, Social Security number, e-mail address, and telephone number.(f) "Secretary" means the Secretary of the West Virginia Department of Health and Human Resources.(g) "Third-party administrator" has the same meaning ascribed to it in 33-46-2 of this code.
(a) The secretary shall have primary responsibility for the collection, retention, and dissemination of the data in an all-payer claims database (APCD). The commissioner shall have primary responsibility for enforcement of data collection. (b) The secretary shall provide for the development of a plan for the financial stability of the APCD. (c) The secretary shall provide for the use of the hospital uniform billing data collected by the West Virginia Department of Health and Human Resources as a tool in the validation of APCD reports.
(a) The secretary may:(1) Accept gifts, bequests, grants, or other funds dedicated to the furtherance of the goals of the all-payer claim database (APCD);(2) Select a vendor to handle data collection and processing and such other tasks as deemed appropriate;(3) Enter into agreements with other states to perform joint administrative operations, share information, and assist in the development of multistate efforts to further the goals of this article: Provided, That any such agreements must include adequate protections with respect to the confidentiality of the information to be shared and comply with all state and federal laws and regulations;(4) Enter into memoranda of understanding with other governmental agencies to carry out any of its functions, including contracts with other states to perform joint administrative functions;(5) Attempt to ensure that the requirements with respect to the reporting of data be standardized; (6) Enter into voluntary agreements to obtain data from payers not subject to mandatory reporting under this article; and (7) Exempt a payer or class of payers from the requirements of this article for cause. (b) Contracts for professional services for the development and operation of the APCD are not subject to the provisions of 5A-3-1 et seq. of this code relating to the Purchasing Division of the Department of Administration. The award of such contracts shall be subject to a competitive process established by the secretary.(c) The secretary shall make an annual report to the Governor, which shall also be filed with the Joint Committee on Government and Finance, summarizing the activities of the APCD in the preceding calendar year.
(a) All health care payers shall submit data to the secretary, or an entity designated by the secretary, at such times and in a form specified in rule. Any health care payer that the secretary or commissioner determines paid or administered the payment of health insurance claims in this state for policies on fewer than 500 covered lives in the previous calendar year is exempt from the requirements of this article.(b) Data submitted in accordance with this article shall be considered confidential by law and privileged, are exempt from disclosure pursuant to 29B-1-1 et seq. of this code, are not open to public inspection, are not subject to subpoena, are not subject to discovery or admissible in evidence in any criminal, private, civil, or administrative action, are not subject to production pursuant to court order, and shall only be used and disclosed pursuant to law and legislative rules promulgated pursuant to this article.(c)(1) Data submitted to and retained by the all-payer claims database (APCD) shall be available as a resource for the secretary and commissioner to conduct public health analyses, conduct program analyses, review health care utilization, expenditures, and performance in West Virginia, conduct academic research, and to enhance the ability of consumers to make informed and cost-effective health care decisions.(2) Data submitted to and retained by the APCD may, in accordance with this article and the legislative rules promulgated pursuant to this article, also be available as a resource for insurers, researchers, employers, providers, purchasers of health care, consumers, and state agencies. Any such use shall be limited to public health, research, consumer reporting, and program evaluation purposes.(d) Notwithstanding any other provision of law to the contrary, the APCD may not disclose any data that contain personal identifiers. The secretary, in accordance with procedures and standards set forth in legislative rule, may approve access to data elements not prohibited from disclosure by the APCD, as well as synthetic or created unique identifiers, for use by researchers, including government agencies, with established protocols for safeguarding confidential or privileged information. Use of the data by the secretary and commissioner shall not constitute a disclosure.
Reasonable user fees may be set by the secretary, in the manner established in legislative rule, for the right to access and use the data available from the all-payer claim database (APCD). The secretary may reduce or waive the fee if he or she determines that the user is unable to pay the scheduled fees and that the user has a viable plan to use the data or information in research of general value to the public health.
If there is any violation of this article or any rule adopted thereunder, the commissioner or secretary may seek to enjoin a further violation in the circuit court of Kanawha County. Injunctive relief ordered pursuant to this section may be in addition to any other remedies and enforcement actions available to the secretary and commissioner under this chapter.
(a) There is hereby created a special revenue account in the State Treasury, designated the West Virginia All-Payer Claims Database Fund, which shall be an interest-bearing account and may be invested in the manner permitted by 12-6-1 et seq. of this code, with the interest income a proper credit to the fund and which shall not revert to the general revenue, unless otherwise designated in law. The fund shall be overseen by the secretary and shall be used to pay all proper costs incurred in implementing the provisions of this article.(b) The following funds shall be paid into this account:(1) Penalties imposed on health care payers pursuant to this article and rules promulgated thereunder;(2) Funds received from the federal government;(3) Appropriations from the Legislature; and(4) All other payments, gifts, grants, bequests, or income from any source.
To effectuate the provisions of this article, the secretary and commissioner may propose joint rules for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code as necessary to implement this article. Such rules may include, but are not limited to, the following:(a) Procedures for the collection, retention, use, and disclosure of data from the all-payer claims database (APCD), including procedures and safeguards to protect the privacy, integrity, confidentiality, and availability of any data;(b) Penalties against health care payers for violation of rules governing the submission of data, including a schedule of fines for failure to file data or to pay assessments;(c) Fees payable by users of the data and the process for a waiver or reduction of user fees. Any such fees shall be established at a level that, when considered together with other available funding sources, is deemed necessary to sustain the operation of the APCD;(d) A proposed time frame for the creation of the database;(e) Criteria for determining whether data collected, beyond the listed personal identifiers, is confidential clinical data, confidential financial data, or privileged medical information, and procedures to give affected providers and health care payers notice and opportunity to comment in response to requests for information that may be considered confidential or privileged;(f) Penalties, including fines and other administrative sanctions, that may be imposed by the commissioner for a health care payers failure to comply with requirements of this article and rules adopted thereunder; and(g) Establishment of advisory boards to provide advice to the secretary with respect to the various functions of the APCD.
This article shall govern domestic mutual and stock insurers hereafter formed and shall govern existing domestic mutual and stock insurers to the extent applicable.
A domestic mutual insurer may in its bylaws adopt a reasonable provision for determining a quorum of members at any meeting thereof. This section shall not affect any other provision of law requiring vote of a larger percentage of members for a specified purpose.
Each holder of one or more insurance policies or contracts issued by a domestic mutual insurer, other than a contract of reinsurance, is a member of the insurer with all the rights and obligations of such membership and each such policy or contract so issued shall so specify. Any person, government or governmental agency, state or political subdivision thereof, public or private corporation, board, association, firm, estate, trustee or fiduciary may be a member of a domestic, foreign, or alien mutual insurer.
With respect to the management, records, and affairs of the insurer, a member of a domestic mutual insurer shall have the same character of rights and relationship as a stockholder has toward a domestic stock insurer.
(a) Each member of a domestic mutual insurer shall, except as otherwise hereinafter provided with respect to nonassessable policies, have a contingent liability, pro rata and not one for another, for the discharge of its obligations, which contingent liability shall be in such maximum amount as is stated in the insurer's articles of incorporation.(b) Each policy issued by the insurer shall contain a statement of the contingent liability, if any, of its members.(c) Termination of the policy of any such member shall not relieve the member of contingent liability for his proportion, if any, of the obligations of the insurer which accrued while the policy was in force.(d) Unrealized contingent liability of members does not constitute an asset of the insurer in any determination of its financial condition.
(a) If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required of it by this chapter for authority to transact the kinds of insurance being transacted, and the deficiency is not cured from other sources, its directors shall levy an assessment only upon its members who at any time within the twelve months immediately preceding the date notice of such assessment was mailed to them held policies providing for contingent liability, and such members shall be liable to the insurer for the amount so assessed.(b) The assessment shall be for such an amount as is required to cure such deficiency and to provide a reasonable amount of working funds above such minimum amount of surplus, but such working funds so provided shall not exceed five per cent of the insurer's liabilities as of the date as of which the amount of such deficiency was determined.(c) No one policy or member as to such policy shall be assessed or charged with an aggregate of contingent liability as to obligations incurred by the insurer in any one calendar year, in excess of the number of times the premium as stated in the policy as computed solely upon premium earned on such policy during that year.(d) No member shall have an offset against any assessment for which he is liable, on account of any claim for unearned premium or loss payable.(e) As to life insurance, any part of such an assessment upon a member which remains unpaid following notice of assessment, demand for payment, and lapse of a reasonable waiting period as specified in such notice, may, if approved by the commissioner as being in the best interests of the insurer and its members, be secured by placing a lien upon the cash surrender values and accumulated dividends held by the insurer to the credit of such member.
While a domestic mutual insurer maintains the deposits and surplus funds necessary for the kinds of insurance it is transacting, and is otherwise in compliance with this chapter and in a sound condition, it may extinguish the contingent liability of its members as to all its policies in force and may omit provisions imposing contingent liability in all its policies currently issued upon receiving written approval by the commissioner. The commissioner shall revoke the authority of a domestic mutual insurer to issue policies without contingent liability at any time the insurer's assets are less than the sum of its liabilities and the surplus required for such authority, or if the insurer, by resolution of its board of directors approved by a majority of its members, requests that such authority be revoked.
(a) If so provided in its articles of incorporation, a domestic stock or domestic mutual insurer may issue any or all of its policies with or without participation in profits, savings, or unabsorbed portions of premiums, may classify policies issued on a participating or nonparticipating basis, and may determine the right to participate and the extent of participation of any class or classes of policies. Any such classification or determination shall be reasonable, and shall not unfairly discriminate as between policyholders within the same such classification. A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged.(b) No dividend, otherwise earned, shall be made contingent upon the payment of renewal premium on any policy.
(a) A domestic stock insurer shall not pay any cash dividend to stockholders except out of that part of its available surplus funds which is derived from realized net profits on its business.(b) A stock dividend may be paid out of any available surplus funds in excess of the aggregate amount of surplus loaned to the insurer pursuant to section twenty of this article.(c) A dividend otherwise proper, may be payable out of the insurer's earned surplus even though its total surplus is then less than the aggregate of its past contributed surplus resulting from issuance of its capital stock at a price in excess of the par value thereof.
(a) The directors of a domestic mutual insurer may from time to time apportion and pay or credit to its members dividends only out of that part of its surplus funds which represents net realized savings and net realized earnings from its business.(b) A dividend otherwise proper may be payable out of such savings and earnings even though the insurer's total surplus is then less than the aggregate of its contributed surplus.
(a) Any director of a domestic stock or mutual insurer who votes for or concurs in declaration or payment of an illegal dividend to stockholders or members shall upon conviction thereof be guilty of a misdemeanor and, shall be jointly and severally liable, together with other such directors, for any loss thereby sustained by the insurer.(b) The stockholders or members receiving such an illegal dividend shall be liable in the amount thereof to the insurer.(c) The commissioner may revoke or suspend the license of an insurer which has declared or paid an illegal dividend.
The statutes of this state relating to corporations generally, except where inconsistent with the provisions of this chapter, shall apply to domestic stock and mutual insurers.
(a) A domestic stock or mutual insurer may borrow money to defray the expenses of its organization, provide it with surplus funds, or for any purpose required by its business, upon a written agreement that such money is required to be repaid only out of the insurer's surplus in excess of that stipulated in such agreement. The agreement may provide for interest at the rate agreed upon by such insurer and its lender. Such interest shall not constitute a liability of the insurer as to its funds other than such excess of surplus unless so stipulated in the agreement.(b) Money so borrowed, together with the interest thereon if so stipulated in the agreement, shall not form a part of the insurer's legal liabilities except as to its surplus in excess of the amount thereof stipulated in the agreement, or be the basis of any setoff; but until repaid, financial statements filed or published by the insurer shall show as a footnote thereto the amount thereof then unpaid together with any interest thereon accrued but unpaid.(c) Such insurer in advance of any such loan shall file with the commissioner a statement of the purposes of the loan and a copy of the proposed loan agreement, which shall be subject to the commissioner's approval. The loan and agreement shall be deemed approved thirty days after date of filing with the commissioner, unless within such thirty-day period the insurer is notified in writing of the commissioner's disapproval and the reasons therefor. The commissioner shall so disapprove any such proposed loan or agreement if he finds that the loan is reasonably unnecessary or excessive for the purpose intended, or that the terms of the loan agreement are not fair and equitable to the parties, and to other similar lenders, if any, to the insurer, or is not fair to policyholders, or that the information so filed by the insurer is inadequate.(d) Any such loan to a mutual insurer or substantial portion thereof shall be repaid by the insurer when no longer reasonably necessary for the purpose originally intended. No repayment of such a loan shall be made by a mutual insurer unless in advance approved by the commissioner.(e) This section shall not apply to loans obtained by the insurer in ordinary course of business from banks and other financial institutions, nor to loans secured by pledge of assets.
(a) No domestic stock or mutual insurer shall make any contract whereby any person or persons is granted or is to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors, or to have the controlling or preemptive right to produce substantially all insurance business for the insurer, unless such contract is filed with the commissioner for his approval. The contract shall be deemed approved thirty days after filing unless disapproved by the commissioner within such thirty-day period, subject to such reasonable extension of time as the commissioner may require by notice given within such thirty days. Any disapproval shall be delivered to the insurer in writing, stating the grounds therefor.(b) The commissioner shall disapprove any such contract if he finds that it:(1) Subjects the insurer to excessive charges; or(2) Is to extend for an unreasonable length of time; or(3) Does not contain fair and adequate standards of performance; or(4) Contains other inequitable provisions or provisions which impair the proper interests of stockholders, policyholders or members of the insurer.
(a) If the capital stock of a domestic stock insurer becomes impaired, or the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required of it by this chapter for authority to transact the kinds of insurance being transacted, the commissioner shall at once determine the amount of the deficiency and serve notice upon the insurer to make good the deficiency within ninety days after service of such notice.(b) The deficiency may be made good in cash or in assets eligible under this chapter for the investment of the insurer's funds; or if a stock insurer by reduction of the insurer's capital to an amount not below the minimum required for the kinds of insurance thereafter to be transacted; or if a mutual insurer, by amendment of its license to cover only such kind or kinds of insurance for which the insurer has on deposit sufficient surplus.(c) If the deficiency is not made good and proof thereof filed with the commissioner within such ninety-day period, the insurer shall be deemed insolvent and the commissioner shall institute delinquency proceedings against it as authorized by this chapter. If such deficiency exists because of increased loss reserves required by the commissioner, or because of disallowance by the commissioner of certain assets or reduction of the value at which carried in the insurer's accounts, the commissioner may in his discretion and upon application and good cause shown, extend for not more than an additional one hundred eighty days the period within which such deficiency may be so made good and such proof thereof so filed.(d) The ninety-day notice required in subsection (a) of this section shall only affect the grounds for rehabilitation of domestic insurers and grounds for liquidation as set forth in subdivision (c), section five, article ten of this chapter, and shall not affect the rights and duties of the commissioner to take action under any other grounds for rehabilitation of domestic insurers or grounds for liquidation as set forth in article ten of this chapter.
(a) A domestic stock insurer may become a domestic mutual insurer pursuant to such plan and procedure as may be approved in advance by the commissioner.(b) The commissioner shall not approve any such plan, procedure, or mutualization unless:(1) It is equitable to both stockholders and policyholders; (2) It is subject to approval by a vote of the holders of not less than three fourths of the insurer's capital stock having voting rights and by a vote of not less than two thirds of the insurer's policyholders who vote on such plan in person, by proxy or by mail, pursuant to such notice and procedure as may be approved by the commissioner;(3) If a life insurer, the right to vote thereon is limited to those policyholders whose policies have face amounts of not less than $1,000 and have been in force for one year or more;(4) Mutualization will result in retirement of shares of the insurer's capital stock at a price not in excess of the fair market value thereof as determined by competent disinterested appraisers;(5) The plan provides for definite conditions to be fulfilled by a designated early date upon which such mutualization will be deemed effective; and(6) The mutualization leaves the insurer with surplus funds reasonably adequate for the security of its policyholders and to continue successfully in business in the states in which it is then authorized to transact insurance, and for the kinds of insurance included in its license.(c) This section shall not apply to mutualization under order of court pursuant to rehabilitation or reorganization of an insurer under article ten of this chapter.
(a) A domestic mutual insurer may become a domestic stock insurer pursuant to such plan and procedure as is approved in advance by the commissioner.(b) The commissioner shall not approve any such plan or procedure unless:(1) Equitable to the insurer's members;(2) Subject to approval by vote of not less than three fourths of the insurer's current members voting thereon in person, by proxy, or by mail at a meeting of members called for the purpose pursuant to such notice and procedure as may be approved by the commissioner; if a life insurer, the right to vote may be limited to members whose policies have face amounts of not less than $1,000 and have been in force one year or more;(3) The equity of each policyholder in the insurer is determinable under a fair formula approved by the commissioner, which such equity shall be based upon not less than the insurer's entire surplus (after deducting contributed or borrowed surplus funds) plus a reasonable present equity in its reserves and in all nonadmitted assets;(4) The policyholders entitled to participate in the purchase of stock or distribution of assets shall include all current policyholders and all existing persons who had been a policyholder of the insurer within three years prior to the date such plan was submitted to the commissioner;(5) The plan gives to each policyholder of the insurer as specified in paragraph (4), above, a preemptive right to acquire his proportionate part of all of the proposed capital stock of the insurer, within a designated reasonable period, and to apply upon the purchase thereof the amount of his equity in the insurer as determined under paragraph (3), above;(6) Shares are so offered to policyholders at a price not greater than to be thereafter offered to others nor at more than double the par value of such shares;(7) The plan provides for payment to each policyholder not electing to apply his equity in the insurer for or upon the purchase price of stock to which preemptively entitled, of cash in the amount of not less than fifty percent of the amount of his equity not so used for the purchase of stock, and which cash payment together with stock so purchased, if any, shall constitute full payment and discharge of the policyholder's equity as an owner of such mutual insurer; and(8) The plan, when completed, would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a domestic stock insurer transacting like kinds of insurance, together with surplus funds in amount not less than one half of such required capital.
(a) A domestic stock insurer of any kind may merge or consolidate with another domestic or foreign stock insurer by complying with the provisions of general law governing the merger or consolidation of stock corporations formed for profit, but subject to subsection (b), below.(b) No such merger or consolidation shall be effectuated unless in advance thereof the plan, agreement and other supporting documents have been filed with and approved in writing by the commissioner. The commissioner shall give such approval within a reasonable time after such filing unless he finds such plan or agreement:(1) Is contrary to law; or(2) Inequitable to the stockholders of any domestic insurer involved; or(3) Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in West Virginia or elsewhere.(c) If the commissioner does not approve any such plan or agreement he shall so notify the insurer in writing specifying his reasons therefor.
(a) A domestic stock or mutual insurer may accept reinsurance for the same kinds of insurance and within the same limits as it is authorized to transact direct insurance, unless such reinsurance is prohibited by its articles of incorporation.(b) A domestic stock or mutual insurer may reinsure all or substantially all its business in force, or substantially all of a major class thereof, with another insurer by an agreement of bulk reinsurance; but such agreements shall not become effective unless filed in advance with and approved in writing by the commissioner.(c) The commissioner shall approve such agreement within a reasonable time after such filing unless he or she finds that it is inequitable to the domestic insurer, its stockholders or members, or would substantially reduce the protection or service to its policyholders or members. If the commissioner does not approve the agreement, he or she shall so notify the insurer in writing specifying his or her reasons therefor.(d) For the purposes of this section, "bulk reinsurance" means any quota share, surplus aid or portfolio reinsurance agreement which, of itself or in combination with other similar agreements, assumes fifty-one percent or more of the liability of the reinsured company.(e) Any contract of reinsurance whereby a domestic stock or mutual insurer cedes more than seventy-five percent of the total of its outstanding insurance liabilities shall be subject to the approval, in writing, by the commissioner.(f) A filing shall not be made pursuant to this section unless the reinsurance agreement be certified under oath by responsible officers of the reinsurer and the reinsured to contain the entire agreement between the parties to the reinsurance agreement.(g) Credit for reinsurance shall be subject to the provisions of section fifteen, article four of this chapter.
(a) A domestic insurer may, upon the approval of the commissioner, transfer its domicile to any other state in which it is admitted to transact the business of insurance and, upon such transfer, shall cease to be a domestic insurer and shall be admitted to this state if qualified as a foreign insurer. The commissioner shall approve the proposed transfer unless he or she determines the transfer is not in the best interest of the policyholders of this state.(b) The certificate of authority, agents' appointments and licenses, rates and other items which the commissioner allows, in his or her discretion, that are in existence at the time an insurer licensed to transact the business of insurance in this state transfers its corporate domicile to this or any other state by merger, consolidation or any other lawful method shall continue in full force and effect upon transfer if the insurer remains duly qualified to transact the business of insurance in this state. All outstanding policies of a transferring insurer shall remain in full force and effect and need not be endorsed as to the new name of the company or its new location unless so ordered by the commissioner.(c) A transferring insurer shall file new policy forms with the commissioner on or before the effective date of the transfer, but may use existing policy forms with appropriate endorsements if allowed by, and under such conditions as approved by, the commissioner. However, every transferring insurer shall notify the commissioner of the details of the proposed transfer and shall file promptly any resulting amendments to corporate documents filed or required to be filed with the commissioner.
(a) A domestic mutual insurer shall not merge or consolidate with a stock insurer.(b) A domestic mutual insurer may merge or consolidate with another mutual insurer in accordance with procedures prescribed by general laws applying to corporations formed for profit, except as hereinbelow provided.(c) The plan and agreement for merger or consolidation shall be submitted to and approved by at least two thirds of the members of each mutual insurer involved voting thereon at meetings called for the purpose pursuant to such reasonable notice and procedure as has been approved by the commissioner. If a life insurer, right to vote may be limited to members whose policies are in face amount of not less than $1,000 and have been in force one year or more.(d) No such merger or consolidation shall be effectuated unless in advance thereof the plan and agreement therefor have been filed with and approved in writing by the commissioner. The commissioner shall give such approval within a reasonable time after such filing unless he finds such plan or agreement:(1) Inequitable to the policyholders of any domestic insurer involved; or(2) Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in West Virginia or elsewhere.If the commissioner does not approve such plan or agreement he shall so notify the insurer in writing specifying his reasons therefor.
(a) Upon any liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness, policy obligations, repayment of contributed or borrowed surplus, if any, and expenses of administration, shall be distributed to existing persons who were its members at any time within thirty- six months next preceding the date such liquidation was authorized or ordered, or date of last termination of the insurer's license, whichever date is the earliest.(b) The distributive share of each such member shall be in the proportion that the aggregate premiums earned by the insurer on the policies of the member during the combined periods of his membership, bear to the aggregate of all premiums so earned on the policies of all such members. The insurer may, and a life insurer shall, make a reasonable classification of its policies so held by such members and a formula based upon such classification for determining the equitable distributive share of each such member. Such classification and formula shall be subject to the approval of the commissioner.
In addition to the matters and things required generally in articles of incorporation, those of a domestic stock or mutual insurer shall state:(a) The name of the corporation;(b) The duration of its existence, which may be perpetual;(c) The kinds of insurance the corporation is formed to transact according to the definitions thereof in this chapter;(d) If a stock insurer, its authorized capital, the classes and number of shares into which divided, the par value of each such share, and the respective rights of each such class. Shares without par value shall not be authorized;(e) If a mutual insurer, the maximum contingent liability of its members (other than as to nonassessable policies) for payment of losses and expenses incurred, which liability shall be as stated in the articles of incorporation but not less than one nor more than six times the premium for the member's policy at the annual premium rate for a term of one year;(f) The number of directors, not less than five nor more than twenty, who shall conduct the affairs of the corporation;(g) The city or town in West Virginia in which is to be located the principal place of business, and states and countries in which business may be transacted;(h) The limitations, if any, on the corporation's indebtedness;(i) If a stock insurer, the extent, if any, to which its stock shall be assessable;(j) Such other provisions, not inconsistent with law, as are deemed appropriate.
(a) Every person who is directly or indirectly the beneficial owner of more than ten percent of any class of any equity security of a domestic stock insurance company, or who is a director or an officer of such company, shall file in the office of the commissioner on or before January 31, 1966, or within ten days after he becomes such beneficial owner, director or officer a statement, in such form as the commissioner may prescribe, of the amount of all equity securities of such company of which he is the beneficial owner, and within ten days after the close of each calendar month thereafter, if there has been a change in such ownership during such month, shall file in the office of the commissioner a statement, in such form as the commissioner may prescribe, indicating his ownership at the close of the calendar month and such changes in his ownership as have occurred during such calendar month.(b) For the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director or officer by reason of his relationship to such company, any profit realized by him from any purchase and sale, or any sale and purchase, of any equity security of such company within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company, irrespective of any intention on the part of such beneficial owner, director or officer in entering into such transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. An action to recover such profit may be instituted in any court of competent jurisdiction by the company, or by the owner of any security of the company in the name and in behalf of the company if the company shall fail or refuse to bring such action within sixty days after request or shall fail diligently to prosecute the same thereafter; but no such action shall be brought more than two years after the date such profit was realized. This section shall not be construed to cover any transaction where such beneficial owner was not such, both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions which the commissioner by rules and regulations may exempt as not comprehended within the purpose of this section.(c) It shall be unlawful for any such beneficial owner, director or officer, directly or indirectly, to sell any equity security of such company if the person selling the security or his principal (i) does not own the security sold, or (ii) if owning the security, does not deliver it against such sale within twenty days thereafter, or does not within five days after such sale deposit it in the mails or other usual channels of transportation; but no person shall be deemed to have violated this section if he proves that notwithstanding the exercise of good faith he was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense.(d) The provisions of subsection (b) of this section shall not apply to any purchase and sale, or sale and purchase, and the provisions of subsection (c) of this section shall not apply to any sale of an equity security of a domestic stock insurance company not then or theretofore held by him in an investment account, by a dealer in the ordinary course of his business and incident to the establishment or maintenance by him of a primary or secondary market (otherwise than on an exchange as defined in the Securities Exchange Act of 1934) for such security. The commissioner may, by such rules and regulations as he deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market.(e) The provisions of subsections (a), (b) and (c) of this section shall not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules and regulations as the commissioner may adopt in order to carry out the purposes of this section.(f) The term "equity security" when used in this section means any stock or similar security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase with a security; or any such warrant or right; or any other security which the commissioner shall deem to be of similar nature and consider necessary or appropriate, by such rules and regulations as he may prescribe in the public interest or for the protection of investors, to treat as an equity security.(g) The provisions of subsections (a), (b) and (c) of this section shall not apply to equity securities of a domestic stock insurance company if (i) such securities shall be registered, or shall be required to be registered, pursuant to section twelve of the Securities Exchange Act of 1934, as amended, or if (ii) such domestic stock insurance company shall not have any class of its equity securities held of record by one hundred or more persons on the last business day of the year next preceding the year in which equity securities of the company would be subject to the provisions of subsections (a), (b) and (c) of this section except for the provisions of this subsection (ii).(h) The commissioner shall have the power to make such rules and regulations as may be necessary for the execution of the functions vested in him by subsections (a) through (g) of this section, and may for such purpose classify domestic stock insurance companies, securities, and other persons or matters within his jurisdiction. No provision of subsections (a), (b) and (c) of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the commissioner, notwithstanding that such rule or regulation may, after such act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason.(i) This section shall take effect January 1, 1966.
(a) The commissioner may, by regulation, prescribe the form, content and manner of solicitation of any proxy, consent or authorization in respect of any voting security issued by a domestic insurer as necessary or appropriate in the public interest or for the proper protection of investors in the voting securities issued by such insurer, or to insure the fair dealing in such voting securities.(b) No person and no domestic insurer or any director, officer or employee of such insurer shall solicit or permit the use of his name to solicit, by mail or otherwise, any person to give any proxy, consent or authorization in respect of any voting security issued by such insurer in contravention of any rule or regulation the commissioner may prescribe pursuant to this section.(c) Failure to comply with any rule or regulation of the commissioner made pursuant to this section shall be unlawful and any proxy or consent obtained in violation of this section or in contravention of any rule or regulation issued pursuant thereto shall be void. Any domestic insurer or any person (who is legally entitled to vote, consent or authorize by virtue of being the holder of record of such a voting security) or the commissioner, if any of the foregoing parties shall fail to act within fifteen days after the date on which such vote was cast or counted, may enforce compliance with the rules and regulations made pursuant to this section, by appropriate action in law or equity: Provided, That no suit shall be brought more than thirty days after the date on which such vote, consent or authorization was to have been effected.(d) None of the provisions of this section shall apply to voting securities of a domestic insurer if such voting securities shall be registered pursuant to section twelve of the Securities Exchange Act of 1934, as amended.(e) The term "voting security" as used in this section shall mean any instrument which, in law or by contract, gives the holder the right to vote, consent or authorize any corporate action of an insurer.
Any domestic insurer which moves or maintains its principal office or place of business outside the State of West Virginia after June 1, 1969, shall not thereafter be licensed as a domestic insurer in this state.For purposes of this article, "principal office or place of business" means the single state in which the direction, control and coordination of the operations of the insurer as a whole are primarily exercised, with consideration being given to, but not limited to:(1) The state in which the primary executive and administrative headquarters of the insurer is located;(2) The state in which the principal office of the chief executive officer of the insurer is located;(3) The state in which the assets and books and records of the insurer are located;(4) The state in which the board of directors (or similar governing body) of the insurer conducts the majority of its meetings;(5) The state in which the executive or management committee of the board of directors (or similar governing body) of the insurer conducts the majority of its meetings; and(6) The state from which the management of the overall operations of the insurer is directed.
The articles of incorporation shall be filed with the Secretary of State of this state in the same manner as for other corporations and he shall issue a certificate of incorporation subject to the provisions of section three of article three of this chapter.
(a) A stock insurer may amend its articles of incorporation in the same manner as other corporations, but no such amendment shall reduce authorized capital below the amount required by this chapter for the kinds of insurance thereafter to be transacted and except that no such amendment shall be filed with or accepted by the Secretary of State unless approved in writing by the commissioner.(b) A mutual insurer may amend its articles of incorporation by the affirmative vote of two thirds of its members present in person or by proxy at a regular or special meeting of members of which notice in writing setting forth the proposed amendment was mailed to all members at least thirty days in advance, except that no such amendment shall reduce the surplus below the amount required by this chapter for the kinds of insurance thereafter to be transacted and except that no such amendment shall be filed with or accepted by the Secretary of State unless approved in writing by the commissioner.
(a) Upon issuance of its certificate of incorporation as provided in section four of this article, the directors and officers of a domestic mutual corporation formed for the purpose of becoming a mutual insurer may open books for the registration of such requisite applications for insurance policies as they may accept, and may receive deposits of premiums thereon.(b) All such applications shall be in writing signed by the applicant, covering subjects of insurance resident, located, or to be performed in West Virginia.(c) All such applications shall provide that:(1) Issuance of the policy is contingent upon completion of organization of the insurer and issuance to it of a proper license;(2) No insurance is provided until the license has been so issued; and(3) The prepaid premium or deposit, and membership or policy fee if any, shall be refunded in full to the applicant if the organization is not completed and license issued before a specified reasonable date, which date shall be not later than one year following date of issuance of the certificate of incorporation.(d) All qualifying premiums collected shall be in cash.(e) Solicitation for such qualifying applications for insurance shall be by licensed agents of the insurer, and the commissioner shall upon application therefor issue temporary agent's licenses expiring on the date specified pursuant to paragraph (3), above, to individuals appointed by the insurer and qualified as for a resident agent's license. The commissioner may suspend or revoke any such license for any of the same causes and pursuant to the same procedures as are applicable to suspension or revocation of licenses of agents in general under article twelve.
(a) All sums collected by a domestic mutual insurer as premiums and fees on qualifying applications for insurance therein shall be deposited in trust in a West Virginia bank or trust company under a written trust agreement consistent with this section and with paragraph (3) of subsection (c) of section six of this article. The corporation shall file an executed copy of such trust agreement with the commissioner.(b) Upon issuance to the insurer of a license as an insurer for the kind of insurance for which such applications were solicited, all funds so held in trust shall become the funds of the insurer, and the insurer shall forthwith issue and deliver its policies for which premiums had been paid and accepted. The insurance provided by such policies shall be effective as of the date of the license.
No such domestic mutual insurer shall be issued a license until bona fide applications have been received and cash premiums collected in the manner provided in sections six and seven of this article in such sum, which, together with any other funds that may be legally available, will result in the insurer having unencumbered assets over and above all required reserves and other liabilities of at least an amount equal to that required under section five of article three of this chapter for issuance of a license for the kinds of insurance proposed to be transacted. Such other funds may be provided by the issuance of temporary capital stock in an amount which together with such premiums collected will provide the amount necessary under section five of article three of this chapter, the proceeds of said stock to be invested in the manner provided for the investment of other funds of the insurer. In the event such temporary capital stock shall be issued, the amount of premiums required to be collected prior to licensing shall be not less than $10,000. Out of the net surplus of the insurer the holders of such temporary capital stock may receive a dividend of not more than ten per cent per annum, which may be cumulative. The stock shall not be a liability of the insurer, except that it shall be retired as soon as the surplus of the insurer becomes sufficient to pay it at its par value and leave a surplus not less than the amount of the temporary capital so retired.
(a) The initial board of directors of a domestic mutual insurer shall adopt original bylaws for the government of the corporation and conduct of its business. Such bylaws shall be subject to the approval of a majority of the insurer's members who are present in person or by proxy at the next succeeding annual meeting of members, and no bylaw provision shall thereafter be effective which is not so approved. Bylaws shall be revoked or modified only by vote of a majority of the insurer's members who are present in person or by proxy at a meeting of which notice was given as provided in the bylaws.(b) The bylaws shall provide that each member of the insurer is entitled to one vote in the election of corporate directors and on all matters coming before membership meetings, and that such vote may be exercised in person or by proxy.(c) The insurer shall promptly file with the commissioner a copy, certified by the insurer's secretary, of such bylaws and of every modification thereof or of addition thereto. The commissioner shall disapprove any bylaw provision deemed by him to be unlawful, inadequate, unfair, or detrimental to the proper interests and protection of the insurer's members or any class thereof. The insurer shall not, after receiving written notice of such disapproval and during the existence thereof, effectuate any bylaw provision so disapproved.
For the purposes of this article, the following words and terms mean the following:(1) "Commissioner" means the West Virginia Insurance Commissioner.(2) "Consumer" means an individual or family purchasing insurance coverage through the exchange.(3) "Exchange" means the West Virginia Health Benefit Exchange or an exchange website operated by the federal government.(4) "Health care provider" means a provider of medical or health services and any other person or organization who furnishes, bills or is paid for health care in the normal course of business.(5) "Health carrier" means an entity subject to the insurance laws of this state, or subject to the jurisdiction of the commissioner, that contracts or offers to contract to provide, deliver, arrange for, pay for or reimburse any of the costs of health care services, including a sickness and accident insurance company, a health maintenance organization, a nonprofit hospital and health service corporation or any other entity providing a plan of health insurance, health benefits or health services.(6) "Network" means a group of health care providers that have contracted with a health plan to provide care at a discounted rate.(7) "Qualified health plan" means a health plan certified to be offered for sale through the exchange.(8) "West Virginia Health Benefit Exchange" means the government-regulated marketplace of qualified health plans with multiple levels of coverage established pursuant to article sixteen-g of this chapter.
(a) The commissioner shall on his or her website provide information regarding the qualified health plans being offered for sale through the exchange in a format easily found by a consumer on such website. Information may be provided through links to specific information, including through links to the website of each health carrier offering a qualified health plan for sale through the exchange.(b) Information to be made available to consumers for each qualified health plan offered for sale through the exchange include:(1) The names of the physicians, hospitals and other health care providers that are in network;(2) A list of the types of specialists that are in network;(3) Exclusions from coverage by category of benefits;(4) Restrictions on use or quantity of covered items and services by category of benefits;(5) The dollar amount of copayments;(6) The percentage of coinsurance by item and service;(7) Required cost-sharing;(8) Information sufficient to determine whether a specific drug is available on formulary;(9) Clinical prerequisites or authorization requirements for coverage of specific drugs;(10) A description of how medications will be included in or excluded from the deductible;(11) A description of out-of-pocket costs that may not apply to the deductible for a medication;(12) Information sufficient to determine whether a specific drug is covered when furnished by a physician or clinic;(13) An explanation of the amount of coverage for out-of-network providers or noncovered services;(14) The process for a patient to appeal a health plan decision; and(15) Contact information for the qualified health plan.(c) The commissioner may require a qualified health plan to make the information listed in subsection (b) of this section available, including for website usage, and to provide for the reasonable updating of such information.(d) The commissioner's website should provide general information concerning the exchange, qualified health plans, health insurance terminology and other information consumers may need to assist them in making informed decisions concerning the purchase of a qualified health plan through the exchange.
The commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to implement the provisions of this article.
This article may be cited and known as the Pharmacy Audit Integrity Act. 
The Insurance Commissioner shall propose rules for legislative approval in accordance with 29A-3-1 et seq. of this code that are necessary to effectuate the provisions of this article.
(a) A pharmacy benefits manager, may not:(1) Prohibit or limit any covered individual from selecting a pharmacy or pharmacist of his or her choice who has agreed to participate in the health benefit plan according to the terms offered by the health benefit plan;(2) Deny a pharmacy or pharmacist the right to participate as a contract provider under the policy or plan if the pharmacy or pharmacist agrees to provide pharmacy services, including, but not limited to, prescription drugs, that meet the terms and requirements set forth by the health benefit plan and agrees to the terms of reimbursement set forth by the insurer;(3) Impose upon a pharmacy or pharmacist, as a condition of participation in a health benefit plan network, any course of study, accreditation, certification, or credentialing that is inconsistent with, more stringent than, or in addition to state requirements for licensure or certification as provided for in the 30-5-1 et seq. and legislative rules of the Board of Pharmacy.  (4) Impose upon a beneficiary of pharmacy services under a health benefit plan any copayment, fee, or condition that is not equally imposed upon all beneficiaries in the same benefit category, class, or copayment level under the health benefit plan when receiving services from a contract provider;(5) Impose a monetary advantage or penalty under a health benefit plan that would affect a beneficiarys choice among those pharmacies or pharmacists who have agreed to participate in the plan according to the terms offered by the insurer. Monetary advantage or penalty includes higher copayment, a reduction in reimbursement for services, or promotion of one participating pharmacy over another by these methods;(6) Reduce allowable reimbursement for pharmacy services to a beneficiary under a health benefit plan because the beneficiary selects a pharmacy of his or her choice, so long as that pharmacy has enrolled with the health benefit plan under the terms offered to all pharmacies in the plan coverage area;(7) Prohibit or otherwise limit a beneficiarys access to prescription drugs from a pharmacy or pharmacist enrolled with the health benefit plan under the terms offered to all pharmacies in the plan coverage area by unreasonably designating the covered prescription drug as a specialty drug. Any beneficiary or pharmacy impacted by an alleged violation of this subsection may file a complaint with the Insurance Commissioner, who shall, in consultation with the West Virginia Board of Pharmacy, make a determination as to whether the covered prescription drug meets the definition of a specialty drug;(8) Limit a beneficiarys access to specialty drugs; (9) Require a beneficiary, as a condition of payment or reimbursement, to purchase pharmacy services, including prescription drugs, exclusively through a mail-order pharmacy; or(10) Impose upon a beneficiary any copayment, amount of reimbursement, number of days of a drug supply for which reimbursement will be allowed, or any other payment or condition relating to purchasing pharmacy services from any pharmacy, including prescription drugs, that are more costly or more restrictive than that which would be imposed upon the beneficiary if such services were purchased from a mail-order pharmacy or any other pharmacy that is willing to provide the same services or products for the same cost and copayment as any mail order service.(b) If a health benefit plan providing reimbursement to West Virginia residents for prescription drugs restricts pharmacy participation, the health benefit plan shall notify, in writing, all pharmacies within the geographical coverage area of the health benefit plan, and offer to the pharmacies the opportunity to participate in the health benefit plan at least 60 days prior to the effective date of the plan. All pharmacies in the geographical coverage area of the plan shall be eligible to participate under identical reimbursement terms for providing pharmacy services, including prescription drugs. Participating pharmacies shall be entitled to 30 business days effective date notice for any subsequent contract amendment or provider manual change by a health benefit plan or a pharmacy benefit manager. The health benefit plan shall, through reasonable means, on a timely basis and on regular intervals, inform the beneficiaries of the plan of the names and locations of pharmacies that are participating in the plan as providers of pharmacy services and prescription drugs. Additionally, participating pharmacies shall be entitled to announce their participation to their customers through a means acceptable to the pharmacy and the health benefit plan. The pharmacy notification provisions of this section shall not apply when an individual or group is enrolled, but when the plan enters a particular county of the state.(c) The Insurance Commissioner shall not approve any pharmacy benefits manager or health benefit plan providing pharmaceutical services which do not conform to this section.(d) Any covered individual or pharmacy injured by a violation of this section may maintain a cause of action to enjoin the continuance of any such violation.(e) This section shall apply to all pharmacy benefits managers and health benefit plans providing pharmaceutical services benefits, including prescription drugs, to any resident of West Virginia. This section shall not apply to any entity that has its own facility, employs or contracts with physicians, pharmacists, nurses, and other health care personnel, and that dispenses prescription drugs from its own pharmacy to its employees and dependents enrolled in its health benefit plan; but this section shall apply to an entity otherwise excluded that contracts with an outside pharmacy or group of pharmacies to provide prescription drugs and services.
(a) A pharmacy benefits manager shall report to the commissioner on an annual basis, or more often as the commissioner deems necessary, for each health plan or covered entity the following information: (1) The aggregate amount of rebates received by the pharmacy benefits manager;(2) The aggregate amount of rebates distributed to each health plan or covered entity contracted with the pharmacy benefits manager;(3) The aggregate amount of rebates passed on to the enrollees of each health plan or covered entity at the point of sale that reduced the enrollees applicable deductible, copayment, coinsurance, or other cost-sharing amount;(4) The individual and aggregate amount paid by the health plan or covered entity to the pharmacy benefits manager for pharmacist services itemized by pharmacy, by product, and by goods and services; and(5) The individual and aggregate amount a pharmacy benefits manager paid for pharmacist services itemized by pharmacy, by product, and by goods and services.(b) A pharmacy benefits manager shall annually report in the aggregate to the commissioner and to a health plan or covered entity the difference between the amount the pharmacy benefits manager reimbursed a pharmacy and the amount the pharmacy benefits manager charged a health plan.(c) A health benefit plan or covered entity shall annually report to the commissioner the aggregate amount of credits, rebates, discounts, or other such payments received by the health benefit plan or covered entity from a pharmacy benefits manager or drug manufacturer and disclose whether or not those credits, rebates, discounts or other such payments were passed on to reduce insurance premiums or rates. The commissioner shall consider the information in this report in reviewing any premium rates charged for any individual or group accident and health insurance policy as set forth in 33-6-9(e), 33-24-6(c), and 33-25A-8 of this code. (d) A pharmacy benefits manager shall produce a quarterly report to the commissioner of all drugs appearing on the national average drug acquisition cost list reimbursed 10 percent and below the national average drug acquisition cost, as well as all drugs reimbursed 10 percent and above the national average drug acquisition cost. For each drug in the report, a pharmacy benefits manager shall include the month the drug was dispensed, the quantity of the drug dispensed, the amount the pharmacy was reimbursed, whether the dispensing pharmacy was an affiliate of the pharmacy benefits manager, whether the drug was dispensed pursuant to a government health plan, and the average national drug acquisition cost for the month the drug was dispensed. The report shall exclude drugs dispensed pursuant to 42 U.S.C. 256b. A copy of this report shall also be published on the pharmacy benefits managers publicly available website for a period of at least 24 months. This report is exempt from the confidentiality provisions of subsection (f).(e) The reports shall be filed electronically on a form and manner as prescribed by the commissioner pursuant to a legitimate rule promulgated by the commissioner.(f) With the exception of the quarterly report noted in subsection (d) of this section all data and information provided by the pharmacy benefits manager, health plan, or covered entity pursuant to these established reporting requirements shall be considered proprietary and confidential and exempt from disclosure under the West Virginia Freedom of Information Act 29B-1-4(a)(1) of this code.
Notwithstanding any other effective date to the contrary, the amendments to this article enacted during the 2022 regular legislative session shall apply to all policies, contracts, plans, or agreements subject to this section that are delivered, executed, amended, adjusted, or renewed on or after January 1, 2023.
This article covers any audit of the records of a pharmacy conducted by a managed care company, third-party payer, pharmacy benefits manager or an entity that represents a covered entity, or health benefit plan, the registration of auditing entities, and the licensure and regulation of pharmacy benefits managers. 
For purposes of this article:"340B entity" means an entity participating in the federal 340B drug discount program, as described in 42 U.S.C. 256b, including its pharmacy or pharmacies, or any pharmacy or pharmacies, contracted with the participating entity to dispense drugs purchased through such program."Affiliate" means a pharmacy, pharmacist, or pharmacy technician which, either directly or indirectly through one or more intermediaries: (A) Has an investment or ownership interest in a pharmacy benefits manager licensed under this chapter; (B) shares common ownership with a pharmacy benefits manager licensed under this chapter; or (C) has an investor or ownership interest holder which is a pharmacy benefits manager licensed under this article."Auditing entity" means a person or company that performs a pharmacy audit, including a pharmacy benefits manager, managed care organization, or third-party administrator."Business day" means any day of the week excluding Saturday, Sunday, and any legal holiday as set forth in 2-2-1 of this code. "Claim level information" means data submitted by a pharmacy, required by a payor, or claims processor to adjudicate a claim."Covered individual" means a member, participant, enrollee, or beneficiary of a health benefit plan who is provided health care service coverage by a health benefit plan, including a dependent or other person provided health coverage through the policy or contract of a covered individual. "Extrapolation" means the practice of inferring a frequency of dollar amount of overpayments, underpayments, nonvalid claims, or other errors on any portion of claims submitted, based on the frequency of dollar amount of overpayments, underpayments, nonvalid claims, or other errors actually measured in a sample of claims."Defined cost sharing" means a deductible payment or coinsurance amount imposed on an enrollee for a covered prescription drug under the enrollees health plan."Health benefit plan" or "health plan" means a policy, contract, certificate, or agreement entered into, offered, or issued by a health care payor to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services."Health care payor" or "payor" means a health insurance company, a health maintenance organization, a hospital, medical, or dental corporation, a health care corporation, an entity that provides, administers, or manages a self-funded health benefit plan, including a governmental plan, or any other payor that provides prescription drug coverages, including a workers compensation insurer. Health care payor does not include an insurer that provides coverage under a policy of casualty or property insurance."Health care provider" has the same meaning as defined in 33-41-2 of this code."Health insurance policy" means a policy, subscriber contract, certificate, or plan that provides prescription drug coverage. The term includes both comprehensive and limited benefit health insurance policies."Insurance commissioner" or "commissioner" has the same meaning as defined in 33-1-5 of this code."Network" means a pharmacy or group of pharmacies that agree to provide prescription services to covered individuals on behalf of a health benefit plan in exchange for payment for its services by a pharmacy benefits manager or pharmacy services administration organization. The term includes a pharmacy that generally dispenses outpatient prescriptions to covered individuals or dispenses particular types of prescriptions, provides pharmacy services to particular types of covered individuals or dispenses prescriptions in particular health care settings, including networks of specialty, institutional or long-term care facilities."Maximum allowable cost" means the per unit amount that a pharmacy benefits manager reimburses a pharmacist for a prescription drug, excluding dispensing fees and copayments, coinsurance, or other cost-sharing charges, if any."National average drug acquisition cost" means the monthly survey of retail pharmacies conducted by the federal Centers for Medicare and Medicaid Services to determine average acquisition cost for Medicaid covered outpatient drugs."Nonproprietary drug" means a drug containing any quantity of any controlled substance or any drug which is required by any applicable federal or state law to be dispensed only by prescription."Pharmacist" means an individual licensed by the West Virginia Board of Pharmacy to engage in the practice of pharmacy. "Pharmacy" means any place within this state where drugs are dispensed and pharmacist care is provided."Pharmacy audit" means an audit, conducted by or on behalf of an auditing entity of any records of a pharmacy for prescription or nonproprietary drugs dispensed by a pharmacy to a covered individual."Pharmacy benefits management" means the performance of any of the following:(1) The procurement of prescription drugs at a negotiated contracted rate for dispensation within the state of West Virginia to covered individuals;(2) The administration or management of prescription drug benefits provided by a health benefit plan for the benefit of covered individuals;(3) The administration of pharmacy benefits, including: (A) Operating a mail-service pharmacy; (B) Claims processing; (C) Managing a retail pharmacy network;(D) Paying claims to a pharmacy for prescription drugs dispensed to covered individuals via retail or mail-order pharmacy; (E) Developing and managing a clinical formulary including utilization management and quality assurance programs; (F) Rebate contracting administration; and(G) Managing a patient compliance, therapeutic intervention, and generic substitution program."Pharmacy benefits manager" means a person, business, or other entity that performs pharmacy benefits management for health benefit plans; "Pharmacy record" means any record stored electronically or as a hard copy by a pharmacy that relates to the provision of prescription or nonproprietary drugs or pharmacy services or other component of pharmacist care that is included in the practice of pharmacy."Pharmacy services administration organization" means any entity that contracts with a pharmacy to assist with payor interactions and that may provide a variety of other administrative services, including contracting with pharmacy benefits managers on behalf of pharmacies and managing pharmacies claims payments from payors."Point-of-sale fee" means all or a portion of a drug reimbursement to a pharmacy or other dispenser withheld at the time of adjudication of a claim for any reason. "Rebate" means any and all payments that accrue to a pharmacy benefits manager or its health plan client, directly or indirectly, from a pharmaceutical manufacturer, including, but not limited to, discounts, administration fees, credits, incentives, or penalties associated directly or indirectly in any way with claims administered on behalf of a health plan client. The term "rebate" does not include any discount or payment that may be provided to or made to any 340B entity through such program."Retroactive fee" means all or a portion of a drug reimbursement to a pharmacy or other dispenser recouped or reduced following adjudication of a claim for any reason, except as otherwise permissible as described in this article."Specialty drug" means a drug used to treat chronic and complex, or rare medical conditions and requiring special handling or administration, provider care coordination, or patient education that cannot be provided by a non-specialty pharmacy or pharmacist.
