Opinion ID: 1342549
Heading Depth: 2
Heading Rank: 1

Heading: CCPA Statutes

Text: The parties concur that the CCPA statute which governs the right of a creditor to include charges for credit insurance in a consumer transaction is West Virginia Code § 46A-3-109 (1998) (Supp.2008). Under authority of subsection (a)(2), a creditor such as CitiFinancial is permitted to contract for and receive charges for insurance as described in subsection (b). See W.Va.Code § 46A-3-109(a)(2). [17] Subsection (b)(3) specifies how a creditor is permitted to collect a charge for credit insurance: When the insurance is obtained or provided by or through a creditor, [18] the creditor may collect from the consumer or include as part of the cash price of a consumer credit sale or as part of the principal of a consumer loan or deduct from the proceeds of any consumer loan the premium or, in the case of group insurance, the identifiable charge. The premium or identifiable charge for the insurance required or obtained by a creditor may equal, but may not exceed the premium rate filed by the insurer with the insurance commissioner .... W.Va.Code § 46A-3-109(b)(3) (emphasis supplied and footnote added). In addition to establishing that permissible insurance charges cannot be more than the premium rate filed by the insurer with the insurance commissioner, the Act specifies that charges for other benefits, including insurance must be reasonable in relation to the benefits. Id., W.Va.Code § 46A-3-109(a)(4). The Act is clear that the determination of whether the charges therefor [insurance] are reasonable in relation to the benefits shall be determined by the Insurance Commissioner of this State. W.Va. Code § 46A-3-109(a)(4). As a corollary to its clear grant of rate-making authority to the Commissioner, the Legislature gave the Commissioner express and exclusive rule-making authority for the purpose of implementing all of the Act's provisions that relate to insurance. West Virginia Code § 46A-3-109(c) provides: The Insurance Commissioner of this State shall promulgate legislative rules in accordance with the provisions of chapter twenty-nine-a [§§ 29A-1-1 et seq.] of this code to implement the provisions of this article relating to insurance and the authority of the Insurance Commissioner to promulgate the rules is exclusive notwithstanding any other provisions of this code to the contrary. W.Va.Code § 46A-3-109(c) (emphasis supplied). Pursuant to this statutory authority, the Commissioner has promulgated rules that address, inter alia, the standards by which a determination is made concerning whether an insurance rate is reasonable in relation to the benefits that are provided. See, e.g., C.S.R. § 114-61-6.2 (defining standard as being met by loss ratio of not less than sixty percent or such other loss ratio as designated by the commissioner ... for credit personal property insurance policies). If a consumer is charged an amount in excess of what is permitted under the Act, the Legislature has created a remedy for such violations. Under authority of West Virginia Code § 46A-5-101 (1996) (Repl.Vol. 2006), the consumer has a cause of action to recover actual damages and in addition a right in an action to recover from the person violating this chapter a penalty in an amount determined by the court not less than one hundred dollars nor more than one thousand dollars. W.Va.Code § 46A-5-101(1) (emphasis supplied); see also W.Va. Code § 46A-5-101(3) (providing that consumer is not obligated to pay a charge in excess of that allowed by this chapter, and if he has paid an excess charge he has a right to a refund). Citing subsections (1) and (3) of West Virginia Code § 46A-5-101, Respondent Lightner asserts that CitiFinancial violated the CCPA by charging him amounts for credit insurance that violated the Act's requirement that such assessments be reasonable in relation to the benefits provided. W.Va.Code § 46A-3-109(a)(4). Consequently, he avers that such amounts were necessarily in excess of what CitiFinancial was statutorily permitted to charge him for credit insurance. See W.Va.Code § 46A-5-101(1), (3).