(a) An entity conducting a pharmacy audit under this article shall conform to the following rules: (1) Except as otherwise provided by federal or state law, an auditing entity conducting a pharmacy audit may have access to a pharmacys previous audit report only if the report was prepared by that auditing entity.(2) Information collected during a pharmacy audit is confidential by law, except that the auditing entity conducting the pharmacy audit may share the information with the pharmacy benefits manager and with the covered entity for which a pharmacy audit is being conducted and with any regulatory agencies and law-enforcement agencies as required by law. (3) The auditing entity conducting a pharmacy audit may not compensate an employee or contractor with which an auditing entity contracts to conduct a pharmacy audit solely based on the amount claimed or the actual amount recouped by the pharmacy being audited. (4) The auditing entity shall provide the pharmacy being audited with at least 14 calendar days" prior written notice before conducting a pharmacy audit unless both parties agree otherwise. If a delay of the audit is requested by the pharmacy, the pharmacy shall provide notice to the pharmacy benefits manager within 72 hours of receiving notice of the audit.(5) The auditing entity may not initiate or schedule a pharmacy audit without the express consent of the pharmacy during the first five business days of any month for any pharmacy that averages in excess of 600 prescriptions filled per week.(6) The auditing entity shall accept paper or electronic signature logs that document the delivery of prescription or nonproprietary drugs and pharmacist services to a health plan beneficiary or the beneficiarys caregiver or guardian.(7) Prior to leaving the pharmacy after the on-site portion of the pharmacy audit, the auditing entity shall provide to the representative of the pharmacy a complete list of pharmacy records reviewed.(8) A pharmacy audit that involves clinical judgment shall be conducted by, or in consultation with, a pharmacist.(9) A pharmacy audit may not cover: (A) A period of more than 24 months after the date a claim was submitted by the pharmacy to the pharmacy benefits manager or covered entity unless a longer period is required by law; or (B) More than 250 prescriptions: Provided, That a refill does not constitute a separate prescription for the purposes of this subparagraph. (10) The auditing entity may not use extrapolation to calculate penalties or amounts to be charged back or recouped unless otherwise required by federal requirements or federal plans.(11) The auditing entity may not include dispensing fees in the calculation of overpayments unless a prescription is considered a misfill. As used in this subdivision, "misfill" means a prescription that was not dispensed, a prescription error, a prescription where the prescriber denied the authorization request, or a prescription where an extra dispensing fee was charged.(12) The auditing entity conducting a pharmacy audit or person acting on behalf of the auditing entity may not seek any fee, charge-back, recoupment, or other adjustment for a dispensed product, or any portion of a dispensed product, unless one of the following has occurred:(A) Fraud or other intentional and willful misrepresentation as evidenced by a review of the claims data, statements, physical review, or other investigative methods;(B) Dispensing in excess of the benefit design, as established by the plan sponsor; (C) Prescriptions not filled in accordance with the prescribers order; or (D) Actual overpayment to the pharmacy.(13) Any fee, charge-back, recoupment, or other adjustment is limited to the actual financial harm associated with the dispensed product, or portion of the dispensed product, or the actual underpayment or overpayment as set forth in the criteria in subdivision (12) of this subsection. (14) A pharmacy may do any of the following when a pharmacy audit is performed:(A) A pharmacy may use authentic and verifiable statements or records, including, but not limited to, medication administration records of a nursing home, assisted living facility, hospital, or health care provider with prescriptive authority, to validate the pharmacy record and delivery; and(B) A pharmacy may use any valid prescription, including, but not limited to, medication administration records, facsimiles, electronic prescriptions, electronically stored images of prescriptions, electronically created annotations, or documented telephone calls from the prescribing health care provider or practitioners agent, to validate claims in connection with prescriptions or changes in prescriptions or refills of prescription or nonproprietary drugs. Documentation of an oral prescription order that has been verified by the prescribing health care provider shall meet the provisions of this subparagraph for the initial audit review.(b) An auditing entity shall provide the pharmacy with a written report of the pharmacy audit and comply with the following requirements:(1) A preliminary pharmacy audit report shall be delivered to the pharmacy or its corporate parent within 60 calendar days after the completion of the pharmacy audit. The preliminary report shall include contact information for the auditing entity that conducted the pharmacy audit and an appropriate and accessible point of contact, including telephone number, facsimile number, e-mail address, and auditing firm name and address so that audit results, procedures and any discrepancies can be reviewed. The preliminary pharmacy audit report shall include, but not be limited to, claim level information for any discrepancy found and total dollar amounts of claims subject to recovery.(2) A pharmacy is allowed at least 30 calendar days following receipt of the preliminary audit report to respond to the findings of the preliminary report.(3) A final pharmacy audit report shall be delivered to the pharmacy or its corporate parent no later than 90 calendar days after completion of the pharmacy audit. The final pharmacy audit report shall include any response provided to the auditing entity by the pharmacy or corporate parent and shall consider and address such responses.(4) The final audit report may be delivered electronically. (5) A pharmacy may not be subject to a charge-back or recoupment for a clerical or recordkeeping error in a required document or record, including a typographical or computer error, unless the error resulted in overpayment to the pharmacy.(6) An auditing entity conducting a pharmacy audit or person acting on behalf of the entity may not charge-back, recoup, or collect penalties from a pharmacy until the time to file an appeal of a final pharmacy audit report has passed or the appeals process has been exhausted, whichever is later.(7) If an identified discrepancy in a pharmacy audit exceeds $25,000, future payments to the pharmacy in excess of that amount may be withheld pending adjudication of an appeal.(8) No interest accrues for any party during the audit period, beginning with the notice of the pharmacy audit and ending with the conclusion of the appeals process.(9) Except for Medicare claims, approval of drug, prescriber, or patient eligibility upon adjudication of a claim may not be reversed unless the pharmacy or pharmacist obtained adjudication by fraud or misrepresentation of claims elements.
A pharmacy may appeal a final audit report in accordance with the procedures established by the entity conducting the pharmacy audit.
(a) The provisions of this article do not apply to an investigative audit of pharmacy records when:(1) Fraud, waste, abuse or other intentional misconduct is indicated by physical review or review of claims data or statements; or(2) Other investigative methods indicate a pharmacy is or has been engaged in criminal wrongdoing, fraud or other intentional or willful misrepresentation. (b) This article does not supersede any audit requirements established by federal law.
(a) Prior to conducting business in the State of West Virginia, except as provided in subsection (d) of this section, an auditing entity shall register with the Insurance Commissioner. The commissioner shall make an application form available on its publicly accessible Internet website that includes a request for the following information: (1) The identity, address, and telephone number of the applicant;(2) The name, business address, and telephone number of the contact person for the applicant; and(3) When applicable, the federal employer identification number for the applicant.(b) Term and fee. (1) The term of registration shall be two years from the date of issuance. (2) The Insurance Commissioner shall determine the amount of the initial application fee and the renewal application fee for the registration. Such fee shall be submitted by the applicant with an application for registration. An initial application fee is nonrefundable. A renewal application fee shall be returned if the renewal of the registration is not granted.(3) The amount of the initial application fees and renewal application fees must be sufficient to fund the Insurance Commissioner's duties in relation to its responsibilities under this article, but a single fee may not exceed $1,000.(c) Registration. (1) The Insurance Commissioner shall issue a registration, as appropriate, to an applicant when the Insurance Commissioner determines that the applicant has submitted a completed application and paid the required registration fee.(2) The registration may be in paper or electronic form, is nontransferable, and shall prominently list the expiration date of the registration.(d) Duplicate registration. (1) A licensed insurer or other entity licensed by the commissioner pursuant to this chapter shall comply with the standards and procedures of this article but is not required to separately register as an auditing entity.(2) A pharmacy benefits manager that is registered as a third-party administrator pursuant to 33-46-1 et seq. of this code shall comply with the standards and procedures of this article but is not required to register separately as an auditing entity.
(a) A person or organization may not establish or operate as a pharmacy benefits manager in the state of West Virginia without first obtaining a license from the Insurance Commissioner pursuant to this section: Provided, That a pharmacy benefit manager registered pursuant to 33-51-7 of this code may continue to do business in the state until the Insurance Commissioner has completed the legislative rule as set forth in 33-51-10 of this code: Provided, however, That additionally the pharmacy benefit manager shall submit an application within six months of completion of the final rule. The Insurance Commissioner shall make an application form available on its publicly accessible internet website that includes a request for the following information: (1) The identity, address, and telephone number of the applicant;(2) The name, business address, and telephone number of the contact person for the applicant; (3) When applicable, the federal employer identification number for the applicant; and(4) Any other information the Insurance Commissioner considers necessary and appropriate to establish the qualifications to receive a license as a pharmacy benefit manager to complete the licensure process, as set forth by legislative rule promulgated by the Insurance Commissioner pursuant to 33-51-10 of this code.(b) Term and fee. (1) The term of licensure shall be two years from the date of issuance. (2) The Insurance Commissioner shall determine the amount of the initial application fee and the renewal application fee for the registration. The fee shall be submitted by the applicant with an application for registration. An initial application fee is nonrefundable. A renewal application fee shall be returned if the renewal of the registration is not granted.(3) The amount of the initial application fees and renewal application fees must be sufficient to fund the Insurance Commissioners duties in relation to his/her responsibilities under this section, but a single fee may not exceed $10,000.(4) Each application for a license, and subsequent renewal for a license, shall be accompanied by evidence of financial responsibility in an amount of $1 million. (c) Licensure. (1) The Insurance Commissioner shall propose legislative rules, in accordance with 33-51-10 of this code, establishing the licensing, fees, application, financial standards, and reporting requirements of pharmacy benefit managers.(2) Upon receipt of a completed application, evidence of financial responsibility, and fee, the Insurance Commissioner shall make a review of each applicant and shall issue a license if the applicant is qualified in accordance with the provisions of this section and the rules promulgated by the Insurance Commissioner pursuant to this section. The commissioner may require additional information or submissions from an applicant and may obtain any documents or information reasonably necessary to verify the information contained in the application. (3) The license may be in paper or electronic form, is nontransferable, and shall prominently list the expiration date of the license.(d) Network adequacy. (1) A pharmacy benefit managers network shall be reasonably adequate, shall provide for convenient patient access to pharmacies within a reasonable distance from a patients residence and shall not be comprised only of mail-order benefits but must have a mix of mail-order benefits and physical stores in this state.(2) A pharmacy benefit manager shall provide a pharmacy benefit managers network report describing the pharmacy benefit managers network and the mix of mail-order to physical stores in this state in a time and manner required by rule issued by the Insurance Commissioner pursuant to this section. A pharmacy benefit managers network report shall include a detailed description of any separate, sub-networks for specialty drugs.(3) Failure to provide a timely report may result in the suspension or revocation of a pharmacy benefit managers license by the Insurance Commissioner.(4) A pharmacy benefit manager may not require a pharmacy or pharmacist, as a condition for participating in the pharmacy benefit managers network, to obtain or maintain accreditation, certification, or credentialing that is inconsistent with, more stringent than, or in addition to state requirements for licensure or other relevant federal or state standards.(e) Enforcement. (1) The Insurance Commissioner shall enforce this section and may examine or audit the books and records of a pharmacy benefit manager providing pharmacy benefits management to determine if the pharmacy benefit manager is in compliance with this section: Provided, That any information or data acquired during the examination or audit is considered proprietary and confidential and exempt from disclosure under the West Virginia Freedom of Information Act pursuant to 29B-1-4(a)(1) of this code.(2) The Insurance Commissioner may propose rules for legislative approval in accordance with 29A-3-1 et seq. of this code regulating pharmacy benefit managers in a manner consistent with this chapter. Rules adopted pursuant to this section shall set forth penalties or fines, including, without limitation, monetary fines, suspension of licensure, and revocation of licensure for violations of this chapter and the rules adopted pursuant to this section.
(a) A pharmacy, a pharmacist, and a pharmacy technician shall have the right to provide a covered individual with information related to lower cost alternatives and cost share for the covered individual to assist health care consumers in making informed decisions. Neither a pharmacy, a pharmacist, nor a pharmacy technician may be penalized by a pharmacy benefit manager for discussing information in this section or for selling a lower cost alternative to a covered individual, if one is available, without using a health insurance policy. (b) A pharmacy benefit manager may not collect from a pharmacy, a pharmacist, or a pharmacy technician a cost share charged to a covered individual that exceeds the total submitted charges by the pharmacy or pharmacist to the pharmacy benefit manager.(c) A pharmacy benefit manager that reimburses a 340B entity for drugs that are subject to an agreement under 42 U.S.C. 256b shall not reimburse the 340B entity for pharmacy-dispensed drugs at a rate lower than that paid for the same drug to pharmacies similar in prescription volume that are not 340B entities, and shall not assess any fee, charge-back, or other adjustment upon the 340B entity on the basis that the 340B entity participates in the program set forth in 42 U.S.C. 256b. For purposes of this subsection, the term "other adjustment" includes placing any additional requirements, restrictions, or unnecessary burdens upon the 340B entity that results in administrative costs or fees to the 340B entity that are not placed upon other pharmacies that do not participate in the 340B program, including affiliate pharmacies of the pharmacy benefit manager, and further includes but is not limited to requiring a claim for a drug to include a modifier or be processed or resubmitted to indicate that the drug is a 340B drug: Provided, That nothing in this subsection shall be construed to prohibit the Medicaid program or a Medicaid managed care organization as described in 42 U.S.C. 1396b(m) from preventing duplicate discounts as described in 42 U.S.C. 256b(a)(5)(A)(i). The provisions of this subsection are applicable to the West Virginia Public Employees Insurance Agency.(d) With respect to a patient eligible to receive drugs subject to an agreement under 42 U.S.C. 256b, a pharmacy benefit manager shall not discriminate against a 340B entity in a manner that prevents or interferes with the patients choice to receive such drugs from the 340B entity: Provided, That this section, does not apply to the state Medicaid program when Medicaid is providing reimbursement for covered outpatient drugs, as that term is defined in 42 U.S.C. 1396r-8(k), on a fee-for-service basis: Provided, however, That this subsection does apply to a Medicaid-managed care organization as described in 42 U.S.C. 1396b(m). For purposes of this subsection, it shall be considered a discriminatory practice that prevents or interferes with a patients choice to receive drugs at a 340B entity if a pharmacy benefit manager places additional requirements, restrictions or unnecessary burdens upon a 340B entity that results in administrative costs or fees to the 340B entity that are not placed upon other pharmacies that do not participate in the 340B program, including affiliate pharmacies of the pharmacy benefit manager or any other third-party, and further includes but is not limited to requiring a claim for a drug to include a modifier or be processed or resubmitted to indicate that the drug is a 340B drug: Provided further, That nothing in this subsection shall be construed to prohibit the Medicaid program or a Medicaid managed care organization as described in 42 U.S.C. 1396b(m) from preventing duplicate discounts as described in 42 U.S.C. 256b(a)(5)(A)(i). The provisions of this subsection are applicable to the West Virginia Public Employees Insurance Agency.(e) A pharmacy benefit manager may not reimburse a pharmacy or pharmacist for a prescription drug or pharmacy service in an amount less than the national average drug acquisition cost for the prescription drug or pharmacy service at the time the drug is administered or dispensed, plus a professional dispensing fee of $10.49: Provided, That if the national average drug acquisition cost is not available at the time a drug is administered or dispensed, a pharmacy benefit manager may not reimburse in an amount that is less than the wholesale acquisition cost of the drug, as defined in 42 U.S.C. 1395w-3a(c)(6)(B), plus a professional dispensing fee of $10.49. (f) A pharmacy benefit manager may not reimburse a pharmacy or pharmacist for a prescription drug or pharmacy service in an amount less than the amount the pharmacy benefit manager reimburses itself or an affiliate for the same prescription drug or pharmacy service.(g)The commissioner may order reimbursement to an insured, pharmacy, or dispenser who has incurred a monetary loss as a result of a violation of this article or legislative rules implemented pursuant to this article. (h) (1) Any methodologies utilized by a pharmacy benefits manager in connection with reimbursement shall be filed with the commissioner at the time of initial licensure and at any time thereafter that the methodology is changed by the pharmacy benefit manager for use in determining maximum allowable cost appeals. The methodologies are not subject to disclosure and shall be treated as confidential and exempt from disclosure under the West Virginia Freedom of Information Act 29B-1-4(a)(1) of this code. The filed methodologies shall comply with the provisions of 33-51-9(e) of this code, and a pharmacy benefits manager shall not enter into a contract with a pharmacy that provides for reimbursement methodology not permissible under the provisions of 33-51-9(e) of this code.(2) For purposes of complying with the provisions of 33-51-9(e) of this code, a pharmacy benefits manager shall utilize the most recently published monthly national average drug acquisition cost as a point of reference for the ingredient drug product component of a pharmacys reimbursement for drugs appearing on the national average drug acquisition cost list; and, (i) A pharmacy benefits manager may not: (1) Discriminate in reimbursement, assess any fees or adjustments, or exclude a pharmacy from the pharmacy benefit managers network on the basis that the pharmacy dispenses drugs subject to an agreement under 42 U.S.C. 256b; or (2) Engage in any practice that: (A) In any way bases pharmacy reimbursement for a drug on patient outcomes, scores, or metrics. This does not prohibit pharmacy reimbursement for pharmacy care, including dispensing fees from being based on patient outcomes, scores, or metrics so long as the patient outcomes, scores, or metrics are disclosed to and agreed to by the pharmacy in advance; (B) Includes imposing a point-of-sale fee or retroactive fee; or (C) Derives any revenue from a pharmacy or insured in connection with performing pharmacy benefits management services: Provided, That this may not be construed to prohibit pharmacy benefits managers from processing deductibles or copayments as have been approved by a covered individuals health benefit plan.  (j) A pharmacy benefits manager shall offer a health plan the option of charging such health plan the same price for a prescription drug as it pays a pharmacy for the prescription drug: Provided, That a pharmacy benefits manager shall charge a health benefit plan administered by or on behalf of the state or a political subdivision of the state, the same price for a prescription drug as it pays a pharmacy for the prescription drug.  (k) A covered individuals defined cost sharing for each prescription drug shall be calculated at the point of sale based on a price that is reduced by an amount equal to at least 100 percent of all rebates received, or to be received, in connection with the dispensing or administration of the prescription drug. Any rebate over and above the defined cost sharing would then be passed on to the health plan to reduce premiums. Nothing precludes an insurer from decreasing a covered individuals defined cost sharing by an amount greater than what is previously stated. The commissioner may propose a legislative rule or by policy effectuate the provisions of this subsection. 
(a) This article may be cited as the "Corporate Governance Annual Disclosure Act".(b) The purpose of this article is to:(1) Provide the commissioner a summary of an insurers or insurance groups corporate governance structure, policies and practices to permit the commissioner to gain and maintain an understanding of the insurers corporate governance framework;(2) Outline the requirements for completing a corporate governance annual disclosure with the commissioner;(3) Set forth the procedures for filing the corporate governance annual disclosure; and (4) Provide for the confidential treatment of the corporate governance annual disclosure and related information that will contain confidential and sensitive information related to an insurer or insurance groups internal operations and proprietary and trade secret information which, if made public, could potentially cause the insurer or insurance group competitive harm or disadvantage. (c) Nothing in this article limits the commissioners examination authority, or the rights or obligations of third parties, under 33-2-9 of this code.(d) The requirements of this article apply to all licensed insurers domiciled in this state.
As used in this article:(1) "Board" means the board of directors of an insurer or insurance group.(2) "Corporate Governance Annual Disclosure" or "CGAD" means a confidential report filed by the insurer or insurance group made in accordance with the requirements of this article.(3) "Insurance group" means those insurers and affiliates included within an insurance holding company system as defined in 33-27-2 of this code.(4) "Insurer" means every person engaged in the business of making contracts of insurance, except that it shall not include agencies, authorities or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.(5) "ORSA summary report" means the report filed in accordance with 33-40B-5 of this code.(6) "Senior management" means any corporate officer responsible for reporting information to the board at regular intervals or providing this information to shareholders or regulators and shall include, for example and without limitation, the chief executive officer (CEO), chief financial officer (CFO), chief operations officer (COO), chief procurement officer (CPO), chief legal officer (CLO), chief information officer (CIO), chief technology officer (CTO), chief revenue officer (CRO), chief visionary officer (CVO), or any other "C" level executive.
(a) An insurer, or the insurance group of which the insurer is a member, shall annually submit to the commissioner a CGAD that contains the information described in 33-52-4 of this code. Notwithstanding any request from the commissioner made pursuant to subsection (c) of this section, if the insurer is a member of an insurance group, the insurer shall submit the report required by this section to the commissioner of the lead state for the insurance group, in accordance with the laws of the lead state, as determined by the procedures outlined in the most recent financial analysis handbook adopted by the National Association of Insurance Commissioners. (b) The CGAD must include a signature of the insurers or insurance groups chief executive officer or corporate secretary attesting to the best of that individuals belief and knowledge that the insurer or insurance group has implemented the corporate governance practices and that a copy of the CGAD has been provided to the insurers or insurance groups board or the appropriate committee thereof. (c) An insurer not required to submit a CGAD under this section shall do so upon the commissioners request.(d) For purposes of completing the CGAD, the insurer or insurance group may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level and/or the individual legal entity level, depending upon how the insurer or insurance group has structured its system of corporate governance. The insurer or insurance group is encouraged to make the CGAD disclosures at the level at which the insurers or insurance groups risk appetite is determined, or at which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised, or the level at which legal liability for failure of general corporate governance duties would be placed. If the insurer or insurance group determines the level of reporting based on these criteria, it shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in level of reporting.(e) The review of the CGAD and any additional requests for information shall be made through the lead state as determined by the procedures within the most recent financial analysis handbook referenced in subsection (a) of this section.(f) Insurers providing information substantially similar to the information required by this article in other documents provided to the commissioner, including proxy statements filed in conjunction with a holding companys Form B requirements or other state or federal filings provided to the commissioner, are not required to duplicate that information in the CGAD, but are only required to cross reference the document in which the information is included.(g) Documentation and supporting information relevant to the CGAD shall be maintained by the insurer or insurance group and made available upon examination or upon request of the commissioner.
(a) The insurer or insurance group shall be as descriptive as possible in completing the CGAD, with inclusion of attachments or example documents that are used in the governance process, since these may provide a means to demonstrate the strengths of their governance framework and practices.(b) The CGAD shall describe the insurers or insurance groups corporate governance framework and structure, including consideration of the following:(1) The board and various committees thereof ultimately responsible for overseeing the insurer or insurance group and the level(s) at which that oversight occurs, including, but not limited to, ultimate control level, intermediate holding company or legal entity. The insurer or insurance group shall describe and discuss the rationale for the current board size and structure; and (2) The duties of the board and each of its significant committees and how they are governed, including, but not limited to, bylaws, charters or informal mandates, as well as how the boards leadership is structured, including a discussion of the roles of chief executive officer and chairman of the board within the organization.(c) The insurer or insurance group shall describe the policies and practices of the most senior governing entity and significant committees thereof, including a discussion of the following factors:(1) How the qualifications, expertise, and experience of each board member meet the needs of the insurer or insurance group; (2) How an appropriate amount of independence is maintained on the board and its significant committees; (3) The number of meetings held by the board and its significant committees over the past year as well as information on director attendance;(4) The processes in place for the board to evaluate its performance and the performance of its committees, as well as any recent measures taken to improve performance, including any board or committee training programs that have been put in place; and(5) How the insurer or insurance group identifies, nominates and elects members to the board and its committees. The discussion should include, for example: (A) Whether a nomination committee is in place to identify and select individuals for consideration;(B) Whether term limits are placed on directors;(C) How the election and reelection processes function; and(D) Whether a board diversity policy is in place and if so, how it functions. (d) The insurer or insurance group shall describe the policies and practices for directing senior management, including a description of the following factors:(1) Any processes or practices, such as suitability standards, to determine whether officers and key persons in control functions have the appropriate background, experience and integrity to fulfill their prospective roles, including:(A) Identification of the specific positions for which suitability standards have been developed and a description of the standards employed; and (B) Any changes in an officers or key persons suitability as outlined by the insurers or insurance groups standards and procedures to monitor and evaluate such changes. (2) The insurers or insurance groups code of business conduct and ethics, the discussion of which considers, for example:(A) Compliance with laws, rules, and regulations; and(B) Proactive reporting of any illegal or unethical behavior. (3) The insurers or insurance groups processes for performance evaluation, compensation and corrective action to ensure effective senior management throughout the organization, including a description of the general objectives of significant compensation programs and what the programs are designed to reward. The description shall include sufficient detail to allow the commissioner to understand how the organization ensures that compensation programs do not encourage and/or reward excessive risk taking. Elements to be discussed may include, for example:(A) The boards role in overseeing management compensation programs and practices; (B) The various elements of compensation awarded in the insurers or insurance groups compensation programs and how the insurer or insurance group determines and calculates the amount of each element of compensation paid; (C) How compensation programs are related to both company and individual performance over time;(D) Whether compensation programs include risk adjustments and how those adjustments are incorporated into the programs for employees at different levels;(E) Any clawback provisions built into the programs to recover awards or payments if the performance measures upon which they are based are restated or otherwise adjusted; and(F) Any other factors relevant in understanding how the insurer or insurance group monitors its compensation policies to determine whether its risk management objectives are met by incentivizing its employees.(4) The insurers or insurance groups plans for chief executive officer and senior management succession.(e) The insurer or insurance group shall describe the processes by which the board, its committees and senior management ensure an appropriate amount of oversight to the critical risk areas impacting the insurers business activities, including a discussion of:(1) How oversight and management responsibilities are delegated between the board, its committees and senior management;(2) How the board is kept informed of the insurers strategic plans, the associated risks, and steps that senior management is taking to monitor and manage those risks; and(3) How reporting responsibilities are organized for each critical risk area. The description should allow the commissioner to understand the frequency at which information on each critical risk area is reported to and reviewed by senior management and the board. This description may include, for example, the following critical risk areas of the insurer:(A) Risk management processes: Provided, That an insurer or insurance group may refer to its ORSA summary report;(B) Actuarial function;(C) Investment decision-making processes;(D) Reinsurance decision-making processes;(E) Business strategy/finance decision-making processes;(F) Compliance function;(G) Financial reporting/internal auditing; and(H) Market conduct decision-making processes.(f) The insurer or insurance group has discretion over the responses to the CGAD inquiries: Provided, That the CGAD shall contain the material information necessary to permit the commissioner to gain an understanding of the insurers or insurance groups corporate governance structure, policies, and practices. The commissioner may request additional information that he or she deems material and necessary to provide the commissioner with a clear understanding of the corporate governance policies, the reporting or information system or controls implementing those policies.
(a) An insurer, or the insurance group of which the insurer is a member, required to file a CGAD by 33-52-3 of this code, shall, no later than June 1 of each calendar year, submit to the commissioner a CGAD that contains the information described in 33-52-4 of this code. (b) The insurer or insurance group has discretion regarding the appropriate format for providing the information required by this article and is permitted to customize the CGAD to provide the most relevant information necessary to permit the commissioner to gain an understanding of the corporate governance structure, policies and practices utilized by the insurer or insurance group. (c) Notwithstanding subsection (a) of this section, and as outlined in 33-52-3 of this code, if the CGAD is completed at the insurance group level, then it must be filed with the lead state of the group as determined by the procedures outlined in the most recent financial analysis handbook adopted by the National Association of Insurance Commissioners. In these instances, a copy of the CGAD must also be provided to the chief regulatory official of any state in which the insurance group has a domestic insurer, upon request. (d) An insurer or insurance group may comply with this section by referencing other existing documents, including, but not limited to, ORSA summary report, holding company Form B or F filings, Securities and Exchange Commission (SEC) proxy statements or foreign regulatory reporting requirements, if the documents provide information that is comparable to the information described in 33-52-4 of this code. The insurer or insurance group shall clearly reference the location of the relevant information within the CGAD and attach the referenced document if it is not already filed or available to the commissioner.(e) Each year following the initial filing of the CGAD, the insurer or insurance group shall file an amended version of the previously filed CGAD indicating where changes have been made. If no changes were made in the information or activities reported by the insurer or insurance group, the filing should so state.
(a) Documents, materials or other information, including the CGAD, in the possession or control of the commissioner that are obtained by, created by or disclosed to the commissioner or any other person under this article, are recognized by this state as being proprietary and to contain trade secrets. All such documents, materials or other information are confidential by law and privileged, are not subject to the provisions of chapter 29e-b of this code, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. The commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioners official duties. The commissioner shall not otherwise make the documents, materials or other information public without the prior written consent of the insurer. Nothing in this section requires written consent of the insurer before the commissioner may share or receive confidential documents, materials or other CGAD-related information pursuant to subsection (c) of this section to assist in the performance of the commissioners regulatory duties. (b) Neither the commissioner nor any person who received documents, materials or other CGAD-related information, through examination or otherwise, while acting under the authority of the commissioner, or with whom such documents, materials or other information are shared pursuant to this article is permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (a) of this section.(c) In order to assist in the performance of the commissioners regulatory duties, the commissioner may:(1) Share documents, materials or other CGAD-related information including the confidential and privileged documents, materials or information subject to subsection (a) of this section, including proprietary and trade secret documents and materials with other state, federal and international financial regulatory agencies, members of any supervisory college as defined in 33-27-6a of this code, the National Association of Insurance Commissioners, and third party consultants pursuant to 33-52-7 of this code: Provided, That the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, material or other information and has verified in writing the legal authority to maintain confidentiality; and (2) Receive documents, materials or other CGAD-related information, including otherwise confidential and privileged documents, materials or information, including proprietary and trade-secret information or documents, from regulatory officials of other state, federal and international financial regulatory agencies, members of any supervisory college as defined in 33-27-6a of this code, and the National Association of Insurance Commissioners, and shall maintain as confidential or privileged any documents, materials or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information.(d) The sharing of information and documents by the commissioner pursuant to this article does not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for the administration, execution and enforcement of the provisions of this article. (e) No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials or other CGAD-related information may occur as a result of disclosure of such CGAD-related information or documents to the commissioner under this section or as a result of sharing as authorized in this article.
(a) The commissioner may retain, at the insurers expense, third-party consultants, including attorneys, actuaries, accountants and other experts not otherwise a part of the commissioners staff as may be reasonably necessary to assist the commissioner in reviewing the CGAD and related information or the insurers compliance with this article.(b) Any persons retained under subsection (a) of this section is under the direction and control of the commissioner and may act only in a purely advisory capacity.(c) The National Association of Insurance Commissioners and third-party consultants are subject to the same confidentiality standards and requirements as the commissioner.(d) As part of the retention process, a third-party consultant shall verify to the commissioner, with notice to the insurer, that it is free of a conflict of interest and that it has internal procedures in place to monitor compliance with a conflict and to comply with the confidentiality standards and requirements of this article.(e) A written agreement with the National Association of Insurance Commissioners and/or a third-party consultant governing sharing and use of information provided pursuant to this article shall contain the following provisions and expressly require the written consent of the insurer prior to making public information provided under this article:(1) Specific procedures and protocols for maintaining the confidentiality and security of CGAD-related information shared with the National Association of Insurance Commissioners or a third-party consultant pursuant to this article;(2) Procedures and protocols for sharing by the National Association of Insurance Commissioners only with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials or other information and has verified in writing the legal authority to maintain confidentiality; (3) A provision specifying that ownership of the CGAD-related information shared with the National Association of Insurance Commissioners or a third-party consultant remains with the commissioner and the use of the information by the National Association of Insurance Commissioners or third-party consultant is subject to the direction of the commissioner; (4) A provision that prohibits the National Association of Insurance Commissioners or a third-party consultant from storing the information shared pursuant to this article in a permanent database after the underlying analysis is completed;(5) A provision requiring the National Association of Insurance Commissioners or third-party consultant to provide prompt notice to the commissioner and to the insurer or insurance group regarding any subpoena, request for disclosure, or request for production of the insurers CGAD-related information; and(6) A requirement that the National Association of Insurance Commissioners or a third-party consultant to consent to intervention by an insurer in any judicial or administrative action in which the National Association of Insurance Commissioners or a third-party consultant may be required to disclose confidential information about the insurer shared with the National Association of Insurance Commissioners or a third-party consultant pursuant to this article.
Any insurer failing, without just cause, to timely file the CGAD as required in this article shall be required, after notice and hearing, to pay a penalty of up to $1,000 for each days delay, to be recovered by the commissioner. Any penalty so recovered shall be paid into the General Revenue Fund of this state. The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer. 
The requirements of this article are effective on January 1, 2020. The first filing of the CGAD shall be in 2020.
This article shall be known as the "Certificates of Insurance Act".
For purposes of this article:"Certificate of insurance" means a document or instrument, regardless of how titled or described, that is prepared or issued by an insurer or insurance producer as evidence or confirmation of the existence of property or casualty insurance coverage. The term does not include a statement of declaration, policy of insurance, insurance binder, policy endorsement, or automobile insurance identification or information card. "Insurance producer" means a person required to be licensed under the laws of this state to sell, solicit, or negotiate property or casualty insurance."Insurer" means any organization that issues property or casualty insurance."Person" means any individual, partnership, corporation, association, or other legal entity, including any government or governmental subdivision or agency.
(a) The Commissioner of Insurance shall prohibit the use of a certificate of insurance form if the form:(1) Is unfair, misleading, or deceptive, or violates public policy; or(2) Violates any law, including any rule promulgated by the commissioner.(b) A certificate of insurance is not a policy of insurance and does not affirmatively or negatively amend, extend, or alter the coverage afforded by the policy to which the certificate of insurance makes reference. A certificate of insurance does not confer to any person new or additional rights beyond what the referenced policy of insurance expressly provides. 
(a) A person may not:(1) Prepare, issue, or request or require the issuance of a certificate of insurance that contains any false or misleading information concerning the policy of insurance to which the certificate of insurance refers; or(2) Prepare, issue, or request or require the issuance of a certificate of insurance that purports to affirmatively or negatively alter, amend, or extend the coverage provided by the policy of insurance to which the certificate of insurance refers.(b) A certificate of insurance may not warrant that the policy of insurance referenced in the certificate comply with the insurance or indemnification requirements of a contract and the inclusion of a contract number or description within a certificate of insurance may not be interpreted as doing such.
A person is entitled to notice of cancellation, nonrenewal, or any material change, and to any similar notice concerning a policy of insurance only if the person has such notice rights under the terms of the policy of insurance or any endorsement to the policy. The terms and conditions of the notice are governed by the policy of insurance or endorsement and may not be altered by a certificate of insurance.
(a) The provisions of this article apply to all certificates of insurance issued in connection with a property or casualty insurance policy issued or renewed on or after July 1, 2020, and in connection with property, operations, or risks located in this state, regardless of where the policyholder, insurer, insurance producer, or person requesting or requiring the issuance of a certificate of insurance is located.(b) A certificate of insurance or any other document or correspondence prepared, issued, requested, or required in violation of this article is void.
(a) The Commissioner of Insurance shall examine and investigate the activities of any person that the commissioner reasonably believes has been or is engaged in an act or practice prohibited by this article.(b) The commissioner may enforce the provisions of this article by any means permissible in this chapter, including by issuing orders to cease and desist. Any person who violates a provision of this article may, after notice and hearing pursuant to 33-2-13 of this code, be fined by the commissioner a sum not to exceed $1,000 per violation.(c) The commissioner may propose rules for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code, necessary or reasonable to carry out the provisions of this article.
This article shall be known and cited as the Requiring Accountable Pharmaceutical Transparency, Oversight, and Reporting Act. 
For the purpose of this article:"Auditor" means the State Auditor of West Virginia, by himself or herself, or by any person appointed, designated, or approved by the State Auditor to perform the service."Brand-name drug" means a prescription drug approved under 21 USC 355(b) or 42 USC 262."Drug" or "prescription drug" refers to a brand-name, specialty, or generic prescription drug."Drug manufacturer" means any entity that holds the national drug code for a prescription drug and is engaged in the production, preparation, propagation, compounding, conversion, or processing of drug products; or is engaged in the packaging, repackaging, labeling, relabeling, or distribution of drug products, and is not a wholesale distributor of drugs or a retail pharmacy licensed under state law. "Generic drug" means a prescription drug approved under 21 USC 355(j)."Health benefit plan" means an individual, blanket, or group plan, policy, or contract for health care services issued or delivered by a health benefit plan issuer in the state."Health benefit plan issuer" means an entity subject to the insurance laws and rules of this state, or subject to the jurisdiction of the Insurance Commissioner, that contracts or offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including government agencies and any insurer subject to 5-16-1 et seq., 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 et seq. of this code. For purposes of this article, the term "health benefit plan issuer" does not include insurers or managed care organizations with respect to their Medicaid or CHIP plans or contracts which are reviewed and approved by the Department of Health and Human Resources Bureau of Medical Services. "Market introduction" means the month and year in which the manufacturer acquired or first marketed the drug for sale in the United States."National drug code" or "NDC" means the numerical code maintained by the United States Food and Drug Administration that includes the labeler code, product code, and package code."Specialty drug" means a prescription drug covered under Medicare Part D that exceeds the specialty tier cost threshold established by the Centers for Medicare and Medicaid Services."Total spending" means the total of allowed amounts associated with payment for a specified drug or drug group, for all covered lives."Utilization management" means a set of formal techniques designed to monitor the use of, or evaluate the medical necessity, appropriateness, efficacy, or efficiency of, health care services, procedures, or settings. "Wholesale acquisition cost" or "WAC" is the manufacturers list price to wholesalers or direct purchasers in the United States on December 31 of the reference year, as reported in wholesale price guides or other publications of drug or biological pricing data; it does not include prompt pay or other discounts, rebates, or reductions in price. The current or proposed WAC is the amount that prompts reporting under this act. If reported by a drug group, it is the average WAC weighted by the relevant number of WAC units. "Wholesale drug distributor" means an entity licensed by the West Virginia State Board of Pharmacy that is engaged in the sale of generic, brand-name, or specialty drugs to persons other than a consumer or patient.
(a) Not later than January 15 of each calendar year, a drug manufacturer shall submit a report to the Auditor stating the following information for each brand-name, specialty, and generic drug manufactured by the drug manufacturer and sold in the state directly by the drug manufacturer or a wholesale drug distributor: Provided, That the requirements of this section only apply to: (1) Generic, brand-name, or specialty drugs with a wholesale acquisition cost of at least $100 for a 30-day supply; and (2) A generic, brand-name, or specialty drug manufactured by a drug manufacturer that recognizes a wholesale acquisition cost increase of 40 percent or greater over the preceding three calendar years, or 15 percent or greater in the previous calendar year. (b) The report shall include: (1) The name of the drug;(2) Whether the drug is a brand-name drug or generic drug;(3) The effective date of any change or any reportable change in the wholesale acquisition cost price;(4) The introductory price of the prescription drug when it was approved for marketing by the United States Food and Drug Administration;(5) The national drug code for the specific drug;(6) Aggregate company-level research and development costs for the most recent calendar year for which final audit data is available;(7) The name and annual U.S. sales/revenue of each drug manufacturers prescription drugs that lost patent exclusivity in the United States in the previous three calendar years; and(8) A statement regarding the factor or factors that caused any increase in the wholesale acquisition cost. (c) If the drug manufacturer is subject to reporting requirements established by the Securities and Exchange Commission, the quality and types of information submitted to the Auditor under this section must be consistent with the information that the drug manufacturer includes in the drug manufacturers annual report submitted on Form 10-K to the Securities and Exchange Commission.
No later than March 1 of each calendar year, each health benefit plan issuer shall submit to the Auditor a report providing the following information for the immediately preceding calendar year: Provided, That nothing in this article should be construed as to requiring a health benefit plan issuer to disclose confidential health information protected by the Health Insurance Portability and Accountability Act:(1) The names of the 25 most frequently prescribed prescription drugs across all plans;(2) The percent increase in annual net spending for prescription drugs across all plans;(3) The percent increase in premiums that were attributable to prescription drugs across all plans;(4) The percentage of specialty drugs with utilization management requirements across all plans; and(5) The premium reductions that were attributable to specialty drug utilization management.
(a) By July 1, 2021, the Auditor shall create a searchable pharmaceutical price transparency website, containing the information specified in 33-54-3 and 33-54-4 of this code, available to the public at no cost, and presented in a consumer-friendly, searchable format.(b) Effective July 1, 2021, the Auditor shall update the information displayed on the searchable pharmaceutical price transparency website within 30 days of receiving updated or revised information from a drug manufacturer or health benefit plan issuer.(c) Each drug manufacturer or health benefit plan issuer shall submit to the Auditor in writing contact information for those entities or individuals employed by the health benefit plan issuer or drug manufacturer responsible for complying with reporting requirements specified in 33-54-3 of this code, and shall notify the Auditor within 30 days of any changes to this information.(d) The Auditor shall publish the identity of any drug manufacturer or health benefit plan issuer who fails to comply with the requirements of this article or who submits false or inaccurate information to the Auditor.(e) The Auditor shall compile a report regarding information submitted pursuant to the provisions of 33-54-4 of this code and submit this analysis to the Legislative Oversight Commission on Health and Human Resources Accountability created pursuant to 16-29E-1 et seq. of this code beginning on December 30, 2022, and annually thereafter.
For purposes of this article:"Authorized representative" means: (A) A person to whom a covered person has given express written consent to represent the covered person; (B) A person authorized by law to provide substituted consent for a covered person; or (C) The covered persons treating health care professional, only when the covered person is unable to provide consent, or a family member of the covered person. "Commissioner" means the Insurance Commissioner of this state. "Covered benefit" or "benefit" means those health care services to which a covered person is entitled under the terms of a health benefit plan. "Covered person" means a policyholder, subscriber, enrollee, or other individual participating in a health benefit plan. "Emergency medical condition" means a physical, mental, or behavioral health condition that manifests itself by acute symptoms of sufficient severity, including severe pain that would lead a prudent layperson, possessing an average knowledge of medicine and health, to reasonably expect, in the absence of immediate medical attention, to result in: (A) Placing the individuals physical, mental, or behavioral health, or, with respect to a pregnant woman, the womans or her fetuss health in serious jeopardy; (B) Serious impairment to a bodily function; (C) Serious impairment of any bodily organ or part; or (D) With respect to a pregnant woman who is having contractions: (i) Inadequate time to affect a safe transfer to another hospital before delivery; or (ii) When transfer to another hospital may pose a threat to the health or safety of the woman or fetus. "Emergency services" means, with respect to an emergency condition: (A) A medical or mental health screening examination that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate the emergency medical condition; and (B) Any further medical or mental health examination and treatment, to the extent they are within the capabilities of the staff and facilities available at the hospital to stabilize the patient. "Essential community provider" or "ECP" means a provider that: (A) Serves predominantly low-income, medically underserved individuals, including a health care provider defined in Section 340B(a)(4) of the Public Health Service Act (PHSA); or (B) Is described in Section 1927(c)(1)(D)(i)(IV) of the Social Security Act, as set forth by Section 221 of Pub.L.111-8. "Facility" means an institution providing health care services or a health care setting, including, but not limited to, hospitals and other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, urgent care centers, diagnostic, laboratory, and imaging centers, and rehabilitation and other therapeutic health settings. "Health benefit plan" means a policy, contract, certificate, or agreement entered into, offered, or issued by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. "Health care professional" means a physician or other health care practitioner licensed, accredited, or certified to perform specified (physical, mental, or behavioral) health care services consistent with their scope of practice under state law. "Health care provider" or "provider" means a health care professional, a pharmacy, or a facility. "Health care services" means services for the diagnosis, prevention, treatment, cure, or relief of a physical, mental, or behavioral health condition, illness, injury, or disease, including mental health and substance use disorders. "Health carrier" or "carrier" means an entity subject to the insurance laws and rules of this state, or subject to the jurisdiction of the commissioner, that contracts or offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including an insurer issuing an accident and sickness insurance policy pursuant to 33-15-1 et seq. of this code, an insurer issuing an accident and sickness group policy pursuant to 33-16-1 et seq. of this code, a hospital medical and dental corporation licensed pursuant to 33-24-1 et seq. of this code, a health care corporation licensed pursuant to 33-25-1 et seq. of this code, or a health maintenance organization licensed pursuant to 33-25A-1 et seq. of this code. For purposes of this article, the term "health carrier" or "carrier" does not include insurers or managed care organizations with respect to their Medicaid or Childrens Health Insurance Program (CHIP) plans or contracts which are reviewed and approved by the Department of Health and Human Resources Bureau for Medical Services. "Intermediary" means a person authorized to negotiate and execute provider contracts with health carriers on behalf of health care providers or on behalf of a network. "Limited scope dental plan" means a plan that provides coverage, substantially all of which is for treatment of the mouth, including any organ or structure within the mouth, which is provided under a separate policy, certificate, or contract of insurance or is otherwise not an integral part of a group benefit plan. "Limited scope vision plan" means a plan that provides coverage, substantially all of which is for treatment of the eye, that is provided under a separate policy, certificate, or contract of insurance or is otherwise not an integral part of a group benefit plan. "Network" means the group or groups of participating providers providing services under a network plan. "Network plan" means a health benefit plan that either requires a covered person to use, or creates incentives, including financial incentives, for a covered person to use health care providers managed, owned, under contract with, or employed by the health carrier. "Participating provider" means a provider who, under a contract with the health carrier or with its contractor or subcontractor, has agreed to provide health care services to covered persons with an expectation of receiving payment, other than coinsurance, copayments, or deductibles, directly or indirectly from the health carrier."Person" means an individual, a corporation, a partnership, an association, a joint venture, a joint stock company, a trust, an unincorporated organization, any similar entity, or any combination of the foregoing."Primary care" means health care services for a range of common physical, mental, or behavioral health conditions provided by a physician or nonphysician primary care professional. "Primary care professional" means a participating health care professional designated by the health carrier to supervise, coordinate, or provide initial care or continuing care to a covered person, and who may be required by the health carrier to initiate a referral for specialty care and maintain supervision of health care services rendered to the covered person."Specialist" means a physician or non-physician health care professional who:(A) Focuses on a specific area of physical, mental, or behavioral health or a group of patients; and (B) Has successfully completed required training and is recognized by the state in which he or she practices to provide specialty care."Specialist" includes a subspecialist who has additional training and recognition above and beyond his or her specialty training."Specialty care" means advanced medically necessary care and treatment of specific physical, mental, or behavioral health conditions, or those health conditions which may manifest in particular ages or subpopulations, that are provided by a specialist, preferably in coordination with a primary care professional or other health care professional."Telemedicine" or "Telehealth" means health care services provided through telecommunications technology by a health care professional who is at a location other than where the covered person is located."Tiered network" means a network that identifies and groups some or all types of providers and facilities into specific groups to which different provider reimbursement, covered person cost-sharing, or provider access requirements, or any combination thereof, apply for the same services."To stabilize" means with respect to an emergency medical condition to provide such medical treatment of the condition as may be necessary to assure, within a reasonable medical probability, that no material deterioration of the condition is likely to result from or occur during the transfer of the individual to or from a facility, or, with respect to an emergency birth with no complications resulting in a continued emergency to deliver the child and the placenta."Transfer" means the movement, including the discharge, of an individual outside a hospitals facilities at the direction of any person employed by, or affiliated or associated, directly or indirectly, with the hospital, but does not include the movement of an individual who:(A) Has been declared dead; or (B) Leaves the facility without the permission of any such person.
A violation of this article shall be penalized in accordance with 33-4-11 of this code.
(a) Except as provided in subsection (b) of this section, this article applies to all health carriers that offer network plans.(b) The following provisions of this article do not apply to health carriers that offer network plans that consist solely of limited scope dental plans or limited scope vision plans:(1) 33-55-3(a)(2) of this code;(2) 33-55-3(f)(7)(E), 33-55-3(f)(8)(B) and 33-55-3(f)(11) of this code;(3) 33-55-4(b)(2) and (3) of this code; and (4) 33-55-4(c)(1)(A) and (B), 33-55-4(c)(2), 33-55-4(c)(3), 33-55-4(d)(1)(B) and 33-55-4(d)(1)(C) of this code.
(a)(1) A health carrier providing a network plan shall maintain a network that is sufficient in numbers and appropriate types of providers, including those that serve predominantly low-income, medically underserved individuals, to assure that all covered services to covered persons, including children and adults, will be accessible without unreasonable travel or delay. (2) Covered persons have access to emergency services 24 hours per day, seven days per week. (b) The commissioner shall determine sufficiency in accordance with the requirements of this section, and may establish sufficiency by reference to any reasonable criteria, which may include, but are not limited to:(1) Provider-covered person ratios by specialty;(2) Primary care professional-covered person ratios;(3) Geographic accessibility of providers;(4) Geographic variation and population dispersion;(5) Waiting times for an appointment with participating providers;(6) Hours of operation;(7) The ability of the network to meet the needs of covered persons, which may include low-income persons, children and adults with serious, chronic, or complex health conditions or physical or mental disabilities, or persons with limited English proficiency;(8) Other health care service delivery system options, such as telemedicine or telehealth, mobile clinics, centers of excellence, and other ways of delivering care; and (9) The volume of technological and specialty care services available to serve the needs of covered persons requiring technologically advanced or specialty care services.(c)(1) A health carrier shall have a process to assure that a covered person obtains a covered benefit at an in-network level of benefits, including an in-network level of cost-sharing, from a nonparticipating provider, or make other arrangements acceptable to the commissioner when:(A) The health carrier has a sufficient network, but does not have a type of participating provider available to provide the covered benefit to the covered person, or it does not have a participating provider available to provide the covered benefit to the covered person without unreasonable travel or delay; or(B) The health carrier has an insufficient number or type of participating providers available to provide the covered benefit to the covered person without unreasonable travel or delay.(2) The health carrier shall specify and inform covered persons of the process a covered person may use to request access to obtain a covered benefit from a non-participating provider as provided in subdivision (1) of this subsection when:(A) The covered person is diagnosed with a condition or disease that requires specialized health care services or medical services; and (B) The health carrier:(i) Does not have a participating provider of the required specialty with the professional training and expertise to treat or provide health care services for the condition or disease; or (ii) Cannot provide reasonable access to a participating provider with the required specialty with the professional training and expertise to treat or provide health care services for the condition or disease without unreasonable travel or delay.(3) The health carrier shall treat the health care services the covered person receives from a nonparticipating provider pursuant to subdivision (2) of this subsection as if the services were provided by a participating provider, including counting the covered persons cost-sharing for such services toward the maximum out-of-pocket limit applicable to services obtained from participating providers under the health benefit plan.(4) The process described under subdivisions (1) and (2) of this subsection shall ensure that requests to obtain a covered benefit from a nonparticipating provider are addressed in a timely fashion appropriate to the covered persons condition.(5) The health carrier shall have a system in place that documents all requests to obtain a covered benefit from a nonparticipating provider under this subsection and shall provide this information to the commissioner upon request.(6) The process established in this subsection is not intended to be used by health carriers as a substitute for establishing and maintaining a sufficient provider network in accordance with the provisions of this article nor is it intended to be used by covered persons to circumvent the use of covered benefits available through a health carriers network delivery system options.(7) Nothing in this section prevents a covered person from exercising the rights and remedies available under applicable state or federal law relating to internal and external claims grievance and appeals processes.(d)(1) A health carrier shall establish and maintain adequate arrangements to ensure covered persons have reasonable access to participating providers located near their home or business address. In determining whether the health carrier has complied with this provision, the commissioner shall give due consideration to the relative availability of health care providers with the requisite expertise and training in the service area under consideration.(2) A health carrier shall monitor, on an ongoing basis, the ability, clinical capacity, and legal authority of its participating providers to furnish all contracted covered benefits to covered persons.(e)(1) Beginning January 1, 2021, a health carrier shall file with the commissioner for review prior to or at the time it files a newly offered network, in a manner and form defined by rule of the commissioner, an access plan meeting the requirements of this article.(2)(A) The health carrier may request the commissioner to deem sections of the access plan as proprietary information that may not be made public. The health carrier shall make the access plans, absent proprietary information, available online, at its business premises, and to any person upon request.(B) For the purposes of this subsection, information is proprietary if revealing the information would cause the health carriers competitors to obtain valuable business information.(3) The health carrier shall prepare an access plan prior to offering a new network plan and shall notify the commissioner of any material change to any existing network plan within 15 business days after the change occurs. The carrier shall include in the notice to the commissioner a reasonable timeframe within which it will submit to the commissioner for approval or file with the commissioner, as appropriate, an update to an existing access plan.(f) The access plan shall describe or contain at least the following:(1) The health carriers network, including how the use of telemedicine or telehealth or other technology may be used to meet network access standards, if applicable;(2) The health carriers procedures for making and authorizing referrals within and outside its network, if applicable; (3) The health carriers process for monitoring and assuring on an ongoing basis the sufficiency of the network to meet the health care needs of populations that enroll in network plans;(4) The factors used by the health carrier to build its provider network, including a description of the network and the criteria used to select providers;(5) The health carriers efforts to address the needs of covered persons, including, but not limited to, children and adults, including those with limited English proficiency or illiteracy, diverse cultural or ethnic backgrounds, physical or mental disabilities, and serious, chronic, or complex medical conditions. This includes the carriers efforts, when appropriate, to include various types of ECPs in its network;(6) The health carriers methods for assessing the health care needs of covered persons and their satisfaction with services;(7) The health carriers method of informing covered persons of the plans covered services and features, including, but not limited to:(A) The plans grievance and appeals procedures;(B) Its process for choosing and changing providers;(C) Its process for updating its provider directories for each of its network plans; (D) A statement of health care services offered, including those services offered through the preventive care benefit, if applicable; and (E) Its procedures for covering and approving emergency, urgent, and specialty care, if applicable; (8) The health carriers system for ensuring the coordination and continuity of care: (A) For covered persons referred to specialty physicians; and (B) For covered persons using ancillary services, including social services and other community resources, and for ensuring appropriate discharge planning; (9) The health carriers process for enabling covered persons to change primary care professionals, if applicable; (10) The health carriers proposed plan for providing continuity of care in the event of contract termination between the health carrier and any of its participating providers, or in the event of the health carriers insolvency or other inability to continue operations. The description shall explain how covered persons will be notified of the contract termination, or the health carriers insolvency or other cessation of operations, and transitioned to other providers in a timely manner; (11) The health carriers process for monitoring access to physician specialist services in emergency room care, anesthesiology, radiology, hospitalist care, and pathology/laboratory services at their participating hospitals; and (12) Any other information required by the commissioner to determine compliance with the provisions of this article. 
(a)(1)(A) A health carrier shall post electronically a current and accurate provider directory for each of its network plans with the information and search functions, as described in subsection (b) of this section. (B) In making the directory available electronically, the carrier shall ensure that the general public is able to view all of the current providers for a plan through a clearly identifiable link or tab and without creating or accessing an account or entering a policy or contract number. (2)(A) The health carrier shall update each network plan provider directory at least monthly. (B) The health carrier shall periodically audit at least a reasonable sample size of its provider directories for accuracy, and retain documentation of such an audit to be made available to the commissioner upon request. (3) A health carrier shall provide a print copy, or a print copy of the requested directory information of a current provider directory with the information described in subsection (b) of this section upon request of a covered person or a prospective covered person. (4) For each network plan, a health carrier shall include in plain language, in both the electronic and print directory, the following general information: (A) In plain language, a description of the criteria the carrier has used to build its provider network; (B) If applicable, in plain language, a description of the criteria the carrier has used to tier providers; (C) If applicable, in plain language, how the carrier designates the different provider tiers or levels in the network and identifies for each specific provider, hospital, or other type of facility in the network which tier each is placed, for example, by name, symbols, or grouping, in order for a covered person or a prospective covered person to be able to identify the provider tier; and (D) If applicable, note that authorization or referral may be required to access some providers. (5)(A) A health carrier shall make it clear for both its electronic and print directories what provider directory applies to which network plan, such as including the specific name of the network plan as marketed and issued in this state. (B) The health carrier shall include in both its electronic and print directories a customer service email address and telephone number or electronic link that covered persons or the general public may use to notify the health carrier of inaccurate provider directory information. (6) For the pieces of information required pursuant to subsections (b), (c), and (d) of this section in a provider directory pertaining to a health care professional, a hospital, or a facility other than a hospital, the health carrier shall make available through the directory the source of the information and any limitations, if applicable. (7) A provider directory, whether in electronic or print format, shall accommodate the communication needs of individuals with disabilities, and include a link to or information regarding available assistance for persons with limited English proficiency. (b) The health carrier shall make available through an electronic provider directory, for each network plan, the information under this subsection in a searchable format: (1) For health care professionals: (A) Name; (B) Gender; (C) Participating office location(s); (D) Specialty, if applicable; (E) Medical group affiliations, if applicable; (F) Facility affiliations, if applicable; (G) Participating facility affiliations, if applicable; (H) Languages spoken other than English, if applicable; and (I) Whether accepting new patients. (2) For hospitals: (A) Hospital name; (B) Hospital type (i. e., acute, rehabilitation, childrens, cancer); (C) Participating hospital location; (D) Hospital accreditation status; and (3) For facilities, other than hospitals, by type: (A) Facility name; (B) Facility type; (C) Types of services performed; and (D) Participating facility location(s). (c) For the electronic provider directories, for each network plan, a health carrier shall make available the following information in addition to all of the information available under subsection (b) of this section: (1) For health care professionals: (A) Contact information; (B) Board certification(s); and (C) Languages spoken other than English by clinical staff, if applicable. (2) For hospitals: Telephone number; and (3) For facilities other than hospitals: Telephone number. (d)(1) The health carrier shall make available in print, upon request, the following provider directory information for the applicable network plan: (A) For health care professionals: (i) Name; (ii) Contact information; (iii) Participating office location(s); (iv) Specialty, if applicable; (v) Languages spoken other than English, if applicable; and (vi) Whether accepting new patients. (B) For hospitals: (i) Hospital name; (ii) Hospital type, (i. e., acute, rehabilitation, childrens, cancer); and (iii) Participating hospital location and telephone number; and (C) For facilities, other than hospitals, by type: (i) Facility name; (ii) Facility type; (iii) Types of services performed; and (iv) Participating facility location(s) and telephone number. (2) The health carrier shall include a disclosure in the directory that the information in subdivision (1) of this subsection, included in the directory, is accurate as of the date of printing, and that covered persons or prospective covered persons should consult the carriers electronic provider directory on its website to obtain current provider directory information. 
A contract between a health carrier and an intermediary shall satisfy all the requirements contained in this section. (a) A health carriers statutory responsibility to monitor the offering of covered benefits to covered persons may not be delegated or assigned to the intermediary. (b) A health carrier has the right to approve or disapprove participation status of a subcontracted provider in its own or a contracted network for the purpose of delivering covered benefits to the carriers covered persons. (c) A health carrier shall maintain copies of all intermediary health care subcontracts at its principal place of business in the state, or ensure that it has access to all intermediary subcontracts, including the right to make copies to facilitate regulatory review, upon 20 days prior written notice from the health carrier. (d) If applicable, an intermediary shall transmit utilization documentation and claims-paid documentation to the health carrier. The carrier shall monitor the timeliness and appropriateness of payments made to providers and health care services received by covered persons. (e) If applicable, an intermediary shall maintain the books, records, financial information, and documentation of services provided to covered persons at its principal place of business in the state and preserve them for two years in a manner that facilitates regulatory review. (f) An intermediary shall allow the commissioner access to the intermediarys books, records, financial information, and any documentation of services provided to covered persons, as necessary to determine compliance with this article. (g) A health carrier has the right, in the event of the intermediarys insolvency, to require the assignment to the health carrier of the provisions of a providers contract addressing the providers obligation to furnish covered services. If a health carrier requires assignment, the health carrier remains obligated to pay the provider for furnishing covered services under the same terms and conditions as the intermediary prior to the insolvency. (h) Notwithstanding any other provision of this section, to the extent the health carrier delegates its responsibilities to the intermediary, the carrier shall retain full responsibility for the intermediarys compliance with the requirements of this article. 
(a) At the time a health carrier files its access plan, the health carrier shall file for approval with the commissioner sample contract forms proposed for use with its participating providers and intermediaries. (b) A health carrier shall submit material changes to a contract that would affect a provision required under this article or implementing regulations to the commissioner for approval at least 30 days prior to use. (c) The health carrier shall maintain provider and intermediary contracts at its principal place of business in the state, or the health carrier shall have access to all contracts and provide copies to facilitate regulatory review upon 20 days prior written notice from the commissioner. 
(a) The execution of a contract by a health carrier does not relieve the health carrier of its liability to any person with whom it has contracted for the provision of services, nor of its responsibility for compliance with the law or applicable regulations. (b) All contracts shall be in writing and subject to review. (c) All contracts shall comply with applicable requirements of the law and applicable regulations. 
(a) If the commissioner determines that a health carrier has not contracted with a sufficient number of participating providers to assure that covered persons have accessible health care services in a geographic area, or that a health carriers network access plan does not assure reasonable access to covered benefits, or that a health carrier has entered into a contract that does not comply with this article, or that a health carrier has not complied with a provision of this article, the commissioner shall require a modification to the access plan or institute a corrective action plan, as appropriate, that shall be followed by the health carrier, or may use any of the commissioners other enforcement powers to obtain the health carriers compliance with this article. (b) The commissioner will not act to arbitrate, mediate, or settle disputes regarding a decision not to include a provider in a network plan or in a provider network or regarding any other dispute between a health carrier, its intermediaries, or one or more providers arising under or by reason of a provider contract or its termination. 
The commissioner shall propose a rule for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code to implement the provisions of this article.
(a) For health plans, policies, contracts, or agreements issued, amended, adjusted, or renewed on or after January 1, 2021:(1) Benefits may not be denied for any health care service performed by a pharmacist licensed under 30-5-1 et seq. of this code if:(A) The service performed was within the lawful scope of the pharmacists license;(B) The plan would have provided benefits if the service had been performed by another health care provider; and(C) The pharmacist is included in the plans network of participating providers.(2) The health plan shall include an adequate number of pharmacists in its network of participating health care providers.(b) The participation of pharmacies in the plan networks drug benefit does not satisfy the requirement that plans include pharmacists in their network of participating health care providers.(c) Health benefit plans, policies, contracts, or agreements issued, amended, adjusted, or renewed on or after January 1, 2020, but before January 1, 2021, that delegate credentialing agreements to contracted health care facilities shall accept credentialing for pharmacists employed or contracted by those facilities. Health plans shall reimburse facilities for covered services provided by network pharmacists within the pharmacists scope of practice per negotiations with the facility.(d) For purposes of this section, health plans, policies, contracts, or agreements do not include Medicaid or Children's Health Insurance Program health plans, policies, contracts, or agreements that are approved by the Department of Health and Human Resources Bureau of Medical Services.
(a) The following terms are defined:(1) Distant site means the telehealth site where the health care practitioner is seeing the patient at a distance or consulting with a patients health care practitioner.(2) Established patient means a patient who has received professional services, face-to-face, from the physician, qualified health care professional, or another physician or qualified health care professional of the exact same specialty and subspecialty who belongs to the same group practice, within the past three years.(3) Health care practitioner means a person licensed under 30-1-1 et seq. of this code who provides health care services.(4) Originating site means the location where the patient is located, whether or not accompanied by a health care practitioner, at the time services are provided by a health care practitioner through telehealth, including, but not limited to, a health care practitioners office, hospital, critical access hospital, rural health clinic, federally qualified health center, a patients home, and other nonmedical environments such as school-based health centers, university-based health centers, or the work location of a patient.(5) Remote patient monitoring services means the delivery of home health services using telecommunications technology to enhance the delivery of home health care, including monitoring of clinical patient data such as weight, blood pressure, pulse, pulse oximetry, blood glucose, and other condition-specific data; medication adherence monitoring; and interactive video conferencing with or without digital image upload.(6) Telehealth services means the use of synchronous or asynchronous telecommunications technology or audio only telephone calls by a health care practitioner to provide health care services, including, but not limited to, assessment, diagnosis, consultation, treatment, and monitoring of a patient; transfer of medical data; patient and professional health-related education; public health services; and health administration. The term does not include e-mail messages or facsimile transmissions.(7) Virtual telehealth means a new patient or follow-up patient for acute care that does not require chronic management or scheduled medications.(b) Notwithstanding the provisions of 33-1-1 et seq. of this code, an insurer subject to 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 et seq. of this code which issues or renews a health insurance policy on or after July 1, 2020, shall provide coverage of health care services provided through telehealth services if those same services are covered through face-to-face consultation by the policy.(c) An insurer subject to 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 et seq. of this code which issues or renews a health insurance policy on or after July 1, 2020, may not exclude a service for coverage solely because the service is provided through telehealth services.(d) An insurer subject to 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 et seq. of this code which issues, renews, amends, or adjusts a plan, policy, contract, or agreement on or after July 1, 2021, shall provide reimbursement for a telehealth service at a rate negotiated between the provider and the insurance company for the virtual telehealth encounter. An insurer subject to 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 et seq. of this code which issues, renews, amends, or adjusts a plan, policy, contract, or agreement on or after July 1, 2021, shall provide reimbursement for a telehealth service for an established patient, or care rendered on a consulting basis to a patient located in an acute care facility whether inpatient or outpatient on the same basis and at the same rate under a contract, plan, agreement, or policy as if the service is provided through an in-person encounter rather than provided via telehealth.(e) An insurer subject to 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 et seq. of this code may not impose any annual or lifetime dollar maximum on coverage for telehealth services other than an annual or lifetime dollar maximum that applies in the aggregate to all items and services covered under the policy, or impose upon any person receiving benefits pursuant to the provisions of or the requirements of this section any copayment, coinsurance, or deductible amounts, or any policy year, calendar year, lifetime, or other durational benefit limitation or maximum for benefits or services, that is not equally imposed upon all terms and services covered under the policy, contract, or plan.(f) An originating site may charge an insurer subject to 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 et seq. of this code a site fee.(g) The coverage required by this section shall include the use of telehealth technologies as it pertains to medically necessary remote patient monitoring services to the full extent that those services are available.
(a) Notwithstanding a prohibition or limitation contained within the provisions of 33-1-1 et seq. and 5-16-1 of this code an insurer subject to 5-16-1 et seq., 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 of this code which amends, renews, or delivers a health policy on or after January 1, 2021, that provides coverage for contraceptive drugs, shall provide coverage for a 12-month refill of contraceptive drugs obtained at one time by the insured after the insured has completed the initial supply of the drugs, unless the insured requests a smaller supply or the prescribing provider instructs that the insured must receive a smaller supply. A health benefit plan that provides coverage shall allow the insured to receive the contraceptive drugs on-site at the providers office, if available, and dispensing practices must follow all clinical guidelines for appropriate prescribing and dispensing to ensure the health of the patient while maximizing access to effective contraceptive drugs.(b) A health benefit plan that provides coverage for hormonal contraceptives, in the absence of clinical contraindications, may not impose utilization controls or other forms of medical management limiting the supply of contraceptive drugs that may be dispensed or furnished by a provider or pharmacy, or at a location licensed or otherwise authorized to dispense drugs or supplies, to an amount that is less than a 12-month supply.(c) This section does not exclude coverage for contraceptive drugs as prescribed by a provider for reasons other than contraceptive purposes, such as decreasing the risk of ovarian cancer or eliminating symptoms of menopause, or for contraception that is necessary to preserve the life or health of an enrollee.(d) Nothing in this section requires a health benefit plan to cover contraceptive drugs provided by a provider, pharmacy, or at a location authorized to dispense drugs or supplies, that does not participate in the health benefit plans provider or pharmacy network, as appliable, except as may be otherwise authorized or required by state law or by the plans policies governing out-of-network coverage.(e) For purposes of this section, the term "contraceptive drugs" means all drugs approved by the United States Food and Drug Administration that are used to prevent pregnancy, including, but not limited to, hormonal drugs administered orally, transdermally, and intravaginally.
(a) Findings. (1) It is estimated that over 240,000 West Virginians are diagnosed and living with type 1 or type 2 diabetes and another 65,000 are undiagnosed;(2) Every West Virginian with type 1 diabetes and many with type 2 diabetes rely on daily doses of insulin to survive;(3) The annual medical cost related to diabetes in West Virginia is estimated at $2.5 billion annually;(4) Persons diagnosed with diabetes will incur medical costs approximately 2.3 times higher than persons without diabetes;(5) The cost of insulin has increased astronomically, especially the cost of insurance copayments, which can exceed $600 per month. Similar increases in the cost of diabetic equipment and supplies, and insurance premiums have resulted in out-of-pocket costs for many West Virginia diabetics in excess of $1,000 per month;(6) National reports indicate as many as one in four type 1 diabetics underuse, or ration, insulin due to these increased costs. Rationing insulin has resulted in nerve damage, diabetic comas, amputation, kidney damage, and even death; and(7) It is important to enact policies to reduce the costs for West Virginians with diabetes to obtain life-saving and life-sustaining insulin.(b) As used in this section:(1) "Cost-sharing payment" means the total amount a covered person is required to pay at the point of sale in order to receive a prescription drug that is covered under the covered persons health plan.(2) "Covered person" means a policyholder, subscriber, participant, or other individual covered by a health plan.(3) "Health plan" means any health benefit plan, as defined in 33-16-1a(h) of this code, that provides coverage for a prescription insulin drug.(4) "Pharmacy benefits manager" means an entity that engages in the administration or management of prescription drug benefits provided by an insurer for the benefit of its covered persons.(5) "Prescription insulin drug" means a prescription drug that contains insulin and is used to treat diabetes. (c) Each health plan shall cover at least one type of insulin in all the following categories:(1) Rapid-acting;(2) Short-acting;(3) Intermediate-acting;(4) Long-acting;(5) Pre-mixed insulin products;(6) Pre-mixed insulin/GLP-1 RA products; and(7) Concentrated human regular insulin.(d) Notwithstanding the provisions of 33-1-1 et seq. of this code, an insurer subject to 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 et seq. of this code which issues or renews a health insurance policy on or after July 1, 2020, shall provide coverage for prescription insulin drugs pursuant to this section. (e) Cost sharing for a 30-day supply of a covered prescription insulin drug shall not exceed $100 for a 30-day supply of a covered prescription insulin, regardless of the quantity or type of prescription insulin used to fill the covered persons prescription needs.(f) Nothing in this section prevents an insurer from reducing a covered persons cost sharing to an amount less than the amount specified in subsection (e) of this section.(g) No contract between an insurer subject to 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 of this code or its pharmacy benefits manager and a pharmacy or its contracting agent shall contain a provision: (i) Authorizing the insurers pharmacy benefits manager or the pharmacy to charge; (ii) requiring the pharmacy to collect; or (iii) requiring a covered person to make a cost-sharing payment for a covered prescription insulin drug in an amount that exceeds the amount of the cost-sharing payment for the covered prescription insulin drug established by the insurer pursuant to subsection (e) of this code. (h) An insurer subject to 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 of this code shall provide coverage for the following equipment and supplies for the treatment and/or management of diabetes for both insulin-dependent and noninsulin-dependent persons with diabetes and those with gestational diabetes: Blood glucose monitors, monitor supplies, insulin, injection aids, syringes, insulin infusion devices, pharmacological agents for controlling blood sugar, and orthotics. (i) An insurer subject to 33-15-1 et seq., 33-16-1 et seq., 33-24-1 et seq., 33-25-1 et seq., and 33-25A-1 of this code shall include coverage for diabetes self-management education to ensure that persons with diabetes are educated as to the proper self-management and treatment of their diabetes, including information on proper diets.(j) All health care plans must offer an appeals process for persons who are not able to take one or more of the offered prescription insulin drugs noted in subsection (c) of this code. The appeals process shall be provided to covered persons in writing and afford covered persons and their health care providers a meaningful opportunity to participate with covered persons health care providers.(k) Diabetes self-management education shall be provided by a health care practitioner who has been appropriately trained. The Secretary of the Department of Health and Human Resources shall promulgate legislative rules to implement training requirements and procedures necessary to fulfill provisions of this subsection: Provided, That any rules promulgated by the secretary shall be done after consultation with the Coalition for Diabetes Management, as established in 16-5Z-1 et seq. of this code. (l) A pharmacy benefits manager, a health plan, or any other third party that reimburses a pharmacy for drugs or services shall not reimburse a pharmacy at a lower rate and shall not assess any fee, charge-back, or adjustment upon a pharmacy on the basis that a covered persons costs sharing is being impacted.
This article shall not apply to reinsurance.
(a) Insurance contracts shall contain such standard provisions as are required by the applicable provisions of this chapter pertaining to contracts of particular kinds of insurance. The commissioner may waive the required use of a particular standard provision in a particular insurance policy form, if he finds such provision unnecessary for the protection of the insured and inconsistent with the purposes of the policy, and the policy is otherwise approved by him (b) No policy shall contain any provision inconsistent with or contradictory to any standard provision used or required to be used, but the commissioner may approve any substitute provision which is, in his opinion, not less favorable in any particular to the insured or beneficiary than the standard provisions or optional standard provisions, otherwise required. This section shall not apply to the standard fire insurance policy.(c) On or after October 1, 1996, the insurer shall provide to all prospective purchasers of individual life insurance policies with a face value of $25,000 or less a notice upon a form prescribed by the commissioner to such prospective policyholder that the total premiums paid by the purchaser at some point in the future may exceed the death benefit. For purposes of calculating whether or at what point premiums paid by the policyholder will exceed the death benefit, the insurer shall use the annual premium for the life insurance death benefit. All other costs, including, but not limited to, costs for benefits provided pursuant to a policy rider, and costs associated with the exercise of any option permitted by the policy, shall be excluded from the calculation. This notice shall be provided at the time of delivery of the policy. This subsection does not apply to mass market life insurance products as defined in section thirty-five of this article, to life insurance policies used exclusively to fund preneed burial contracts under article fourteen, chapter forty-seven of this code or to life insurance policies for which the total premiums paid by the purchaser will not at any time exceed the death benefit.
Every policy, except surety and group policies, shall specify the names of the parties to the contract, the insurer's name, the subject of the insurance, the risks insured against, the time the insurance coverage becomes effective and the term during which such coverage continues, the premium (or if the exact amount of premium is determinable only at stated intervals or termination, a statement of the basis and rates upon which the premium is to be determined), and the conditions pertaining to the insurance.
Medicare supplement or limited benefit Medicare supplement policies, certificates or contracts (as such terms are defined by regulations issued by the commissioner) issued to persons eligible for Medicare by reason of age, other than those issued pursuant to direct response solicitation, shall have a notice prominently printed on the first page of the policy, certificate or contract, attached thereto stating in substance that the insured person shall have the right to return the policy, and to have the premium refunded if, after examination of the policy, certificate or contract, the insured person is not satisfied for any reason. Policies, certificates or contracts issued pursuant to a direct response solicitation to persons eligible for Medicare by reason of age shall have a notice prominently printed on the first page or attached thereto, stating in substance that the policyholder, certificate holder or contract holder shall have the right to return the policy, certificate or contract within thirty days of its delivery and to have the premium refunded if after examination the insured person is not satisfied for any reason.
All life or sickness and accident insurance policies, certificates or contracts issued to persons in this state shall have a notice prominently printed on the first page of the policy, certificate or contract stating in substance that the insured person or person obtaining the policy shall have the right to return the policy, certificate or contract within ten days of its receipt and to have the premium refunded if, after examination of the policy, certificate or contract, the person obtaining the insurance is not satisfied for any reason: Provided, That this section does not apply to group annuity policies, contracts or certificates issued in connection with a pension or profit-sharing plan qualified or exempt under sections 401, 403, 408, 457 or 501 of the Internal Revenue Code.
A policy may contain additional provisions not inconsistent with this chapter and which are:(a) Required to be inserted by the laws of the insurer's domicile;(b) Necessary, because of the manner in which the insurer is constituted or operated, in order to state the rights and obligations of the parties; or(c) Desired by the insurer and not prohibited by law nor in conflict with any provisions required to be included therein and which are considered reasonable and just.
No policy shall contain any provision purporting to make any portion of the charter, bylaws or other constituent document of the insurer a part of the contract unless such portion is set forth in full in the policy. Any policy provision in violation of this section shall be invalid. This section shall not apply to the subscriber's agreement or power of attorney of a reciprocal insurer.
No policy delivered or issued for delivery in West Virginia and covering a subject of insurance resident, located, or to be performed in West Virginia, shall contain any condition, stipulation or agreement requiring such policy to be construed according to the laws of any other state or country, except as necessary to meet the requirements of the motor vehicle financial responsibility laws or compulsory disability benefit laws of such other state or country, or preventing the bringing of an action against any such insurer for more than six months after the cause of action accrues, or limiting the time within which an action may be brought to a period of less than two years from the time the cause of action accrues in connection with all insurances other than marine insurances; in marine policies such time shall not be limited to less than one year from the date of occurrence of the event resulting in the loss. Any such condition, stipulation or agreement shall be void, but such voidance shall not affect the validity of the other provisions of the policy. This section shall not apply to the standard fire insurance policy.
Any policy or contract of public liability insurance providing coverage for public liability sold, issued, or delivered in this state to any religious or charitable corporation or association, either directly or to the trustees of such associations, shall be read so as to contain a provision of endorsement whereby the company issuing such policy waives, or agrees not to assert as a defense, on behalf of the policyholder or any beneficiary thereof, to any claim covered by the terms of such policy within the policy limits, the immunity from liability of the insured by reason of such insured's charitable status, unless such provision or endorsement is rejected in writing by the named insured.
Every insurance policy shall be executed in the name of and on behalf of the insurer by its officer, attorney-in-fact, employee, or representative duly authorized by the insurer. A facsimile signature of any such executing individual may be used in lieu of an original signature, except that in all policies other than those approved for machine vending the countersignature shall be in original handwriting. No insurance contract heretofore or hereafter issued and which is otherwise valid shall be rendered invalid by reason of the apparent execution thereof on behalf of the insurer by the imprinted facsimile signature of an individual not authorized so to execute as of the date of the policy.
Each policy issued following enactment of this provision during the two thousand five regular session, during the year following the effective date, shall display in a prominent location on the policy itself or on an insert included with each policy and provided to each policyholder, statements as following:(1) "YOUR COSTS FOR THIS POLICY (HAVE/HAVE NOT) BEEN REDUCED BY (insert savings amount here) BECAUSE OF CIVIL JUSTICE REFORMS ENACTED BY THE WEST VIRGINIA LEGISLATURE IN 2005 AND SIGNED INTO LAW BY THE GOVERNOR"; and(2) "YOUR COST FOR THIS POLICY HAS BEEN REDUCED BY (insert savings amount here) BECAUSE OF PREMIUM SURCHARGE REDUCTIONS ENACTED BY THE WEST VIRGINIA LEGISLATURE IN 2005 AND SIGNED INTO LAW BY THE GOVERNOR". If the insurer did not offer the type of insurance provided by the policy in two thousand four, the requirement for these statements do not apply.This section was amended twice.This version passed subsequent to the additional enactment.33-6-15a. Notation of consumer cost savings.Each policy issued following enactment of this provision during the two thousand five regular session, during the year following the effective date, shall display in a prominent location on the policy itself or on an insert included with each policy and provided to each policyholder, statements as following:(1) "YOUR COSTS FOR THIS POLICY (HAVE/HAVE NOT) BEEN REDUCED BY (insert savings amount here) BECAUSE OF INSURANCE LAW REFORMS ENACTED BY THE WEST VIRGINIA LEGISLATURE IN 2005 AND SIGNED INTO LAW BY THE GOVERNOR".If the insurer did not offer the type of insurance provided by the policy in two thousand four, the requirement for these statements do not apply.
(a) Two or more licensed insurers may jointly issue, and shall be jointly and severally liable on, an underwriters' policy bearing their names. Any one insurer may issue policies in the name of an underwriter's department and such policy shall plainly show the true name of the insurer.(b) Two or more insurers may, with the approval of the commissioner, issue a combination policy which shall contain provisions substantially as follows:(1) That the insurers executing the policy shall be severally liable for the full amount of any loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof, aggregating the full amount of insurance under the policy, and(2) That service of process, or of any notice or proof of loss required by such policy, upon any of the insurers executing the policy, shall constitute service upon all such insurers.(c) This section shall not apply to cosurety obligations.
Any insurance policy, rider, or endorsement hereafter issued and otherwise valid which contains any condition or provision not in compliance with the requirements of this chapter, shall not be thereby rendered invalid but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy, rider, or endorsement been in full compliance with this chapter.
(a) Binders or other contracts for temporary insurance may be made orally or in writing, and shall be deemed to include all the usual terms of the policy as to which the binder was given together with such applicable endorsements as are designated in the binder, except as superseded by the clear and express terms of the binder.(b) No binder shall be valid beyond the issuance of the policy with respect to which it was given, and no agent or insurer shall issue a binder covering a period in excess of ninety days from its effective date.(c) If the policy has not been issued a binder may be extended or renewed beyond such ninety days with the written approval of the commissioner, or in accordance with such rules and regulations relative thereto as the commissioner may promulgate.(d) This section shall not apply to conditional receipts issued by life and accident and sickness insurers, nor to policies of group insurance.
Any insurance policy terminating by its terms at a specified expiration date and not otherwise renewable, may be renewed or extended at the option of the insurer and upon a currently authorized policy form and at the premium rate then required therefor for a specific additional period or periods by certificate or by endorsement of the policy, and without requiring the issuance of a new policy when such certificate and its use for such purpose have been approved by the commissioner.
(a) Any individual of competent legal capacity may procure or effect an insurance contract upon his own life or body for the benefit of any person. But no person shall procure or cause to be procured any insurance contract upon the life or body of another individual unless the benefits under such contract are payable to the individual insured or his personal representative or to a person having, at the time when such contract was made, an insurable interest in the individual insured.(b) If the beneficiary, assignee, or other payee under any contract made in violation of this section receives from the insurer any benefits thereunder accruing upon the death, disablement, or injury of the individual insured, the individual insured or his executor or administrator, as the case may be, may maintain an action to recover such benefits from the person so receiving them.(c) "Insurable interest" with reference to personal insurance includes only interests as follows:(1) In the case of individuals related closely by blood or by law, a substantial interest engendered by love and affection.(2) In the case of other persons, a lawful and substantial economic interest in having the life, health, or bodily safety of the individual insured continue, as distinguished from an interest which would arise only by, or would be enhanced in value by, the death, disablement or injury of the individual insured.(3) An individual heretofore or hereafter party to a contract or option for the purchase or sale of an interest in a business partnership or firm, or of shares of stock of a closed corporation or of an interest in such shares, has an insurable interest in the life of each individual party to such contract and for the purposes of such contract only, in addition to any insurable interest which may otherwise exist as to the life of such individual.(4) A charitable institution as defined under Sections 501(c)(3), 501(c)(6), 501(c)(8) and 501(c)(9) of the Internal Revenue Code of 1986, as amended.
Whenever the insured in a policy owned by him has reserved to himself the right to change the beneficiary thereunder, the insured shall have the right to and may assign said policy to the extent permitted by the terms thereof as collateral security for a loan or loans, or for any other purpose without any beneficiary thereunder joining therein or assenting thereto, and such assignment shall subordinate the rights and interests of any beneficiary in the proceeds of the policy to the rights and interests of the assignee as created and defined by such assignment.
No insurance policy insuring against loss or damage through legal liability for the bodily injury or death by accident of any individual, or for damage to the property of any person, shall be retroactively annulled by any agreement between the insurer and the insured after the occurrence of any such injury, death, or damage for which the insured may be liable, and any such attempted annulment shall be void.
Whenever the proceeds of or payments under a life or accident and sickness policy or annuity contract heretofore or hereafter issued become payable in accordance with the terms of such policy or contract, or the exercise of any right or privilege thereunder, and the insurer makes payment thereof in accordance with the terms of the policy or contract or in accordance with any written assignment thereof, the person then designated in the policy or contract or by such assignment as being entitled thereto shall be entitled to receive such proceeds or payments and to give full release therefor, and such payments shall fully discharge the insurer from all claims under the policy or contract unless, before payment is made, the insurer has received at its home office written notice by or on behalf of some other person that such other person claims to be entitled to such payment or some interest in the policy or contract.
Where the individual insured or the annuitant and the beneficiary designated in a life policy or policy insuring against accidental death or in an annuity contract have died and there is not sufficient evidence that they have died otherwise than simultaneously, the proceeds of the policy or contract shall be distributed as if the insured or annuitant had survived the beneficiary, unless otherwise specifically provided in the policy or contract.
An insurer shall furnish, upon written request of any person claiming to have a loss under an insurance contract issued by such insurer, forms of proof of loss for completion by such person.
Without limitation of any right or defense of an insurer otherwise, none of the following acts by or on behalf of an insurer shall be deemed to constitute a waiver of any provision of a policy or of any defense of the insurer thereunder:(a) Acknowledgment of the receipt of notice of loss or claim under the policy.(b) Furnishing forms for reporting a loss or claim, for giving information relative thereto, or for making proof of loss, or receiving or acknowledging receipt of any such forms or proofs completed or uncompleted.(c) Investigating any loss or claim under any policy or engaging in negotiations looking toward a possible settlement of any such loss or claim.
(a) If a policy of insurance, whether heretofore or hereafter issued, is effected by any person on his own life or on another life, in favor of a person other than himself or, except in cases of transfer with intent to defraud creditors, if a policy of life insurance is assigned or in any way made payable to any such person, the lawful beneficiary or assignee thereof, other than the insured or the person so effecting such insurance or executors or administrators of such insured or the person so effecting such insurance, shall be entitled to its proceeds and avails against the creditors and representatives of the insured and of the person effecting the same, whether or not the right to change the beneficiary is reserved or permitted, and whether or not the policy is made payable to the person whose life is insured if the beneficiary or assignee shall predecease such person.(b) Subject to the statute of limitations, the amount of any premiums for such insurance paid in fraud of creditors, with interest thereon, shall inure to their benefit from the proceeds of the policy, but the insurer issuing the policy shall be discharged of all liability thereon by payment of the proceeds in accordance with its terms, unless before such payment the insurer received written notice by or in behalf of some creditor, with specification of the amount claimed, claiming to recover for certain premiums paid in fraud of creditors.(c) For the purposes of paragraph (a), above, a policy shall also be deemed to be payable to a person other than the insured if and to the extent that a facility-of-payment clause or similar clause in the policy permits the insurer to discharge its obligations after the death of the individual insured by paying the death benefits to a person as permitted by such clause.
(a) A policy of group life insurance or the proceeds thereof payable to the individual insured or to the beneficiary thereunder, shall not be liable, either before or after payment, to be applied by any legal or equitable process to pay any liability of any person having a right under the policy.(b) This section shall not apply to group life insurance issued to a creditor covering his debtors, to the extent that such proceeds are applied to payment of the obligation for the purpose for which the insurance was so issued.
(a) An insurer may not issue any policy of bodily injury or property damage liability insurance which excludes coverage to the owner or operator of a motor vehicle on account of bodily injury or property damage to any guest or invitee who is a passenger in such motor vehicle.(b) Every policy or contract of liability insurance which insures a motor vehicle licensed in this state with collision, comprehensive, property or bodily injury coverage shall extend these coverages to cover the insured individual while operating a motor vehicle which he or she is permitted to use by a person, firm or corporation that owns the vehicle and is engaged in the business of selling, repairing, leasing or servicing motor vehicles. Coverage under any motor vehicle insurance policy available to such insured individual shall be primary, and any collision, comprehensive, property or bodily injury insurance coverage owned or obtained by a person, firm or corporation that owns the motor vehicle and is engaged in the business of selling, repairing, leasing or servicing motor vehicles shall be secondary. Recovery under the motor vehicle owner's insurance policy shall not be permitted until the insured individual has exhausted the limits of all other insurance policies available to him or her: Provided, That the following conditions are met: (1) No separate consideration is paid by or on behalf of the insured individual at the time of his or her use of the vehicle; and (2) the insured individual is operating the vehicle with the business owner's permission as a replacement vehicle provided to the insured individual while his or her vehicle is out of use because it is being repaired or serviced by the business owner or another person with the permission of the business owner.(c) Notwithstanding any provision of this section to the contrary, any insurance coverage available to the insured individual as described in subsection (b) of this section shall be secondary to any motor vehicle liability insurance owned or obtained by the person, firm or corporation engaged in the business of selling, repairing, leasing or servicing motor vehicles, if the insured individual is an employee of the business owner and is operating the motor vehicle with the permission of the business owner while acting within the scope of his or her employment or the insured individual is testing the vehicle for possible purchase or for a lease with more than a thirty-day term.(d) Notwithstanding any provision of this code to the contrary, security maintained as required by section three, article two-a and section two, article four, chapter seventeen-d of this code on any motor vehicle owned by any person, firm or corporation engaged in the business of renting or leasing the motor vehicle is secondary to coverage under any motor vehicle liability insurance or other form of security meeting or exceeding the requirements in chapter seventeen-d of this code that is available and in effect for an individual with respect to the renting, leasing, operation, maintenance, or use of the motor vehicle: Provided, That any liability insurance purchased for additional consideration from the rental or leasing company shall be primary to other available insurance.
(a) No insurance contract on property or of any interest therein or arising therefrom shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured.(b) "Insurable interest" as used in this section means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.(c) The measure of an insurable interest in property is the extent to which the insured might be damnified by loss, injury, or impairment thereof.
(a) Every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended or modified by any rider, endorsement or application attached to and made a part of the policy: Provided, That the word "physician" when used in any accident and sickness policy or other contract providing for the payment of surgical procedures shall be construed to include a physician, dentist or chiropodist-podiatrist performing surgical procedures or chiropractor performing other health care services within the scope of his or her professional license: Provided, however, That any policy of insurance or medical or health service contract providing for payment or reimbursement for any professional services pertaining to eye examination, refractions or the fitting of corrective lenses shall be construed to include payment or reimbursement for professional services rendered by either a duly licensed physician or a duly licensed optometrist, within the scope of their respective professional licenses, and that the insured or subscriber have freedom of choice to select either a physician or an optometrist to render or perform professional services.(b) The Legislature finds:(1) That consumers and insurers both benefit from the legislative mandate that the Insurance Commissioner approve the forms used and the rates charged by insurance companies in this state;(2) That certain classes of persons are seeking refunds of insurance premiums and seeking to void exclusions and other policy provisions on the basis that insurance companies allegedly failed to provide or demonstrate a reduction in premiums charged in relation to certain terms or exclusions incorporated into policies of insurance;(3) That historically, as a prerequisite to a rate or form being approved, neither the Legislature nor the Insurance Commissioner has ever required that the insurer demonstrate that there was a specific premium reduction for certain exclusions incorporated into policies of insurance;(4) That the provisions of this chapter were enacted with the intent of requiring the filing of all rates and forms with the Insurance Commissioner to enable the Insurance Commissioner to review and regulate rates and forms in a fair and consistent manner;(5) That the provisions of this chapter do not provide and were not intended to provide the basis for monetary damages in the form of premium refunds or partial premium refunds when the form used and the rates charged by the insurance company have been approved by the Insurance Commissioner;(6) That actions seeking premium refunds or partial premium refunds have a severe and negative impact upon insurers operating in this state by imposing unexpected liabilities when insurers have relied upon the Insurance Commissioner's approval of the forms used and the rates charged insureds; and (7) That it is in the best interest of the citizens of this state to ensure a stable insurance market. (c) Nothing in this chapter may be construed as requiring specific line item premium discounts or rate adjustments corresponding to any exclusion, condition, definition, term or limitation in any policy of insurance, including policies incorporating statutorily mandated benefits or optional benefits which as a matter of law must be offered. Where any insurance policy form, including any endorsement thereto, has been approved by the commissioner, and the corresponding rate has been approved by the commissioner, there is a presumption that the policy forms and rate structure are in full compliance with the requirements of this chapter. It is the intent of the Legislature that the amendments in this section enacted during the regular session of two thousand two are: (1) A clarification of existing law as previously enacted by the Legislature, including, but not limited to, the provisions of subsection (k), section thirty-one of this article; and, (2) specifically intended to clarify the law and correct a misinterpretation and misapplication of the law that was expressed in the holding of the Supreme Court of Appeals of West Virginia in the case of Mitchell v. Broadnax, 537 S.E.2d 882 (W.Va. 2000). These amendments are a clarification of the existing law as previously enacted by this Legislature.
(a) No policy or contract of bodily injury liability insurance, or of property damage liability insurance, covering liability arising from the ownership, maintenance or use of any motor vehicle, may be issued or delivered in this state to the owner of such vehicle, or may be issued or delivered by any insurer licensed in this state upon any motor vehicle for which a certificate of title has been issued by the Division of Motor Vehicles of this state, unless it contains a provision insuring the named insured and any other person, except a bailee for hire and any persons specifically excluded by any restrictive endorsement attached to the policy, responsible for the use of or using the motor vehicle with the consent, expressed or implied, of the named insured or his or her spouse against liability for death or bodily injury sustained or loss or damage occasioned within the coverage of the policy or contract as a result of negligence in the operation or use of such vehicle by the named insured or by such person: Provided, That in any such automobile liability insurance policy or contract, or endorsement thereto, if coverage resulting from the use of a nonowned automobile is conditioned upon the consent of the owner of such motor vehicle, the word "owner" shall be construed to include the custodian of such nonowned motor vehicles. Notwithstanding any other provision of this code, if the owner of a policy receives a notice of cancellation pursuant to article six-a of this chapter and the reason for the cancellation is a violation of law by a person insured under the policy, said owner may by restrictive endorsement specifically exclude the person who violated the law and the restrictive endorsement shall be effective in regard to the total liability coverage provided under the policy, including coverage provided pursuant to the mandatory liability requirements of section two, article four, chapter seventeen-d of this code, but nothing in such restrictive endorsement may be construed to abrogate the "family purpose doctrine".(b) Nor may any such policy or contract be so issued or delivered unless it contains an endorsement or provisions undertaking to pay the insured all sums which he or she is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle, within limits which shall be no less than the requirements of section two, article four, chapter seventeen-d of this code, as amended from time to time: Provided, That such policy or contract shall provide an option to the insured with appropriately adjusted premiums to pay the insured all sums which he or she shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle up to an amount of $100,000 because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, in the amount of $300,000 because of bodily injury to or death of two or more persons in any one accident and in the amount of $50,000 because of injury to or destruction of property of others in any one accident: Provided, however, That such endorsement or provisions may exclude the first $300 of property damage resulting from the negligence of an uninsured motorist: Provided further, That such policy or contract shall provide an option to the insured with appropriately adjusted premiums to pay the insured all sums which he or she is legally entitled to recover as damages from the owner or operator of an uninsured or underinsured motor vehicle up to an amount not less than limits of bodily injury liability insurance and property damage liability insurance purchased by the insured without set off against the insured's policy or any other policy. Regardless of whether motor vehicle coverage is offered and provided to an insured through a multiple vehicle insurance policy or contract, or in separate single vehicle insurance policies or contracts, no insurer or insurance company providing a bargained for discount for multiple motor vehicles with respect to underinsured motor vehicle coverage may be treated differently from any other insurer or insurance company utilizing a single insurance policy or contract for multiple covered vehicles for purposes of determining the total amount of coverage available to an insured. "Underinsured motor vehicle" means a motor vehicle with respect to the ownership, operation or use of which there is liability insurance applicable at the time of the accident, but the limits of that insurance are either: (i) Less than limits the insured carried for underinsured motorists' coverage; or (ii) has been reduced by payments to others injured in the accident to limits less than limits the insured carried for underinsured motorists' coverage. No sums payable as a result of underinsured motorists' coverage may be reduced by payments made under the insured's policy or any other policy.(c) As used in this section, the term "bodily injury" includes death resulting therefrom and the term "named insured" means the person named as such in the declarations of the policy or contract and also includes such person's spouse if a resident of the same household and the term "insured" means the named insured and, while resident of the same household, the spouse of any such named insured and relatives of either, while in a motor vehicle or otherwise, and any person, except a bailee for hire, who uses, with the consent, expressed or implied, of the named insured, the motor vehicle to which the policy applies or the personal representative of any of the above; and the term "uninsured motor vehicle" means a motor vehicle as to which there is no: (i) Bodily injury liability insurance and property damage liability insurance both in the amounts specified by section two, article four, chapter seventeen-d of this code, as amended from time to time; (ii) there is such insurance, but the insurance company writing the same denies coverage thereunder; or (iii) there is no certificate of self-insurance issued in accordance with the provisions of said section. A motor vehicle shall be deemed to be uninsured if the owner or operator thereof be unknown: Provided, That recovery under the endorsement or provisions is subject to the conditions hereinafter set forth.(d) Any insured intending to rely on the coverage required by subsection (b) of this section shall, if any action be instituted against the owner or operator of an uninsured or underinsured motor vehicle, cause a copy of the summons and a copy of the complaint to be served upon the insurance company issuing the policy, in the manner prescribed by law, as though such insurance company were a named party defendant; such company shall thereafter have the right to file pleadings and to take other action allowable by law in the name of the owner, or operator, or both, of the uninsured or underinsured motor vehicle or in its own name.Nothing in this subsection prevents such owner or operator from employing counsel of his or her own choice and taking any action in his or her own interest in connection with such proceeding.(e) If the owner or operator of any motor vehicle which causes bodily injury or property damage to the insured is unknown, the insured, or someone in his or her behalf, in order for the insured to recover under the uninsured motorist endorsement or provision, shall:(1) Within twenty-four hours after the insured discover, and being physically able to report the occurrence of such accident, the insured, or someone in his or her behalf, reports the accident to a police, peace or to a judicial officer, unless the accident has already been investigated by a police officer;(2) Notify the insurance company, within sixty days after such accident, that the insured or his or her legal representative has a cause or causes of action arising out of such accident for damages against a person or persons whose identity is unknown and setting forth the facts in support thereof; and, upon written request of the insurance company communicated to the insured not later than five days after receipt of such statement, make available for inspection the motor vehicle which the insured was occupying at the time of the accident; and(3) Upon trial establish that the motor vehicle, which caused the bodily injury or property damage, whose operator is unknown, was a "hit and run" motor vehicle, meaning a motor vehicle which causes damage to the property of the insured arising out of physical contact of such motor vehicle therewith, or which causes bodily injury to the insured arising out of physical contact of such motor vehicle with the insured or with a motor vehicle which the insured was occupying at the time of the accident. If the owner or operator of any motor vehicle causing bodily injury or property damage be unknown, an action may be instituted against the unknown defendant as "John Doe", in the county in which the accident took place or in any other county in which such action would be proper under the provisions of article one, chapter fifty-six of this code; service of process may be made by delivery of a copy of the complaint and summons or other pleadings to the clerk of the court in which the action is brought, and service upon the insurance company issuing the policy shall be made as prescribed by law as though such insurance company were a party defendant. The insurance company has the right to file pleadings and take other action allowable by law in the name of John Doe.(f) An insurer paying a claim under the endorsement or provisions required by subsection (b) of this section issubrogated to the rights of the insured to whom such claim was paid against the person causing such injury, death or damage to the extent that payment was made. The bringing of an action against the unknown owner or operator as John Doe or the conclusion of such an action does not constitute a bar to the insured, if the identity of the owner or operator who caused the injury or damages complained of, becomes known, from bringing an action against the owner or operator theretofore proceeded against as John Doe. Any recovery against such owner or operator shall be paid to the insurance company to the extent that such insurance company has paid the insured in the action brought against such owner or operator as John Doe, except that such insurance company shall pay its proportionate part of any reasonable costs and expenses incurred in connection therewith, including reasonable attorney's fees. Nothing in an endorsement or provision made under this subsection, nor any other provision of law, operates to prevent the joining, in an action against John Doe, of the owner or operator of the motor vehicle causing injury as a party defendant, and such joinder is hereby specifically authorized.(g) No such endorsement or provisions may contain any provision requiring arbitration of any claim arising under any such endorsement or provision, nor may anything be required of the insured except the establishment of legal liability, nor may the insured be restricted or prevented in any manner from employing legal counsel or instituting legal proceedings.(h) The provisions of subsections (a) and (b) of this section do not apply to any policy of insurance to the extent that it covers the liability of an employer to his or her employees under any workers' compensation law.(i) The commissioner of insurance shall formulate and require the use of standard policy provisions for the insurance required by this section, but use of such standard policy provisions may be waived by the commissioner in the circumstances set forth in section ten of this article.(j) A motor vehicle is uninsured within the meaning of this section, if there has been a valid bodily injury or property damage liability policy issued upon such vehicle, but which policy is uncollectible, in whole or in part, by reason of the insurance company issuing such policy upon such vehicle being insolvent or having been placed in receivership. The right of subrogation granted insurers under the provisions of subsection (f) of this section does not apply as against any person or persons who is or becomes an uninsured motorist for the reasons set forth in this subsection.(k) Nothing contained herein prevents any insurer from also offering benefits and limits other than those prescribed herein, nor does this section prevent any insurer from incorporating in such terms, conditions and exclusions as may be consistent with the premium charged.(l) The Insurance Commissioner shall review on an annual basis the rate structure for uninsured and underinsured motorists' coverage as set forth in subsection (b) of this section and shall report to the Legislature on said rate structure on or before January 15, 1983, and on or before January 15, of each of the next two succeeding years.(m) For insurance policies in effect on December 31, 2015, including motor vehicle insurance policies and liability policies that are of an excess or umbrella type that cover automobile liability, insurers are not required to make a new offer of uninsured and underinsured motor vehicle coverage upon the renewal if the liability coverage is increased solely to meet the requirements of the increased minimum required financial responsibility limits set forth in subdivision (b), section two, article four, chapter seventeen-d of this code. Those insurers that have issued policies that carry limits of coverage below the minimum required financial responsibility limits in effect on December 31, 2015 shall increase such limits to an amount equal to or above the new minimum required financial responsibility limits when the policy is renewed but not later than December 31, 2016.
Rates charged by insurers for the minimum uninsured motorist coverage required under the provisions of section thirty-one, of this article, shall be separate from the rates charged by an insurer for the optional limits afforded the policyholder under said section.
No insurer, in determining rates to be charged for a policy or contract of bodily injury liability insurance or of property damage liability insurance, covering liability arising from the ownership, maintenance or use of a motor vehicle, may discriminate in any manner on the basis of an insured's or potential insured's physical handicap.
(a) For purposes of this section, the following definitions apply:(1) A "substandard risk" means an applicant for insurance who presents a greater exposure to loss than that contemplated by commonly used rate classifications, as evidenced by one or more of the following conditions:(A) A record of traffic accidents;(B) A record of traffic law violations;(C) Undesirable occupational circumstances; or(D) Any other valid underwriting consideration.(2) "Substandard risk rate" means a rate or premium charge that reflects the greater than normal exposure to loss which is assumed by an insurer writing insurance for a substandard risk.(b) Every application for a motor vehicle insurance policy to be issued in this state and written on the basis of a substandard risk rate schedule shall have printed on the application, in bold-faced type in a contrasting color or in reverse print, a statement reading substantially as follows: THE POLICY FOR WHICH YOU ARE APPLYING HAS BEEN RATED IN ACCORDANCE WITH A SPECIAL RATING SCHEDULE FILED WITH THE COMMISSIONER OF INSURANCE PROVIDING FOR HIGHER PREMIUM CHARGES THAN THOSE GENERALLY APPLICABLE FOR AVERAGE RISKS. IF THE COVERAGE OR PREMIUM IS NOT SATISFACTORY, YOU MAY BE ELIGIBLE FOR OTHER INSURANCE. IF THIS COVERAGE OR PREMIUM IS SATISFACTORY, YOU MAY BE ELIGIBLE FOR COVERAGE UNDER A STANDARD OR PREFERRED POLICY IF DURING THE NEXT THREE YEARS YOU HAVE NO TRAFFIC VIOLATIONS OR ACCIDENTS AND YOU MAINTAIN CONTINUOUS INSURANCE COVERAGE.(c) Every motor vehicle insurance policy issued in this state and written on the basis of a substandard risk rate schedule shall have printed on the policy, in bold-faced type in a contrasting color or in reverse print, a statement reading substantially as follows: THIS POLICY HAS BEEN RATED IN ACCORDANCE WITH A SPECIAL RATING SCHEDULE FILED WITH THE COMMISSIONER OF INSURANCE PROVIDING FOR HIGHER PREMIUM CHARGES THAN THOSE GENERALLY APPLICABLE FOR AVERAGE RISKS. IF THE COVERAGE OR PREMIUM IS NOT SATISFACTORY, YOU MAY BE ELIGIBLE FOR OTHER INSURANCE. IF THIS COVERAGE OR PREMIUM IS SATISFACTORY, YOU MAY BE ELIGIBLE FOR COVERAGE UNDER A STANDARD OR PREFERRED POLICY IF DURING THE NEXT THREE YEARS YOU HAVE NO TRAFFIC VIOLATIONS OR ACCIDENTS AND YOU MAINTAIN CONTINUOUS INSURANCE COVERAGE.(d) All insurers licensed or registered in this state to market or sell substandard risk motor vehicle insurance policies shall submit all applications and policies for substandard risk insurance to the commissioner of insurance for approval prior to being used by the insurer.(e) All insurers selling or which have in force substandard risk motor vehicle insurance policies shall provide a one-time notice in writing to the policyholders who have maintained continuous insurance coverage for three years, have not been convicted of any moving traffic violations and had no at fault accidents that they may be eligible for coverage under a standard or preferred policy. The commissioner may levy an administrative penalty not to exceed $1,000 for each incidence where an insurer fails to give notice in accordance with the provisions in this subsection.(f) The commissioner shall promulgate rules in accordance with the provisions of article three, chapter twenty-nine-a of this code regarding the format, style, design and approval of substandard risk insurance applications, notices and policies and any other procedures that are required by this section.(g) This section, as amended in the year 2002, shall take effect on July 1, 2002.
(a) Optional limits of uninsured motor vehicle coverage and underinsured motor vehicle coverage required by 33-6-31 of this code shall be made available to the named insured at the time of initial application for liability coverage and upon any request of the named insured on a form prepared and made available by the Insurance Commissioner. The contents of the form shall be prescribed by the commissioner and shall specifically inform the named insured of the coverage offered and the rate calculation for the coverage, including, but not limited to, levels and amounts of the coverage available and the number of vehicles which will be subject to the coverage. The commissioner shall provide for the use of electronic means of delivery and electronic signing when issuing the prescribed form. The form shall allow any named insured to waive any or all of the coverage offered.(b) Any insurer who issues a motor vehicle insurance policy in this state shall provide the form to each person who applies for the issuance of a policy by delivering the form to the applicant or by mailing the form to the applicant. Insurers may deliver the form by electronic means. Delivery by "electronic means" includes delivery of the form to an electronic mail address at which an applicant or policyholder has consented to receive notices or documents, by posting on an electronic network or site accessible via the Internet, electronic device, or mobile application, at or from which the applicant or policyholder has consented to receive delivery, or by any other delivery method that has been consented to by the applicant or policyholder. Any document delivered electronically satisfies any font, size, color, spacing, or other format requirements that are established for printed documents, provided that the format in the document delivered electronically has reasonably similar proportions or emphasis for the characters relative to the rest of the electronic document. The applicant shall complete, date, and sign the form and return the form to the insurer within 30 days after receipt of the form. Any signature executed in conformity with the Uniform Electronic Transactions Act in 39A-1-1 et seq. of this code is enforceable as provided by that act. An insurer or agent of the insurer is not liable for payment of any damages applicable under any optional uninsured or underinsured coverage authorized by 33-6-31 of this code for any incident which occurs from the date the form was mailed or delivered to the applicant until the insurer receives the form and accepts payment of the appropriate premium for the coverage requested in the form from the applicant: Provided, That if prior to the insurers receipt of the executed form the insurer issues a policy to the applicant which provides for optional uninsured or underinsured coverage, the insurer is liable for payment of claims against the optional coverage up to the limits provided in the policy. The contents of a form described in this section which has been signed by an applicant creates a presumption that the applicant and all named insureds received an effective offer of the optional coverages described in this section and that the applicant exercised a knowing and intelligent election or rejection of the offer as specified in the form. The election or rejection is binding on all persons insured under the policy. (c) Failure of the applicant or a named insured to return the form described in this section to the insurer as required by this section within the time periods specified in this section creates a presumption that the person received an effective offer of the optional coverages described in this section and that the person exercised a knowing and intelligent rejection of the offer. The rejection is binding on all persons insured under the policy. (d) The insurer shall make the forms available to any named insured who requests different coverage limits on or after the effective date of this section. An insurer is not required to make the form available or notify any person of the availability of the optional coverages authorized by this section except as required by this section. (e) Notwithstanding any of the provisions of this article to the contrary, including 33-6-31f of this code, for insurance policies in effect on December 31, 2015, insurers are not required to offer or obtain new uninsured or underinsured motorist coverage offer forms as described in this section on any insurance policy to comply with the amount of the minimum required financial responsibility limits set forth in 17D-4-2(b) of this code. All offer forms that were executed prior to January 1, 2016, shall remain in full force and effect.(f) If an insurer offers to place an insured with an affiliate of the insurer, the insurer shall make available a new uninsured and underinsured motorist coverage offer form, in the manner provided by and pursuant to subsections (a) and (b) of this section. A named insured shall complete, date, and sign the form as provided by subsection (b) of this section and return the form to the insurer within 30 days after receipt of the form. If an insured does not return the form within 30 days, then the last form previously signed by the insured for the insurer or any affiliate governs the amount of uninsured and underinsured motorist coverage provided by the newly issuing insurer and remains binding on all persons insured under the policy.
(a) When an automobile liability insurer indemnifying a tortfeasor offers to pay its full policy limits of coverage for bodily injury or death to a claimant in a claim involving a motor vehicle accident, conditioned upon an underinsured motorist coverage carrier waiving its rights of subrogation against the tortfeasor, then the claimant or the liability insurer indemnifying the tortfeasor may give to the underinsured motorist coverage carrier notice in writing that an offer to settle for policy limits has been made by the liability insurer indemnifying the tortfeasor.(b) The notice shall be in writing and sent by certified mail, return receipt requested, to the underinsured motorist coverage carrier, and it shall state plainly the following information:(1) The name and address of the underinsured motorist coverage claimant;(2) The name and address of the person in whose name the underinsured motorist coverage is written;(3) The policy number of the policy under which the underinsured motorist coverage is written;(4) The name of the tortfeasor;(5) The name of the insurance company and the policy number for the insurance policy indemnifying the tortfeasor under which an offer to settle for policy limits has been made;(6) A statement that the company indemnifying the tortfeasor has offered to settle with the claimant for policy limits, conditioned upon the waiver by the underinsured motorist coverage carrier of its subrogation rights against the tortfeasor; and(7) A statement that under the law the underinsured motorist coverage carrier has sixty days to preserve its subrogation rights against the tortfeasor by providing written notice of its intention to do so and by paying to the claimant an amount equal to the policy limits that have been offered to the claimant by the liability insurance company indemnifying the tortfeasor.(c) The underinsured motorist coverage carrier is considered to have fully waived its rights of subrogation against the tortfeasor, unless within sixty days from receipt of the notice described in subsection (b) above, the underinsured motorist coverage carrier sends in writing by certified mail, return receipt requested, to the claimant and to the liability insurer indemnifying the tortfeasor written notice that it does not waive its rights of subrogation against the tortfeasor. This notice is not effective unless the notice to the claimant is accompanied by payment to the claimant of an amount equal to the policy limits which had been offered by the liability insurance company indemnifying the tortfeasor. If the underinsured motorist carrier fails to send the notice provided for in this subsection or fails to pay the sum required by this subsection within the time specified, then the underinsured motorist coverage carrier is considered to have waived its subrogation rights against the tortfeasor, and the claimant may proceed to consummate the settlement about which notice had been provided, as set forth in subsections (a) and (b) of this section.(d) If the underinsured motorist carrier gives notice and tenders the payment, as required in subsection (c) of this section, then the underinsured motorist carrier is and remains subrogated to the rights of the claimant as to the tortfeasor to the extent of any and all sums paid by the underinsured motorist carrier to the claimant, as provided under current law. The payment by the underinsured motorist coverage carrier of the amount equal to the policy limits offered by the liability insurer indemnifying the tortfeasor, as provided for in this section, shall not serve in any way to waive, change or increase the amount of the applicable underinsured motorist coverage beyond the underlying underinsured motorist coverage policy limits.(e) The provisions of this section shall apply only to written notices sent to underinsured motorist coverage carriers on or after the effective date of this section.
(a) Notwithstanding any other provisions of this article, insurers issuing or providing liability policies that are of an excess or umbrella type and which are written to cover automobile liability shall offer uninsured and underinsured motor vehicle coverage on such policies in an amount not less than the amount of liability insurance purchased by the named insured: Provided, That the named insured may decline any or all of the coverage offered under the excess or umbrella type policy.(b) Offers of optional uninsured and underinsured motor vehicle coverage required by subsection (a) of this section shall be made to the named insured on a form prepared and made available by the Insurance Commissioner on or before the effective date of this section. The form shall allow any named insured to decline any or all of the coverage offered.(c) Offers of optional uninsured and underinsured motor vehicle coverage required by subsection (a) of this section shall be made to the named insured by delivering the form at the time of initial application for insurance policies described in subsection (a) of this section or by mailing the form to the named insured along with the initial premium notice. The named insured shall complete, date, sign, and return the form to the insurer within thirty days after receipt thereof. No insurer or agent thereof is liable for payment of any damages applicable under any optional uninsured or underinsured coverage described in this section which occurs from the date the form was mailed or delivered to the named insured until the insurer receives the form and accepts payment of the premium for the coverage requested therein from the named insured: Provided, That if prior to the insurer's receipt of the executed form, the insurer issues a policy described in this section to the named insured which provides for such optional uninsured or underinsured coverage, the insurer shall be liable for payment of claims against such optional coverage up to the limits provided in such policy. The contents of a form described in this section which has been signed by a named insured shall create a presumption that such named insured and all named insureds received an effective offer of the optional coverages described in this section and that such named insured exercised a knowing and intelligent election or rejection, as the case may be, of such offer specified in the form. Such election or rejection shall be binding on all persons insured under the policy.(d) Failure of the named insured to return the form described in this section to the insurer as required by this section within the time periods specified in this section creates a presumption that such person received an effective offer of the optional coverages described in this section and that such person exercised a knowing and intelligent rejection of such offer. Such rejection is binding on all persons insured under the policy.(e) The insurer shall make such forms available to any named insured who requests different coverage limits on or after the effective date of this section. No insurer is required to make forms described herein available or notify any person of the availability of such optional coverages authorized by this section except as required by this section.
(a) If the Division of Motor Vehicles establishes an electronic insurance verification program in accordance with the provisions of section six-a, article two-a, chapter seventeen-d of this code, any insurance company that issues or delivers in this state a policy or contract of bodily injury liability insurance or of property damage liability insurance covering liability arising from the ownership, maintenance or use of any motor vehicle, or upon any motor vehicle for which a certificate of title has been issued by the Division of Motor Vehicles of this state, shall comply with the requirements of the program.(b) The insurance commissioner may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code as necessary to implement the provisions of this section, and may initially promulgate emergency rules pursuant to the provisions of section fifteen, article three, chapter twenty-nine-a of this code. Such rules may prescribe penalties, including fines and other administrative sanctions, that may be imposed by the commissioner for a company's failure to comply with requirements of the electronic insurance verification program.
(a) For purposes of this section, the following definitions apply:(1) A "motor vehicle liability policy" means an "owner's policy" or an "operator's policy" of liability insurance certified as provided in section twelve, article four, chapter seventeen-d of this code.(2) "Excluded driver" means any driver specifically excluded from coverage under section thirty- one, article six, chapter thirty-three of this code.(3) "Minimum financial responsibility limits" means those limits defined in section two, article four, chapter seventeen-d of this code.(b) The Legislature finds that:(1) The explicit, plain language of a motor vehicle liability policy between an insurer and its insureds should control its effect;(2) Where insurers are required by the common law to provide minimum financial responsibility limits coverage for excluded drivers, consumers not excluded by restrictive endorsement are negatively impacted;(3) The decision of the Supreme Court of Appeals of West Virginia in Jones v. Motorists Mutual Insurance Company, 177 W. Va. 763 (1987) interpreted chapter seventeen-d of this code to require insurers to provide minimum financial responsibility limits of coverage to excluded drivers; and(4) It is not the intent of the legislature to require insurers to provide minimum financial responsibility limits of coverage to excluded drivers.(c) When any person is specifically excluded from coverage under the provisions of a motor vehicle liability policy by any restrictive endorsement to the policy, the insurer is not required to provide any coverage, including both the duty to indemnify and the duty to defend, for damages arising out of the operation, maintenance or use of any motor vehicle by the excluded driver, notwithstanding the provisions of chapter seventeen-d of this code.
All individual and group health insurance policies providing coverage on an expense incurred basis and individual and group service or indemnity type contracts issued by a nonprofit corporation which provide coverage for a family member of the insured or subscriber shall, as to such family members' coverage, also provide that the health insurance benefits applicable for children shall be payable with respect to a newly born child of the insured or subscriber from the moment of birth.The coverage for newly born children shall consist of coverage of injury or sickness including the necessary care and treatment of medically diagnosed congenital defects and birth abnormalities.If payment of a specific premium or subscription fee is required to provide coverage for a child, the policy or contract may require that notification of birth of a newly born child and payment of the required premium or fees must be furnished to the insurer or nonprofit service or indemnity corporation within thirty-one days after the date of birth in order to have the coverage continue beyond such thirty-one day period.The requirements of this section shall apply to all insurance policies and subscriber contracts now existing or hereafter delivered or issued for delivery in this state.
Insurance companies doing business in this state shall use the most recent version of an "official used car guide" approved by the Insurance Commissioner as a guide for setting the minimum value of any motor vehicle involved in a claim settlement arising from the total loss of a motor vehicle. In addition to any cash settlement value so agreed to by the claimant, there shall be added an amount equal to the consumers sales tax set forth in 11-15-3c (b) of this code.
(a) As used in this section, "filing" means any form filing made pursuant to 33-6-8 of this code or any rule or rate filing made pursuant to this chapter.(b) A fee of $100 shall be submitted with each filing for each insurer, irrespective of the number of forms, rules, or rates included within or affected by the filing. If a filing is made on behalf of more than one insurer, other than a filing made by a rating organization licensed by the commissioner, the applicable fee shall be $100 multiplied by the number of insurers on whose behalf the filing is made. Fees submitted pursuant to this section may not be refunded, and a resubmission of a filing previously disapproved by the commissioner shall be considered a new filing for the purposes of the filing fee. Any request by the commissioner for additional information pertaining to a form filing shall not be considered a new filing for purposes of the filing fee. All fees collected pursuant to this section shall be used for the operation of the offices of the Insurance Commissioner.
(a) No mass marketed life or health insurance including mass marketed life or health insurance under a group or blanket policy issued outside this state to residents of this state, shall be effected on persons in this state until the commissioner finds that the total charges for the insurance to the persons insured are reasonable in relation to the benefits provided.(1) "Direct response solicitation" means any offer by an insurer to persons in this state, either directly or through a third party, to effect life or health insurance coverage which enables the individual to apply or enroll for the insurance on the basis of the offer. It shall not include solicitations for insurance through an employee benefit plan which is defined in P.L. 90-406, 88 Stat. 829, nor shall it include such a solicitation through the individual's creditor with respect to credit life or credit health insurance.(2) "Mass marketed life or health insurance" for purposes of this article, means the insurance under any individual, franchise, group or blanket policy of life or health insurance which is offered by means of direct response solicitation through a sponsoring organization or through mails or other mass communications media and under which the person insured pays all or substantially all of the cost of his or her insurance. (b) Any insurer extending mass marketed life or health insurance under a group or blanket policy issued outside this state to residents of this state shall comply with respect to such insurance with the requirements of this state relating to advertising and to claim settlement practices.
(a) In the event of death, legal separation or termination of the marital relationship of the named insured, the named insured or spouse covered by a motor vehicle liability policy for a period of two or more years shall, upon request of the named insured or spouse within thirty days of the expiration of said policy, be issued his or her own individual motor vehicle liability insurance policy providing the same coverage as the original policy through the same insurer, without any lapse in coverage: Provided, That any such named insured or spouse may elect to increase or decrease the amount of coverage in his or her respective policies without affecting any privilege provided by this section. Any named insured or spouse requesting an individual policy pursuant to this section shall be entitled to the continuation of all rights and privileges afforded by section one-a and section four of article six-a of this chapter which were accrued under the original policy: Provided, however, That this section shall not apply to any motor vehicle liability insurance policy canceled, nonrenewed or terminated pursuant to the provisions of section one or section four, article six-a of this chapter.(b) Insurers shall notify all named insureds at policy issuance or the first renewal after the effective date of this section and upon any change or termination of the policy for reasons other than those provided in sections one and four of article six-a of this chapter of the right of the named insured or spouse to continue coverage as provided by this section.(c) The commissioner shall promulgate rules in accordance with the provisions of chapter twenty-nine-a of this code regarding the form of such notice and procedures required by this section.
Notwithstanding of any provision of this chapter to the contrary, an insurer may cancel or nonrenew a combination automobile and homeowners policy of insurance if either the automobile or homeowners insurance in such policy may be cancelled or nonrenewed pursuant to the cancellation or nonrenewal provisions of this chapter pertaining to such insurance: Provided, That the insurer shall offer, on a form approved by the commissioner, to issue a policy of insurance, effective as of the date of cancellation of the combination policy, to the insured for the insurance that was not cancelled or nonrenewed and shall issue such policy if the offer is accepted by the insured. For the purposes of cancellation, nonrenewal and termination of policies provided for in articles six-a and seventeen-a of this chapter, the inception date of a reissued policy is the inception date of the combination policy.
All individual and group health insurance policies providing coverage on an expense-incurred basis and individual and group service or indemnity type contracts issued by a nonprofit corporation shall provide coverage for long-term antibiotic therapy for a patient with Lyme disease when determined to be medically necessary and ordered by a licensed physician after making a thorough evaluation of the patients symptoms, diagnostic test results, or response to treatment. 
(a) For purposes of this section:"Covered services" means dental care services for which reimbursement is available/ under an enrollees plan contract, or for which reimbursement would be available but for the application of contractual limitations such as deductibles, copayments, coinsurance, waiting periods, annual or lifetime maximum, frequency limitations, alternative benefit payments, or any other limitation."Contractual discount" means a percentage reduction from the providers usual and customary rate for covered dental services and materials required under a participating provider agreement."Dental plan" includes any policy of insurance which is issued by a health care service contractor which provides for coverage of dental services not in connection with a medical plan."Materials" includes, but is not limited to, any material or device utilized within the scope of practice by a licensed dentist.(b) No contract of any health care service contractor that covers any dental services, and no contract or participating provider agreement with a dentist may require, directly or indirectly, that a dentist who is a participating provider, provide services to an enrolled participant at a fee set by, or a fee subject to the approval of, the health care services contractor unless the dental services are covered services.(c) A health care service contractor or other person providing third-party administrator services shall not make available any providers in its dental network to a plan that sets dental fees for any services except covered services.(d) A dentist may not charge more for services and materials that are noncovered services under a dental benefits policy than his or her usual and customary fee for those services and materials.(e) Reimbursement paid by a dental plan for covered services and materials shall be reasonable and may not provide nominal reimbursement in order to claim that services and materials are covered services.(f) This section applies to dental plans, contracts, and participating provider agreements which take effect or are renewed on or after July 1, 2019.
(a) Any person of competent legal capacity may contract for insurance.(b) A minor not less than fifteen years of age as at nearest birthday, may notwithstanding such minority, contract for life or accident and sickness insurance on his own life or body, for his own benefit or for the benefit of his father or mother, spouse, child, brother, sister or grandparents. Such a minor shall, notwithstanding such minority, be deemed competent to exercise all rights and powers with respect to or under any contract of life or accident and sickness on his own life or body, as though of full legal age, and may surrender his interest therein and give a valid discharge for any benefit accruing or money payable thereunder. The minor shall not, by reason of his minority, be entitled to rescind, avoid or repudiate the contract, nor to rescind, avoid or repudiate any exercise of a right or privilege thereunder, except that such minor, not otherwise emancipated, shall not be bound by any unperformed agreement to pay, by promissory note or otherwise, any premium on any such insurance contract.
With respect to any fire, marine, or casualty insurance contract, no person may deny, refuse to renew, cancel coverage, or charge increased premiums for applicants or insureds solely as a result of a uniformed service members performance of active military duty in the United States armed forces or as a member of a reserve component of the United States armed forces, to include the National Guard of a state or territory, because the uniformed service member fails to meet underwriting standards that require continuous coverage unless the failure to maintain continuous coverage existed prior to the applicants or insureds entry into active duty status and was not related in any way to the applicants or insureds military service. For the purposes of this section, service in the National Guard includes any full-time active duty for training in the National Guard, active duty operational support, active duty special work, state active duty as a member of a National Guard unit, or any other periods of service pursuant to Title 32 of the United States Code or active service of the state or territory. For purposes of determining premiums, an insurer shall consider such persons as having maintained continuous coverage.
No life or accident and sickness insurance contract upon an individual, except a contract of group life insurance or of group accident and sickness insurance, shall be made unless at the time of the making of the contract the individual insured, being of competent legal capacity to contract, applies therefor or consents thereto, except in the following cases:(a) A spouse may procure such insurance upon the other spouse.(b) Any person having an insurable interest in the life of a minor, or any person upon whom a minor is dependent for support and maintenance, may procure insurance upon the life of or pertaining to such minor.
(a) All applications for life or accident and sickness insurance, as defined in section ten, article one of this chapter, to be issued in this state shall:(1) If application is made by the proposed insured, include the signature of both the proposed insured and the agent;(2) If application is made by the proposed insured, be completed by a licensed and appointed agent in the presence of the proposed insured;(3) If application is made by a spouse upon the other spouse, include the signature of the spouse procuring the insurance and the agent; or(4) If application is made by any person having an insurable interest in the life of a minor, or any person upon whom a minor is dependent for support and maintenance, include the signature of the person procuring the insurance and the agent.(b) Upon the hand delivery of a policy of life or accident and sickness insurance, a delivery receipt shall be signed and dated by the insured and returned to the insurer for filing.If the delivery of a policy of life or accident and sickness insurance is by mail, it shall either: (1) Be sent by certified mail from the insurer, return receipt requested, and the date of receipt noted on the receipt is the date of receipt for the purposes of section eleven-b of this article; or (2) the insurer shall prepare a certificate of mailing. For the purposes of this section, a certificate of mailing means a record prepared and retained in accordance with general business practices indicating the date that the policy was mailed to the insured and it is presumed that the policy was received by the insured twenty days from the date of mailing.(c) Any amendments to the application after it is originally signed by the proposed insured shall be expressly disclosed in writing to the proposed insured and his or her signature is obtained to verify agreement with the changes: Provided, That the failure of the insurer to notify the insured of any change, or the failure of the insured to execute the signature, does not invalidate the existence of insurance coverage.(d) The following shall be exempt from the requirements of subdivisions (1), (2), (3) and (4), subsection (a) of this section:(1) Group life or group accident and sickness insurance applications if the insurer accepts all prospective principal insureds with no underwriting restrictions on the individual proposed insureds;(2) Group life or group accident and sickness insurance applications if there is underwriting as to the individual proposed insureds and the applications are completed without a licensed and appointed agent present, but the insurer verifies the information on the application by telephone with the proposed insured;(3) Applications for life or accident and sickness insurance if the insurance is solely mass marketed and the only contact with the insured is by mail, mass media or telephone; and(4) Applications for life or accident and sickness insurance if the insurer is an underwriter for supplemental retirement plans and additional retirement plans provided to eligible employees of the governing boards of state institutions of higher education pursuant to the provisions of section four-a, article twenty-three, chapter eighteen of this code.(e) The taking of an application for life or accident and sickness insurance and otherwise completing a transaction electronically is exempt from the requirements of subdivision (2), subsection (a) of this section.
(a) No application for the issuance of any life or accident and sickness insurance policy or contract shall be admissible in evidence in any action relative to such policy or contract, unless a true copy of the application was attached to or otherwise made a part of the policy when issued. This paragraph shall not apply to industrial life insurance policies.(b) If any policy of life or accident and sickness insurance delivered in this state is reinstated or renewed, and the insured or the beneficiary or assignee of the policy makes written request, together with in the case of a beneficiary evidence of the beneficiary's vested interest in the policy, to the insurer for a copy of the application, if any, for such reinstatement or renewal, the insurer shall, within thirty days after receipt of such request at its home office or at any of its branch offices, deliver or mail to the person making such request a copy of such application. If such copy is not so delivered or mailed after having been so requested, the insurer shall be precluded from introducing the application in evidence in any action or proceeding based upon or involving the policy or its reinstatement or renewal.(c) As to kinds of insurance other than life and accident and sickness insurance, no application for insurance signed by or on behalf of the insured shall be admissible in evidence in any action between the insured and the insurer arising out of the policy so applied for, if the insurer has failed, at expiration of thirty days after receipt by the insurer of written demand therefor by or on behalf of the insured, to furnish to the insured a copy of such application reproduced by any legible means.
All statements and descriptions in any application for an insurance policy or in negotiations therefor, by or in behalf of the insured, shall be deemed to be representations and not warranties. Misrepresentations, omissions, concealments of facts, and incorrect statements shall not prevent a recovery under the policy unless:(a) Fraudulent; or(b) Material either to the acceptance of the risk, or to the hazard assumed by the insurer; or(c) The insurer in good faith would either not have issued the policy, or would not have issued a policy in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or otherwise.
(a) No insurance policy form, no group certificate form, no insurance application form where a written application is required and is to be made a part of the policy and no rider, endorsement or other form to be attached to any policy shall be delivered or issued for delivery in this state by an insurer unless it has been filed with the Commissioner and, to the extent required by subdivision (1), subsection (b) of this section, approved by the Commissioner, except that as to group insurance policies delivered outside this state, only the group certificates to be delivered or issued for delivery in this state shall be filed for approval with the Commissioner. This section does not apply to policies, riders, endorsements or forms of unique character designed for and used with relation to insurance upon a particular subject, or which relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or accident and sickness insurance policies, and are used at the request of the individual policyholder, contract holder or certificate holder, nor to the surety bond forms.(b)(1) Forms for noncommercial lines shall be filed by an insurer no less than sixty days in advance of any delivery. At the expiration of the sixty-day period, unless the period was extended by the commissioner to obtain additional information from the insurer, the form is deemed to be approved unless prior thereto it was affirmatively approved or disapproved by the commissioner. Approval of any form by the commissioner constitutes a waiver of any unexpired portion of the sixty-day period.(2) Forms for: (A) Commercial lines property and casualty risks; and (B) any mass-marketed life and/or health insurance policy offered to members of any association by the association shall be filed with the Commissioner and need not be approved by the Commissioner prior to use. The Commissioner may, within the first thirty days after receipt of the form, request information to ensure compliance with applicable statutory provisions and may disapprove forms not in compliance with the provisions of this chapter. If the Commissioner does not disapprove the form within the thirty-day period, the form is effective upon its first use after filing.(c) When an insurer does not submit supporting information with the form filing that allows the Commissioner to determine whether the form meets all applicable statutory requirements, the Commissioner shall require the insurer to furnish supporting information. The sixty-day period for personal lines risks shall be suspended on the date the Commissioner requests additional information and shall recommence on the date the Commissioner receives the supporting information: Provided, That the Commissioner shall have no less than fifteen days from receipt of the supporting information to act. The Commissioner may request additional information after the initial sixty-day period with respect to noncommercial lines, or thirty-day period with respect to commercial lines and mass-marketed life and/or health insurance to associations, to ensure continuing compliance with applicable statutory provisions and may at any time, after notice and for cause shown, withdraw any approval or disapprove any form: Provided, however, That any disapproval by the Commissioner of any form or withdrawal of a previous approval shall state the grounds therefor and shall include a notice that the insurer may request a hearing on the denial or withdrawal of approval.(d) The Commissioner may, by order, exempt from the requirements of this section for so long as he or she considers proper any insurance document or form or type specified in the order, to which, in his or her opinion, this section may not practicably be applied, or the filing and approval of which are, in his or her opinion, not desirable or necessary for the protection of the public.(e) For purposes of this section:(1) An association must have a minimum of sixty-one members at the outset of the issuance of the mass-marketed life and/or health insurance policy and shall have been organized and maintained in good faith for purposes other than that of obtaining or providing insurance. The association shall also have been in active existence for at least two years and shall have a Constitution and bylaws which provide that: (A) The association holds annual meetings to further purposes of its members; (B) except in the case of credit unions, the association collects dues or solicits contributions from members; and C) the members have voting privileges and representation on the governing board and committees that exist under the authority of the association: Provided, That upon written application by an association and for good cause shown, the Commissioner may grant an exemption to the association from the minimum member requirements of this section.(2) "Commercial lines" means insurance for business and professional interests, except that it does not include medical malpractice insurance.(3) "Noncommercial lines" means all insurance other than commercial lines and includes medical malpractice and insurance for personal, family and household needs.(f) This section also applies to any form used by domestic insurers for delivery in a jurisdiction outside West Virginia if the insurance supervisory official of the jurisdiction informs the Commissioner that the form is not subject to approval or disapproval by the official and upon the Commissioner's order requiring the form to be submitted to him or her for that purpose. The same standards applicable to forms for domestic use apply to forms used by domestic insurers for delivery in a jurisdiction outside West Virginia.
The commissioner shall disapprove any such form of policy, application, rider, or endorsement or withdraw any previous approval thereof:(a) If it is in any respect in violation of or does not comply with this chapter.(b) If it contains or incorporates by reference any inconsistent, ambiguous, or misleading clauses, or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract.(c) If it has any title, heading, or other indication of its provisions which is misleading.(d) If the purchase of such policy is being solicited by deceptive advertising.(e) If the benefits provided therein are unreasonable in relation to the premium charged.(f) If the coverages provided therein are not sufficiently broad to be in the public interest.
For the purposes of this article, unless the context otherwise indicates:"Applicant" means a person or entity that has filed an application under 33-60-2 of this code."Beta test" means the phase of testing of an insurance innovation in the regulatory sandbox through the use, sale, license, or availability of the insurance innovation by or to clients or consumers under the supervision of the commissioner."Client" means a person, other than a consumer, utilizing a participants insurance innovation during a beta test to carry on some activity regulated by the commissioner."Commissioner" means the West Virginia Insurance Commissioner or the West Virginia Offices of the Insurance Commissioner, as appropriate."Extended no-action letter" means a public notice setting forth the conditions for an extended safe harbor beyond the beta test under which the commissioner will not take any administrative or regulatory action against any person using the insurance innovation described in the extended no-action letter."Innovation" means any product, process, method, or procedure relating to the sale, solicitation, negotiation, fulfilment, administration, or use of any product or service regulated by the commissioner:(A) That has not been used, sold, licensed, or otherwise made available in this state before the filing date of the application, whether or not the product or service is marketed or sold directly to consumers; and (B) That has regulatory and statutory barriers that prevent its use, sale, license, or availability within this state."Innovations utility" means an evaluation by the commissioner of the insurance innovations ability to adequately satisfy factors set forth in 33-60-2(a)(2)(A) of this code."Limited no-action letter" or "limited letter" means a letter setting forth the conditions of a beta test and establishing a safe harbor under which the commissioner will not take any administrative or regulatory action against a participant or client of the participant concerning the compliance of the insurance innovation with West Virginia law so long as the participant or client abides by the terms and conditions established in the limited no-action letter."Participant" means an applicant that has been issued a limited no-action letter under 33-60-4 of this code."Person" means a person or entity."Qualified United States financial institution" means an institution that:(A) Is organized or, in the case of a United States office of a foreign banking organization, licensed under the laws of the United States or any state thereof;(B) Is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies; and(C) Has been determined by either the commissioner or the Securities Valuation Office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the commissioner."Regulatory sandbox" means the process established under this article by which an applicant may apply to beta test and obtain a limited no-action letter for an innovation, potentially resulting in the issuance of an extended no-action letter.
(a) The Insurance Commissioner shall propose rules for legislative approval in accordance with the provisions of 29A-3-1 et seq. of this code for the purposes of administering this article.(b) The Insurance Commissioner shall develop all forms, contracts, or other documents to be used for the purposes outlined in this article.
(a) Except as provided in subsection (b) of this section, on or before December 31, 2025, an applicant may apply to the commissioner for admission to the regulatory sandbox by submitting an application in the form prescribed by the commissioner, accompanied by the following:(1) A filing fee of $750;(2) A detailed description of the innovation, which shall include:(A) An explanation of how the innovation will:(i) Add value to customers and serve the public interest;(ii) Be economically viable for the applicant;(iii) Provide suitable consumer protection; and(iv) Pose no unreasonable risk of consumer harm.(B) A detailed description of the statutory and regulatory issues that prevents the innovation from being utilized, issued, sold, solicited, distributed, or advertised in the market currently;(C) A description of how the innovation functions, as well as the manner in which it will be offered or provided;(D) If the innovation involves the use of software, hardware, or other technology developed for the purpose of implementing or operating it, a technical white paper setting forth a description of the operation and general content of technology to be utilized, including:(i) The problem addressed by that technology; and(ii) The interaction between that technology and its users;(E) If the innovation involves the issuance of a policy of insurance, a statement that:(i) If the applicant will be the insurer on the policy, the applicant holds a valid license or certificate of authority and is authorized to issue the insurance coverage in question; or(ii) If some other person will be the insurer on the policy, the other person holds a valid license or certificate of authority and is authorized to issue the insurance coverage in question; and(F) A statement by an officer of the applicant certifying that no product, process, method, or procedure substantially similar to the innovation has been used, sold, licensed, or otherwise made available in this state before the filing date of the application;(3) The name, contact information, and bar number of the applicants insurance regulatory counsel, which shall be a person with experience providing insurance regulatory compliance advice;(4) A detailed description of the specific conduct that the applicant proposes should be permitted by the limited no-action letter;(5) Proposed terms and conditions to govern the applicants beta test, which shall include:(A) Citation to the provisions of West Virginia law that should be excepted in the notice of acceptance issued under 33-60-3(d)(2) of this code; and(B) Any request for an extension of the time period for a beta test under 33-60-5(a) of this code and the grounds for the request;(6) Proposed metrics by which the commissioner may reasonably test the innovations utility during the beta test;(7) Disclosure of all:(A) Persons who are directors and executive officers of the applicant;(B) General partners of the applicant if the applicant is a limited partnership;(C) Members of the applicant if the applicant is a limited liability applicant;(D) Persons who are beneficial owners owning 10 percent or more of the voting securities of the applicant;(E) Other persons with direct or indirect authority to direct the management and policies of the applicant by contract, other than a commercial contract for goods or nonmanagement services; and(F) Conflicts of interest with respect to any person listed in this subdivision and the commissioner;(8) A statement that the applicant has funds of at least $25,000 available to guarantee its financial stability through one or a combination of any of the following:(A) A contractual liability insurance policy;(B) A surety bond issued by an authorized surety;(C) Securities of the type eligible for deposit by authorized insurers in this state;(D) Evidence that the applicant has established an account payable to the commissioner in a federally insured financial institution in this state and has deposited money of the United States in an amount equal to the amount required by this subdivision that is not available for withdrawal except by direct order of the commissioner;(E) A letter of credit issued by a qualified United States financial institution; or(F) Another form of security authorized by the commissioner; and(9) A statement confirming that the applicant is not seeking authorization for, nor shall it engage in, any conduct that would render the applicant unauthorized to make an application under subsection (b) of this section.(b)(1)The following persons shall not be authorized to make an application to the commissioner for admission to the regulatory sandbox:(A) Any person seeking to sell or license an insurance innovation directly to any federal, state, or local government entity, agency, or instrumentality as the insured person or end user of the innovation;(B) Any person seeking to sell, license, or use an insurance innovation that is not in compliance with 33-60-2(a)(2)(E) of this code;(C) Any person seeking to make an application that would result in the person having more than five active beta tests ongoing within the state at any one time; or(D) Any person seeking a limited or extended no-action letter or exemption from any administrative regulation or statute concerning:(i) Assets, deposits, investments, capital, surplus, or other solvency requirements applicable to insurers;(ii) Required participation in any assigned risk plan, residual market, or guaranty fund;(iii) Any licensing or certificate of authority requirements; or(iv) The application of any taxes or fees.(2) For the purposes of this subsection, "federal, state, or local government entity, agency, or instrumentality" includes but is not limited to any county, city, municipal corporation, local government, special district, public school district, or public institution of education.
(a)(1) Unless extended as provided in 33-60-3(a)(2) of this code, the commissioner shall issue a notice of acceptance or rejection in accordance with this section within 60 days from the date an application is received.(2) The commissioner may extend by not more than 30 days the period provided in subdivision (1) of this subsection if he or she notifies the applicant before expiration of the initial 60-day period.(3) An application that has not been accepted or rejected by a notice of acceptance or rejection issued by the commissioner prior to expiration of the initial 60-day period, or if applicable, the period provided in 33-60-3(a)(2) of this code, shall be deemed accepted.(b) The commissioner may request from the applicant any additional material or information necessary to evaluate the application, including but not limited to:(1) Proof of financial stability;(2) A proposed business plan;(3) Pro-forma financial statement; and(4) Executive profiles on the applicant and its leadership demonstrating insurance or insurance-related industry experience and applicable experience in the use of the technology.(c) The commissioner shall review the application to:(1) Identify and assess:(A) The potential risks to consumers, if any, posed by the innovation; and(B) The manner in which the innovation would be offered or provided; and(2) Determine whether it satisfies the following requirements:(A) The application satisfies the requirements of 33-60-2 of this code;(B) The application proposes a product, process, method, or procedure that meets the definition of innovation under 33-60-1 of this code;(C) Approval of the application does not pose an unreasonable risk of consumer harm;(D) The application identifies statutory or regulatory requirements that actually prevent the innovation from being utilized, issued, sold, solicited, distributed, or advertised in this state; and(E) The application proposes an innovation that is not substantially similar to another innovation:(i) That has been previously beta tested; or(ii) Proposed in an application that is currently pending with the commissioner.(d) Upon review of the application, the commissioner shall, in his or her discretion, issue one of the following:(1) If the commissioner determines that the application fails to satisfy any of the requirements under 33-60-3(c)(2) of this code, he or she shall:(A) Issue a notice of rejection to the applicant; and(B) Describe in the notice of rejection the specific defects in the application; or (2) If the commissioner determines that the application satisfies the requirements of 33-60-3(c)(2) of this code, he or she shall issue a notice of acceptance to the applicant. The notice of acceptance shall:(A) Set forth the terms and conditions that will govern the applicants beta test, which shall include, at a minimum:(i) A requirement that the applicant:(I) Abide by all West Virginia law, except where explicitly excepted;(II) Utilize the insurance innovation within this state; and(III) Report any change in the disclosures made pursuant to 33-60-2(a)(7) of this code;(ii) A notice of the licenses required to be obtained prior to the commencement of the beta test;(iii) Monthly reporting obligations structured to determine the progress of the beta test;(iv) Consumer protection measures deemed necessary by the commissioner to be employed by the applicant;(v) The level of financial stability required to be in place for the beta test. The commissioner may increase, decrease, or waive the requirements for financial stability required under 33-60-2(a)(8) of this code, commensurate with the risk of consumer harm posed by the insurance innovation;(vi) The duration of the beta test, including any extension authorized under 33-60-5 of this code;(vii) Permitted conduct under the limited letter;(viii) Any limits established by the commissioner on the:(I) Financial exposure that may be assumed by an applicant during the beta test;(II) Number of customers an applicant may accept; and(III) Volume of transactions that an applicant or its clients may complete during the beta test; and(ix) The metrics the commissioner intends to use to determine the innovations utility; and(B) Provide that the notice of acceptance shall expire unless:(i) It is accepted by the applicant in writing; and(ii) The acceptance is filed with the commissioner within 60 days of the issuance of the notice.(e) An applicant may request a hearing pursuant to 33-2-13 of this code on:(1) A notice of rejection; and(2) A notice of acceptance, if the request is made prior to its expiration.
(a) Within 10 days following the timely receipt of an acceptance pursuant to 33-60-3(d)(2)(B) of this code, the commissioner shall issue a limited no-action letter that:(1) Sets forth terms and conditions for the participant that are the same as those set forth in the notice of acceptance issued under 33-60-3(d)(2) of this code; and(2) Provides that so long as the participant and any clients of the participant abide by the terms and conditions set forth in the letter, no administrative or regulatory action concerning the compliance of the insurance innovation with West Virginia law will be taken by the commissioner against the participant or any clients during the term of the beta test.(b) If the application is deemed accepted under 33-60-3(a)(3) of this code, the proposed limited no-action letter included with the application shall be deemed to have the effect of a limited letter issued by the commissioner.(c) The safe harbor of the limited letter shall persist until the earlier of:(1) The early termination of the beta test under 33-60-5 of this code;(2) The issuance of an extended no-action letter; or(3) The issuance of a notice declining to issue an extended no-action letter.(d) The commissioner shall publish all limited letters issued pursuant to this section on the commissioners publicly accessible internet website.
(a) The time period for a beta test shall be three years. The time period may be extended by the commissioner in the notice of acceptance for a period that is not longer than one year if a request is made in accordance with 33-60-2(a)(5)(B) of this code.(b) During the beta test, the participant and any clients of the participant shall:(1) Comply with all terms and conditions set forth in the limited no-action letter; and(2) Provide the commissioner with all documents, data, and information requested by the commissioner.(c) For any violation of the terms or conditions set forth in the limited letter, the commissioner may:(1) Issue an order terminating the beta test and the safe harbor of the limited letter before the time period set forth in the limited letter has expired; and(2) Impose a fine of not more than $2,000 per violation.(d) The commissioner may issue an order under 33-60-5(c) of this code if, following receipt of information or complaints, the commissioner determines the beta test is causing consumer harm.(e) The commissioner may issue an order requiring a client to cease and desist any activity violating the terms or conditions set forth in the limited letter. The issuance of a cease and desist order to one client shall not otherwise impact the ability of the participant or any other clients to continue activities relating to the innovation in a manner compliant with the requirements of the limited letter.(f) A participant or client may request a hearing on any order issued under this section pursuant to 33-2-13 of this code.
(a) Within 60 days of completion of the beta test, unless the time period is extended up to 30 days upon notice from the commissioner, the commissioner shall issue an extended no-action letter or a notice declining to issue an extended no-action letter. The participant may continue to employ the insurance innovation pursuant to the terms and conditions of the limited letter during the period between the completion of the beta test and the issuance of either an extended no-action letter or a notice declining to issue an extended no-action letter.(b) The commissioner shall review the results of the beta test to determine whether the innovation satisfies the following requirements:(1) The data presented demonstrates that the innovations utility was meritorious of an extension;(2) Regulatory and statutory barriers prevent continued use of the innovation within this state;(3) The innovation provided a benefit to West Virginia consumers; and(4) The issuance of an extended no-action letter:(A) Presents no risk of unreasonable harm to consumers or the marketplace; and(B) Serves the public interest.(c) Upon review of the results of the beta test the commissioner shall, in his or her discretion, issue one of the following:(1) If the commissioner determines that the innovation fails to satisfy any of the requirements under 33-60-6(b) of this code, he or she shall:(A) Issue a notice declining to issue an extended no-action letter;(B) Describe in the notice the reasons for the declination;(C) Notify the participant for the innovation of the notice; and(D) Publish the notice on the commissioners publicly accessible Internet website; or(2) If the commissioner determines that the innovation satisfies the requirements under 33-60-6(b) of this code, he or she shall issue an extended no-action letter. An extended no-action letter issued by the commissioner shall include:(A) A description of the insurance innovation and the specific conduct permitted by the extended no-action letter in sufficient detail to enable any person to use the innovation or a product, process, method, or procedure not substantially different from the innovation within the safe harbor of the extended no-action letter;(B) Notice of any certificate of authority, license, or permit the commissioner determines is necessary to use, sell, or license the innovation, or make the innovation available, in this state;(C) An expiration date not greater than three years following the date of issuance;(D) Notice that the extended no-action letter may:(i) Be modified only by:(I) Legislative rule proposed by the commissioner, if the safe harbor addresses a requirement established by rule; or(II) An act of the Legislature; and(ii) Be rescinded prior to its expiration if the commissioner receives complaints and determines continued activity poses a risk of harm to consumers;(E) Clarification of required procedures related to the issuance and cancellation of any policies of insurance, if applicable, due to the expiration period; and(F) Notice that, upon expiration, all persons relying on the extended no-action letter shall cease and desist operations related to the innovation unless changes have been made to West Virginia law to permit the innovation by:(i) The promulgation of a legislative rule by the commissioner, if the safe harbor addresses a requirement established by rule; or(ii) An act of the Legislature.(d) A hearing on a notice of declination may be requested in accordance with 33-2-13 of this code.(e) An extended no-action letter issued by the commissioner pursuant to this section shall be published on the commissioners publicly accessible internet website.
(a) All documents, materials, or other information in the possession or control of the commissioner that are created, produced, obtained, or disclosed in relation to this article and that relate to the financial condition of any person shall be confidential by law and privileged, are not subject to the provisions of chapter 29B of this code, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action.(b) Notwithstanding any law to the contrary, the commissioner may disclose in an extended no-action letter any information relating to the insurance innovation necessary to clearly establish the safe harbor of the extended no-action letter.
(a) On or before September 1 each year during which there was activity pursuant to this article during the prior fiscal year, the commissioner shall submit a written report to the Joint Committee on Government and Finance that meets the requirements of 33-60-8(b) of this code. (b) The report shall include the following:(1) The number of:(A) Applications filed and accepted;(B) Beta tests conducted; and(C) Extended no-action letters issued;(2) A description of the innovations tested;(3) The length of each beta test;(4) The results of each beta test;(5) A description of each safe harbor created under 33-60-6 of this code;(6) The number and types of orders or other actions taken by the commissioner or any other interested party under this article;(7) Identification of any statutory barriers for consideration by the Legislature following successful beta tests and the issuance of extended no-action letters; and(8) Any other information or recommendations deemed relevant by the commissioner.(c) The commissioner shall also, upon request of any committee of the Legislature, testify and explain any report submitted under this section and any activity pursuant to this article.
The commissioner may enter into agreements with state, federal, or foreign regulatory agencies to allow persons who make an insurance innovation available in West Virginia through the regulatory sandbox to make their insurance innovation available in other jurisdictions and to allow persons operating in similar regulatory sandboxes in other jurisdictions to make insurance innovations available in West Virginia under the standards of this article.
This article applies only to the Mining Mutual Insurance Company created pursuant to this article. 
To the extent applicable, and when not in conflict with the provisions of this article, the provisions of chapters 31, 31D, 31E, and 33 of this code apply to the company created pursuant to the provisions of this article. If a provision of this article and another provision of this code are in conflict, the provision of this article controls.
(a) The Legislature finds that:(1) There has been a nationwide downturn in the coal mining industry which was especially difficult in West Virginia;(2) Coal mining permit holders across the state have faced economic circumstances that forced many of them into difficult financial situations;(3) Insolvent permit holders may be unable to continue operations, thus jeopardizing their ability to properly reclaim lands as required under 22-3-1 et seq. of this code;(4) Any shortfall would be paid from the states Special Reclamation Fund which could become strained if the coal industry and/ or reclamation surety bond providers would experience unforeseen circumstances;(5) An increase in bonding amounts would cause undue financial hardships and coal mining permit holders in West Virginia may find it increasingly difficult to comply with the financial assurance provisions of 22-3-1 et seq. of this code;(6) The difficulty or impossibility of obtaining private performance bonds on reasonable economic terms may result in challenges for operators to receive new coal-mining permits;(7) Having a robust guarantee of proper reclamation of mining operations is of utmost importance to the citizens of West Virginia;(8) A mechanism is needed for an alternative provider in the states current coal mining bonding system to provide for additional coverage and further bolster an efficient and effective method of complying with the reclamation requirements and the financial assurance provisions of 22-3-1 et seq. of this code;(9) A state assisted mutual insurance company or a similar entity has proven to be a successful mechanism in West Virginia for helping stabilize certain insurance markets such as medical professional liability and worker compensation;(10) There is a substantial public interest in creating a method to provide an enhanced mining reclamation performance bond insurance market in this state; (11) The state currently funds reclamation at former coal-mining sites, where the bond has been forfeited, through a combination of bond proceeds and, if needed, moneys from the Special Reclamation Fund as approved by the Surface Mining Control and Reclamation Act;(12) There is substantial public benefit in maintaining a stable self-sufficient entity which can be a source of performance bond insurance coverage for permit holders in this state;(13) A stable, financially viable insurer in the private sector will provide a continuing source of insurance funds to accomplish reclamation as needed to protect the environment of the state; and(14) Because the public will greatly benefit from the formation of a Mining Mutual Insurance Company, state efforts to encourage and support the formation of such an entity, including providing a loan of the entitys initial capital, is in the clear public interest.(b) The purpose of this article is to create a mechanism for the formation of a mining mutual insurance company that will provide:(1) An option for mining permit holders to obtain performance bond insurance that is available and affordable; and(2) Assure that reclamation will occur in a timely and predictable fashion in those instances where a permit holder fails to perform under the terms of the permit issued pursuant to 22-3-1 et seq. of this code.
For purposes of this article, the term:"Commissioner" means the Insurance Commissioner as provided in 33-2-1 of this code."Company" means the Mining Mutual Insurance Company created pursuant to the terms of this article."Operator" has the same meaning as provided in 22-3-3 of this code and means any person who is granted or who should obtain a permit to engage in any activity covered by 22-3-1, et seq. of this code and any rule promulgated pursuant thereto and includes any person who engages in surface mining or surface mining and reclamation operations, or both. The term shall also be construed in a manner consistent with the federal program pursuant to the federal Surface Mining Control and Reclamation Act of 1977, as amended.
(a) A Mining Mutual Insurance Company may be created as a domestic, private, nonstock corporation in this state. The company shall remain for the duration of its existence a domestic mutual insurance company owned by its policyholders and may not be converted into a stock corporation or any other entity not owned by its policyholders.(b) For the duration of its existence, the company shall not be considered a department, unit, agency, or instrumentality of this state for any purpose. All debts, claims, obligations, and liabilities of the company, whenever incurred, are the debts, claims, obligations, and liabilities of the company only and not of this state or of any department, unit, agency, instrumentality, officer, or employee of this state.(c) The moneys of the company shall not be considered part of the General Revenue Fund of the state. The debts, claims, obligations, and liabilities of the company are not and may not be considered a debt of the state or a pledge of the credit of the state.(d) The company is not subject to provisions of 6-9A-1 et seq. of this code or the provisions of 29B-1-1, et seq. of this code.(e) All premiums collected by the company are subject to the premium taxes, additional premium taxes, additional fire and casualty insurance premium taxes and surcharges contained in 33-3-14, 33-3-14a, 33-3-14d, and 33-3-33 of this code to the extent applicable.
(a) The company shall initially be governed by a provisional board of directors consisting of five directors. The provisional board shall act as the incorporators of the company and shall prepare and file articles of incorporation and bylaws in accordance with the provisions of this article and all of the provisions of this code. The provisional board of directors shall be appointed as follows:(1) The chair shall be appointed by the Governor. The chair shall be an individual with at least five years experience as a CEO and board member of a mutual insurance company.(2) One member of the board shall be selected by the Secretary of the Department of Environmental Protection. This provisional board member shall have extensive experience in environmental management and shall have at least five years experience in coal mine reclamation.(3) One member of the provisional board shall be selected by the Insurance Commissioner. This provisional board member shall have insurance experience and shall have served at least five years as an officer of a board of directors of a mutual insurance company.(4) One member of the provisional board shall be selected by the President of the Senate. This provisional board member shall have experience in coal mine operations, reclamation, and land management.(5) One member of the provisional board shall be selected by the Speaker of the House of Delegates. This provisional board member shall have experience in coal mine operations, reclamation, and land management.(b) Upon the filing of the companys articles of incorporation and bylaws, the directors and officers of the company are to be chosen in accordance with such articles of incorporation and bylaws: Provided, That the companys articles of incorporation and bylaws shall specifically state that the terms of boards members shall be as follows: (1) Two members shall be for a term of four years; (2) one member shall be for a term of three years; (3) one member shall be for a term of two years; and (4) one member shall be for a term of one year. Thereafter, the directors shall serve staggered terms of four years. If additional directors are added to the board as provided in the companys bylaws, the term shall be for four years.
(a) If the companys board of directors determines that the affairs of the company may be administered suitably and efficiently, the company may enter into a contract with a licensed insurer, licensed health service plan, insurance service organization, third-party administrator, insurance brokerage firm or other firm or company with suitable qualifications and experience to administer some or all of the affairs of the company, subject to the continuing direction of the board of directors as required by the articles of incorporation and bylaws of the company, and the contract. All such contracts shall be awarded by competitive bidding.(b) The company shall file a true copy of the contract with the commissioner.
(a) As soon as practical, the company established pursuant to the provisions of this article shall file its corporate charter and bylaws with the commissioner and apply for a license to transact insurance in this state. Notwithstanding any other provision of this code, the commissioner shall act on the documents within 15 days of the filing by the company.(b) The Legislature authorizes the commissioner to review the documentation submitted by the company and to determine the initial capital and surplus requirements of the company, notwithstanding the provisions of 33-3-5b of this code. The commissioner has the sole discretion to determine the capital and surplus funds of the company and to monitor the economic viability of the company during its initial operation and duration on not less than a monthly basis. The company shall furnish the commissioner with all information and cooperate in all respects necessary for the commissioner to perform the duties set forth in this section and in other provisions of this chapter, including annual audited financial statements required by 33-33-1 et seq. of this code and fidelity bond coverage for each of the directors of the company.(c) Subject to the provisions of subsection (d) of this section, the commissioner may waive other requirements imposed on mutual insurance companies by the provisions of this chapter as the commissioner determines is necessary to enable the company to begin issuing performance bonds in this state at the earliest possible date.(d) Within 40 months of the date of the issuance of its license to transact insurance, the company shall comply with the capital and surplus requirements set forth in 33-3-5b of this code.
(a) There is hereby created in the State Treasury a special revenue account designated as the Department of Environmental Protection Mining Mutual Insurance Company Fund solely for the purpose of receiving moneys transferred from various funds at the Department of Environmental Protection.(b) As soon as practical, but within 30 days of the effective date of this act, the Treasurer shall, with the full cooperation of the Department of Environmental Protection, cause the transfer of $50,000,000 from such funds as the Secretary of the Department of Environmental Protection shall specify into the Department of Environmental Protection Mining Mutual Insurance Company Fund: Provided, That the funds shall not be transferred from the existing Special Reclamation Fund.(c) As soon as practical, but within 30 days of the transfer described in subsection (b) of this section, the Treasurer shall cause the funds in the Department of Environmental Protection Mining Mutual Insurance Company Fund as described in subsection (b) of this section to be transferred to the Mining Mutual to be used as initial capital and surplus in the form of a Surplus Note. These funds shall be deemed a noninterest loan and shall be paid back as credits as reclamation activities are accomplished.(d) As soon as practical, but within 30 days of gaining any necessary approvals, including specific approval of the Insurance Commissioner, the Treasurer shall, with the full cooperation of the Department of Environmental Protection, cause the transfer of such other funds as may, from time to time, be needed for capital by the Mining Mutual Insurance Company from such funds as the Secretary of the Department of Environmental Protection shall specify into the Department of Environmental Protection Mining Mutual Insurance Company Fund: Provided, That the funds shall not be transferred from the existing Special Reclamation Fund. Such funds may or may not be from special grants or other funding mechanisms from the federal government.(e) As soon as practical, but within 30 days of the transfer described in subsection (d) of this section, the Treasurer shall cause the funds in the Department of Environmental Protection Mining Mutual Insurance Company Fund as described in subsection (d) of this section to be transferred to the Mining Mutual to be used as capital and surplus in the form of a Surplus Note. These funds shall be deemed a noninterest loan and shall be paid back as credits as reclamation activities are accomplished.
(a) Upon approval by the commissioner for a license to transact insurance in this state, the company may issue nonassessable policies of performance bonds. (b) Operators may procure nonassessable policies of performance bonds from the company or other allowable providers to satisfy the requirements of 22-3-11 of this code.(c) Nothing in this article shall require compulsory participation in purchasing bonds from the company by operators.
(a) No insurer once having issued or delivered a policy providing automobile liability insurance for a private passenger automobile may, after the policy has been in effect for sixty days, or in case of renewal effective immediately, issue or cause to issue a notice of cancellation during the term of the policy except for one or more of the reasons specified in this section:(1) The named insured fails to make payments of premium for the policy or any installment of the premium when due;(2) The policy is obtained through material misrepresentation;(3) The insured violates any of the material terms and conditions of the policy;(4) The named insured or any other operator, either residing in the same household or who customarily operates an automobile insured under the policy:(A) Has had his or her operator's license suspended or revoked during the policy period including suspension or revocation for failure to comply with the provisions of article five-a, chapter seventeen-c of this code regarding consent for a chemical test for intoxication: Provided, That when a license is suspended for sixty days by the Commissioner of the Division of Motor Vehicles because a person drove a motor vehicle while under the age of twenty-one years with an alcohol concentration in his or her blood of two hundredths of one percent or more, by weight, but less than eight hundredths of one percent, by weight, pursuant to subsection (l), section two of said article, the suspension may not be grounds for cancellation; or(B) Is or becomes subject to epilepsy or heart attacks and the individual cannot produce a certificate from a physician testifying to his or her ability to operate a motor vehicle; or(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:(A) Any felony or assault involving the use of a motor vehicle;(B) Negligent homicide arising out of the operation of a motor vehicle;(C) Operating a motor vehicle while under the influence of alcohol or of any controlled substance or while having an alcohol concentration in his or her blood of eight hundredths of one percent or more, by weight;(D) Leaving the scene of a motor vehicle accident in which the insured is involved without reporting it as required by law;(E) Theft of a motor vehicle or the unlawful taking of a motor vehicle;(F) Making false statements in an application for a motor vehicle operator's license; or(G) Three 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. Notice of any cancellation 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 third moving traffic violation is recorded by the Division of Motor Vehicles.(b) Except as provided in subsections (c) and (d), no insurer may cancel a policy of automobile liability insurance without first giving the insured thirty days' notice of its intention to cancel. Notice of cancellation shall either be sent by first class mail to the named insured at the address supplied on the application for insurance, or by email or other electronic means if at the request of the policyholder in accordance with the Uniform Electronic Transactions Act as codified in chapter thirty-nine-a of this code, and shall state the effective date of the cancellation and provide a written explanation of the specific reason for the cancellation.(c) If, pursuant to subsection (a) of this section, an insurer cancels a policy of automobile liability insurance for the failure of the named insured to make payments of premium for the policy or any installment of the premium when due, then the insurer shall first give the insured at least fourteen days notice of its intention to cancel. Notice of cancellation shall be sent by first class mail to the named insured at the address supplied on the application for insurance, or by email or other electronic means if at the request of the policyholder in accordance with the Uniform Electronic Transactions Act as codified in chapter thirty-nine-a of this code, and shall state the effective date of the cancellation and provide a written explanation of the specific reason for the cancellation. The notice period provided herein shall begin to run on the date mailed and payment shall be deemed accomplished by depositing in first class mail valid payment on or before the expiration date of the fourteen day notice period.(d) If a named insured fails to make the initial payment of premium or any initial installment of the premium after the initial issuance of an automobile liability insurance policy, the insurance policy is voidable from the effective date and time the policy was issued: Provided, That the insurer shall send the insured written notice that the policy will be voided absent payment within ten days of any amounts due under the terms of the policy. Such notice shall either be sent by first class mail to the named insured at the address supplied on the application for insurance, or by email or other electronic means if at the request of the policyholder in accordance with the Uniform Electronic Transactions Act as codified in chapter thirty-nine-a of this code, and shall explain the specific reason for the voidance.
(a) For purposes of this article, a loss payee is defined as the person or persons not a named insured designated on an automobile liability insurance policy contract as being entitled to the proceeds of or payments under such policy.(b) In every instance in which an insurer notifies an insured of its intent to cancel or not renew an automobile liability insurance contract or policy, the insurer shall also provide notice to the loss payee of such cancellation and nonrenewal in accordance with the same notice requirements established for the insured pursuant to sections one and four of this article.
Any purported cancellation by an insurer of a policy of automobile liability insurance which has been in effect for sixty days and which has been renewed shall be void if the purported cancellation is contrary to section one of this article. For purposes of this article, the transfer of an insured between insurance companies within the same group is not considered a cancellation or nonrenewal of an automobile liability insurance policy if the transfer is based upon any valid underwriting reason involving a substantially increased risk associated with the policy.
In every instance in which a policy or contract of automobile liability insurance which has been in effect sixty days or which has been renewed is canceled by the insurer, the insurer or its duly authorized agent shall, in the notice of cancellation or at the written request of the named insured, specify the reason or reasons relied upon by the insurer for the cancellation. These reasons shall be stated in a written notice and shall, if not provided in the notice of cancellation, be made within thirty days after the request: Provided, That there shall be no liability on the part of, and no cause of action shall arise against, any insurer or its agents or its authorized investigative sources for any statements made with probable cause by the insurer, agent or investigative source in a written notice required to be given pursuant to this section. A notice of cancellation for nonpayment of premium is not void on the grounds that the notice includes the amount of premium due or the date by which payment was to be paid.
(a) No insurer shall fail to renew an outstanding automobile liability or physical damage insurance policy unless the nonrenewal is preceded by at least forty-five days advance notice to the named insured of the insurer's election not to renew the policy: Provided, That subject to this section, nothing contained in this article shall be construed to prevent an insurer from refusing to issue an automobile liability or physical damage insurance policy upon application to the insurer, nor shall any provision of this article be construed to prevent an insurer from refusing to renew 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.(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:(1) The named insured fails to make payments of premium for the policy or any installment of the premium when due;(2) The policy is obtained through material misrepresentation;(3) The insured violates any of the material terms and conditions of the policy;(4) The named insured or any other operator, either residing in the same household or who customarily operates an automobile insured under the policy:(A) Has had his or her operator's license suspended or revoked during the policy period; or(B) Is or becomes subject to a physical or mental condition that prevents the insured from operating a motor vehicle, and the individual cannot produce a certificate from a physician testifying to his or her ability to operate a motor vehicle;(5) The named insured or any other operator, either residing in the same household or who customarily operates an automobile insured under the policy, is convicted of or forfeits bail during the policy period for any of the following reasons:(A) Any felony or assault involving the use of a motor vehicle;(B) Negligent homicide arising out of the operation of a motor vehicle;(C) Operating a motor vehicle while under the influence of intoxicating liquor or of any narcotic drug;(D) Leaving the scene of a motor vehicle accident in which the insured is involved without reporting it as required by law;(E) Theft of a motor vehicle or the unlawful taking of a motor vehicle; or(F) Making false statements in an application for a motor vehicle operator's license;(6) The named insured or any other operator, either residing in the same household or who customarily operates an automobile insured under the 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 of the violations: Provided, That an insurer that makes an election pursuant to section four-b of this article to issue all nonrenewal notices pursuant to this section, 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 the 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 July 1, 2004, and after the date that the insurer makes an election pursuant to section four-b of this article, 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 of the violations. Notice of any nonrenewal made pursuant to this 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;(7) The named insured or any other operator either residing in the same household or who customarily operates an automobile insured under the 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 of the accidents: Provided, That an insurer that makes an election pursuant to section four-b of this article to issue all nonrenewal notices pursuant to this section, may nonrenew 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 July 1, 2004, and after the date that the insurer makes an election pursuant to section four-b of this article, and results in a claim paid by the insurer for each accident, whether or not the insurer renewed the policy without knowledge of all of the 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(8) 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 that makes an election pursuant to section four-b of this article to issue all nonrenewal notices pursuant to this section 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 (6) or (7), 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 for the reason that an operator has violated the provisions of subdivision (6) or (7), 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 this section shall state the specific reason or reasons for nonrenewal and shall advise the named insured that nonrenewal of the 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 $75. 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 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 this section exist; and (2) The insured makes an application for reinstatement within forty-five days of the original expiration date of the policy. If a policy is reinstated as provided for in this paragraph, then the coverage afforded shall not be retroactive to the original expiration date of the policy: Provided, That such policy shall 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.
(a) On or after July 1, 2004, an insurer may nonrenew an automobile liability or physical damage insurance policy for any reason which is consistent with its underwriting standards.(b) Notwithstanding any other provisions in this section, race, religion, nationality, ethnic group, age, sex, marital status, or other reason prohibited by the provisions of this chapter may not be considered as a reason for nonrenewal;(c) Notwithstanding the provisions of section four of this article, a nonrenewal may only be issued pursuant to the provisions of this section upon forty-five days advance notice to the named insured of the insurer's election not to renew the policy.(d) The total number of nonrenewal notices issued each year, commencing on July 1, 2004, by the insurer, resulting in nonrenewal, pursuant to this section may not exceed one percent per year of the total number of the 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 each year to insureds within any given county in this state resulting in nonrenewal may not exceed one percent per year of the total number of the 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 per year in any county if the applicable percentage limitation results in less than one policy.(e) 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 the policy for any reason is subject to a hearing and review as provided for in section five of this article: Provided, That the hearing shall relate to whether the nonrenewal of the policy was issued for a discriminatory reason, was based upon inadequate notice, an underwriting standard by the commissioner found to be in violation of this chapter or causes the insurer to exceed the percentage limitations, or percentage limitations by county, of nonrenewal notices set forth in this section. Cost of the hearing shall be assessed against the losing party but shall not exceed $75. The notice shall also advise the insured of possible eligibility for insurance through the West Virginia assigned risk plan.(f) 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 that they are consistent with generally accepted underwriting principles. The underwriting standards filed with the commissioner shall be considered confidential by law and privileged, are exempt from disclosure pursuant to chapter twenty-nine-b of this code, are not open to public inspection, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any criminal, private civil or administrative action and are not subject to production pursuant to court order. The commissioner shall promulgate legislative rules pursuant to chapter twenty-nine-a of this code to implement the provisions of this section.(g) Each insurer that has elected to issue nonrenewal notices pursuant to the percentage limitations provided in this section shall report to the commissioner, on a form prescribed by the commissioner, on or before September 30, of each year the total number of nonrenewal notices issued in this state and in each county of this state for the preceding year. The insurer shall also report to the commissioner the specific reason or reasons for the nonrenewals by county which have been issued pursuant to this section.
(a) Each insurer licensed to write automobile liability or physical damage insurance policies in this state, as of July 1, 2004, may elect to issue all nonrenewal notices either pursuant to section four or section four-a of this article. Each insurer may notify the commissioner of its election any time after July 1, 2004, 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.(1) If no election is made by July 1, 2004, then, until July 1, 2005, the insurer shall continue to issue all nonrenewal notices pursuant to the existing nonrenewal provisions in section four prior to the amendments enacted therein by the acts of the Seventy-Sixth Legislature during the second session, 2004.(2) As of July 1, 2005, each insurer licensed to write automobile liability or physical damage insurance policies in this state, and that has not previously made an election under this section, shall elect to issue all nonrenewal notices either pursuant to section four or section four-a of this article. Each insurer which has not previously made an election must notify the commissioner of its election no later than July 1, 2005, 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 July 1, 2004, 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 nonrenewals may not exceed the percentage limitations set forth in section four-a of this article. An insurer first becoming licensed to issue automobile liability and physical damage insurance policies in this state after July 1, 2004, 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 (6) or (7), subsection (b), section four of this article.
By January 1, 2009, the commissioner shall submit a report to the Legislature. The report shall contain the following:(1) An analysis of the impact of legislation enacted during the two thousand four legislative session upon rates and insurance availability in the state;(2) Statistics reflecting the rate history of insurers conducting business in West Virginia from July 1, 2004, until July 1, 2008.
For the implementation of this article and for advising all persons of their rights and privileges under this article, the commissioner, by regulation and in accordance with section thirteen, article two of this chapter, shall establish a procedure whereby any person whose automobile liability insurance policy has been cancelled or whose policy has not been renewed without proper notice being given to such insured, may within forty-five days after the mailing of notice of cancellation or nonrenewal appeal such cancellation or nonrenewal to the commissioner for hearing and review. The appeal and hearing shall relate to the ground or grounds upon which the insurer's action is based. The commissioner after such hearing may affirm the insurer's cancellation or nonrenewal, or may reinstate the policy and if reinstated such policy shall become effective from the date of cancellation or nonrenewal. Either party may appeal the commissioner's ruling to the circuit court of the county in which the applicant or the insured resides in accordance with section fourteen, article two of this chapter.
The purpose of this article is to regulate the declination of automobile liability policies.
"Declination" means either the refusal of an insurer to issue an automobile liability insurance policy upon receipt of a written nonbinding application or written request for coverage from its agent or an applicant. For the purposes of this article, the offering of insurance coverage with a company within an insurance group which is different from the company requested on the nonbinding application or written request for coverage, or the offering of policy coverage or rates substantially less favorable than requested in the nonbinding application or written request for coverage, shall not be considered a declination. Further, for the purposes of this article "declination" shall include the cancellation of an automobile liability policy which has been in effect less than sixty days and the nonrenewal of an automobile liability policy which has been in effect less than two years.
The declination of an application for a private passenger policy of automobile liability insurance by an insurer, agent or broker is prohibited if the declination is:(a) Based upon the race, religion, nationality or ethnic group, of the applicant or named insured;(b) Based solely upon the lawful occupation or profession of the applicant or named insured, unless the decision is for a business purpose that is not a mere pretext for unfair discrimination: Provided, That this provision does not apply to any insurer, agent or broker that limits its market to one lawful occupation or profession or to several related lawful occupations or professions;(c) Based upon the principal location of the insured motor vehicle unless the decision is for a business purpose which is not a mere pretext for unfair discrimination;(d) Based solely upon the age, sex or marital status of an applicant or an insured, except that this subsection does not prohibit rating differentials based on age, sex or marital status;(e) Based upon the fact that the applicant has previously obtained insurance coverage with a substandard insurance carrier;(f) Based upon the fact that the applicant has not previously been insured;(g) Based upon the fact that the applicant did not have insurance coverage for a period of time prior to the application;(h) Based upon the fact that the applicant or named insured previously obtained insurance coverage through a residual market insurance mechanism;(i) Based upon the fact that another insurer previously declined to insure the applicant or terminated an existing policy in which the applicant was the named insured;(j) Based solely upon an adverse credit report or adverse credit scoring.Nothing in this section may be construed to prohibit an insurer, agent or broker from using legitimate, documented, underwriting data in making their own independent risk assessment of an applicant for insurance.
In the event of a declination, the insurer shall, within thirty days of the receipt of the written nonbinding application or written request for coverage provide the applicant reasons for such declination.
Hearings for the violation of any provision of this article, and the administrative procedure prior to, during, and following these hearings shall be conducted in accordance with the provisions of article two of this chapter.
If the commissioner determines in a final order that:(a) An insurer has violated section three or four of this article, he may require the insurer to:(1) Accept the application or written request for insurance coverage at a rate and on the same terms and conditions as are available to its other risks with similar characteristics; or(2) Reinstate insurance coverage to the end of the policy period; or(3) Continue insurance coverage at a rate and on the same terms and conditions as are available to its other risks with similar characteristics.(b) Any person has violated any provision of this article, he may:(1) Issue a cease and desist order to restrain the person from engaging in practices which violate this article;(2) Assess a penalty against the person of up to $5,000 for each willful and knowing violation of this article.
If any provision of this article or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the article and the application of such provision to other persons or circumstances shall not be affected thereby.
As used in this article:(a) "Commissioner" means the Insurance Commissioner of West Virginia;(b) "Experience period" means, for any given rate filing for which a loss ratio guarantee is made, the period beginning on the first day of the calendar year during which the guaranteed rates first take effect and ending on the last day of the calendar year during which the insurer earns $1 million in premiums on the form in West Virginia or, if the annual premium earned on the form in West Virginia is less than $1 million, earns nationally;(c) "Form" means individual sickness and accident policy forms of any insurer offering such benefits, other than a form for a limited benefits policy or certificate as defined in section two, article sixteen-e of this chapter;(d) "Loss ratio" means the ratio of incurred claims to earned premium; and(e) "Successive experience period" means the experience period beginning on the first day following the end of the preceding experience period.
(a) The Insurance Commissioner shall establish a guaranteed loss ratio which may be implemented by any insurer offering individual sickness and accident insurance policies other than limited benefits accident and sickness insurance policies or certificates, which are subject to loss ratio requirements set forth in sections three and four, article sixteen-e of this chapter. The loss ratios shall be calculated by the commissioner and each individual insurer and shall be based upon studies and relevant information collected from various sources, including, but not limited to, the health care cost review authority and the national association of Insurance Commissioners' rate filing guidelines: Provided, That the guaranteed loss ratio shall not be less than sixty percent. The guaranteed loss ratio for each insurer shall be published by the Insurance Commissioner in the register maintained by the Secretary of State.(b) The guaranteed loss ratio shall be based upon experience periods during which the insurer earns $1 million in premium in West Virginia: Provided, That if the annual earned premium volume in West Virginia is less than $1 million, the loss ratio guarantee shall be based on such other actuarially sound methods as the commissioner may determine are appropriate, including, but not limited to, the actual nationwide loss ratios: Provided, however, That if the aggregate earned premium for all states is less than $1 million , the experience period will be extended until the end of the calendar year in which $1 million of earned premium is attained.(c) Any insurer may apply to the commissioner to operate on a guaranteed loss ratio basis. The Insurance Commissioner may review each application and, in his or her discretion, approve or reject the same. Any insurer approved by the commissioner shall be exempt from filing rate increase applications as required by the commissioner and other provisions of this chapter.
(a) The Insurance Commissioner shall promulgate rules and regulations pursuant to chapter twenty-nine-a of this code establishing procedures for implementing the provisions of this article.(b) The commissioner shall have the authority to examine the records and files of any insurer to determine compliance with the provisions of this article, the costs of which such examination shall be borne by the insurer.(c) The Insurance Commissioner shall develop all forms, contracts or other documents to be used for the purposes outlined in this article.
(a) Individual sickness and accident policy benefits under a policy form other than a limited benefits policy form or certificate shall be deemed reasonable in relation to the premium charged, as required by subdivision (e), section nine, article six of this chapter, if the premium rates are filed pursuant to a loss ratio guarantee which meets the requirements of this article. The Insurance Commissioner shall not withdraw approval of a form on the grounds that benefits are unreasonable in relation to premiums charged so long as the insurer complies with the terms of the loss ratio guarantee.(b) Each insurer of individual sickness and accident policy benefits other than benefits under limited benefits policy forms or certificates shall execute and deliver to the Insurance Commissioner a loss ratio guarantee, to be provided by the commissioner, which guarantee shall be signed by an officer of the insurer.(c) Each loss ratio guarantee shall contain, at a minimum, the following:(1) A recitation of the anticipated lifetime and durational target loss ratios contained in the original actuarial memorandum filed with the policy form when it was originally approved;(2) A guarantee that the actual West Virginia loss ratios for the experience period in which the new rates take effect, and for each experience period thereafter until new rates are filed, will meet or exceed the anticipated lifetime and durational target loss ratios contained in the original actuarial memorandum noted above;(3) A guarantee that the actual West Virginia or, if applicable, national, loss ratio results for the experience period at issue will be independently audited at the insurer's expense; that such audit will be completed in the second quarter of the year following the end of the experience period; and that the results of such audit will be reported to the Insurance Commissioner not later than June 30 following the end of the experience period;(4) A guarantee that if the actual loss ratio during an experience period is less than the anticipated loss ratio for that period, then West Virginia policyholders will receive a proportional refund based on premium earned, which refunds shall be calculated and paid pursuant to section thirty-nine of this article; and(5) A guarantee that the insurer does not engage in any discriminatory practices prohibited by section four, article eleven of this chapter or any such practice which discriminates against any individual on the basis of his or her legal occupation, race, religion or residence.
(a) Refunds to West Virginia policyholders made pursuant to section four of this article and based upon annual earned premium volume in West Virginia shall be calculated by multiplying the anticipated loss ratio by the applicable earned premium during the experience period and subtracting from that result the actual incurred claims during the experience period.(b) Refunds to West Virginia policyholders made pursuant to section four of this article and based upon national annual earned premium volume shall be calculated by:(1) Multiplying the anticipated loss ratio by the applicable earned premium during the experience period and subtracting from that result the actual incurred claims during the experience period; and(2) Multiplying the results of subsection (1) by the total earned premium during the experience period from all West Virginia policyholders eligible for refunds; and(3) Dividing the results of subsection (2) by the total earned premium during that period in all states on the policy form.(c) Refunds must be made to all West Virginia policyholders who are insured under the applicable policy form as of the last day of the experience period. Such refund shall include interest, at the current accident and health reserve interest rate established by the national association of Insurance Commissioners, from the end of the experience period until the date of payment. Payment shall be made during the third quarter of the year following the experience period for which a refund is determined to be due.(d) Refunds of less than $10 shall be aggregated and held by the insurer in a policyholder's liability fund and shall be used to offset any future rate increases.
Each insurer providing individual sickness and accident policy benefits shall make reasonable disclosure in solicitation and sales materials provided to individuals of the following:(a) The extent to which premium rates for individuals are established or adjusted according to the claim experience, health status or duration of coverage of the individual or his or her dependents;(b) Provisions concerning the insurer's right to change premium rates and factors, including case characteristics, which affect changes in premium rates;(c) A description of the class of insureds to which the individual is or will be included; and(d) Provisions relating to renewability of coverage.
 (a) The Insurance Commissioner may reject any loss ratio guarantee filed by an insurer within sixty days from the date on which it was filed for any of the following reasons:(1) The insurer has demonstrated an inability to adequately monitor its loss ratios;(2) The insurer has failed to take timely rate increases in accordance with sound actuarial principles during the three-year period prior to filing the loss ratio guarantee;(3) The insurer has not complied with the terms of a previously filed loss ratio guarantee;(4) The insurer has submitted false, misleading or fraudulent material or information to the commissioner;(5) The insurer is impaired, insolvent or such other similar financial condition as defined in article ten or any other article of this chapter; or(6) Such other criteria as the commissioner, by legislative rule or regulation, may determine is appropriate.(b) The Insurance Commissioner may reject or cancel any loss ratio guarantee filed by an insurer which had been previously approved if, upon review and investigation, the commissioner determines that the insurer has not complied with the provisions of the guarantee or this article.(c) In the event a newly submitted loss ratio guarantee is rejected, the commissioner shall, within sixty days after the date the loss ratio guarantee was filed, mail notice of the rejection to the insurer. In the event an existing or previously approved loss ratio guarantee is cancelled, the commissioner shall mail notice of the rejection or cancellation to the insurer within fifteen days of the decision to cancel. In either situation, the insurer may, within ten days of being notified of its rejection or cancellation, request a hearing before the commissioner, which hearing shall be held within forty-five days from the date the request is made.
No insurer issuing or renewing in this state any motor vehicle insurance policy, nor any agent or adjuster thereof, may require the insured or any person making a claim under such policy to use a particular company or location to obtain automobile glass replacement or repair services or products insured, in whole or in part, by that policy.
No such insurer, agent or adjuster may engage in any act or practice of intimidation, coercion or threat for or against any such insured or claimant to use a particular company or location to obtain automobile glass replacement or repair services or products covered, in whole or in part, by the insurance policy: Provided, That nothing contained in this article shall prohibit an insurer, agent or adjuster from entering into an agreement or arrangement with any company regarding automobile glass prices or services for the repair or replacement of automobile glass.
(a) Nothing contained in this article prohibits any insurer, agent or adjuster from providing to an insured or claimant a list that includes the names of automobile glass companies or locations that are reasonably close and convenient to the insured or claimant, and with which the insurer may have made special arrangements with respect to automobile glass prices or services.(b) If an insurer, agent or adjuster provides an insured or claimant with a list of automobile glass companies or locations, such insurer, agent or adjuster shall advise the insured or claimant that he or she may use any other automobile glass company or location of his or her choice.(c) All insurers shall fully and promptly pay the cost of automobile glass replacement or repair services or products from any nonlisted automobile glass company or location, less any applicable deductible amount payable by the insured according to the terms of the insurance policy, at no less than the prevailing market price charged by other automobile glass companies or locations providing comparable services or products in the same geographic area within the state.(d) No automobile glass company or location may waive insurance deductibles or offer rebates, discounts or other incentives for automobile glass repair which is being reimbursed by insurance. An insurer may limit payment of all glass claims to a glass company or location that has violated this provision to the lowest competitive price. The glass company or location may not seek reimbursement for any amounts not paid directly from the insured or claimant.
(a) No person shall disclose any nonpublic personal information contrary to the provisions of Title V of the Gramm-Leach-Bliley Act, Pub. L. 106-102 (1999).(b) On or before July 1, 2001, the commissioner shall propose rules for legislative approval in accordance with article twenty, chapter twenty-nine-a of this code necessary to carry out the provisions of Title V of the Gramm-Leach-Bliley Act, Pub. L. 106-102 (1999) and this article.(c) Medical records and medical billing records obtained by insurers in connection with insurance claims or civil litigation shall be confidentially maintained by insurers in accordance with state and federal law, including the provisions of Title 114, Series 57 of the Code of State Rules, and no additional restrictions or conditions may be imposed that contradict or are inconsistent with any applicable policy of insurance or the performance of insurance functions permitted or authorized by state and federal law. The Insurance Commissioner shall review the provisions of Title 114, Series 57 of the Code of State Rules and, to the extent determined necessary, shall propose new rules or modify existing rules by December 31, 2017 to address:(1) The circumstances under which an insurance company may disclose medical records and medical billing records to other persons or entities;(2) The circumstances under which personal identifying information of a person must be redacted before that persons medical records or medical billing records may be disclosed to other persons or entities;(3) The steps an insurance company is required to undertake before medical records or medical billing records are disclosed to other persons or entities to assure that any person or entity to which an insurance company is disclosing a persons medical records or medical billing records will be using such records only for purposes permitted by law; and,(4) The implementation of the requirement that the insurance company has processes or procedures in place to prevent the unauthorized access by its own employees to a persons confidential medical records or medical billing records.
Notwithstanding the provisions of section one of this article:(a) Each insurer that provides personal lines liability insurance coverage, as that term is defined in section nine, article twelve of this chapter, to pay all or a portion of a claim asserted against an insurance policy insuring a motor vehicle shall provide, within thirty days of its receipt of a written request from a claimant's attorney who has given written notice that he or she represents the claimant:(1) A response providing the following information relating to each of the insurer's known policies of insurance, including excess or umbrella insurance, which does or may provide liability coverage for the claim:(A) The name of the insurer;(B) The name of each named insured of the subject policy; and(C) The limits of any motor vehicle liability insurance policy at the time of the events that are the subject of the claim; or(2) The declarations page of any motor vehicle liability policy applicable at the time of the events that are the subject of the claim, appropriately redacted to comply with applicable privacy laws or rules;(b) Any written request by the claimant's attorney under this section must include:(1) The date and location of the events that are the subject of the claim;(2) The name and, if known, the last known address of the insured;(3) A copy of the accident or incident report, if any;(4) The insurer's claim number;(5) A good-faith estimate and documentation of all of the claimant's medical expenses if any and any wage loss documentation as of the date of the request, if any; and(6) Documentation as of the date of the request of any and all property damage.(c) Disclosure of the information required by subsection (a) of this section is not an admission that the alleged injury or damage is subject to the policy, nor does the disclosure waive any reservation of rights an insurer may have.(d) The information disclosed by any party pursuant to this section, by reason of the disclosure, is not admissible as evidence at trial.(e) An insurer's compliance with this section does not constitute a violation of this article, or subsection (12), section four, article eleven of this chapter.(f) An insurer that fails to comply with this section is subject to a penalty of $500, plus reasonable attorneys' fees and expenses incurred in obtaining disclosure of the information required by subsection (a) of this section. This penalty is the sole and exclusive remedy for an insurer's failure to comply with this section.
In any determination of the financial condition of an insurer, there shall be allowed as assets only such assets as are owned by the insurer and which consist of:(a) Cash in the possession of the insurer, or in transit under its control, and including the true balance of any deposit in a solvent bank or trust company.(b) Investments, securities, properties and loans acquired or held in accordance with this chapter, and in connection therewith the following items:(1) Interest due or accrued on any bond or evidence of indebtedness which is not in default and which is not valued on a basis including accrued interest.(2) Declared and unpaid dividends on stock and shares, unless such amount has otherwise been allowed as an asset.(3) Interest due or accrued upon a collateral loan in an amount not to exceed one year's interest thereon.(4) Interest due or accrued on deposits in solvent banks and trust companies, and interest due or accrued on other assets, if such interest is in the judgment of the commissioner a collectible asset.(5) Interest due or accrued on a mortgage loan, in an amount not exceeding in any event the amount, if any, of the excess of the value of the property less delinquent taxes thereon over the unpaid principal; but in no event shall interest accrued for a period in excess of eighteen months be allowed as an asset.(6) Rent due or accrued on real property if such rent is not in arrears for more than three months, and rent more than three months in arrears if the payment of such rent be adequately secured by property held in the name of the tenant and conveyed to the insurer as collateral.(7) The unaccrued portion of taxes paid prior to the due date on real property.(c) Premium notes, policy loans, and other policy assets and liens on policies and certificates of life insurance and annuity contracts and interest due and accrued thereon, in an amount not exceeding the legal reserve and other policy liabilities carried on each individual policy.(d) The net amount of uncollected and deferred premiums and annuity considerations in the case of a life insurer.(e) Premiums in the course of collection, other than for life insurance, not more than three months past due, less commissions payable thereon. The foregoing limitation shall not apply to premiums payable directly or indirectly by the United States government or by any of its instrumentalities.(f) Installment premiums other than life insurance premiums, in accordance with regulations prescribed by the commissioner.(g) Notes and like written obligations not past due, taken for premiums other than life insurance premiums, on policies permitted to be issued on such basis, to the extent of the unearned premium reserves carried thereon.(h) The full amount of reinsurance recoverable by a ceding insurer from a solvent reinsurer and which reinsurance is authorized under this chapter.(i) Amounts receivable by an assuming insurer representing funds withheld by a solvent ceding insurer under a reinsurance treaty.(j) Deposits or equities recoverable from underwriting associations, syndicates and reinsurance funds, or from any suspended banking institution, to the extent deemed by the commissioner available for the payment of losses and claims and at values to be determined by him (k) All assets, whether or not consistent with the provisions of this section, as may be allowed pursuant to the annual statement form approved by the commissioner for the kinds of insurance to be reported upon therein.(l) Other assets, not inconsistent with the provisions of this section, deemed by the commissioner to be available for the payment of losses and claims, at values to be determined by him 
(a) All bonds or other evidences of debt having a fixed term and rate of interest held by any insurer may, if amply secured and not in default as to principal or interest, be valued as follows:(1) If purchased at par, at the par value.(2) If purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield in the meantime the effective rate of interest at which the purchase was made, or in lieu of such method, according to such accepted method of valuation as is approved by the commissioner.(3) Purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase, plus actual brokerage, transfer, postage or express charges paid in the acquisition of such securities.(4) Unless otherwise provided by valuation established or approved by the commissioner, no such security shall be carried at above the call price for the entire issue during any period within which the security may be so called.(b) The commissioner shall have full discretion in determining the method of calculating values according to the rules set forth in this section: Provided, That no such method or valuation shall be inconsistent with any applicable valuation or method used by insurers in general or any such method then currently formulated or approved by the committee on valuation of securities of the national association of Insurance Commissioners or its successor organization.
(a) Securities, other than those referred to in section ten of this article, held by an insurer shall be valued, in the discretion of the commissioner, at their market value, or at their appraised value, or at prices determined by him as representing their fair market value, all consistent with any current method for the valuation of any such security formulated or approved by the commissioner.(b) Preferred or guaranteed stocks or shares while paying full dividends may be carried at a fixed value in lieu of market value, at the discretion of the commissioner and in accordance with such method of computation as he may approve.(c) Stock of a subsidiary corporation of an insurer shall not be valued in excess of the net value thereof as based upon those assets only of the subsidiary which would be eligible pursuant to the provisions of this article, and article eight of this chapter, for investment of funds of the insurer directly.(d) No valuations under this section shall be inconsistent with any applicable valuation or method then currently formulated or approved by the committee on valuation of securities of the national association of Insurance Commissioners or its successor organization.
(a) In the event of a default real property acquired pursuant to a mortgage loan or contract for sale shall not be valued at an amount greater than the unpaid principal of the defaulted loan or contract at the date of such acquisition, together with any taxes and expenses paid or incurred in connection with such acquisition, and the cost of improvements thereafter made by the insurer and any amounts thereafter paid by the insurer on assessments levied for improvements in connection with the property.(b) The value of other real property acquired or held by an insurer shall in no event be valued at more than the purchase price. Purchase price includes capitalized permanent improvements, less depreciation as allowed by the current accounting practices and procedures manuals of the national association of Insurance Commissioners. Real property that has been affected by permanent declines in value shall be valued at not more than market value.
Mortgages or deeds of trust on real property shall be valued in an amount equal to the unpaid balance but not exceeding sixty- six and two-thirds percent of the fair value of such real property, except that any amount in excess of sixty-six and two- thirds percent may be included to the extent the loan evidenced by such deed of trust or mortgage is guaranteed by an agency of the federal government.
Assets may be allowed as deductions from corresponding liabilities, and liabilities may be charged as deductions from assets, and deductions from assets may be charged as liabilities, in accordance with the form of annual statement applicable to such insurer as prescribed by the commissioner, or otherwise in his discretion.
In addition to assets impliedly excluded by the provisions of section one of this article, the following expressly shall not be allowed as assets in any determination of the financial condition of an insurer:(a) Goodwill, trade names and other like intangible assets.(b) Advances to officers (other than policy loans) whether secured or not, and advances to employees, agents and other persons on personal security only.(c) Stock of the insurer, owned by it, or any equity therein or loans secured thereby, or any proportionate interest in the stock acquired or held through the ownership by the insurer of an interest in another firm, corporation or business unit.(d) Furniture, fixtures, furnishings, safes, vehicles, libraries, stationery, literature and supplies, and except, in the case of any insurer, personal property the insurer is permitted to hold pursuant to article eight of this chapter, or which is acquired through foreclosure of chattel mortgages acquired pursuant to said article or which is reasonably necessary for the maintenance and operation of real estate lawfully acquired and held by the insurer other than real estate used by it for home office, branch office and similar purposes.(e) The amount, if any, by which the aggregate book value of investments as carried in the ledger assets of the insurer exceeds the aggregate value thereof as determined under this chapter.
All assets not allowed and all other assets of doubtful value or character included as assets in any statement by an insurer to the commissioner, or in any examiner's report to him shall also be reported, to the extent of the value disallowed, as deductions from the gross assets of such insurer except where the commissioner permits a reserve to be carried among the liabilities of such insurer in lieu of any such deduction.
In any determination of the financial condition of an insurer, capital stock and liabilities to be charged against its assets shall include:(a) The amount of its capital stock outstanding, if any;(b) The amount, estimated consistent with the provisions of this chapter, necessary to pay all of its unpaid losses and claims incurred on or prior to the date of statement, whether reported or unreported, together with the expenses of adjustment or settlement thereof;(c) With reference to life and accident and sickness insurance and annuity contracts:(1) The amount of reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest, and methods adopted pursuant to this chapter which are applicable thereto,(2) Reserves for disability benefits, for both active and disabled lives,(3) Reserves for accidental death benefits, and(4) Any additional reserves which may be reasonably required by the commissioner on account of such insurance.(d) With reference to insurance other than specified in paragraph (c) of this section, the amount of reserves equal to the unearned portions of the gross premiums charged on policies in force, computed in accordance with this article;(e) Taxes, expenses and other obligations due or accrued at the date of the statement.
(a) With reference to insurance against loss or damage to property (except as provided in paragraph (e) of this section) and with reference to all general casualty insurance, and surety insurance, every insurer shall maintain an unearned premium reserve on all policies in force.(b) The commissioner may require that such reserves shall be equal to the unearned portions of the gross premiums in force after deducting reinsurance in solvent insurers effected in the manner provided in this chapter as computed on each respective risk from the policy's date of issue.(c) All of such reserves may be computed, at the option of the insurer, on a yearly or more frequent pro rata basis.(d) After adopting a method for computing such reserve, an insurer shall not change methods without approval of the commissioner.(e) With reference to marine insurance, premiums on trip risks not terminated shall be deemed unearned, and the commissioner may require the insurer to carry a reserve thereon equal to one hundred percent on trip risks written during the month ended as of the date of statement.
For all accident and sickness policies the insurer shall maintain an active life reserve which shall place a sound value on its liabilities under such policies and which shall not be less than the reserve according to standards set forth in regulations issued by the commissioner and which,(a) For credit accident and sickness policies, in no event shall be less than the unearned premium reserve for such policies calculated on the sum of the digits formula, commonly known as the "Rule of 78";(b) For all other accident and sickness policies, in no event shall be less than the pro rata gross unearned premium reserve for such policies.
(a) If the commissioner determines that an insurer's unearned premium reserve, however computed, is inadequate, he may require the insurer to compute such reserve or any part thereof according to such other method or methods as are prescribed in this article.(b) If the loss experience of an insurer shows that its loss reserves, however estimated, are inadequate, the commissioner shall require the insurer to maintain loss reserves in such increased amount as is needed to make them adequate.
(a) This section shall be known as the standard valuation law. For the purposes of this section, the following definitions apply on or after the operative date of the valuation manual:(1) The term "accident and health insurance" means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness, or medical conditions and as may be specified in the valuation manual.(2) The term "appointed actuary" means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required in subdivision (2), subsection (c) of this section.(3) The term "company" means an entity that has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and has at least one such policy in force or on claim, or has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in this state.(4) The term "deposit-type contract" means contracts that do not incorporate mortality or morbidity risks, and as may be specified in the valuation manual.(5) The term "life insurance" means contracts that incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual.(6) The term "NAIC" means the National Association of Insurance Commissioners.(7) The term "policyholder behavior" means any action a policyholder, contract holder, or any other person with the right to elect options, such as a certificate holder, may take under a policy or contract subject to this section including, but not limited to, lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization, or benefit elections prescribed by the policy or contract but excluding events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract.(8) The term "principle-based valuation" means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer and is required to comply with subsection (o) of this section as specified in the valuation manual.(9) The term "qualified actuary" means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements and who meets the requirements specified in the valuation manual.(10) The term "tail risk" means a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or where there are observed events of very significant size or magnitude.(11) The term "valuation manual" means the manual of valuation instructions adopted by the commissioner in accordance with subsection (n) of this section.(b) Reserve valuation.  (1) Policies and Contracts Issued Prior to the Operative Date of the Valuation Manual. (A) The commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurance company doing business in this state issued on or after January 1, 1958 and prior to the operative date of the valuation manual. In calculating reserves, the commissioner may use group methods and approximate averages for fractions of a year or otherwise. In lieu of the valuation of the reserves herein required of any foreign or alien company, the commissioner may accept any valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this section.(B) Subsections (d), (e), (f), (g), (h), (i), (j), (k), (l), and (m) of this section apply to all policies and contracts, as appropriate, subject to this section issued on or after January 1, 1958 and prior to the operative date of the valuation manual, and subsections (n) and (o) of this section do not apply to any such policies and contracts.(C) The minimum standard for the valuation of policies and contracts issued prior to January 1, 1958 shall be that provided by the laws in effect immediately prior to that date.(2) Policies and contracts issued on or after the operative date of the valuation manual. (A) The commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every company issued on or after the operative date of the valuation manual. In lieu of the valuation of the reserves required of a foreign or alien company, the commissioner may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this section.(B) Subsection (n) and (o) of this section apply to all policies and contracts issued on or after the operative date of the valuation manual.(c) Actuarial opinion of reserves. (1) Actuarial Opinion Prior to the Operative Date of the Valuation Manual. (A) General.  Every life insurance company doing business in this state shall annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by rule are computed appropriately, are based on assumptions which satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this state. The commissioner shall define the specifics of this opinion and add any other items deemed to be necessary to its scope.(B) Actuarial analysis of reserves and assets supporting the reserves. (i) Every life insurance company, except as exempted by or pursuant to rule, shall also annually include in the opinion required by paragraph (A) of this subdivision an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by rule, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the companys obligations under the policies and contracts, including, but not limited to, the benefits under and expenses associated with the policies and contracts.(ii) The commissioner may provide, by rule, for a transition period for establishing any higher reserves that the qualified actuary may deem necessary in order to render the opinion required by this subdivision.(C) Requirement for opinion under paragraph (B) of this subdivision. - Each opinion required by paragraph (B) of this subdivision shall be governed by the following provisions:(i) A memorandum in form and substance acceptable to the commissioner as specified by rule shall be prepared to support each actuarial opinion.(ii) If the insurance company fails to provide a supporting memorandum at the request of the commissioner within a period specified by rule or the commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the rules or is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the commissioner.(D) Requirement for all opinions subject to this subdivision.  Every opinion required by this subdivision is governed by the following:(i) The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after December 31, 1995.(ii) The opinion shall apply to all business in force, including individual and group health insurance plans, in form and substance acceptable to the commissioner as specified by rule.(iii) The opinion shall be based on standards adopted, from time to time, by the actuarial standards board and on such additional standards as the commissioner may by rule prescribe.(iv) In the case of an opinion required to be submitted by a foreign or alien company, the commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state.(v) For the purposes of this subsection, "qualified actuary" means a member in good standing of the American Academy of Actuaries who meets the requirements set forth in such regulations.(vi) Except in cases of fraud or willful misconduct, the qualified actuary is not liable for damages to any person (other than the insurance company and the commissioner) for any act, error, omission, decision, or conduct with respect to the actuarys opinion.(vii) Disciplinary action by the commissioner against the company or the qualified actuary shall be defined in rules by the commissioner.(viii) Except as provided in subparagraphs (xii), (xiii), and (xiv) of this paragraph, documents, materials or other information in the possession or control of the commissioner that are a memorandum in support of the opinion and any other material provided by the company to the commissioner in connection therewith are confidential by law and privileged, exempt from disclosure under 29A-1-1 et seq. of this code and are not to be subject to subpoena and, additionally, are not subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioners official duties.(ix) Neither the commissioner nor any person who received documents, materials, or other information while acting under the authority of the commissioner is permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subparagraph (viii) of this paragraph.(x) In order to assist in the performance of the commissioners duties, the commissioner:(I) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subparagraph (viii) of this paragraph with other state, federal, and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal, and international law-enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information;(II) May receive documents, materials, or information, including otherwise confidential and privileged documents, materials or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law-enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and(III) May enter into agreements governing sharing and use of information consistent with this subparagraph and subparagraphs (viii) and (ix) of this paragraph.(xi) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information occurs as a result of disclosure to the commissioner under this subsection or as a result of sharing as authorized in subparagraph (x) of this paragraph.(xii) A memorandum in support of the opinion, and any other material provided by the company to the commissioner in connection with the memorandum, may be subject to subpoena for the purpose of defending an action seeking damages from the actuary submitting the memorandum by reason of an action required by this subsection or by rules.(xiii) The memorandum or other material may otherwise be released by the commissioner with the written consent of the company or to the American Academy of Actuaries upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the commissioner for preserving the confidentiality of the memorandum or other material.(xiv) Once any portion of the confidential memorandum is cited by the company in its marketing or is cited before a governmental agency other than a state insurance department or is released by the company to the news media, all portions of the confidential memorandum shall be no longer confidential.(2) Actuarial Opinion of Reserves after the Operative Date of the Valuation Manual. (A) General.  Every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and subject to rule of the commissioner shall annually submit the opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this state. The valuation manual will prescribe the specifics of this opinion including any items deemed to be necessary to its scope.(B) Actuarial Analysis of Reserves and Assets Supporting Reserves.  Every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and subject to rule of the commissioner, except as exempted in the valuation manual, shall also annually include in the opinion required by paragraph (A) of this subdivision, an opinion of the same appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified in the valuation manual, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the companys obligations under the policies and contracts, including, but not limited to, the benefits under and expenses associated with the policies and contracts.(C) Requirement for opinion under paragraph (B) of this subdivision.  Each opinion required by paragraph (B) of this subdivision shall be governed by the following:(i) A memorandum, in form and substance as specified in the valuation manual, and acceptable to the commissioner, shall be prepared to support each actuarial opinion.(ii) If the insurance company fails to provide a supporting memorandum at the request of the commissioner within a period specified in the valuation manual or the commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the valuation manual or is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the commissioner.(D) Requirement for all opinions subject to this subdivision.  Every opinion required by this subdivision is governed by the following:(i) The opinion shall be in form and substance as specified in the valuation manual and acceptable to the commissioner.(ii) The opinion shall be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year ending on or after the operative date of the valuation manual.(iii) The opinion shall apply to all policies and contracts subject to paragraph (B) of this subdivision, plus other actuarial liabilities as may be specified in the valuation manual.(iv) The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board or its successor, and on such additional standards as may be prescribed in the valuation manual.(v) In the case of an opinion required to be submitted by a foreign or alien company, the commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state.(vi) Except in cases of fraud or willful misconduct, the appointed actuary is not liable for damages to any person, other than the insurance company and the commissioner, for any act, error, omission, decision, or conduct with respect to the appointed actuarys opinion.(vii) Disciplinary action by the commissioner against the company or the appointed actuary shall be defined in rules.(d) Computation of minimum standards.  Except as otherwise provided in subsections (e), (f), and (m) of this section, the minimum standard for the valuation of all policies and contracts issued prior to January 1, 1958 shall be that provided by the laws in effect immediately prior to that date. Except as otherwise provided in subsections (e), (f), and (m) of this section, the minimum standard for the valuation of all policies and contracts issued on or after January 1, 1958 of this section shall be the commissioners reserve valuation methods defined in subsections (g), (h), (k), and (m) of this section, three and one-half percent interest or in the case of life insurance policies and contracts, other than annuity and pure endowment contracts, issued on or after June 1, 1974, four percent interest for policies issued prior to April 6, 1977, five and one-half percent interest for single premium life insurance policies, and four and one-half percent interest for all other policies issued on and after April 6, 1977, and the following tables:(1) For all ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in the policies:(A) The commissioners 1941 standard ordinary mortality table for policies issued prior to the operative date of 33-13-30(e) of this code;(B) The commissioners 1958 standard ordinary mortality table for policies issued on or after the operative date of 33-13-30(e) of this code and prior to the operative date of 33-13-30(g) of this code: Provided, That for any category of policies issued on female risks, all modified net premiums and present values referred to in this section may be calculated according to an age not more than six years younger than the actual age of the insured; and(C) For policies issued on or after the operative date of 33-13-30(g) of this code:(i) The commissioners 1980 standard ordinary mortality table; (ii) At the election of the company for any one or more specified plans of life insurance, the commissioners 1980 standard ordinary mortality table with 10 year select mortality factors; or(iii) Any ordinary mortality table adopted after the year 1980 by the NAIC that is approved by rule promulgated by the commissioner for use in determining the minimum standard of valuation for the policies.(2) For all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in the policies: the 1941 standard industrial mortality table for policies issued prior to the operative date of 33-13-30(f) of this code and for policies issued on or after the operative date, the commissioners 1961 standard industrial mortality table or any industrial mortality table adopted after the year 1980 by the NAIC that is approved by rule promulgated by the commissioner for use in determining the minimum standard of valuation for the policies.(3) For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in policies: the 1937 standard annuity mortality table or, at the option of the company, the annuity mortality table for 1949, ultimate, or any modification of either of these tables approved by the commissioner.(4) For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies: The group annuity mortality table for 1951, any modification of the table approved by the commissioner or, at the option of the company, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts.(5) For total and permanent disability benefits in or supplementary to ordinary policies or contracts: for policies or contracts issued on or after January 1, 1966, the tables of period two disablement rates and the 1930 to 1950 termination rates of the 1952 disability study of the society of actuaries, with due regard to the type of benefit or any tables of disablement rates and termination rates adopted after the year 1980 by the NAIC that are approved by rule promulgated by the commissioner for use in determining the minimum standard of valuation for the policies; for policies or contracts issued on or after January 1, 1961, and prior to January 1, 1966, either those tables or, at the option of the company, the Class (3) disability table (1926); and for policies issued prior to January 1, 1961, the Class (3) disability table (1926). Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies.(6) For accidental death benefits in or supplementary to policies issued on or after January 1, 1966, the 1959 accidental death benefits table or any accidental death benefits table adopted after the year 1980 by the NAIC that is approved by rules promulgated by the commissioner for use in determining the minimum standard of valuation for the policies, for policies issued on or after January 1, 1961, and prior to January 1, 1966, either such table or, at the option of the company, the intercompany double indemnity mortality table; and for policies issued prior to January 1, 1961, the intercompany double indemnity mortality table. Either table shall be combined with a mortality table for calculating the reserves for life insurance policies.(7) For group life insurance, life insurance issued on the substandard basis, and other special benefits: Tables as may be approved by the commissioner.(e) Computation of minimum standard for annuities.  Except as provided in subsection (f) of this section, the minimum standard for the valuation of all individual annuity and pure endowment contracts issued on or after the operative date of this subsection, and for all annuities and pure endowments purchased on or after the operative date under group annuity and pure endowment contracts, shall be the commissioners reserve valuation methods defined in subsections (g) and (h) of this section and the following tables and interest rates:(1) For individual annuity and pure endowment contracts issued prior to April 6, 1977, excluding any disability and accidental death benefits in the contracts: The 1971 individual annuity mortality table or any modification of this table approved by the commissioner and six percent interest for single premium immediate annuity contracts and four percent interest for all other individual annuity and pure endowment contracts;(2) For individual single premium immediate annuity contracts issued on or after April 6, 1977, excluding any disability and accidental death benefits in the contracts: The 1971 individual annuity mortality table or any individual annuity mortality table adopted after the year 1980 by the NAIC that is approved by rule promulgated by the commissioner for use in determining the minimum standard of valuation for the contracts or any modification of these tables approved by the commissioner and seven and one-half percent interest;(3) For individual annuity and pure endowment contracts issued on or after April 6, 1977, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in those contracts: The 1971 individual annuity mortality table or any individual annuity mortality table adopted after the year 1980 by the NAIC that is approved by rule promulgated by the commissioner for use in determining the minimum standard of valuation for the contracts or any modification of these tables approved by the commissioner and five and one-half percent interest for single premium deferred annuity and pure endowment contracts and four and one-half percent interest for all other individual annuity and pure endowment contracts;(4) For all annuities and pure endowments purchased prior to April 6, 1977, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under those contracts: The 1971 group annuity mortality table or any modification of this table approved by the commissioner and six percent interest;(5) For all annuities and pure endowments purchased on or after April 6, 1977, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under the contracts: The 1971 group annuity mortality table or any group annuity mortality table adopted after the year 1980 by the NAIC that is approved by rule promulgated by the commissioner for use in determining the minimum standard of valuation for annuities and pure endowments or any modification of these tables approved by the commissioner and seven and one-half percent interest.After June 3, 1974, any company may file with the commissioner a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1979, which shall be the operative date of this subsection for the company provided, if a company makes no election, the operative date of this section for the company shall be January 1, 1979.(f) Computation of minimum standard by calendar year of issue. (1) The interest rates used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest rates as defined in this section:(A) All life insurance policies issued in a particular calendar year, on or after the operative date of 33-13-30(g) of this code, as amended;(B) All individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1982;(C) All annuities and pure endowments purchased in a particular calendar year on or after January 1, 1982, under group annuity and pure endowment contracts; and(D) The net increase, if any, in a particular calendar year after January 1, 1982, in amounts held under guaranteed interest contracts.(2) Calendar year statutory valuation interest rates. (A) The calendar year statutory valuation interest rates, I, shall be determined as follows and the results rounded to the nearer one quarter of one percent:(i) For life insurance: I =.03 + W(R1 - .03) + W/2(R2 - .09);(ii) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options: I = .03 + W(R - .03)Where R1 is the lesser of R and .09; R2 is the greater of R and .09; R is the reference interest rate defined in this subsection; and W is the weighting factor defined in this subsection;(iii) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue-year basis, except as stated in subparagraph (ii) of this paragraph, the formula for life insurance stated in subparagraph (i) of this paragraph shall apply to annuities and guaranteed interest contracts with guarantee durations in excess of ten years and the formula for single premium immediate annuities stated in subparagraph (ii) of this paragraph shall apply to annuities and guaranteed interest contracts with guarantee duration of 10 years or less;(iv) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subparagraph (ii) of this paragraph shall apply;(v) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subparagraph (ii) of this paragraph shall apply.(B) However, if the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one half of one percent, the calendar year statutory valuation interest rate for the life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for the year 1980 (using the reference interest rate defined for the year 1979) and shall be determined for each subsequent calendar year regardless of when 33-13-30(g) of this code, as amended, becomes operative.(3) Weighting factors. (A) The weighting factors referred to in the formulas stated above are given in the following tables:(i) Weighting factors for life insurance:Guarantee duration of 10 years or less: .50Guarantee duration of more than 10 years but not more than 20 years: .45Guarantee duration of more than 20 years: .35For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values or both which are guaranteed in the original policy;(ii) Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options: .80;(iii) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subparagraph (ii) of this paragraph, shall be as specified in clauses (I), (II), and (III) of this subparagraph, according to the rules and definitions in clauses (IV), (V), and (VI) of this subparagraph:(I) For annuities and guaranteed interest contracts valued on an issue year basis, the following weighting factors shall apply:Guarantee duration of five years or less: Plan Type A - .80; Plan Type B - .60; Plan Type C - .50Guarantee duration of more than five years but not more than 10 years: Plan Type A - .75; Plan Type B - .60; Plan Type C - .50Guarantee duration of more than 10 years but not more than 20 years: Plan Type A - .65; Plan Type B - .50; Plan Type C - .45Guarantee duration of more than 20 years: Plan Type A - .45; Plan Type B - .35; Plan Type C - .35(II) For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in clause (I) of this subparagraph increased by: Plan Type A - .15; Plan Type B - .25; Plan Type C - .05(III) For annuities and guaranteed interest contracts valued on an issue-year basis (other than those with no cash settlement options) which do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis which do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors shown in clause (I) of this subparagraph or derived in clause (II) of this subparagraph increased by: Plan Type A - .05; Plan Type B - .05; Plan Type C - .05(IV) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of 20 years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guaranteed duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence.(V) Plan type as used in the above tables is defined as follows:Plan Type A:At any time policyholder may withdraw funds only: (1) With an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company; or (2) without such adjustment but in installments over five years or more; or (3) as an immediate life annuity; or (4) no withdrawal permitted;Plan Type B:Before expiration of the interest rate guarantee, policyholder may withdraw funds only: (1) With an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company; or (2) without such adjustment but in installments over five years or more; or (3) no withdrawal permitted. At the end of interest rate guarantee, funds may be withdrawn without such adjustment in a single sum or installments over less than five years;Plan Type C:Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five years either: (1) Without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company; or (2) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.(VI) A company may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue-year basis or on a change in fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue-year basis. As used in this section, an issue-year basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract and the change in fund basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.(4) The reference interest rate. (A) Reference interest rate referred to in subdivision (2) of this subsection is defined as follows:(i) For all life insurance, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year next preceding the year of issue, of the monthly average of the composite yield on seasoned corporate bonds as published by Moodys Investors Service, Inc.;(ii) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or year of purchase, of the monthly average of the composite yield on seasoned corporate bonds as published by Moodys Investors Service, Inc.;(iii) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subparagraph (ii) of this paragraph, with guarantee duration in excess of 10 years, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds as published by Moodys Investors Service, Inc.;(iv) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subparagraph (ii) of this paragraph, with guarantee duration of 10 years or less, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds as published by Moodys Investors Service, Inc.;(v) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds as published by Moodys Investors Service, Inc.; and(vi) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, except as stated in subparagraph (ii) of this paragraph, the average over a period of 12 months, ending on June 30 of the calendar year of the change in the fund, of the monthly average of the composite yield on seasoned corporate bonds as published by Moodys Investors Service, Inc.(5) Alternative method for determining reference interest rates. In the event that the monthly average of the composite yield on seasoned corporate bonds is no longer published by Moodys Investors Service, Inc., or in the event that the NAIC determines that the monthly average of the composite yield on seasoned corporate bonds as published by Moodys Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate, which is adopted by the NAIC and approved by rule promulgated by the commissioner, may be substituted.(g) Reserve valuation method: Life insurance and endowment benefits. (1) Except as otherwise provided in subsections (h), (k), and (m) of this section, reserves according to the commissioners reserve valuation method for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums shall be the excess, if any, of the present value, at the date of valuation, of the future guaranteed benefits provided by the policies, over the then present value of any future modified net premiums therefor. The modified net premiums for any such policy shall be the uniform percentage of the respective contract premiums for the benefits that the present value, at the date of issue of the policy, of all the modified net premiums shall be equal to the sum of the then present value of the benefits provided by the policy and the excess of paragraph (A) of this subdivision over paragraph (B) of this subdivision, as follows:(A) A net level annual premium equal to the present value, at the date of issue, of such benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of such policy on which a premium falls due: Provided, That such net level annual premium shall not exceed the net level annual premium on the 19 year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of such policy.(B) A net one-year term premium for such benefits provided for in the first policy year. (2) For any life insurance policy issued on or after January 1, 1985, for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the reserve according to the commissioners reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined herein as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than such excess premium shall, except as otherwise provided in subsection (k) of this section, be the greater of the reserve as of such policy anniversary calculated as described in subdivision (1) of this subsection and the reserve as of the policy anniversary calculated as described in that subdivision, but with: (i) The value defined in subdivision (1) of this subsection being reduced by 15 percent of the amount of such excess first-year premium; (ii) all present values of benefits and premiums being determined without reference to premiums or benefits provided by the policy after the assumed ending date; (iii) the policy being assumed to mature on the date as an endowment; and (iv) the cash surrender value provided on such date being considered as an endowment benefit. In making the above comparison, the mortality and interest bases stated in subsections (d) and (f) of this section shall be used.(3) Reserves according to the commissioners reserve valuation method shall be calculated by a method consistent with the principles of subdivisions (1) and (2) of this subsection for: (A) Life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums; (B) Group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code (26 U.S.C. 408) as now or hereafter amended; (C) Disability and accidental death benefits in all policies and contracts; and (D) All other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts. (h) Reserve valuation method: Annuity and pure endowment benefits. (1) This subsection shall apply to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code (26 U.S.C. 408) as now or hereafter amended.(2) Reserves according to the commissioners annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in the contracts, shall be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided by the contracts at the end of each respective contract year over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations, required by the terms of the contract, that become payable prior to the end of the respective contract year. The future guaranteed benefits shall be determined by using the mortality table, if any, and the interest rate, or rates, specified in the contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of the contracts to determine nonforfeiture values.(i) Minimum reserves. (1) In no event shall a companys aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, issued on or after January 1, 1958 be less than the aggregate reserves calculated in accordance with the methods set forth in subsections (g), (h), (k), and (l) of this section and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for the policies.(2) In no event shall the aggregate reserves for all policies, contracts, and benefits be less than the aggregate reserves determined by the qualified actuary to be necessary to render the opinion required by subsection (c) of this section.(j) Optional reserve calculation. (1) Reserves for all policies and contracts issued prior to January 1, 1958 may be calculated, at the option of the company, according to any standards which produce greater aggregate reserves for all policies and contracts than the minimum reserves required by the laws in effect immediately prior to such date.(2) Reserves for any category of policies, contracts or benefits as established by the commissioner issued on or after January 1, 1958 may be calculated, at the option of the company, according to any standards which produce greater aggregate reserves for such category than those calculated according to the minimum standard herein provided, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, shall not be higher than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided therein.(3) Any company which at any time shall have adopted any standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard herein provided may, with the approval of the commissioner, adopt any lower standard of valuation, but not lower than the minimum herein provided: Provided, That for the purposes of this section, the holding of additional reserves previously determined by the appointed actuary to be necessary to render the opinion required by subsection (c) of this section shall not be considered to be the adoption of a higher standard of valuation.(k) Reserve calculation: Valuation net premium exceeding the gross premium charged. (1) If in any contract year the gross premium charged by any life insurance company on any policy or contract is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve thereon but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for the policy or contract shall be the greater of either the reserve calculated according to the mortality table, rate of interest, and method actually used for the policy or contract or the reserve calculated by the method actually used for the policy or contract but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this section are those standards stated in subsections (d) and (f) of this section: Provided, That for any life insurance policy issued on or after January 1, 1985, for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than the excess premium, the foregoing provisions of this subsection shall be applied as if the method actually used in calculating the reserve for the policy were the method described in subsection (g) of this section, ignoring subdivision (2) of said subsection.(2) The minimum reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve calculated in accordance with subsection (g) of this section, including subdivision (2) of said subsection, and the minimum reserve calculated in accordance with this subsection.(l) Reserve calculation: Indeterminate premium plans. In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurance company based on then estimates of future experience, or in the case of any plan of life insurance or annuity which is of such a nature that the minimum reserves cannot be determined by the methods described in subsections (g), (h), and (k) of this section, the reserves which are held under any such plan must:(1) Be appropriate in relation to the benefits and the pattern of premiums for that plan; and(2) Be computed by a method which is consistent with the principles of this standard valuation law as determined by rules promulgated by the commissioner.(m) Minimum standard for accident and health insurance contracts.  For accident and health insurance contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under subdivision (2), subsection (b) of this section. For accident and sickness insurance contracts issued on or after January 1, 1958 and prior to the operative date of the valuation manual, the minimum standard of valuation is the standard adopted by the commissioner by rule. (n) Valuation manual for policies issued on or after the operative date of the valuation manual. (1) The commissioner shall promulgate emergency rules adopting a valuation manual that is substantially similar to the valuation manual approved by the NAIC and any amendments to the manual as may be subsequently approved by the NAIC, and the rules shall be effective in accordance with subdivisions (2) and (3) of this subsection.(2) The operative date of the valuation manual is January 1 of the first calendar year following the first July 1 as of which all of the following have occurred:(A) The valuation manual has been adopted by the NAIC by an affirmative vote of at least 42 members, or three-fourths of the members voting, whichever is greater;(B) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by states representing greater than 75 percent of the direct premiums written as reported in the following annual statements submitted for 2008: Life, accident, and health annual statements; health annual statements; and fraternal annual statements; and(C) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by at least 42 of the following 55 jurisdictions: The 50 states of the United States, American Samoa, the American Virgin Islands, the District of Columbia, Guam, and Puerto Rico.(3) Unless a change in the valuation manual specifies a later effective date, changes to the valuation manual shall be effective on January 1 following the date when the changes have been adopted by the NAIC by an affirmative vote representing:(A) At least three-fourths of the members of the NAIC voting, but not less than a majority of the total membership; and(B) Members of the NAIC representing jurisdictions totaling greater than 75 percent of the direct premiums written, as reported in the following annual statements most recently available prior to the vote in paragraph (A) of this subdivision: Life, accident, and health annual statements, health annual statements, or fraternal annual statements.(4) The valuation manual must specify all of the following:(A) Minimum valuation standards for and definitions of the policies or contracts subject to subdivision (2), subsection (b) of this section. The minimum valuation standards shall be:(i) The commissioners reserve valuation method for life insurance contracts, other than annuity contracts, subject to subdivision (2), subsection (b) of this section;(ii) The commissioners annuity reserve valuation method for annuity contracts subject to subdivision (2), subsection (b) of this section; and(iii) Minimum reserves for all other policies or contracts subject to subdivision (2), subsection (b) of this section.(B) Which policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation in subdivision (1), subsection (o) of this section and the minimum valuation standards consistent with those requirements.(C) For policies and contracts subject to a principle-based valuation under subsection (o) of this section:(i) Requirements for the format of reports to the commissioner under paragraph (C), subdivision (2), subsection (o) of this section and which shall include information necessary to determine if the valuation is appropriate and in compliance with this section;(ii) Assumptions shall be prescribed for risks over which the company does not have significant control or influence; and(iii) Procedures for corporate governance and oversight of the actuarial function and a process for appropriate waiver or modification of the procedures.(D) For policies not subject to a principle-based valuation under subsection (o), the minimum valuation standard shall either:(i) Be consistent with the minimum standard of valuation prior to the operative date of the valuation manual; or(ii) Develop reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring.(E) Other requirements, including, but not limited to, those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memoranda, transition rules and internal controls; and(F) The data and form of the data required under subsection (p) of this section, with whom the data must be submitted, and may specify other requirements including data analyses and reporting of analyses.(5) For policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under subdivision (2), subsection (b) of this section, except as provided under subdivision (6) or (8) of this subsection.(6) In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual is not, in the opinion of the commissioner, in compliance with this section, then the company shall, with respect to the requirements, comply with minimum valuation standards prescribed by rule.(7) The commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a companys compliance with any requirement set forth in this section. The commissioner may rely upon the opinion, regarding provisions contained within this section, of a qualified actuary engaged by the commissioner of another state, district, or territory of the United States. As used in this subdivision, term "engage" includes employment and contracting.(8) The commissioner may require a company to change any assumption or method that in the opinion of the commissioner is necessary in order to comply with the requirements of the valuation manual or this section, and the company shall adjust the reserves as required by the commissioner.(o) Requirements of a Principle-Based Valuation.  (1) A company must establish reserves using a principle-based valuation that meets the following conditions for policies or contracts as specified in the valuation manual:(A) Quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts. For polices or contracts with significant tail risk, reflects conditions appropriately adverse to quantify the tail risk.(B) Incorporate assumptions, risk analysis methods and financial models, and management techniques that are consistent with, but not necessarily identical to, those utilized within the companys overall risk assessment process, while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods.(C) Incorporate assumptions that are derived in one of the following manners:(i) The assumption is prescribed in the valuation manual; or(ii) For assumptions that are not prescribed, the assumptions shall either:(I) Be established utilizing the companys available experience, to the extent it is relevant and statistically credible; or(II) To the extent that company data is not available, relevant or statistically credible, be established utilizing other relevant, statistically credible experience.(D) Provide margins for uncertainty including adverse deviation and estimation error, such that the greater the uncertainty, the larger the margin and resulting reserve.(2) A company using a principle-based valuation for one or more policies or contracts subject to this section as specified in the valuation manual shall:(A) Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual.(B) Provide to the commissioner and the board of directors an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation. The controls shall be designed to assure that all material risks inherent in the liabilities and associated assets subject to the valuation are included in the valuation, and that valuations are made in accordance with the valuation manual. The certification shall be based on the controls in place as of the end of the preceding calendar year.(C) Develop, and file with the commissioner upon request, a principle-based valuation report that complies with standards prescribed in the valuation manual.(3) A principle-based valuation may include a prescribed formulaic reserve component.(p) Experience reporting for policies in force on or after the operative date of the valuation manual.  A company shall submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the valuation manual.(q) Confidentiality. (1) For purposes of this subsection, "confidential information" means:(A) A memorandum in support of an opinion submitted under subsection (c) of this section and any other documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by, or disclosed to the commissioner or any other person in connection with the memorandum;(B) All documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by, or disclosed to the commissioner or any other person in the course of an examination made under subdivision (7), subsection (n) of this section, but only to the same extent as the documents, materials, and other information would be held confidential were they created, produced or obtained in connection with an examination made under the general examination law set forth in 33-2-9 of this code;(C) Any reports, documents, materials, and other information developed by a company in support of, or in connection with, an annual certification by the company under paragraph (B), subdivision (2), subsection (o) of this section evaluating the effectiveness of the companys internal controls with respect to a principle-based valuation and any other documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by, or disclosed to the commissioner or any other person in connection with the reports, documents, materials, and other information;(D) Any principle-based valuation report developed under paragraph (C), subdivision (2), subsection (o) of this section and any other documents, materials, and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by, or disclosed to the commissioner or any other person in connection with the report; and(E) Any documents, materials, data, and other information submitted by a company under subsection (p) of this section (collectively, "experience data") and any other documents, materials, data, and other information, including, but not limited to, all working papers, and copies thereof, created or produced in connection with the experience data, in each case that include any potentially company-identifying or personally identifiable information, that is provided to or obtained by the commissioner (together with any "experience data", the "experience materials") and any other documents, materials, data, and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by, or disclosed to the commissioner or any other person in connection with the experience materials.(2) Privilege for, and Confidentiality of, Confidential Information. (A) Except as otherwise provided in this subsection, a companys confidential information is confidential by law and privileged, is exempt from disclosure under 29A-1-1 et seq. of this code, is not subject to subpoena, and is not subject to discovery or admissible in evidence in any private civil action: Provided, That the commissioner is authorized to use the confidential information in the furtherance of any regulatory or legal action brought against the company as a part of the commissioners official duties.(B) Neither the commissioner nor any person who received confidential information while acting under the authority of the commissioner is permitted or required to testify in any private civil action concerning any confidential information.(C) In order to assist in the performance of the commissioners duties, the commissioner may share confidential information:(i) With other state, federal, and international regulatory agencies and with the NAIC and its affiliates and subsidiaries;(ii) In the case of confidential information specified in paragraphs (A) and (D), subdivision (1) of this subsection only, with the Actuarial Board for Counseling and Discipline or its successor upon request stating that the confidential information is required for the purpose of professional disciplinary proceedings and with state, federal, and international law-enforcement officials; and(iii) In the case of subparagraphs (i) and (ii) of this paragraph, provided that the recipient agrees and has the legal authority to agree, to maintain the confidentiality and privileged status of the documents, materials, data, and other information in the same manner and to the same extent as required for the commissioner.(D) The commissioner may receive documents, materials, data, and other information, including otherwise confidential and privileged documents, materials, data, or information, from the NAIC and its affiliates and subsidiaries, from regulatory or law-enforcement officials of other foreign or domestic jurisdictions, and from the Actuarial Board for Counseling and Discipline or its successor, and he or she shall maintain as confidential or privileged any document, material, data, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or other information.(E) The commissioner may enter into agreements governing sharing and use of information consistent with this subdivision.(F) No waiver of any applicable privilege or claim of confidentiality in the confidential information occurs as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in paragraph (C) of this subdivision.(G) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subdivision is available and may be enforced in any proceeding in, and in any court of, this state.(H) In this subsection "regulatory agency", "law-enforcement agency", and the "NAIC" include, but are not limited to, their employees, agents, consultants, and contractors.(3) Notwithstanding subdivision (2) of this subsection, any confidential information specified in paragraphs (A) and (D), subdivision (1) of this subsection:(A) May be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary submitting the related memorandum in support of an opinion submitted under subsection (c) of this section or principle-based valuation report developed under paragraph (C), subdivision (2), subsection (o) of this section by reason of an action required by this section or by rules promulgated hereunder;(B) May otherwise be released by the commissioner with the written consent of the company; and(C) Once any portion of a memorandum in support of an opinion submitted under subsection (c) of this section or a principle-based valuation report developed under paragraph (C), subdivision (2), subsection (o) of this section is cited by the company in its marketing or is publicly volunteered to or before a governmental agency other than a state insurance department or is released by the company to the news media, all portions of the memorandum or report are no longer confidential.
The commissioner shall propose rules, on or before July 1, 1998, adopting the national association of Insurance Commissioners' model proposal "Recognizing Annuity Mortality Tables For Use In Determining Reserve Liabilities," which incorporates the "Annuity 2000 Mortality Table" and the "1994 Group Annuity Reserving Table."
(a) The purpose of this article is to protect the interestsof insureds by promoting insurer solvency and financial strength. This will be accomplished through the application of investment standards that facilitate a reasonable balance of the following objectives:(1) To preserve principal;(2) To assure reasonable diversification as to type of investment, issuer and credit quality; and(3) To allow insurers to allocate investments in a manner consistent with principles of prudent investment management to achieve an adequate return so that obligations to insureds are adequately met and financial strength is sufficient to cover reasonably foreseeable contingencies.(b) This article applies only to investments and investment practices of domestic insurers and United States branches of alien insurers entered through this state. This article does not apply to separate accounts of an insurer except as provided in article thirteen-a of this chapter.(c) This recodification of former article eight preserves and continues prior limitations contained in section 106(a)(1) or (2) of the Secondary Mortgage Market Enhancement Act of 1984 ("SMMEA"), an act of the Congress of the United States adopted by the acts of the Legislature in 1991 albeit under separate sections of the same article. Pursuant to section 106(b) of SMMEA, this section prohibits domestic insurers from exercising the investment authority granted any person, trust, corporation, partnership, association, business trust or business entity pursuant to section 106(a)(1) or (2) of that act.
(a) Except as otherwise specified in this article, an insurer may not acquire, directly or indirectly through an investment subsidiary, an investment under this article if, as a result of and after giving effect to the investment, the insurer would hold more than three percent of its admitted assets in investments of all kinds issued, assumed, accepted, insured or guaranteed by a single person, or five percent of its admitted assets in investments in the voting securities of a depository institution or any company that controls the institution.(b) This three-percent limitation does not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization.(c) Asset-backed securities are not subject to the limitations of subsection (a) of this section, however, an insurer may not acquire an asset-backed security if, as a result of and after giving effect to the investment, the aggregate amount of asset-backed securities secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity, then held by the insurer would exceed three percent of its admitted assets.(d) Medium and lower grade investments. --An insurer may not acquire, directly or indirectly through an investment subsidiary, an investment under sections eleven, fourteen and seventeen of this article or counterparty exposure under subsection (d), section eighteen of this article if, as a result of and after giving effect to the investment:(1) The aggregate amount of medium and lower grade investments then held by the insurer would exceed twenty percent of its admitted assets;(2) The aggregate amount of lower grade investments then held by the insurer would exceed ten percent of its admitted assets;(3) The aggregate amount of investments rated 5 or 6 by the SVO then held by the insurer would exceed three percent of its admitted assets;(4) The aggregate amount of investments rated 6 by the SVO then held by the insurer would exceed one percent of its admitted assets; or(5) The aggregate amount of medium and lower grade investments then held by the insurer that receive as cash income less than the equivalent yield for treasury issues with a comparative average life, would exceed one percent of its admitted assets.(e) An insurer may not acquire, directly or indirectly through an investment subsidiary, an investment under sections eleven, fourteen and seventeen of this article or counterparty exposure under subsection (d), section eighteen of this article if, as a result of and after giving effect to the investment:(1) The aggregate amount of medium and lower grade investments issued, assumed, guaranteed, accepted or insured by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, then held by the insurer would exceed one percent of its admitted assets;(2) The aggregate amount of lower grade investments issued, assumed, guaranteed, accepted or insured by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, then held by the insurer would exceed one half of one percent of its admitted assets; or(3) If an insurer attains or exceeds the limit of any one rating category referred to in this subsection, the insurer will not be precluded from acquiring investments in other rating categories subject to the specific and multicategory limits applicable to those investments.(f) Canadian investments. --An insurer may not acquire, directly or indirectly through an investment subsidiary, a Canadian investment authorized by this article if, as a result of and after giving effect to the investment, the aggregate amount of these investments then held by the insurer would exceed forty percent of its admitted assets, or if the aggregate amount of Canadian investments not acquired under subdivision (2), section eleven of this article then held by the insurer would exceed twenty-five percent of its admitted assets.(g) However, as to an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of subsection (f) of this section shall be increased by the greater of:(1) The amount the insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or(2) One hundred fifteen percent of the amount of its reserves and other obligations under contracts on lives or risks resident or located in Canada.
(a) Subject to the limitations of subsection (b) of this section, an insurer may acquire rated credit instruments:(1) Subject to the limitations of subsection (b), section ten of this article, but not to the limitations of subsection (a), section ten of this article, an insurer may acquire rated credit instruments issued, assumed, guaranteed or insured by:(A) The United States; or(B) A government-sponsored enterprise of the United States, if the instruments of the government-sponsored enterprise are assumed, guaranteed or insured by the United States or are otherwise backed or supported by the full faith and credit of the United States.(2) Subject to the limitations of subsection (b), section ten of this article, but not to the limitations of subsection (a) of said section, an insurer may acquire rated credit instruments issued, assumed, guaranteed or insured by:(A) Canada; or(B) A government-sponsored enterprise of Canada, if the instruments of the government-sponsored enterprise are assumed, guaranteed or insured by Canada or are otherwise backed or supported by the full faith and credit of Canada. However, an insurer may not acquire an instrument under this subdivision if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this subdivision would exceed forty percent of its admitted assets.(3) Subject to the limitations of subsection (b), section ten of this article, but not to the limitations of subsection (a) of said section, an insurer may acquire rated credit instruments, excluding asset-backed securities:(A) Issued by a government money market mutual fund, a class one money market mutual fund or a class one bond mutual fund;(B) Issued, assumed, guaranteed or insured by a government-sponsored enterprise of the United States other than those eligible under subsection (a) of this section;(C) Issued, assumed, guaranteed or insured by a state, if the instruments are general obligations of the state; or(D) Issued by a multilateral development bank. However, an insurer may not acquire an instrument of any one fund, any one enterprise or entity or any one state under this subdivision if, as a result of and after giving effect to the investment, the aggregate amount of investments then held in any one fund, enterprise or entity or state under this subdivision would exceed ten percent of its admitted assets.(4) Subject to the limitations of section ten of this article, an insurer may acquire preferred stocks that are not foreign investments and that meet the requirements of rated credit instruments if, as a result of and after giving effect to the investment:(A) The aggregate amount of preferred stocks then held by the insurer under this subdivision does not exceed twenty percent of its admitted assets; and(B) The aggregate amount of preferred stocks then held by the insurer under this subdivision which are not sinking fund stocks or rated P1 or P2 by the SVO does not exceed ten percent of its admitted assets.(5) Subject to the limitations of section ten of this article, in addition to those investments eligible under subdivisions (1), (2), (3) and (4) of this section, an insurer may acquire rated credit instruments that are not foreign investments.(b) An insurer may not acquire special rated credit instruments under this section if, as a result of and after giving effect to the investment, the aggregate amount of special rated credit instruments then held by the insurer would exceed five percent of its admitted assets.
(a) An insurer may acquire investments in investment pools that:(1) Invest only in:(A) Obligations that are rated 1 or 2 by the SVO or have an equivalent of an SVO 1 or 2 rating (or, in the absence of a 1 or 2 rating or equivalent rating, the issuer has outstanding obligations with an SVO 1 or 2 or equivalent rating) by a nationally recognized statistical rating organization recognized by the SVO and have:(i) A remaining maturity of three hundred ninety-seven days or less or a put that entitles the holder to receive the principal amount of the obligation which may be exercised through maturity at specified intervals not exceeding three hundred ninety-seven days; or(ii) A remaining maturity of three years or less and a floating interest rate that resets no less frequently than quarterly on the basis of a current short-term index (federal funds, prime rate, treasury bills, London interbank offered rate (LIBOR) or commercial paper) and is subject to no maximum limit, if the obligations do not have an interest rate that varies inversely to market interest rate changes;(B) Government money market mutual funds or class one money market mutual funds; or(C) Securities lending, repurchase and reverse repurchase transactions that meet all the requirements of section sixteen of this article, except the quantitative limitations of subdivision (4), section sixteen of this article; or(2) Invest only in investments which an insurer may acquire under this article, if the insurer's proportionate interest in the amount invested in these investments does not exceed the applicable limits of this article.(b) For an investment in an investment pool to be qualified under this article, the investment pool may not:(1) Acquire securities issued, assumed, guaranteed or insured by the insurer or an affiliate of the insurer;(2) Borrow or incur any indebtedness for borrowed money, except for securities lending and reverse repurchase transactions that meet the requirements of section sixteen of this article except the quantitative limitations of subdivision (4), section sixteen of this article; or(3) Permit the aggregate value of securities then loaned or sold to, purchased from or invested in any one business entity under this section to exceed ten percent of the total assets of the investment pool.(c) The limitations of subsection (a), section ten of this article do not apply to an insurer's investment in an investment pool, however, an insurer may not acquire an investment in an investment pool under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this section:(1) In any one investment pool would exceed ten percent of its admitted assets;(2) In all investment pools investing in investments permitted under subdivision (2), subsection (a) of this section would exceed twenty-five percent of its admitted assets; or(3) In all investment pools would exceed thirty-five percent of its admitted assets.(d) For an investment in an investment pool to be qualified under this article, the manager of the investment pool shall:(1) Be organized under the laws of the United States or a state and designated as the pool manager in a pooling agreement;(2) Be the insurer, an affiliated insurer or a business entity affiliated with the insurer, a qualified bank, a business entity registered under the Investment Advisors Act of 1940, as amended, or, in the case of a reciprocal insurer or interinsurance exchange, its attorney-in-fact, or in the case of a United States branch of an alien insurer, its United States manager or affiliates or subsidiaries of its United States manager;(3) Compile and maintain detailed accounting records setting forth:(A) The cash receipts and disbursements reflecting each participant's proportionate investment in the investment pool;(B) A complete description of all underlying assets of the investment pool (including amount, interest rate, maturity date (if any) and other appropriate designations); and(C) Other records which, on a daily basis, allow third parties to verify each participant's investment in the investment pool; and(4) Maintain the assets of the investment pool in one or more accounts, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank. The custody agreement shall:(A) State and recognize the claims and rights of each participant;(B) Acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its investments in the investment pool; and(C) Contain an agreement that the underlying assets of the investment pool may not be commingled with the general assets of the custodian qualified bank or any other person.(e) The pooling agreement for each investment pool shall be in writing and shall provide that:(1) An insurer and its affiliated insurers or, in the case of an investment pool investing solely in investments permitted under subdivision (1), subsection (a) of this section, the insurer and its subsidiaries, affiliates or any pension or profit sharing plan of the insurer, its subsidiaries and affiliates or, in the case of a United States branch of an alien insurer, affiliates or subsidiaries of its United States manager, shall, at all times, hold one hundred percent of the interests in the investment pool;(2) The underlying assets of the investment pool may not be commingled with the general assets of the pool manager or any other person;(3) In proportion to the aggregate amount of each pool participant's interest in the investment pool:(A) Each participant owns an undivided interest in the underlying assets of the investment pool; and(B) The underlying assets of the investment pool are held solely for the benefit of each participant;(4) A participant, or in the event of the participant's insolvency, bankruptcy or receivership, its trustee, receiver or other successor-in-interest, may withdraw all or any portion of its investment from the investment pool under the terms of the pooling agreement;(5) Withdrawals may be made on demand without penalty or other assessment on any business day, but settlement of funds shall occur within a reasonable and customary period thereafter not to exceed five business days. Distributions under this subdivision shall be calculated in each case net of all then applicable fees and expenses of the investment pool. The pooling agreement shall provide that the pool manager shall distribute to a participant, at the discretion of the pool manager:(A) In cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool;(B) In kind, a pro rata share of each underlying asset; or(C) In a combination of cash and in kind distributions, a pro rata share in each underlying asset; and(6) The pool manager shall make the records of the investment pool available for inspection by the commissioner.
(a) Subject to the limitations of section ten of this article, an insurer may acquire equity interests in business entities organized under the laws of any domestic jurisdiction.(b) An insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this section would exceed twenty percent of its admitted assets, or the amount of equity interests then held by the insurer that are not listed on a qualified exchange would exceed five percent of its admitted assets. An accident and sickness insurer, health maintenance organization, hospital service corporation, medical service corporation, dental service corporation, or health service corporation is not subject to this section but is subject to the same aggregate limitation on equity interests as a property and casualty insurer under section twenty-six of this article and also to the provisions of section twenty-two of this article.(c) An insurer may not acquire under this section any investments that the insurer may acquire under section fifteen of this article.(d) An insurer may not short sell equity investments unless the insurer covers the short sale by owning the equity investment or an unrestricted right to the equity instrument exercisable within six months of the short sale.
(a) Subject to the limitations of section ten of this article, an insurer may acquire tangible personal property or equity interests in tangible personal property located or used wholly, or in part, within a domestic jurisdiction either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subdivision (4), section five of this article, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates or other similar instruments.(b) Investments acquired under subsection (a) of this section are eligible only if:(1) The property is subject to a lease or other agreement with a person whose rated credit instruments in the amount of the purchase price of the personal property the insurer could then acquire under section eleven of this article; and(2) The lease or other agreement provides the insurer the right to receive rental, purchase or other fixed payments for the use or purchase of the property, and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property, shall be adequate to return the cost of the insurer's investment in the property, plus a return considered adequate by the insurer.(c) The insurer shall compute the amount of each investment under this section on the basis of the out-of-pocket purchase price and applicable related expenses paid by the insurer for the investment, net of each borrowing made to finance the purchase price and expenses, to the extent the borrowing is without recourse to the insurer.(d) An insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under this section would exceed:(1) Two percent of its admitted assets; or(2) One half of one percent of its admitted assets as to any single item of tangible personal property.(e) For purposes of determining compliance with the limitations of section ten of this article, investments acquired by an insurer under this section shall be aggregated with those acquired under section eleven of this article, and each lessee of the property under a lease referred to in this section shall be considered the issuer of an obligation in the amount of the investment of the insurer in the property determined as provided in subsection (c) of this section.(f) Nothing in this section is applicable to tangible personal property lease arrangements between an insurer and its subsidiaries and affiliates under a cost sharing arrangement or agreement permitted under article twenty-seven of this chapter.
(a) Subject to the limitations of section ten of this article, an insurer may acquire, either directly, indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subsection (d), section five of this article, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments, obligations secured by mortgages on real estate situated within a domestic jurisdiction, but a mortgage loan which is secured by other than a first lien may not be acquired unless the insurer is the holder of the first lien. The obligations held by the insurer and any obligations with an equal lien priority may not, at the time of acquisition of the obligation, exceed:(1) Ninety percent of the fair market value of the real estate, if the mortgage loan is secured by a purchase money mortgage or like security received by the insurer upon disposition of the real estate;(2) Eighty percent of the fair market value of the real estate, if the mortgage loan requires immediate scheduled payment in periodic installments of principal and interest, has an amortization period of thirty years or less and periodic payments made no less frequently than annually. Each periodic payment shall be sufficient to assure that at all times the outstanding principal balance of the mortgage loan is not greater than the outstanding principal balance that would be outstanding under a mortgage loan with the same original principal balance, with the same interest rate and requiring equal payments of principal and interest with the same frequency over the same amortization period. Mortgage loans permitted under this subsection are permitted notwithstanding the fact that they provide for a payment of the principal balance prior to the end of the period of amortization of the loan. For residential mortgage loans, the eighty percent limitation may be increased to ninety-seven percent if acceptable private mortgage insurance has been obtained; or(3) Seventy-five percent of the fair market value of the real estate for mortgage loans that do not meet the requirements of subdivision (1) or (2) of this subsection.(b) For purposes of subsection (a) of this section, the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the federal housing administration or guaranteed by the administrator of Veterans Affairs, or their successors.(c) A mortgage loan that is held by an insurer under subsection (f), section three of this article or acquired under this section and is restructured in a manner that meets the requirements of a restructured mortgage loan in accordance with the NAIC accounting practices and procedures manual or successor publication continues to qualify as a mortgage loan under this article.(d) Subject to the limitations of section ten of this article, credit lease transactions that do not qualify for investment under section eleven of this article with the following characteristics are exempt from the provisions of subsection (a) of this section:(1) The loan amortizes over the initial fixed lease term at least in an amount sufficient so that the loan balance at the end of the lease term does not exceed the original appraised value of the real estate;(2) The lease payments cover or exceed the total debt service over the life of the loan;(3) A tenant or its affiliated entity whose rated credit instruments have an SVO 1 or 2 designation or a comparable rating from a nationally recognized statistical rating organization recognized by the SVO has a full faith and credit obligation to make the lease payments;(4) The insurer holds or is the beneficial holder of a first lien mortgage on the real estate;(5) The expenses of the real estate are passed through to the tenant, excluding exterior, structural, parking and heating, ventilation and air conditioning replacement expenses, unless annual escrow contributions, from cash flows derived from the lease payments, cover the expense shortfall; and(6) There is a perfected assignment of the rents due pursuant to the lease to, or for the benefit of, the insurer.(e) An insurer may acquire, manage and dispose of real estate situated in a domestic jurisdiction either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subsection (d), section five of this article, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates or other similar instruments. The real estate shall be income producing or intended for improvement or development for investment purposes under an existing program (in which case the real estate shall be considered to be income producing).(f) Income producing real estate that is acquired, managed or disposed of pursuant to subsection (e) of this section may be subject to mortgages, liens or other encumbrances, the amount of which may, to the extent that the obligations secured by the mortgages, liens or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsections (i) and (j) of this section.(g) An insurer may acquire, manage, and dispose of real estate for the convenient accommodation of the insurer's (which may include its affiliates) business operations, including home office, branch office and field office operations, as follows:(1) Real estate acquired under this subsection may include excess space for rent to others, if the excess space, valued at its fair market value, would otherwise be a permitted investment under subsection (e) of this section and is qualified by the insurer;(2) The real estate acquired under this subsection may be subject to one or more mortgages, liens or other encumbrances, the amount of which may, to the extent that the obligations secured by the mortgages, liens or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsection (k) of this section; and(3) For purposes of this subsection, business operations may not include that portion of real estate used for the direct provision of health care services by an accident and sickness insurer for its insureds. An insurer may acquire real estate used for these purposes under subsection (e) of this section.(h) An insurer may not acquire an investment under subsection (a) of this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under subsection (a) of this section would exceed:(1) One percent of its admitted assets in mortgage loans covering any one secured location;(2) One quarter of one percent of its admitted assets in construction loans covering any one secured location; or(3) Two percent of its admitted assets in construction loans in the aggregate.(i) An insurer may not acquire an investment under subsections (e) and (f) of this section if, as a result of and after giving effect to the investment and any outstanding guarantees made by the insurer in connection with the investment, the aggregate amount of investments then held by the insurer under subsections (e) and (f) of this section plus the guarantees then outstanding would exceed:(1) One percent of its admitted assets in one parcel or group of contiguous parcels of real estate, except that this limitation may not apply to that portion of real estate used for the direct provision of health care services by an accident and sickness insurer for its insureds, such as hospitals, medical clinics, medical professional buildings or other health facilities used for the purpose of providing health services; or(2) Fifteen percent of its admitted assets in the aggregate, but not more than five percent of its admitted assets as to properties that are to be improved or developed.(j) An insurer may not acquire an investment under subsection (a) or (e) of this section if, as a result of and after giving effect to the investment and any guarantees made by the insurer in connection with the investment, the aggregate amount of all investments then held by the insurer under subsections (a) and (e) of this section plus the guarantees then outstanding would exceed forty-five percent of its admitted assets. However, an insurer may exceed this limitation by no more than thirty percent of its admitted assets if:(1) This increased amount is invested only in residential mortgage loans;(2) The insurer has no more than ten percent of its admitted assets invested in mortgage loans other than residential mortgage loans;(3) The loan-to-value ratio of each residential mortgage loan does not exceed sixty percent at the time the mortgage loan is qualified under this increased authority and the fair market value is supported by an appraisal no more than two years old, prepared by an independent appraiser;(4) A single mortgage loan qualified under this increased authority may not exceed one half of one percent of its admitted assets;(5) The insurer files with the commissioner, and receives approval from the commissioner for, a plan that is designed to result in a portfolio of residential mortgage loans that is sufficiently geographically diversified; and(6) The insurer agrees to file annually with the commissioner records that demonstrate that its portfolio of residential mortgage loans is geographically diversified in accordance with the plan.(k) The limitations of section ten of this article do not apply to an insurer's acquisition of real estate under subsection (g) of this section. An insurer may not acquire real estate under said subsection if, as a result of and after giving effect to the acquisition, the aggregate amount of real estate then held by the insurer under said subsection would exceed ten percent of its admitted assets. With the permission of the commissioner, additional amounts of real estate may be acquired under said subsection.
(a) An insurer may enter into securities lending, repurchase, reverse repurchase and dollar roll transactions with business entities, subject to the following requirements:(1) The insurer's board of directors shall adopt a written plan that is consistent with the requirements of the written plan in subsection (a), section four of this article that specifies guidelines and objectives to be followed, such as:(A) A description of how cash received will be invested or used for general corporate purposes of the insurer;(B) Operational procedures to manage interest rate risk, counterparty default risk, the conditions under which proceeds from reverse repurchase transactions may be used in the ordinary course of business and the use of acceptable collateral in a manner that reflects the liquidity needs of the transaction; and(C) The extent to which the insurer may engage in these transactions.(2) The insurer shall enter into a written agreement for all transactions authorized in this section other than dollar roll transactions. The written agreement shall require that each transaction terminate no more than one year from its inception or upon the earlier demand of the insurer. The agreement shall be with the business entity counterparty, but for securities lending transactions, the agreement shall be with an agent acting on behalf of the insurer, if the agent is a qualified business entity, and if the agreement:(A) Requires the agent to enter into separate agreements with each counterparty that are consistent with the requirements of this section; and(B) Prohibits securities lending transactions under the agreement with the agent or its affiliates.(3) Cash received in a transaction under this section shall be invested in accordance with this article and in a manner that recognizes the liquidity needs of the transaction or used by the insurer for its general corporate purposes. For so long as the transaction remains outstanding, the insurer, its agent or custodian shall maintain, as to acceptable collateral received in a transaction under this section, either physically or through the book entry systems of the federal reserve, depository trust company, participants trust company or other securities depositories approved by the commissioner:(A) Possession of the acceptable collateral;(B) A perfected security interest in the acceptable collateral; or(C) In the case of a jurisdiction outside of the United States, title to, or rights of a secured creditor to, the acceptable collateral.(4) In a securities lending transaction, the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to one hundred two percent of the market value of the securities loaned by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than the market value of the loaned securities, the business entity counterparty shall be obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, at least equals one hundred two percent of the market value of the loaned securities.(5) In a reverse repurchase transaction, other than a dollar roll transaction, the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to ninety-five percent of the market value of the securities transferred by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than ninety-five percent of the market value of the securities so transferred, the business entity counterparty is obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, at least equals ninety-five percent of the market value of the transferred securities.(6) In a dollar roll transaction, the insurer shall receive cash in an amount at least equal to the market value of the securities transferred by the insurer in the transaction as of the transaction date.(7) In a repurchase transaction, the insurer shall receive as acceptable collateral transferred securities having a market value at least equal to one hundred two percent of the purchase price paid by the insurer for the securities. If at any time the market value of the acceptable collateral is less than one hundred percent of the purchase price paid by the insurer, the business entity counterparty is obligated to provide additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, at least equals one hundred two percent of the purchase price. Securities acquired by an insurer in a repurchase transaction may not be sold in a reverse repurchase transaction, loaned in a securities lending transaction or otherwise pledged.(b) The limitations of sections ten and seventeen of this article do not apply to the business entity counterparty exposure created by transactions under this section. For purposes of calculations made to determine compliance with this subsection, no effect will be given to the insurer's future obligation to resell securities, in the case of a repurchase transaction, or to repurchase securities, in the case of a reverse repurchase transaction. An insurer may not enter into a transaction under this section if, as a result of and after giving effect to the transaction:(1) The aggregate amount of securities then loaned, sold to or purchased from any one business entity counterparty under this section would exceed five percent of its admitted assets. In calculating the amount sold to or purchased from a business entity counterparty under repurchase or reverse repurchase transactions, effect will be given to netting provisions under a master written agreement; or(2) The aggregate amount of all securities then loaned, sold to or purchased from all business entities under this section would exceed forty percent of its admitted assets.
(a) Subject to the limitations of section ten of this article, an insurer may acquire foreign investments, or engage in investment practices with persons of or in foreign jurisdictions, of substantially the same types as those that an insurer is permitted to acquire under this article, other than of the type permitted under section twelve of this article, if, as a result and after giving effect to the investment:(1) The aggregate amount of foreign investments then held by the insurer under this subsection does not exceed twenty percent of its admitted assets; and(2) The aggregate amount of foreign investments then held by the insurer under this subsection in a single foreign jurisdiction does not exceed ten percent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or three percent of its admitted assets as to any other foreign jurisdiction.(b) Subject to the limitations of section ten of this article, an insurer may acquire investments, or engage in investment practices denominated in foreign currencies, whether or not they are foreign investments acquired under subsection (a) of this section, or additional foreign currency exposure as a result of the termination or expiration of a hedging transaction with respect to investments denominated in a foreign currency, if:(1) The aggregate amount of investments then held by the insurer under this subsection denominated in foreign currencies does not exceed ten percent of its admitted assets; and(2) The aggregate amount of investments then held by the insurer under this subsection denominated in the foreign currency of a single foreign jurisdiction does not exceed ten percent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or three percent of its admitted assets as to any other foreign jurisdiction; an investment will not be considered denominated in a foreign currency if the acquiring insurer enters into one or more contracts in transactions permitted under section eighteen of this article and the business entity counterparty agrees under the contract or contracts to exchange all payments made on the foreign currency denominated investment for United States currency at a rate which effectively insulates the investment cash flows against future changes in currency exchange rates during the period the contract or contracts are in effect.(c) In addition to investments permitted under subsections (a) and (b) of this section, an insurer that is authorized to do business in a foreign jurisdiction, and that has outstanding insurance, annuity or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction, may acquire foreign investments respecting that foreign jurisdiction, and may acquire investments denominated in the currency of that jurisdiction, subject to the limitations of section ten of this article. However, investments made under this subsection in obligations of foreign governments, their political subdivisions and government-sponsored enterprises will not be subject to the limitations of section ten of this article if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection may not exceed the greater of:(1) The amount the insurer is required by the law of the foreign jurisdiction to invest in the foreign jurisdiction; or(2) One hundred fifteen percent of the amount of its reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction.(d) In addition to investments permitted under subsections (a) and (b) of this section, an insurer that is not authorized to do business in a foreign jurisdiction, but which has outstanding insurance, annuity or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction, may acquire foreign investments respecting that foreign jurisdiction, and may acquire investments denominated in the currency of that jurisdiction subject to the limitations of section ten of this article. However, investments made under this subsection in obligations of foreign governments, their political subdivisions and government-sponsored enterprises are not subject to the limitations of section ten of this article if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection may not exceed one hundred five percent of the amount of its reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction.(e) Investments acquired under this section shall be aggregated with investments of the same types made under all other sections of this article, and in a similar manner, for purposes of determining compliance with the limitations, if any, contained in the other sections. Investments in obligations of foreign governments, their political subdivisions and government-sponsored enterprises of these persons, except for those exempted under subsections (c) and (d) of this section, are subject to the limitations of section ten of this article.
(a) An insurer may, directly or indirectly through an investment subsidiary, engage in derivative transactions under this section under the following conditions:(1) An insurer may use derivative instruments under this section to engage in hedging transactions and certain income generation transactions, as these terms may be further defined in rules promulgated by the commissioner.(2) An insurer shall be able to demonstrate to the commissioner the intended hedging characteristics and the ongoing effectiveness of the derivative transaction or combination of the transactions through cash flow testing or other appropriate analyses.(b) An insurer may enter into hedging transactions under this section if, as a result of and after giving effect to the transaction:(1) The aggregate statement value of options, caps, floors and warrants not attached to another financial instrument purchased and used in hedging transactions does not exceed seven and one-half percent of its admitted assets;(2) The aggregate statement value of options, caps and floors written in hedging transactions does not exceed three percent of its admitted assets; and(3) The aggregate potential exposure of collars, swaps, forwards and futures used in hedging transactions does not exceed six and one-half percent of its admitted assets.(c) An insurer may only enter into the following types of income generation transactions if as a result of and after giving effect to the transactions, the aggregate statement value of the fixed income assets that are subject to call or that generate the cash flows for payments under the caps or floors, plus the face value of fixed income securities underlying a derivative instrument subject to call, plus the amount of the purchase obligations under the puts, does not exceed ten percent of its admitted assets:(1) Sales of covered call options on noncallable fixed income securities, callable fixed income securities if the option expires by its terms prior to the end of the noncallable period or derivative instruments based on fixed income securities;(2) Sales of covered call options on equity securities, if the insurer holds in its portfolio, or can immediately acquire through the exercise of options, warrants or conversion rights already owned, the equity securities subject to call during the complete term of the call option sold;(3) Sales of covered puts on investments that the insurer is permitted to acquire under this article, if the insurer has escrowed, or entered into a custodian agreement segregating, cash or cash equivalents with a market value equal to the amount of its purchase obligations under the put during the complete term of the put option sold; or(4) Sales of covered caps or floors, if the insurer holds in its portfolio the investments generating the cash flow to make the required payments under the caps or floors during the complete term that the cap or floor is outstanding.(d) An insurer shall include all counterparty exposure amounts in determining compliance with the limitations of section ten of this article.(e) Pursuant to rules promulgated under section eight of this article, the commissioner may approve additional transactions involving the use of derivative instruments in excess of the limits of subsection (b) of this section or for other risk management purposes under rules promulgated by the commissioner, but replication transactions may not be permitted for other than risk management purposes.
A life insurer may lend to a policyholder on the security of the cash surrender value of the policyholder's policy a sum not exceeding the legal reserve that the insurer is required to maintain on the policy.
The following terms are defined for purposes of this article:(1) "Acceptable collateral" means:(A) As to securities lending transactions and for the purpose of calculating counter party exposure amount, cash, cash equivalents, letters of credit, direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States or any agency of the United States, or by the federal national mortgage association or the federal home loan mortgage corporation, and as to lending foreign securities, sovereign debt rated 1 by the securities valuation office ("SVO") of the national association of Insurance Commissioners;(B) As to repurchase transactions, cash, cash equivalents and direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States or an agency of the United States, or by the federal national mortgage association or the federal home loan mortgage corporation; and(C) As to reverse repurchase transactions, cash and cash equivalents.(2) "Acceptable private mortgage insurance" means insurance written by a private insurer protecting a mortgage lender against loss occasioned by a mortgage loan default and issued by a licensed mortgage insurance company, with an SVO 1 designation or a rating issued by a nationally recognized statistical rating organization equivalent to an SVO 1 designation, that covers losses to an eighty percent loan-to-value ratio.(3) "Accident and sickness insurance" means protection which provides payment of benefits for covered sickness or accidental injury, excluding credit insurance, disability insurance, accidental death and dismemberment insurance and long-term care insurance.(4) "Accident and sickness insurer" means a licensed life or sickness insurer or health service corporation whose insurance premiums and required statutory reserves for accident and sickness insurance constitute at least ninety-five percent of total premium considerations or total statutory required reserves, respectively.(5) "Admitted assets" means assets permitted to be reportedas admitted assets on the statutory financial statement of the insurer most recently required to be filed with the commissioner, but excluding assets of separate accounts, the investments of which are not subject to the provisions of this article.(6) "Affiliate" means, as to any person, another person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the person.(7) "Asset-backed security" means a security or other instrument, excluding a mutual fund, evidencing an interest in, or the right to receive payments from, or payable from distributions on, an asset, a pool of assets or specifically divisible cash flows which are legally transferred to a trust or another special purpose bankruptcy-remote business entity, on the following conditions:(A) The trust or other business entity is established solely for the purpose of acquiring specific types of assets or rights to cash flows, issuing securities and other instruments representing an interest in or right to receive cash flows from those assets or rights and engaging in activities required to service the assets or rights and any credit enhancement or support features held by the trust or other business entity; and(B) The assets of the trust or other business entity consist solely of interest bearing obligations or other contractual obligations representing the right to receive payment from the cash flows from the assets or rights. However, the existence of credit enhancements, such as letters of credit or guarantees, or support features such as swap agreements, does not cause a security or other instrument to be ineligible as an asset-backed security.(8) "Business entity" includes a sole proprietorship, corporation, limited liability company, association, partnership, joint stock company, joint venture, mutual fund, trust, joint tenancy or other similar form of business organization, whether organized for-profit or not-for-profit.(9) "Cap" means an agreement obligating the seller to makepayments to the buyer, with each payment based on the amount by which a reference price or level or the performance or value of one or more underlying interests exceeds a predetermined number, sometimes called the strike rate or strike price.(10) "Capital and surplus" means the sum of the capital and surplus of the insurer required to be shown on the statutory financial statement of the insurer most recently required to be filed with the commissioner.(11) "Cash equivalents" means short-term, highly rated andhighly liquid investments or securities readily convertible to known amounts of cash without penalty and so near maturity that they present insignificant risk of change in value. Cash equivalents include government money market mutual funds and class one money market mutual funds. For purposes of this definition:(A) "Short-term" means investments with a remaining term to maturity of ninety days or less; and(B) "Highly rated" means an investment rated "P-1" by Moody's Investors Service, Inc., or "A-1" by Standard and Poor's division of the McGraw Hill Companies, Inc., or its equivalent rating by a nationally recognized statistical rating organization recognized by the SVO.(12) "Class one bond mutual fund" means a mutual fund thatat all times qualifies for investment using the bond class one reserve factor under the purposes and procedures of the securities valuation office of the national association of Insurance Commissioners, or any successor publication.(13) "Class one money market mutual fund" means a money market mutual fund that at all times qualifies for investment using the bond class one reserve factor under the purposes and procedures of the securities valuation office or any successor publication.(14) "Collar" means an agreement to receive payments as thebuyer of an option, cap or floor and to make payments as the seller of a different option, cap or floor.(15) "Commercial mortgage loan" means a loan secured by a mortgage, other than a residential mortgage loan.(16) "Construction loan" means a loan of less than three years in term, made for financing the cost of construction of a building or other improvement to real estate, that is secured by the real estate.(17) "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract (other than a commercial contract for goods or nonmanagement services), or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control will be presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote or holds proxies representing ten percent or more of the voting securities of another person. This presumption may be rebutted by a showing that control does not exist in fact. The commissioner may determine, after furnishing all interested persons notice and an opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.(18) "Counterparty exposure amount" means:(A) The net amount of credit risk attributable to a derivative instrument entered into with a business entity other than through a qualified exchange, qualified foreign exchange, or cleared through a qualified clearinghouse ("over-the-counter derivative instrument"). The amount of credit risk equals:(i) The market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer; or(ii) Zero if the liquidation of the derivative instrument would not result in a final cash payment to the insurer.(B) If over-the-counter derivative instruments are entered into under a written master agreement which provides for netting of payments owed by the respective parties and the domiciliary jurisdiction of the counterparty is either within the United States or if not within the United States, within a foreign jurisdiction listed in the purposes and procedures of the securities valuation office as eligible for netting, the net amount of credit risk will be the greater of zero or the net sum of:(i) The market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment to the insurer; and(ii) The market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment by the insurer to the business entity.(C) For open transactions, market value will be determined at the end of the most recent quarter of the insurer's fiscal year and will be reduced by the market value of acceptable collateral held by the insurer or placed in escrow by one or both parties.(19) "Covered" means that an insurer owns or can immediately acquire, through the exercise of options, warrants or conversion rights already owned, the underlying interest in order to fulfill or secure its obligations under a call option, cap or floor it has written, or has set aside under a custodial or escrow agreement cash or cash equivalents with a market value equal to the amount required to fulfill its obligations under a put option it has written, in an income generation transaction.(20) "Credit tenant loan" means a mortgage loan which is made primarily in reliance on the credit standing of a major tenant, structured with an assignment of the rental payments to the lender with real estate pledged as collateral in the form of a first lien.(21) "Derivative instrument" means an agreement, option, instrument or a series or combination of those instruments:(A) To make or take delivery of, or assume or relinquish, a specified amount of one or more underlying interests, or to make a cash settlement in lieu thereof; or that has a price, performance, value or cash flow based primarily upon the actual or expected price, level, performance, value or cash flow of one or more underlying interests.(B) Derivative instruments include options, warrants used in a hedging transaction and not attached to another financial instrument, caps, floors, collars, swaps, forwards, futures and any other agreements, options or instruments substantially similar to those instruments or any series or combination thereof and any agreements, options or instruments permitted under rules adopted under section eight of this article. Derivative instruments does not include an investment authorized by sections eleven through seventeen, inclusive, nineteen and twenty-four through thirty, inclusive, of this article.(22) "Derivative transaction" means a transaction involving the use of one or more derivative instruments.(23) "Direct" or "directly", when used in connection with an obligation, means that the designated obligor is primarily liable on the instrument representing the obligation.(24) "Dollar roll transaction" means two simultaneous transactions with different settlement dates no more than ninety-six days apart, so that in the transaction with the earlier settlement date, an insurer sells to a business entity, and in the other transaction the insurer is obligated to purchase from the same business entity substantially similar securities that are asset-backed securities issued, assumed or guaranteed by the government national mortgage association, the federal national mortgage association or the federal home loan mortgage corporation or their respective successors.(25) "Domestic jurisdiction" means the United States, Canada, any state, any province of Canada or any political subdivision of any of those jurisdictions.(26) "Equity interest" means any of the following that arenot rated credit instruments:(A) Common stock;(B) Preferred stock;(C) Trust certificates;(D) Equity investment in an investment company other than amoney market mutual fund or a class one bond mutual fund;(E) Investment in a common trust fund of a bank regulated by a federal or state agency;(F) An ownership interest in minerals, oil or gas, the rights to which have been separated from the underlying fee interest in the real estate where the minerals, oil or gas are located;(G) Instruments which are mandatorily, or at the option of the issuer, convertible to equity;(H) Limited partnership interests and those general partnership interests authorized under subdivision (4), section five of this article;(I) Member interests in limited liability companies;(J) Warrants or other rights to acquire equity interests that are created by the person that owns or would issue the equity to be acquired; or(K) Instruments that would be rated credit instruments except for the provisions of paragraph (B), subdivision (70) of this section.(27) "Equivalent securities" means:(A) In a securities lending transaction, securities that are identical to the loaned securities in all features including the amount of the loaned securities, except as to certificate number if held in physical form, but if any different security will be exchanged for a loaned security by recapitalization, merger, consolidation or other corporate action, the different security shall be considered to be the loaned security;(B) In a repurchase transaction, securities that are identical to the purchased securities in all features including the amount of the purchased securities, except as to the certificate number if held in physical form; or(C) In a reverse repurchase transaction, securities that are identical to the sold securities in all features including the amount of the sold securities, except as to the certificate number if held in physical form.(28) "Floor" means an agreement obligating the seller to make payments to the buyer in which each payment is based on the amount by which that a predetermined number, sometimes called the floor rate or price, exceeds a reference price, level, performance or value of one or more underlying interests.(29) "Foreign currency" means a currency other than that of a domestic jurisdiction.(30) "Foreign investment" means an investment in a foreign jurisdiction, or an investment in a person, real estate or asset domiciled in a foreign jurisdiction, that is substantially of the same type as those eligible for investment under this article, other than under sections seventeen and thirty of this article. An investment will not be considered to be foreign if the issuing person, qualified primary credit source or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction, unless:(A) The issuing person is a shell business entity; and(B) The investment is not assumed, accepted, guaranteed orinsured or otherwise backed by a domestic jurisdiction or a person, that is not a shell business entity, domiciled in a domestic jurisdiction.(C) For purposes of this definition:(i) "Shell business entity" means a business entity having no economic substance, except as a vehicle for owning interests in assets issued, owned or previously owned by a person domiciled in a foreign jurisdiction;(ii) "Qualified guarantor" means a guarantor against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction; and(iii) "Qualified primary credit source" means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction.(31) "Foreign jurisdiction" means a jurisdiction other than a domestic jurisdiction.(32) "Forward" means an agreement (other than a future) to make or take delivery of, or effect a cash settlement based on the actual or expected price, level, performance or value of, one or more underlying interests.(33) "Future" means an agreement, traded on a qualified exchange or qualified foreign exchange, to make or take delivery of, or effect a cash settlement based on the actual or expected price, level, performance or value of, one or more underlying interests.(34) "Government money market mutual fund" means a money market mutual fund that at all times:(A) Invests only in obligations issued, guaranteed or insured by the federal government of the United States or collateralized repurchase agreements composed of these obligations; and(B) Qualifies for investment without a reserve under the purposes and procedures of the securities valuation office or any successor publication.(35) "Government-sponsored enterprise" means a:(A) Governmental agency; or(B) Corporation, limited liability company, association, partnership, joint stock company, joint venture, trust or other entity or instrumentality organized under the laws of any domestic jurisdiction to accomplish a public policy or other governmental purpose.(36) "Guaranteed or insured", when used in connection withan obligation acquired under this article, means that the guarantor or insurer has agreed to:(A) Perform or insure the obligation of the obligor or purchase the obligation; or(B) Be unconditionally obligated until the obligation is repaid to maintain in the obligor a minimum net worth, fixed charge coverage, stockholders' equity or sufficient liquidity to enable the obligor to pay the obligation in full.(37) "Hedging transaction" means a derivative transaction which is entered into and maintained to reduce:(A) The risk of a change in the value, yield, price, cash flow or quantity of assets or liabilities which the insurer has acquired or incurred or anticipates acquiring or incurring; or(B) The currency exchange rate risk or the degree of exposure as to assets or liabilities which an insurer has acquired or incurred or anticipates acquiring or incurring.(38) "High grade investment" means a rated credit instrument rated 1 or 2 by the SVO.(39) "Income" means, as to a security, interest, accrual of discount, dividends or other distributions, such as rights, tax or assessment credits, warrants and distributions in kind.(40) "Income generation transaction" means a derivative transaction involving the writing of covered call options, covered put options, covered caps or covered floors that is intended to generate income or enhance return.(41) "Initial margin" means the amount of cash, securities or other consideration initially required to be deposited to establish a futures position.(42) "Insurance future" means a future relating to an index or pool that is based on insurance-related items.(43) "Insurance futures option" means an option on an insurance future.(44) "Investment company" means an investment company as defined in Section 3(a) of the Investment Company Act of 1940, as amended, and a person described in Section 3(c) of that act.(45) "Investment company series" means an investment portfolio of an investment company that is organized as a series company and to which assets of the investment company have been specifically allocated.(46) "Investment practices" means transactions of the types described in sections sixteen, eighteen, twenty-nine or thirty-one of this article.(47) "Investment subsidiary" means a subsidiary of an insurer engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer if each subsidiary agrees to limit its investment in any asset so that its investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations or avoid any other provisions of this article applicable to the insurer. As used in this subdivision, the total investment of the insurer shall include:(A) Direct investment by the insurer in an asset; and(B) The insurer's proportionate share of an investment in an asset by an investment subsidiary of the insurer, which shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the insurer's ownership interest in the subsidiary.(48) "Investment strategy" means the techniques and methods used by an insurer to meet its investment objectives, such as active bond portfolio management, passive bond portfolio management, interest rate anticipation, growth investing and value investing.(49) "Letter of credit" means a clean, irrevocable and unconditional letter of credit issued or confirmed by, and payable and presentable at, a financial institution on the list of financial institutions meeting the standards for issuing letters of credit under the purposes and procedures of the securities valuation office or any successor publication. To constitute acceptable collateral for the purposes of sections sixteen and twenty-nine of this article, a letter of credit must have an expiration date beyond the term of the subject transaction.(50) "Limited liability company" means a business organization, excluding partnerships and ordinary business corporations, organized or operating under the laws of the United States or any state thereof that limits the personal liability of investors to the equity investment of the investor in the business entity.(51) "Lower grade investment" means a rated credit instrument rated 4, 5 or 6 by the SVO.(52) "Market value" means:(A) As to cash and letters of credit, the amounts of the cash and letters of credit; and(B) As to a security as of any date, the price for the security on that date obtained from a generally recognized source or the most recent quotation from such a source or, to the extent no generally recognized source exists, the price for the security as determined in good faith by the parties to a transaction, plus accrued but unpaid income on the security to the extent not included in the price as of that date.(53) "Medium grade investment" means a rated credit instrument rated 3 by the SVO.(54) "Money market mutual fund" means a mutual fund that meets the conditions of 17 code of federal regulations par. 270.2a-7, under the Investment Company Act of 1940, as amended or renumbered.(55) "Mortgage loan" means an obligation secured by a mortgage, deed of trust, trust deed or other consensual lien on real estate.(56) "Multilateral development bank" means an international development organization of which the United States is a member.(57) "Mutual fund" means an investment company or, in the case of an investment company that is organized as a series company, an investment company series that, in either case, is registered with the United States securities and exchange commission under the Investment Company Act of 1940, as amended.(58) "NAIC" means the national association of Insurance Commissioners.(59) "Obligation" means a bond, note, debenture, trust certificate including an equipment certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, credit tenant loan, loan secured by financing net leases and other evidence of indebtedness for the payment of money (or participations, certificates or other evidences of an interest in any of the foregoing), whether constituting a general obligation of the issuer or payable only out of certain revenues or certain funds pledged or otherwise dedicated for payment.(60) "Option" means an agreement giving the buyer the right to buy or receive (a "call option"), sell or deliver (a "put option"), enter into, extend or terminate or effect a cash settlement based on the actual or expected price, level, performance or value of one or more underlying interests.(61) "Person" means an individual, a business entity, a multilateral development bank or a government or quasi-governmental body, such as a political subdivision or a government-sponsored enterprise.(62) "Potential exposure" means the amount determined in accordance with the NAIC annual statement instructions.(63) "Preferred stock" means preferred, preference or guaranteed stock of a business entity authorized to issue the stock, that has a preference in liquidation over the common stock of the business entity.(64) "Qualified bank" means:(A) A national bank, state bank or trust company that at all times is no less than adequately capitalized as determined by standards adopted by United States banking regulators and that is either regulated by state banking laws or is a member of the federal reserve system; or(B) A bank or trust company incorporated or organized under the laws of a country other than the United States that is regulated as a bank or trust company by that country's government or an agency of the government and that at all times is no less than adequately capitalized as determined by the standards adopted by international banking authorities.(65) "Qualified business entity" means a business entity that is:(A) An issuer of obligations or preferred stock that are rated 1 or 2 by the SVO or an issuer of obligations, preferred stock or derivative instruments that are rated the equivalent of 1 or 2 by the SVO or by a nationally recognized statistical rating organization recognized by the SVO; or(B) A primary dealer in United States government securities, recognized by the Federal Reserve Bank of New York.(66) "Qualified clearinghouse" means a clearinghouse for, and subject to the rules of, a qualified exchange or a qualified foreign exchange, which provides clearing services, including acting as a counterparty to each of the parties to a transaction so that the parties no longer have credit risk as to each other.(67) "Qualified exchange" means:(A) A securities exchange registered as a national securities exchange, or a securities market regulated under the Securities Exchange Act of 1934, as amended;(B) A board of trade or commodities exchange designated as a contract market by the commodity futures trading commission or any successor thereof;(C) Private offerings, resales and trading through automated linkages (PORTAL);(D) A designated offshore securities market as defined in securities exchange commission regulation S, 17 C.F.R. part 230, as amended; or(E) A qualified foreign exchange.(68) "Qualified foreign exchange" means a foreign exchange, board of trade or contract market located outside the United States, its territories or possessions:(A) That has received regulatory comparability relief undercommodity futures trading commission (CFTC) rule 30.10 (as set forth in appendix C to part 30 of the CFTC's regulations, 17 C.F.R. part 30);(B) That is, or its members are, subject to the jurisdiction of a foreign futures authority that has received regulatory comparability relief under CFTC rule 30.10 (as set forth in appendix C to part 30 of the CFTC's regulations, 17 C.F.R. part 30) as to futures transactions in the jurisdiction where the exchange, board of trade or contract market is located; or(C) Upon which foreign stock index futures contracts are listed that are the subject of no-action relief issued by the CFTC's office of general counsel, provided that an exchange, board of trade or contract market that qualifies as a "qualified foreign exchange" only under this subdivision shall only be a "qualified foreign exchange" as to foreign stock index futures contracts that are the subject of no-action relief.(69) "Rated credit instrument" means:(A) A contractual right to receive cash or another rated credit instrument from another entity which:(i) Is rated or required to be rated by the SVO;(ii) In the case of an instrument with a maturity of three hundred ninety-seven days or less, is issued, guaranteed or insured by an entity that is rated by, or another obligation of the entity is rated by, the SVO or by a nationally recognized statistical rating organization recognized by the SVO;(iii) In the case of an instrument with a maturity of ninety days or less, is issued by a qualified bank;(iv) Is a share of a class one bond mutual fund; or(v) Is a share of a money market mutual fund.(B) However, "rated credit instrument" does not mean:(i) An instrument that is mandatorily, or at the option of the issuer, convertible to an equity interest; or(ii) A security that has a par value and whose terms provide that the issuer's net obligation to repay all or part of the security's par value is determined by reference to the performance of an equity, a commodity, a foreign currency or an index of equities, commodities, foreign currencies or combinations thereof.(70) "Real estate" means:(A) Real property, including: Interests in real property, such as leaseholds, minerals and oil and gas that have not been separated from the underlying fee interest; improvements and fixtures located on or in real property; and the seller's equity in a contract providing for a deed of real estate.(B) As to a mortgage on a leasehold estate, real estate shall include the leasehold estate only if it has an unexpired term (including renewal options exercisable at the option of the lessee) extending beyond the scheduled maturity date of the obligation that is secured by a mortgage on the leasehold estate by a period equal to at least twenty percent of the original term of the obligation or ten years, whichever is greater.(71) "Replication transaction" means a derivative transaction that is intended to replicate the performance of one or more assets that an insurer is authorized to acquire under this article. A derivative transaction that is entered into as a hedging transaction will not be considered a replication transaction.(72) "Repurchase transaction" means a transaction in which an insurer purchases securities from a business entity that is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period of time or upon demand.(73) "Required liabilities" means total liabilities required to be reported on the statutory financial statement of the insurer most recently required to be filed with the commissioner.(74) "Residential mortgage loan" means a loan primarily secured by a mortgage on real estate improved with a one-to-four family residence.(75) "Reverse repurchase transaction" means a transaction in which an insurer sells securities to a business entity and is obligated to repurchase the sold securities or equivalent securities from the business entity at a specified price, either within a specified period of time or upon demand.(76) "Secured location" means the contiguous real estate owned by one person.(77) "Securities lending transaction" means a transaction in which securities are loaned by an insurer to a business entity that is obligated to return the loaned securities or equivalent securities to the insurer, either within a specified period of time or upon demand.(78) "Series company" means an investment company that is organized as a series company, as defined in rule 18f-2(a) adopted under the Investment Company Act of 1940, as amended.(79) "Sinking fund stock" means preferred stock that:(A) Is subject to a mandatory sinking fund or similar arrangement that will provide for the redemption (or open market purchase) of the entire issue over a period not longer than forty years from the date of acquisition; and(B) Provides for mandatory sinking fund installments (or open market purchases) commencing not more than ten and one-half years from the date of issue, with the sinking fund installments providing for the purchase or redemption, on a cumulative basis commencing ten years from the date of issue, of at least two and one-half percent per year of the original number of shares of that issue of preferred stock.(80) "Special rated credit instrument" means a rated credit instrument that is:(A) An instrument that is structured so that, if it is held until retired by or on behalf of the issuer, its rate of return, based on its purchase cost and any cash flow stream possible under the structure of the transaction, may become negative due to reasons other than the credit risk associated with the issuer of the instrument; however, a rated credit instrument will not be a special rated credit instrument under this subdivision if it is:(i) A share in a class one bond mutual fund;(ii) An instrument, other than an asset-backed security, with payments of par value fixed as to amount and timing, or callable but in any event payable only at par or greater, and interest or dividend cash flows that are based on either a fixed or variable rate determined by reference to a specified rate or index;(iii) An instrument, other than an asset-backed security, that has a par value and is purchased at a price no greater than one hundred ten percent of par;(iv) An instrument, including an asset-backed security, whose rate of return would become negative only as a result of a prepayment due to casualty, condemnation or economic obsolescence of collateral or change of law;(v) An asset-backed security that relies on collateral that meets the requirements of subparagraph (ii) of this paragraph, the par value of which collateral:(I) Is not permitted to be paid sooner than one half of the remaining term to maturity from the date of acquisition;(II) Is permitted to be paid prior to maturity only at a premium sufficient to provide a yield to maturity for the investment, considering the amount prepaid and reinvestment rates at the time of early repayment, at least equal to the yield to maturity of the initial investment; or(III) Is permitted to be paid prior to maturity at a premium at least equal to the yield of a treasury issue of comparable remaining life; or(vi) An asset-backed security that relies on cash flows from assets that are not prepayable at any time at par, but is not otherwise governed by subparagraph (v) of this paragraph, if the asset-backed security has a par value reflecting principal payments to be received if held until retired by or on behalf of the issuer and is purchased at a price no greater than one hundred five percent of such par amount.(B) An asset-backed security that:(i) Relies on cash flows from assets that are prepayable at par at any time;(ii) Does not make payments of par that are fixed as to amount and timing; and(iii) Has a negative rate of return at the time of acquisition if a prepayment threshold assumption is used with the prepayment threshold assumption defined as either:(I) Two times the prepayment expectation reported by a recognized, publicly available source as being the median of expectations contributed by broker dealers or other entities, except insurers, engaged in the business of selling or evaluating the securities or assets. The prepayment expectation used in this calculation shall be, at the insurer's election, the prepayment expectation for pass-through securities of the federal national mortgage association, the federal home loan mortgage corporation, the government national mortgage association or for other assets of the same type as the assets that underlie the asset-backed security, in either case with a gross weighted average coupon comparable to the gross weighted average coupon of the assets that underlie the asset-backed security; or(II) Another prepayment threshold assumption specified by the commissioner by rule promulgated under section eight of this article.(C) For purposes of paragraph (B) of this subdivision, if the asset-backed security is purchased in combination with one or more other asset-backed securities that are supported by identical underlying collateral, the insurer shall calculate the rate of return for these specific combined asset-backed securities in combination. The insurer must maintain documentation demonstrating that the securities were acquired and are continuing to be held in combination.(81) "State" means a state, territory or possession of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico.(82) "Substantially similar securities" means securities that meet all criteria for substantially similar specified in the NAIC accounting practices and procedures manual, as amended, and in an amount that constitutes good delivery form as determined from time to time by the public securities administration.(83) "SVO" means the securities valuation office of the NAIC or any successor office established by the NAIC.(84) "Swap" means an agreement to exchange or to net payments at one or more times based on the actual or expected price, level, performance or value of one or more underlying interests.(85) "Underlying interest" means the assets, liabilities, other interests or a combination thereof underlying a derivative instrument, such as any one or more securities, currencies, rates, indices, commodities or derivative instruments.(86) "Unrestricted surplus" means the amount by which total admitted assets exceed one hundred twenty-five percent of the insurer's required liabilities.(87) "Warrant" means an instrument that gives the holder the right to purchase an underlying financial instrument at a given price and time or at a series of prices and times outlined in the warrant agreement. Warrants may be issued alone or in connection with the sale of other securities, for example, as part of a merger or recapitalization agreement, or to facilitate divestiture of the securities of another business entity.
(a) Solely for the purpose of acquiring investments that exceed the quantitative limitations of sections ten through seventeen, inclusive, of this article, an insurer may acquire under this subsection an investment, or engage in investment practices described in section sixteen of this article, but an insurer may not acquire an investment, or engage in investment practices described in said section, under this subsection if, as a result of and after giving effect to the transaction:(1) The aggregate amount of investments then held by an insurer under this subsection would exceed three percent of its admitted assets; or(2) The aggregate amount of investments as to one limitation in sections ten through seventeen, inclusive, of this article then held by the insurer under this subsection would exceed one percent of its admitted assets.(b) In addition to the authority provided under subsection (a) of this section, an insurer may acquire under this subsection an investment of any kind, or engage in investment practices described in section sixteen of this article, that are not specifically prohibited by this article, without regard to the categories, conditions, standards or other limitations of sections ten through seventeen, inclusive, of this article if, as a result of and after giving effect to the transaction, the aggregate amount of investments then held under this subsection would not exceed the lesser of:(1) Ten percent of its admitted assets; or(2) Seventy-five percent of its capital and surplus. However, an insurer may not acquire any investment or engage in any investment practice under this subsection if, as a result of and after giving effect to the transaction, the aggregate amount of all investments in any one person then held by the insurer under this subsection would exceed three percent of its admitted assets.(c) In addition to the investments acquired under subsections (a) and (b) of this section, an insurer may acquire under this subsection an investment of any kind, or engage in investment practices described in section sixteen of this article, that are not specifically prohibited by this article without regard to any limitations of sections ten through seventeen, inclusive, of this article if:(1) The commissioner grants prior approval;(2) The insurer demonstrates that its investments are being made in a prudent manner and that the additional amounts will be invested in a prudent manner; and(3) As a result of and after giving effect to the transaction the aggregate amount of investments then held by the insurer under this subsection does not exceed the greater of:(A) Twenty-five percent of its capital and surplus; or(B) One hundred percent of capital and surplus less ten percent of its admitted assets.(d) An investment prohibited under section five of this article, not permitted under section eighteen of this article or additional derivative instruments acquired under said section may not be acquired under this section.
Sections twenty-two through thirty-two, inclusive, of this article apply to the investments and investment practices of property and casualty, financial guaranty and mortgage guaranty insurers, subject to the provisions of subsection (b), section one of this article.
(a) Subject to all other limitations and requirements of this article, a property and casualty, financial guaranty, mortgage guaranty or accident and sickness insurer shall maintain an amount at least equal to one hundred percent of adjusted loss reserves and loss adjustment expense reserves, one hundred percent of adjusted unearned premium reserves and one hundred percent of statutorily required policy and contract reserves in:(1) Cash and cash equivalents;(2) High and medium grade investments that qualify under section twenty-four or twenty-five of this article;(3) Equity interests that qualify under section twenty-six of this article and that are traded on a qualified exchange;(4) Investments of the type set forth in section thirty of this article if the investments are rated in the highest generic rating category by a nationally recognized statistical rating organization recognized by the SVO for rating foreign jurisdictions and if any foreign currency exposure is effectively hedged through the maturity date of the investments;(5) Qualifying investments of the type set forth in subdivision (2), (3) or (4) of this subsection that are acquired under section thirty-two of this article;(6) Interest and dividends receivable on qualifying investments of the type set forth in subdivisions (1) through (5), inclusive, of this subsection; or(7) Reinsurance recoverable on paid losses.(b) For purposes of determining the amount of assets to be maintained under subsection (a) of this section, the calculation of adjusted loss reserves and loss adjustment expense reserves, adjusted unearned premium reserves and statutorily required policy and contract reserves shall be based on the amounts reported as of the most recent annual or quarterly statement date.(1) Adjusted loss reserves and loss adjustment expense reserves shall be equal to the sum of the amounts derived from the following calculations:(A) The result of each amount reported by the insurer as losses and loss adjustment expenses unpaid for each accident year for each individual line of business; multiplied by(B) The discount factor that is applicable to the line of business and accident year published by the internal revenue service under Section 846 of the Internal Revenue Code, as amended, for the calendar year that corresponds to the most recent annual statement of the insurer; minus(C) Accrued retrospective premiums discounted by an average discount factor. The discount factor shall be calculated by dividing the losses and loss adjustment expenses unpaid after discounting (the product of subparagraphs (i) and (ii) of this paragraph) by loss and loss adjustment expense reserves before discounting subparagraph (i) of this paragraph.(D) For purposes of these calculations, the losses and loss adjustment expenses unpaid shall be determined net of anticipated salvage and subrogation, and gross of any discount for the time value of money or tabular discount.(2) Adjusted unearned premium reserves shall be equal to the result of the following calculation:(A) The amount reported by the insurer as unearned premium reserves; minus(B) The admitted asset amounts reported by the insurer as:(i) Premiums in and agents' balances in the course of collection, accident and sickness premiums due and unpaid and uncollected premiums for accident and sickness premiums;(ii) Premiums, agents' balances and installments booked but deferred and not yet due; and(iii) Bills receivable, taken for premium.(3) Statutorily required policy and contract reserves also include, in the case of a financial guaranty insurer, or a mortgage guaranty insurer the contingency reserves, and with respect to accident and sickness insurers the additional or contingency reserves, prescribed by the NAIC in the accounting practices and procedures manual as amended.(c) Monitoring and reporting. --A property and casualty, financial guaranty, mortgage guaranty or accident and health sickness insurer shall supplement its annual statement with a reconciliation and summary of its assets and reserve requirements as required in subsection (a) of this section. A reconciliation and summary showing that an insurer's assets as required in said subsection are greater than or equal to its undiscounted reserves referred to in said subsection are sufficient to satisfy this requirement. Upon prior notification, the commissioner may require an insurer to submit a reconciliation and summary with any quarterly statement filed during the calendar year.(d) If a property and casualty, financial guaranty, mortgage guaranty or accident and sickness insurer's assets and reserves do not comply with subsections (a) and (b) of this section, the insurer shall notify the commissioner immediately of the amount by which the reserve requirements exceed the annual statement value of the qualifying assets, explain why the deficiency exists and within thirty days of the date of the notice propose a plan of action to remedy the deficiency.(e) If the commissioner determines that an insurer is not in compliance with subsection (a) of this section, the commissioner shall require the insurer to eliminate the condition causing the noncompliance within a specified time from the date the notice of the commissioner's requirement is mailed or delivered to the insurer. If an insurer fails to comply with the commissioner's requirement the insurer is considered to be in hazardous financial condition, and the commissioner may take one or more of the actions authorized by law as to insurers in hazardous financial condition.
(a) Except as otherwise specified in this article, an insurer may not acquire directly or indirectly through an investment subsidiary an investment under this article if, as a result of and after giving effect to the investment, the insurer would hold more than five percent of its admitted assets in investments of all kinds issued, assumed, accepted, insured or guaranteed by a single person.(b) The five percent limitation set forth in subsection (a) of this section does not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization.(c) Asset-backed securities are not subject to the limitations of subsection (a) of this section, however an insurer may not acquire an asset-backed security if, as a result of and after giving effect to the investment, the aggregate amount of asset-backed securities secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity, then held by the insurer would exceed five percent of its admitted assets.(d) An insurer may not acquire, directly or indirectly through an investment subsidiary, an investment under sections twenty-four, twenty-seven and thirty of this article or counterparty exposure under subsection (d), section thirty-one of this article if, as a result of and after giving effect to the investment:(1) The aggregate amount of all medium and lower grade investments then held by the insurer would exceed twenty percent of its admitted assets;(2) The aggregate amount of lower grade investments then held by the insurer would exceed ten percent of its admitted assets;(3) The aggregate amount of investments rated 5 or 6 by the SVO then held by the insurer would exceed five percent of its admitted assets;(4) The aggregate amount of investments rated 6 by the SVO then held by the insurer would exceed one percent of its admitted assets; or(5) The aggregate amount of medium and lower grade investments then held by the insurer that receive as cash income less than the equivalent yield for treasury issues with a comparative average life, would exceed one percent of its admitted assets.(e) An insurer may not acquire, directly or indirectly through an investment subsidiary, an investment under section twenty-four, twenty-seven or thirty of this article or counterparty exposure under subsection (d), section thirty-one of this article if, as a result of and after giving effect to the investment:(1) The aggregate amount of medium and lower grade investments issued, assumed, guaranteed, accepted or insured by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, then held by the insurer would exceed one percent of its admitted assets; or(2) The aggregate amount of lower grade investments issued, assumed, guaranteed, accepted or insured by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, then held by the insurer would exceed one half of one percent of its admitted assets.(f) If an insurer attains or exceeds the limit of any one rating category referred to in subsection (d) or (e) of this section, the insurer may not be precluded from acquiring investments in other rating categories subject to the specific and multicategory limits applicable to those investments.(g) An insurer may not acquire, directly or indirectly through an investment subsidiary, any Canadian investments authorized by this article, if as a result of and after giving effect to the investment, the aggregate amount of these investments then held by the insurer would exceed forty percent of its admitted assets, or if the aggregate amount of Canadian investments not acquired under subsection (b), section twenty-four of this article then held by the insurer would exceed twenty-five percent of its admitted assets. However, as to an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of this subsection shall be increased by the greater of:(1) The amount the insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or(2) One hundred twenty-five percent of the amount of its reserves and other obligations under contracts on risks resident or located in Canada.
(a) Subject to the limitations of subsection (b), section twenty-three of this article, but not to the limitations of subsection (a) of said section, an insurer may acquire rated credit instruments issued, assumed, guaranteed or insured by:(1) The United States; or(2) A government-sponsored enterprise of the United States, if the instruments of the government-sponsored enterprise are assumed, guaranteed or insured by the United States or are otherwise backed or supported by the full faith and credit of the United States.(b) Subject to the limitations of subsections (d), (e) and (f), section twenty-three of this article, but not to the limitations of subsections (a), (b) and (c) of said section, an insurer may acquire rated credit instruments issued, assumed, guaranteed or insured by:(1) Canada; or(2) A government-sponsored enterprise of Canada, if the instruments of the government-sponsored enterprise are assumed, guaranteed or insured by Canada or are otherwise backed or supported by the full faith and credit of Canada; however, an insurer may not acquire an instrument under this subdivision if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this subsection would exceed forty percent of its admitted assets.(c) Subject to the limitations of subsections (d), (e) and (f), section twenty-three of this article, but not to the limitations of subsections (a), (b) and (c) of said section, an insurer may acquire rated credit instruments, excluding asset-backed securities:(1) Issued by a government money market mutual fund, a class one money market mutual fund or a class one bond mutual fund;(2) Issued, assumed, guaranteed or insured by a government-sponsored enterprise of the United States other than those eligible under subsection (a) of this section;(3) Issued, assumed, guaranteed or insured by a state, if the instruments are general obligations of the state; or(4) Issued by a multilateral development bank. However, an insurer may not acquire an instrument of any one fund, any one enterprise or entity, or any one state under this subsection if, as a result of and after giving effect to the investment, the aggregate amount of investments then held in any one fund, enterprise or entity or state under this subsection would exceed ten percent of its admitted assets.(d) Subject to the limitations of section twenty-three of this article, an insurer may acquire preferred stocks that are not foreign investments and that meet the requirements of rated credit instruments if, as a result of and after giving effect to the investment:(1) The aggregate amount of preferred stocks then held by the insurer under this subsection does not exceed twenty percent of its admitted assets; and(2) The aggregate amount of preferred stocks then held by the insurer under this subsection which are not sinking fund stocks or rated P1 or P2 by the SVO does not exceed ten percent of its admitted assets.(e) Subject to the limitations of section twenty-three of this article in addition to those investments eligible under subsections (a), (b), (c) and (d) of this section, an insurer may acquire rated credit instruments that are not foreign investments.(f) An insurer may not acquire special rated credit instruments under this section if, as a result of and after giving effect to the investment, the aggregate amount of special rated credit instruments then held by the insurer would exceed five percent of its admitted assets.
(a) An insurer may acquire investments in investment pools that:(1) Invest only in:(A) Obligations that are rated 1 or 2 by the SVO or have an equivalent of an SVO 1 or 2 rating (or, in the absence of a 1 or 2 rating or equivalent rating, the issuer has outstanding obligations with an SVO 1 or 2 or equivalent rating) by a nationally recognized statistical rating organization recognized by the SVO and have:(i) A remaining maturity of three hundred ninety-seven days or less or a put that entitles the holder to receive the principal amount of the obligation which put may be exercised through maturity at specified intervals not exceeding three hundred ninety-seven days; or(ii) A remaining maturity of three years or less and a floating interest rate that resets no less frequently than quarterly on the basis of a current short-term index (federal funds, prime rate, treasury bills, LIBOR or commercial paper) and is subject to no maximum limit, if the obligations do not have an interest rate that varies inversely to market interest rate changes;(B) Government money market mutual funds or class one money market mutual funds; or(C) Securities lending, repurchase and reverse repurchase transactions that meet all the requirements of section twenty-nine of this article, except the quantitative limitations of subsection (b), section twenty-nine of this article; or(2) Invest only in investments which an insurer may acquire under this article, if the insurer's proportionate interest in the amount invested in these investments does not exceed the applicable limits of this article.(b) For an investment in an investment pool to be qualified under this article, the investment pool may not:(1) Acquire securities issued, assumed, guaranteed or insured by the insurer or an affiliate of the insurer;(2) Borrow or incur any indebtedness for borrowed money, except for securities lending and reverse repurchase transactions that meet the requirements of section twenty-nine of this article except the quantitative limitations of subsection (b), section twenty-nine of this article; or(3) Permit the aggregate value of securities then loaned or sold to, purchased from or invested in any one business entity under this section to exceed ten percent of the total assets of the investment pool.(c) The limitations of subsection (a), section twenty-three of this article do not apply to an insurer's investment in an investment pool, however an insurer may not acquire an investment in an investment pool under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this section:(1) In any one investment pool would exceed ten percent of its admitted assets;(2) In all investment pools investing in investments permitted under subdivision (2), subsection (a) of this section would exceed twenty-five percent of its admitted assets; or(3) In all investment pools would exceed forty percent of its admitted assets.(d) For an investment in an investment pool to be qualified under this article, the manager of the investment pool shall:(1) Be organized under the laws of the United States or a state and designated as the pool manager in a pooling agreement;(2) Be the insurer, an affiliated insurer or a business entity affiliated with the insurer, a qualified bank, a business entity registered under the Investment Advisors Act of 1940, as amended, or, in the case of a reciprocal insurer or interinsurance exchange, its attorney-in-fact, or in the case of a United States branch of an alien insurer, its United States manager or affiliates or subsidiaries of its United States manager;(3) Compile and maintain detailed accounting records setting forth:(A) The cash receipts and disbursements reflecting each participant's proportionate investment in the investment pool;(B) A complete description of all underlying assets of the investment pool (including amount, interest rate, maturity date (if any) and other appropriate designations); and(C) Other records which, on a daily basis, allow third parties to verify each participant's investment in the investment pool; and(4) Maintain the assets of the investment pool in one or more accounts, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank. The custody agreement shall:(A) State and recognize the claims and rights of each participant;(B) Acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its investments in the investment pool; and(C) Contain an agreement that the underlying assets of the investment pool may not be commingled with the general assets of the custodian qualified bank or any other person.(e) The pooling agreement for each investment pool shall be in writing and shall provide that:(1) An insurer and its affiliated insurers or, in the case of an investment pool investing solely in investments permitted under subdivision (1), subsection (a) of this section, the insurer and its subsidiaries, affiliates or any pension or profit sharing plan of the insurer, its subsidiaries and affiliates or, in the case of a United States branch of an alien insurer, affiliates or subsidiaries of its United States manager, shall, at all times, hold one hundred percent of the interests in the investment pool;(2) The underlying assets of the investment pool may not be commingled with the general assets of the pool manager or any other person;(3) In proportion to the aggregate amount of each pool participant's interest in the investment pool:(A) Each participant owns an undivided interest in the underlying assets of the investment pool; and(B) The underlying assets of the investment pool are held solely for the benefit of each participant;(4) A participant, or in the event of the participant's insolvency, bankruptcy or receivership, its trustee, receiver or other successor-in-interest, may withdraw all or any portion of its investment from the investment pool under the terms of the pooling agreement;(5) Withdrawals may be made on demand without penalty or other assessment on any business day, but settlement of funds shall occur within a reasonable and customary period thereafter not to exceed five business days. Distributions under this subdivision shall be calculated in each case net of all then applicable fees and expenses of the investment pool. The pooling agreement shall provide that the pool manager shall distribute to a participant, at the discretion of the pool manager:(A) In cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool;(B) In kind, a pro rata share of each underlying asset; or(C) In a combination of cash and in kind distributions, a pro rata share in each underlying asset; and(6) The pool manager shall make the records of the investment pool available for inspection by the commissioner.
(a) Subject to the limitations of section twenty-three of this article, an insurer may acquire equity interests in business entities organized under the laws of any domestic jurisdiction.(b) An insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this section would exceed the greater of twenty-five percent of its admitted assets or one hundred percent of its surplus as regards policyholders: Provided, That the aggregate investments of a health maintenance organization may not exceed the greater of thirty percent of its admitted assets or one hundred percent of its total capital and surplus.(c) An insurer may not acquire under this section any investments that the insurer may acquire under section twenty-eight of this article.(d) An insurer may not short sell equity investments unless the insurer covers the short sale by owning the equity investment or an unrestricted right to the equity instrument exercisable within six months of the short sale.
(a) Subject to the limitations of section twenty-three of this article, an insurer may acquire tangible personal property or equity interests therein located or used, wholly or in part, within a domestic jurisdiction either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subdivision (d), section five of this article, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates or other similar instruments.(b) Investments acquired under subsection (a) of this section are eligible only if:(1) The property is subject to a lease or other agreement with a person whose rated credit instruments in the amount of the purchase price of the personal property the insurer could then acquire under section twenty-four of this article; and(2) The lease or other agreement provides the insurer the right to receive rental, purchase or other fixed payments for the use or purchase of the property, and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property, is adequate to return the cost of the insurer's investment in the property, plus a return considered adequate by the insurer.(c) The insurer shall compute the amount of each investment under this section on the basis of the out-of-pocket purchase price and applicable related expenses paid by the insurer for the investment, net of each borrowing made to finance the purchase price and expenses, to the extent the borrowing is without recourse to the insurer.(d) An insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under this section would exceed:(1) Two percent of its admitted assets; or(2) One half of one percent of its admitted assets as to any single item of tangible personal property.(e) For purposes of determining compliance with the limitations of section twenty-three of this article, investments acquired by an insurer under this section shall be aggregated with those acquired under section twenty-four of this article, and each lessee of the property under a lease referred to in this section shall be considered the issuer of an obligation in the amount of the investment of the insurer in the property determined as provided in subsection (c) of this section.(f) Nothing in this section is applicable to tangible personal property lease arrangements between an insurer and its subsidiaries and affiliates under a cost sharing arrangement or agreement permitted under this article.
(a) Subject to the limitations of section twenty-three of this article, an insurer may acquire, either directly, indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subdivision (4), section five of this article, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments, obligations secured by mortgages on real estate situated within a domestic jurisdiction, but a mortgage loan which is secured by other than a first lien may not be acquired unless the insurer is the holder of the first lien. The obligations held by the insurer and any obligations with an equal lien priority, may not, at the time of acquisition of the obligation, exceed:(1) Ninety percent of the fair market value of the real estate, if the mortgage loan is secured by a purchase money mortgage or like security received by the insurer upon disposition of the real estate;(2) Eighty percent of the fair market value of the real estate, if the mortgage loan requires immediate scheduled payment in periodic installments of principal and interest, has an amortization period of thirty years or less and periodic payments made no less frequently than annually. Each periodic payment shall be sufficient to assure that at all times the outstanding principal balance of the mortgage loan is not greater than the outstanding principal balance which would be outstanding under a mortgage loan with the same original principal balance, with the same interest rate and requiring equal payments of principal and interest with the same frequency over the same amortization period. Mortgage loans permitted under this subsection are permitted notwithstanding the fact that they provide for a payment of the principal balance prior to the end of the period of amortization of the loan. For residential mortgage loans, the eighty percent limitation may be increased to ninety-seven percent if acceptable private mortgage insurance has been obtained; or(3) Seventy-five percent of the fair market value of the real estate for mortgage loans that do not meet the requirements of subdivision (1) or (2) of this subsection.(b) For purposes of subsection (a) of this section, the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the federal housing administration or guaranteed by the administrator of Veterans Affairs, or their successors.(c) A mortgage loan that is held by an insurer under subsection (f), section three of this article or acquired under this section and is restructured in a manner that meets the requirements of a restructured mortgage loan in accordance with the NAIC accounting practices and procedures manual or successor publication continues to qualify as a mortgage loan under this article.(d) Subject to the limitations of section twenty-three of this article, credit lease transactions that do not qualify for investment under section twenty-four of this article with the following characteristics are exempt from the provisions of subsection (a) of this section:(1) The loan amortizes over the initial fixed lease term at least in an amount sufficient so that the loan balance at the end of the lease term does not exceed the original appraised value of the real estate;(2) The lease payments cover or exceed the total debt service over the life of the loan;(3) A tenant or its affiliated entity whose rated credit instruments have a SVO 1 or 2 designation or a comparable rating from a nationally recognized statistical rating organization recognized by the SVO has a full faith and credit obligation to make the lease payments;(4) The insurer holds or is the beneficial holder of a first lien mortgage on the real estate;(5) The expenses of the real estate are passed through to the tenant, excluding exterior, structural, parking and heating, ventilation and air conditioning replacement expenses, unless annual escrow contributions, from cash flows derived from the lease payments, cover the expense shortfall; and(6) There is a perfected assignment of the rents due pursuant to the lease to, or for the benefit of, the insurer.(e) An insurer may acquire, manage and dispose of real estate situated in a domestic jurisdiction either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subsection (d), section five of this article, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments. The real estate shall be income producing or intended for improvement or development for investment purposes under an existing program (in which case the real estate shall be considered to be income producing).(f) The income producing real estate that is acquired, managed or disposed of pursuant to subsection (e) of this section may be subject to mortgages, liens or other encumbrances, the amount of which may, to the extent that the obligations secured by the mortgages, liens or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsections (i) and (j) of this section.(g) Real estate for the accommodation of business. --An insurer may acquire, manage, and dispose of real estate for the convenient accommodation of the insurer's (which may include its affiliates) business operations, including home office, branch office and field office operations, as follows:(1) Real estate acquired under this subsection may include excess space for rent to others, if the excess space, valued at its fair market value, would otherwise be a permitted investment under subsection (e) of this section and is qualified by the insurer;(2) The real estate acquired under this subsection may be subject to one or more mortgages, liens or other encumbrances, the amount of which may, to the extent that the obligations secured by the mortgages, liens or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsection (k) of this section; and(3) For purposes of this subsection, business operations may not include that portion of real estate used for the direct provision of health care services by an insurer whose insurance premiums and required statutory reserves for accident and sickness insurance constitute at least ninety-five percent of total premium considerations or total statutory required reserves, respectively. An insurer may acquire real estate used for these purposes under subsection (e) of this section.(h) An insurer may not acquire an investment under subsection (a) of this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under subsection (a) of this section would exceed:(1) One percent of its admitted assets in mortgage loans covering any one secured location;(2) One quarter of one percent of its admitted assets in construction loans covering any one secured location; or(3) One percent of its admitted assets in construction loans in the aggregate.(i) An insurer may not acquire an investment under subsections (e) and (f) of this section if, as a result of and after giving effect to the investment and any outstanding guarantees made by the insurer in connection with the investment, the aggregate amount of investments then held by the insurer under subsections (e) and (f) of this section plus the guarantees then outstanding would exceed:(1) One percent of its admitted assets in any one parcel or group of contiguous parcels of real estate, except that this limitation may not apply to that portion of real estate used for the direct provision of health care services by an insurer whose insurance premiums and required statutory reserves for accident and sickness constitute at least ninety-five percent of total premium considerations or total statutory required reserves, respectively, such as hospitals, medical clinics, medical professional buildings or other health facilities used for the purpose of providing health services; or(2) The lesser of ten percent of its admitted assets or forty percent of its surplus as regards policyholders in the aggregate, except for an insurer whose insurance premiums and required statutory reserves for accident and sickness insurance constitute at least ninety-five percent of total premium considerations or total statutory required reserves, respectively, this limitation shall be increased to fifteen percent of its admitted assets in the aggregate.(j) An insurer may not acquire an investment under subsection (a) or (b) of this section if, as a result of and after giving effect to the investment and any guarantees it has made in connection with the investment, the aggregate amount of all investments then held by the insurer under subsections (a) and (b) of this section plus the guarantees then outstanding would exceed twenty-five percent of its admitted assets.(k) The limitations of section twenty-three of this article do not apply to an insurer's acquisition of real estate under subsection (g) of this section. An insurer may not acquire real estate under said subsection if, as a result of and after giving effect to the acquisition, the aggregate amount of all real estate then held by the insurer under said subsection would exceed ten percent of its admitted assets. With the permission of the commissioner, additional amounts of real estate may be acquired under said subsection.
(a) An insurer may enter into securities lending, repurchase, reverse repurchase and dollar roll transactions with business entities, subject to the following requirements:(1) The insurer's board of directors shall adopt a written plan that is consistent with the requirements of the written plan in subsection (a), section four of this article that specifies guidelines and objectives to be followed, such as:(A) A description of how cash received will be invested or used for general corporate purposes of the insurer;(B) Operational procedures to manage interest rate risk, counterparty default risk, the conditions under which proceeds from reverse repurchase transactions may be used in the ordinary course of business and the use of acceptable collateral in a manner that reflects the liquidity needs of the transaction; and(C) The extent to which the insurer may engage in these transactions.(2) The insurer shall enter into a written agreement for all transactions authorized in this section other than dollar roll transactions. The written agreement shall require that each transaction terminate no more than one year from its inception or upon the earlier demand of the insurer. The agreement shall be with the business entity counterparty, but for securities lending transactions, the agreement shall be with an agent acting on behalf of the insurer, if the agent is a qualified business entity, and if the agreement:(A) Requires the agent to enter into separate agreements with each counterparty that are consistent with the requirements of this section; and(B) Prohibits securities lending transactions under the agreement with the agent or its affiliates.(3) Cash received in a transaction under this section shall be invested in accordance with this article and in a manner that recognizes the liquidity needs of the transaction or used by the insurer for its general corporate purposes. For so long as the transaction remains outstanding, the insurer, its agent or custodian shall maintain, as to acceptable collateral received in a transaction under this section, either physically or through the book entry systems of the federal reserve, depository trust company, participants trust company or other securities depositories approved by the commissioner:(A) Possession of the acceptable collateral;(B) A perfected security interest in the acceptable collateral; or(C) In the case of a jurisdiction outside of the United States, title to, or rights of a secured creditor to, the acceptable collateral.(4) In a securities lending transaction, the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to one hundred two percent of the market value of the securities loaned by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than the market value of the loaned securities, the business entity counterparty shall be obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, at least equals one hundred two percent of the market value of the loaned securities.(5) In a reverse repurchase transaction, (other than a dollar roll transaction), the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to ninety-five percent of the market value of the securities transferred by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than ninety-five percent of the market value of the securities transferred, the business entity counterparty is obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, at least equals ninety-five percent of the market value of the transferred securities.(6) In a dollar roll transaction, the insurer shall receive cash in an amount at least equal to the market value of the securities transferred by the insurer in the transaction as of the transaction date.(7) In a repurchase transaction, the insurer shall receive as acceptable collateral transferred securities having a market value at least equal to one hundred two percent of the purchase price paid by the insurer for the securities. If at any time the market value of the acceptable collateral is less than one hundred percent of the purchase price paid by the insurer, the business entity counterparty is obligated to provide additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, at least equals one hundred two percent of the purchase price. Securities acquired by an insurer in a repurchase transaction may not be sold in a reverse repurchase transaction, loaned in a securities lending transaction or otherwise pledged.(b) The limitations of sections twenty-three and thirty of this article do not apply to the business entity counterparty exposure created by transactions under this section. For purposes of calculations made to determine compliance with this subdivision, no effect will be given to the insurer's future obligation to resell securities, in the case of a repurchase transaction, or to repurchase securities, in the case of a reverse repurchase transaction. An insurer may not enter into a transaction under this section if, as a result of and after giving effect to the transaction:(1) The aggregate amount of securities then loaned, sold to or purchased from any one business entity counterparty under this section would exceed five percent of its admitted assets. In calculating the amount sold to or purchased from a business entity counterparty under repurchase or reverse repurchase transactions, effect will be given to netting provisions under a master written agreement; or(2) The aggregate amount of all securities then loaned, sold to or purchased from all business entities under this section would exceed forty percent of its admitted assets but the limitation of this subdivision does not apply to reverse repurchase transactions for so long as the borrowing is used to meet operational liquidity requirements resulting from an officially declared catastrophe and subject to a plan approved by the commissioner.
(a) Insurers shall acquire, hold or invest in investments or engage in investment practices as set forth in this article. Investments not conforming to this article will not be admitted assets.(b) Subject to subsection (c) of this section, an insurer may not acquire or hold an investment as an admitted asset unless at the time of acquisition it is:(1) Eligible for the payment or accrual of interest or discount (whether in cash or other securities), eligible to receive dividends or other distributions or is otherwise income producing; or(2) Acquired under subsection (c), section fifteen of this article; sections sixteen, eighteen or twenty of this article; subsection (c), section twenty-eight of this article; sections twenty-nine, thirty-one or thirty-two of this article; or under the authority of sections of the code other than this article.(c) An insurer may acquire or hold as admitted assets investments that do not otherwise qualify as provided in this article if the insurer has not acquired them for the purpose of circumventing any limitations contained in this article, if the insurer acquires the investments in the following circumstances and the insurer complies with the provisions of sections five and seven of this article as to the investments:(1) As payment on account of existing indebtedness or in connection with the refinancing, restructuring or workout of existing indebtedness, if taken to protect the insurer's interest in that investment;(2) As realization on collateral for an obligation;(3) In connection with an otherwise qualified investment or investment practice, as interest on or a dividend or other distribution related to the investment or investment practice or in connection with the refinancing of the investment, in each case for no additional or only nominal consideration;(4) Under a lawful and bona fide agreement of recapitalization or voluntary or involuntary reorganization in connection with an investment held by the insurer; or(5) Under a bulk reinsurance, merger or consolidation transaction approved by the commissioner if the assets constitute admissible investments for the ceding, merged or consolidated companies.(d) An investment or portion of an investment acquired by an insurer under subsection (c) of this section shall become a nonadmitted asset three years (or five years in the case of mortgage loans and real estate) from the date of its acquisition, unless within that period the investment has become a qualified investment under a section of this article other than subsection (c) of this section, but an investment acquired under an agreement of bulk reinsurance, merger or consolidation may be qualified for a longer period if so provided in the plan for reinsurance, merger or consolidation as approved by the commissioner. Upon application by the insurer and a showing that the nonadmission of an asset held under said subsection would materially injure the interests of the insurer, the commissioner may extend the period for admissibility for an additional reasonable period of time.(e) Except as provided in subsections (f) and (h) of this section, an investment shall qualify under this article if, on the date the insurer committed to acquire the investment or on the date of its acquisition, it would have qualified under this article. For the purposes of determining limitations contained in this article, an insurer shall give appropriate recognition to any commitments to acquire investments.(f) Investments held and investment transactions entered into before the effective date of this article are valid as follows:(1) An investment held as an admitted asset by an insurer on the effective date of this article which qualified under applicable law in effect before the effective date remains qualified as an admitted asset under this article; and(2) Each specific transaction constituting an investment practice of the type described in this article that was lawfully entered into by an insurer and was in effect on the effective date of this article continues to be permitted under this article until its expiration or termination under its terms;(g) Unless otherwise specified, an investment limitation computed on the basis of an insurer's admitted assets or capital and surplus relates to the amount required to be shown on the statutory balance sheet of the insurer most recently required to be filed with the commissioner. For purposes of computing any limitation based upon admitted assets, the insurer shall deduct from the amount of its admitted assets the amount of the liability recorded on its statutory balance sheet for:(1) The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction;(2) Cash received in a dollar roll transaction; and(3) The amount reported as borrowed money in the most recently filed financial statement to the extent not included in subdivisions (1) and (2) of this subsection.(h) An investment qualified, in whole or in part, for acquisition or holding as an admitted asset may be qualified or requalified at the time of acquisition or a later date, in whole or in part, under any other section, if the relevant conditions contained in the other section are satisfied at the time of qualification or requalification.(i) An insurer shall maintain documentation demonstrating that investments were acquired in accordance with this article, and specifying the section of this article under which they were acquired.(j) An insurer may not enter into an agreement to purchase securities in advance of their issuance for resale to the public as part of a distribution of the securities by the issuer or otherwise guarantee the distribution, except that an insurer may acquire privately placed securities with registration rights.(k) Notwithstanding the provisions of this article, the commissioner, for good cause, may order under the state's administrative procedures or equivalent, an insurer to nonadmit, limit, dispose of, withdraw from or discontinue an investment or investment practice. The authority of the commissioner under this subsection is in addition to any other authority of the commissioner.(l) Insurance futures and insurance futures options are not considered investments or investment practices for purposes of this article.
(a) Subject to the limitations of section twenty-three of this article, an insurer may acquire foreign investments, or engage in investment practices with persons of or in foreign jurisdictions, of substantially the same types as those that an insurer is permitted to acquire under this article, other than of the type permitted under section twenty-five of this article, if, as a result and after giving effect to the investment:(1) The aggregate amount of foreign investments then held by the insurer under this subsection does not exceed twenty percent of its admitted assets; and(2) The aggregate amount of foreign investments then held by the insurer under this subsection in a single foreign jurisdiction does not exceed ten percent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or five percent of its admitted assets as to any other foreign jurisdiction.(b) Subject to the limitations of section twenty-three of this article, an insurer may acquire investments, or engage in investment practices denominated in foreign currencies, whether or not they are foreign investments acquired under subsection (a) of this section, or additional foreign currency exposure as a result of the termination or expiration of a hedging transaction with respect to investments denominated in a foreign currency, if:(1) The aggregate amount of investments then held by the insurer under this subsection denominated in foreign currencies does not exceed fifteen percent of its admitted assets; and(2) The aggregate amount of investments then held by the insurer under this subsection denominated in the foreign currency of a single foreign jurisdiction does not exceed ten percent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or five percent of its admitted assets as to any other foreign jurisdiction. However, an investment will not be considered denominated in a foreign currency if the acquiring insurer enters into one or more contracts in transactions permitted under section thirty-one of this article and the business entity counterparty agrees under the contract or contracts to exchange all payments made on the foreign currency denominated investment for United States currency at a rate which effectively insulates the investment cash flows against future changes in currency exchange rates during the period the contract or contracts are in effect.(c) In addition to investments permitted under subsections (a) and (b) of this section, an insurer that is authorized to do business in a foreign jurisdiction, and that has outstanding insurance, annuity or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction, may acquire foreign investments respecting that foreign jurisdiction, and may acquire investments denominated in the currency of that jurisdiction, subject to the limitations of section twenty-three of this article. However, investments made under this subsection in obligations of foreign governments, their political subdivisions and government-sponsored enterprises are not subject to the limitations of section twenty-three of this article if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection may not exceed the greater of:(1) The amount the insurer is required by law to invest in the foreign jurisdiction; or(2) One hundred twenty-five percent of the amount of its reserves, net of reinsurance, and other obligations under the contracts.(d) In addition to investments permitted under subsections (a) and (b) of this section, an insurer that is not authorized to do business in a foreign jurisdiction but which has outstanding insurance, annuity or reinsurance contracts on lives or risks resident or located in a foreign jurisdiction and denominated in foreign currency of that jurisdiction, may acquire foreign investments respecting that foreign jurisdiction and may acquire investments denominated in the currency of that jurisdiction subject to the limitations set forth in section twenty-three of this article. However, investments made under this subsection in obligations of foreign governments, their political subdivisions and government-sponsored enterprises are not subject to the limitations of section twenty-three of this article if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection may not exceed one hundred five percent of the amount of its reserves, net of reinsurance, and other obligations under the contracts on risks resident or located in the foreign jurisdiction.(e) Investments acquired under this section shall be aggregated with investments of the same types made under all other sections of this article, and in a similar manner, for purposes of determining compliance with the limitations, if any, contained in the other sections. Investments in obligations of foreign governments, their political subdivisions and government-sponsored enterprises of these persons, except for those exempted under subsections (c) and (d) of this section, are subject to the limitations of section twenty-three of this article.
(a) An insurer may, directly or indirectly through an investment subsidiary, engage in derivative transactions under this section under the following conditions:(1) An insurer may use derivative instruments under this section to engage in hedging transactions and certain income generation transactions, as these terms may be further defined in rules promulgated by the commissioner.(2) An insurer must be able to demonstrate to the commissioner the intended hedging characteristics and the ongoing effectiveness of the derivative transaction or combination of transactions through cash flow testing or other appropriate analyses.(b) An insurer may enter into hedging transactions under this section if, as a result of and after giving effect to the transaction:(1) The aggregate statement value of options, caps, floors and warrants not attached to another financial instrument purchased and used in hedging transactions does not exceed seven and one-half percent of its admitted assets;(2) The aggregate statement value of options, caps and floors written in hedging transactions does not exceed three percent of its admitted assets; and(3) The aggregate potential exposure of collars, swaps, forwards and futures used in hedging transactions does not exceed six and one-half percent of its admitted assets.(c) An insurer may only enter into the following types of income generation transactions if as a result of and after giving effect to the transactions, the aggregate statement value of the fixed income assets that are subject to call plus the face value of fixed income securities underlying a derivative instrument subject to call, plus the amount of the purchase obligations under the puts, does not exceed ten percent of its admitted assets:(1) Sales of covered call options on noncallable fixed income securities, callable fixed income securities if the option expires by its terms prior to the end of the noncallable period or derivative instruments based on fixed income securities;(2) Sales of covered call options on equity securities, if the insurer holds in its portfolio, or can immediately acquire through the exercise of options, warrants or conversion rights already owned, the equity securities subject to call during the complete term of the call option sold; or(3) Sales of covered puts on investments that the insurer is permitted to acquire under this article, if the insurer has escrowed, or entered into a custodian agreement segregating, cash or cash equivalents with a market value equal to the amount of its purchase obligations under the put during the complete term of the put option sold.(d) An insurer shall include all counterparty exposure amounts in determining compliance with the limitations of section twenty-three of this article.(e) Pursuant to rules promulgated under section eight of this article, the commissioner may approve additional transactions involving the use of derivative instruments in excess of the limits of subsection (b) of this section or for other risk management purposes under rules promulgated by the commissioner, but replication transactions may not be permitted for other than risk management purposes.
(a) An insurer may acquire under this section investments, or engage in investment practices, of any kind that are not specifically prohibited by this article, or engage in investment practices, without regard to any limitation in sections twenty-three through thirty of this article, but an insurer may not acquire an investment or engage in an investment practice under this section if, as a result of and after giving effect to the transaction, the aggregate amount of the investments then held by the insurer under this section would exceed the greater of:(1) Its unrestricted surplus; or(2) The lesser of:(A) Ten percent of its admitted assets; or(B) Fifty percent of its surplus as regards policyholders.(b) An insurer may not acquire any investment or engage in any investment practice under subdivision (2), subsection (a) of this section if, as a result of and after giving effect to the transaction the aggregate amount of all investments in any one person then held by the insurer under that subsection would exceed five percent of its admitted assets.
(a) An insurer's board of directors shall adopt a written plan for acquiring and holding investments and for engaging in investment practices that specifies guidelines as to the quality, maturity and diversification of investments and other specifications including investment strategies intended to assure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs and its capital and surplus. The board shall review and assess the insurer's technical investment and administrative capabilities and expertise before adopting a written plan concerning an investment strategy or investment practice.(b) Investments acquired and held under this article shall be acquired and held under the supervision and direction of the board of directors of the insurer. The board of directors shall evidence by formal resolution, at least annually, that it has determined whether all investments have been made in accordance with delegations, standards, limitations and investment objectives prescribed by the board or a committee of the board charged with the responsibility to direct its investments.(c) On no less than a quarterly basis, and more often if considered appropriate, an insurer's board of directors or committee of the board of directors shall:(1) Receive and review a summary report on the insurer's investment portfolio, its investment activities and investment practices engaged in under delegated authority, in order to determine whether the investment activity of the insurer is consistent with its written plan; and(2) Review and revise, as appropriate, the written plan.(d) In discharging its duties under this section, the board of directors shall require that records of any authorizations or approvals, other documentation as the board may require and reports of any action taken under authority delegated under the plan referred to in subsection (a) of this section shall be made available on a regular basis to the board of directors.(e) In discharging their duties under this section, the directors of an insurer shall perform their duties in good faith and with that degree of care that ordinarily prudent individuals in like positions would use under similar circumstances.(f) If an insurer does not have a board of directors, all references to the board of directors in this article shall be considered to be references to the governing body of the insurer having authority equivalent to that of a board of directors.
An insurer may not, directly or indirectly:(a) Invest in an obligation or security or make a guarantee for the benefit of or in favor of an officer or director of the insurer, except as provided in section six of this article;(b) Invest in an obligation or security, make a guarantee for the benefit of or in favor of, or make other investments in a business entity of which ten percent or more of the voting securities or equity interests are owned directly or indirectly by or for the benefit of one or more officers or directors of the insurer, except as authorized in article twenty-seven of this chapter or provided in section six of this article;(c) Engage on its own behalf or through one or more affiliates in a transaction or series of transactions designed to evade the prohibitions of this article;(d) Invest in a partnership as a general partner, except that an insurer may make an investment as a general partner:(1) If all other partners in the partnership are subsidiaries of the insurer;(2) For the purpose of meeting cash calls committed to prior to the effective date of this article, completing those specific projects or activities of the partnership in which the insurer was a general partner as of the effective date of this article that had been undertaken as of that date, or making capital improvements to property owned by the partnership on the effective date of this article if the insurer was a general partner as of that date; or(3) In accordance with subsection (c), section three of this article, this paragraph does not prohibit a subsidiary or other affiliate of the insurer from becoming a general partner; or(e) Invest in or lend its funds upon the security of shares of its own stock, except that an insurer may acquire shares of its own stock for the following purposes, but the shares may not be admitted assets of the insurer:(1) Conversion of a stock insurer into a mutual or reciprocal insurer or a mutual or reciprocal insurer into a stock insurer;(2) Issuance to the insurer's officers, employees or agents in connection with a plan approved by the commissioner for converting a publicly held insurer into a privately held insurer or in connection with other stock option and employee benefit plans; or(3) In accordance with any other plan approved by the commissioner.
(a) Except as provided in subsection (b) of this section, an insurer may not, without the prior written approval of the commissioner, directly or indirectly:(1) Make a loan to or other investment in an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest;(2) Make a guarantee for the benefit of or in favor of an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; or(3) Enter into an agreement for the purchase or sale of property from or to an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest.(b) For purposes of this section, an officer or director may not be determined to have a financial interest by reason of an interest that is held directly or indirectly through the ownership of equity interests representing less than two percent of all outstanding equity interests issued by a person that is a party to the transaction, or solely by reason of that individual's position as a director or officer of a person that is a party to the transaction.(c) This subsection does not permit an investment that is prohibited by section five of this article.(d) This subsection does not apply to a transaction between an insurer and any of its subsidiaries or affiliates that is entered into in compliance with article twenty-seven of this chapter, other than a transaction between an insurer and its officer or director.(e) An insurer may make, without the prior written approval of the commissioner:(1) Policy loans in accordance with the terms of the policy or contract and section nineteen of this article;(2) Advances to officers or directors for expenses reasonably expected to be incurred in the ordinary course of the insurer's business or guarantees associated with credit or charge cards issued or credit extended for the purpose of financing these expenses;(3) Loans secured by the principal residence of an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loans comply with the requirements of section fifteen or twenty-eight of this article and the terms and conditions otherwise are the same as those generally available from unaffiliated third parties;(4) Secured loans to an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loans:(A) Do not have a term exceeding two years;(B) Are required to finance mortgage loans outstanding at the same time on the prior and new residences of the officer;(C) Do not exceed an amount equal to the equity of the officer in the prior residence; and(D) Are required to be fully repaid upon the earlier of the end of the two-year period or the sale of the prior residence; and(5) Loans and advances to officers or directors made in compliance with state or federal law specifically related to the loans and advances by a regulated noninsurance subsidiary or affiliate of the insurer in the ordinary course of business and on terms no more favorable than available to other customers of the entity.
For the purposes of this article, the value or amount of an investment acquired or held, or an investment practice engaged in, under this article, unless otherwise specified in this code, is the value at which assets of an insurer are required to be reported for statutory accounting purposes as determined in accordance with procedures prescribed in published accounting and valuation standards of the NAIC, including the purposes and procedures of the securities valuation office, the valuation of securities manual, the accounting practices and procedures manual, the annual statement instructions or any successor valuation procedures officially adopted by the NAIC.
The commissioner may, in accordance with article one, chapter twenty-nine-a of this code, promulgate rules implementing the provisions of this article.
Sections ten through twenty, inclusive, of this article apply to the investments and investment practices of life and health insurers, subject to the provisions of subsection (b), section one of this article.
The purpose of this article is to authorize domestic insurance companies to utilize modern systems for holding and transferring securities without physical delivery of securities certificates, subject to appropriate regulation of the commissioner.
As used in this article, the term:(1) "Agent" means a national bank, state bank, trust company or broker-dealer that maintains an account in its name in a clearing corporation or that is a member of the federal reserve system and through which a custodian participates in a clearing corporation or the federal reserve book-entry system, including the Treasury/Reserve Automated Debt Entry Securities System (TRADES) or Treasury Direct Systems, except that with respect to securities issued by institutions organized or existing under the laws of a foreign country, "agent" may include a corporation that is organized or existing under the laws of a foreign country and that is legally qualified under those laws to accept custody of securities;(2) "Clearing corporation" has the same meaning set forth in subdivision (5), subsection (a), section one hundred two, article eight, chapter forty-six of this code, except that with respect to securities issued by institutions organized or existing under the laws of any foreign country, clearing corporation may include a corporation which is organized or existing under the laws of any foreign country and is legally qualified under such laws to effect the transactions in securities by computerized book entry. Clearing corporation also includes the Treasury/Reserve Automated Debt Entry Securities System (TRADES) or Treasury Direct Book-Entry Systems established pursuant to 31 C.F.R., Part 357; (3) "Custodian" means:(A) A national bank, state bank or trust company that shall at all times during which it acts as a custodian pursuant to this article be no less than adequately capitalized as determined by the standards adopted by United States banking regulators and that is regulated by either state banking laws or is a member of the Federal Reserve System and that is legally qualified to accept custody of securities in accordance with the standards set forth below, except that with respect to securities issued by institutions organized or existing under the laws of a foreign country, "custodian" may include a bank or trust company incorporated or organized under the laws of a country other than the United States that is regulated as such by that country's government or an agency thereof that shall at all times during which it acts as a custodian pursuant to this article be no less than adequately capitalized as determined by the standards adopted by international banking authorities and that is legally qualified to accept custody of securities; or(B) A broker-dealer that is registered with and subject to the jurisdiction of the Securities and Exchange Commission, maintains membership in the Securities Investor Protection Corporation, and has a tangible net worth equal to or greater than $250 million. For the purposes of this subdivision, "tangible net worth" means shareholders' equity, less intangible assets, as reported in the broker-dealer's most recent annual or transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission (15 U.S.C. 78m or 78o(d));(4) "Custodied securities" means securities held by the custodian or its agent or in a clearing corporation, including the Treasury/Reserve Automated Debt Entry Securities Systems (TRADES) or Treasury Direct Systems;(5) "Direct participant" means a bank, trust company or other institution or other custodian which maintains an account in its name in a clearing corporation and through which an insurance company participates in a clearing corporation;(6) "Federal reserve book-entry system" means the computerized systems sponsored by the United States Department of the Treasury and certain agencies and instrumentalities of the United States for holding and transferring securities of the United States government and such agencies and instrumentalities, respectively, in federal reserve banks and through banks which are members of the Federal Reserve System or which otherwise have access to such computerized systems;(7) "Member bank" means a national bank, state bank or trust company which is a member of the Federal Reserve System and through which an insurance company participates in the federal reserve book-entry system;(8) "Securities" means certificated securities as defined in subdivision (4), subsection (a), section one hundred two, article eight, chapter forty-six of this code and uncertificated securities as defined in subdivision (18) of subsection (a), section one hundred two, article eight, chapter forty-six; and (9) "Security certificate" has the same meaning set forth in subdivision (16), subsection (a), section one hundred two, article eight, chapter forty-six of this code.
(a) Notwithstanding any other provision of law, a domestic insurance company may deposit or arrange for the deposit of securities held in or purchased for its general account and its separate accounts in a clearing corporation or the federal reserve book-entry system. When securities are deposited with a clearing corporation, certificates representing securities of the same class of the same issuer may be merged and held in bulk in the name of the nominee of the clearing corporation with any other securities deposited with the clearing corporation by any person, regardless of the ownership of the securities, and certificates representing securities of small denominations may be merged into one or more certificates of larger denominations. The records of any custodian through which an insurance company holds securities in the federal reserve book-entry system or a clearing corporation shall at all times show that the securities are held for the insurance company and for which accounts. Ownership of, and other interests in, the securities may be transferred by bookkeeping entry on the books of such clearing corporation or in the federal reserve book-entry system without, in either case, physical delivery of certificates representing the securities.(b) The Commissioner is authorized to promulgate rules governing the deposit of securities by insurance companies and custodians with clearing corporations and in the federal reserve book-entry system.
Notwithstanding any other provision of law, the securities qualified for deposit under this section may be deposited with a clearing corporation or held in the federal reserve book-entry system. Securities deposited with a clearing corporation or held in the federal reserve book-entry system and used to meet the deposit requirements set forth in this section shall be under the control of the commissioner and may not be withdrawn by the insurance company without the approval of the commissioner. An insurance company holding securities in this manner shall provide to the commissioner evidence issued by its custodian or member bank through which the insurance company has deposited the securities in a clearing corporation or through which the securities are held in the federal reserve book-entry system, respectively, in order to establish that the securities are actually recorded in an account in the name of the custodian or other direct participant or member bank and that the records of the custodian, other participant or member bank reflect that the securities are held subject to the order of the commissioner.
Notwithstanding any other provision of law, securities eligible for deposit under the insurance law of this state relating to deposit of securities by an insurance company as a condition of commencing or continuing to do an insurance business in this state may be deposited with a clearing corporation or held in the federal reserve book-entry system. Securities deposited with a clearing corporation or held in the federal reserve book-entry system and used to meet the deposit requirements under the insurance laws of this state shall be under the control of the commissioner and shall not be withdrawn by the insurance company without the approval of the commissioner. An insurance company holding securities in this manner shall provide to the commissioner evidence issued by its custodian or a member bank through which the insurance company has deposited securities with a clearing corporation or held in the federal reserve book-entry system, respectively, in order to establish that the securities are actually recorded in an account in the name of the custodian or other direct participant or member bank and evidence that the records of the custodian, other participant or member bank reflect that the securities are held subject to the order of the commissioner.
(a) An insurance company may, by written agreement with a custodian, provide for the custody of its securities with a custodian. The securities may be held by the custodian or its agent or in a clearing corporation or in the federal reserve book-entry system. Securities so held, whether held by the custodian or its agent or in a clearing corporation or in the federal reserve book-entry system, are referred to herein as "custodied securities".(b) The agreement shall be in writing and shall be authorized by a resolution of the board of directors of the insurance company or of an authorized committee of the board. The terms of the agreement shall comply with the following:(1) Certificated securities held by the custodian shall be held either separate from the securities of the custodian and of all of its other customers or in a fungible bulk of securities as part of a filing of securities by issue (FOSBI) arrangement.(2) Securities held in a fungible bulk by the custodian and securities in a clearing corporation or in the federal reserve book-entry system shall be separately identified on the custodian's official records as being owned by the insurance company. The records shall identify which custodied securities are held by the custodian or by its agent and which securities are in a clearing corporation or in the federal reserve book-entry system. If the securities are in a clearing corporation or in the federal reserve book-entry system, the records shall also identify where the securities are and if in a clearing corporation, the name of the clearing corporation and, if through an agent, the name of the agent.(3) All custodied securities that are registered shall be registered in the name of the company or in the name of a nominee of the company or in the name of the custodian or its nominee or, if in a clearing corporation, in the name of the clearing corporation or its nominee.(4) Custodied securities shall be held subject to the instructions of the insurance company and shall be withdrawable upon the demand of the insurance company, except that custodied securities used to meet the deposit requirements set forth in section six, article three of this chapter shall, to the extent required by said section, be under the control of the state Treasurer and shall not be withdrawn by the insurance company without the approval of the Insurance Commissioner.(5) The custodian shall be required to send or cause to be sent to the insurance company a confirmation of all transfers of custodied securities to or from the account of the insurance company. In addition, the custodian shall be required to furnish no less than monthly the insurance company with reports of holdings of custodied securities at times and containing information reasonably requested by the insurance company. The custodian's trust committee's annual reports of its review of the insurer's trust accounts shall also be provided to the insurer. Reports and verifications may be transmitted in electronic or paper form.(6) During the course of the custodian's regular business hours, an officer or employee of the insurance company, an independent accountant selected by the insurance company and a representative of an appropriate regulatory body shall be entitled to examine, on the premises of the custodian, the custodian's records relating to custodied securities, but only upon furnishing the custodian with written instructions to that effect from an appropriate officer of the insurance company.(7) The custodian and its agents shall be required to send to the insurance company:(A) All reports which they receive from a clearing corporation or the federal reserve book-entry system on their respective systems of internal accounting control; and(B) Reports prepared by outside Auditors on the custodians or its agent's internal accounting control of custodied securities that the insurance company may reasonably request.(8) The custodian shall maintain records sufficient to determine and verify information relating to custodied securities that may be reported in the insurance company's annual statement and supporting schedules and information required in an audit of the financial statements of the insurance company.(9) The custodian shall provide, upon written request from an appropriate officer of the insurance company, the appropriate affidavits, substantially in the form attached to this regulation, with respect to custodied securities.(10) The custodian shall secure and maintain insurance protection in an adequate amount covering the custodian's duties and activities as custodian for the insurer's assets and shall state in the custody agreement that protection is in compliance with the requirements of the custodian's banking regulator. The commissioner may determine whether the type of insurance is appropriate and the amount of coverage is adequate.(11) The custodian shall be obligated to indemnify the insurance company for any loss of custodied securities occasioned by the negligence or dishonesty of the custodian's officers or employees, or burglary, robbery, holdup, theft or mysterious disappearance, including loss by damage or destruction.(12) In the event that there is a loss of custodied securities for which the custodian shall be obligated to indemnify the insurance company as provided in subdivision (11) of this subsection, the custodian shall promptly replace the securities or the value thereof and the value of any loss of rights or privileges resulting from the loss of securities.(13) The agreement may provide that the custodian will not be liable for a failure to take an action required under the agreement in the event and to the extent that the taking of the action is prevented or delayed by war (whether declared or not and including existing wars), revolution, insurrection, riot, civil commotion, act of God, accident, fire, explosion, stoppage of labor, strikes or other differences with employees, laws, regulations, orders or other acts of any governmental authority, or any other cause whatever beyond its reasonable control.(14) In the event that the custodian gains entry in a clearing corporation or in the federal reserve book-entry system through an agent, there shall be an agreement between the custodian and the agent under which the agent shall be subject to the same liability for loss of custodied securities as the custodian. However, if the agent shall be subject to regulation under the laws of a jurisdiction that is different from the jurisdiction the laws of which regulate the custodian, the Insurance Commissioner of the state of domicile of the insurance company may accept a standard of liability applicable to the agent that is different from the standard of liability applicable to the custodian.(15) The custodian shall provide written notification to the insurer's domiciliary commissioner if the custodial agreement with the insurer has been terminated or if one hundred percent of the account assets in any one custody account have been withdrawn. This notification shall be remitted to the Insurance Commissioner within three business days of the receipt by the custodian of the insurer's written notice of termination or within three business days of the withdrawal of one hundred percent of the account assets.
(a) Nothing in this regulation shall prevent an insurance company from depositing securities with another insurance company with which the depositing insurance company is affiliated, provided that the securities are deposited pursuant to a written agreement authorized by the board of directors of the depositing insurance company or an authorized committee thereof and that the receiving insurance company is organized under the laws of one of the states of the United States of America or of the District of Columbia. If the respective states of domicile of the depositing and receiving insurance companies are not the same, the depositing insurance company shall have given notice of the deposit to the Insurance Commissioner in the state of its domicile and the Insurance Commissioner shall not have objected to it within thirty days of the receipt of the notice.(b) The terms of the agreement shall comply with the following:(1) The insurance company receiving the deposit shall maintain records adequate to identify and verify the securities belonging to the depositing insurance company.(2) The receiving insurance company shall allow representatives of an appropriate regulatory body to examine records relating to securities held subject to the agreement.(3) The depositing insurance company may authorize the receiving insurance company:(A) To hold the securities of the depositing insurance company in bulk, in certificates issued in the name of the receiving insurance company or its nominee, and to commingle them with securities owned by other affiliates of the receiving insurance company; and(B) To provide for the securities to be held by a custodian, including the custodian of securities of the receiving insurance company or in a clearing corporation or the federal reserve book-entry system.
The State Treasurer of West Virginia shall accept and hold in trust, when made through the commissioner, deposits of securities or funds by insurers as follows:(a) Deposits required for a license to transact insurance in West Virginia.(b) Deposits of domestic, foreign, or alien insurers when made pursuant to the laws of other states, provinces, and countries as prerequisite for authority to transact insurance in such state, province, or country.(c) Deposits in such additional amounts as are permitted to be made by section six of this article.
Such deposits shall be held for purposes as follows:(a) When the deposit is required for authority to transact insurance in West Virginia the deposit shall be held for the protection of all the insurer's policyholders and creditors within the United States.(b) When the deposit is required pursuant to the laws of another state, province, or country, the deposit shall be held for such purposes as is required by such laws, and as specified by the commissioner at the time the deposit is made.(c) When the deposit is required pursuant to the retaliatory provisions, section sixteen of article three of this chapter, the deposit shall be held for purposes as specified in the commissioner's order requiring the deposit.
(a) All deposits required for a license to transact insurance in West Virginia shall consist of cash or any combination of the government obligations described in paragraph (A) or (B), subdivision (1), subsection (a), section eleven, article eight of this chapter or paragraph (A), (B) or (C), subdivision (3) of said subsection.(b) All deposits required pursuant to the laws of another state, province or country, or pursuant to the retaliatory provision, section sixteen, article three of this chapter, shall consist of those assets that are required or permitted by the laws, or as required pursuant to the retaliatory provision.
(a) Upon request of the insurer, the state Treasurer may designate any solvent trust company or other solvent financial institution having trust powers domiciled in this state as the treasurer's depository to receive and hold any such deposit. Any such deposit so held shall be at the expense of the insurer.(b) The state of West Virginia shall be responsible for the safekeeping and return of all funds and securities deposited pursuant to this chapter with the state Treasurer or in any depository so designated by him 
So long as the insurer remains solvent and complies with this chapter it may:(a) Demand, receive, sue for and recover the income from the securities or cash deposited,(b) Exchange and substitute for the deposited cash or securities, or any part thereof, cash or eligible securities of equivalent or greater value, and(c) Inspect, at reasonable times, any such deposit.
An insurer may so deposit cash or eligible securities in an amount exceeding its deposit required or otherwise permitted under this chapter, such excess deposit to be held for the protection of such insurer's policyholders and creditors. During the solvency of the insurer any such excess deposit or part thereof shall be released to the insurer upon its request. During the insolvency of the insurer such excess deposit shall be released only as provided in section seven of this article.
Any deposit made in this state under this chapter shall be released and returned:(a) To the insurer upon extinguishment by authorized reinsurance or otherwise of substantially all liability of the insurer for the security of which the deposit is held;(b) To the insurer to the extent such deposit is in excess of the amount required; or(c) Upon proper order of a court of competent jurisdiction to the receiver, conservator, rehabilitator or liquidator of the insurer, or to any other properly designated official or officials who succeed to the management and control of the insurer's assets.
No such release of deposited funds shall be made except upon application to and written order of the commissioner. The commissioner shall have no personal liability for any such release of any such deposit or part thereof so made by him in good faith.
No judgment creditor or other claimant of an insurer shall levy upon any deposit held pursuant to this chapter, or upon any part thereof; except, that such levy may be permitted if so specified in the commissioner's order requiring the deposit pursuant to the retaliatory provision, section sixteen of article three of this chapter.