The Legislature amended West Virginia Code §33-17-8 governing an insurer’s filing of insurance policy, rider or endorsement forms with the Commissioner. All forms still must be filed and approved by the Commissioner before they may be delivered or issued to an insured. Such forms also must meet all applicable legislative rules, be identical to a form already approved by the Commissioner or qualify under West Virginia Code § 33-17-8(c), which provides that the form filing process of West Virginia Code §33-6-8 noted above applies to commercial lines risks for fire and marine coverage.

The 2005 reforms included an alternative method for fire and marine insurers to nonrenew or cancel property insurance policies in West Virginia as set out in the newly enacted §33-17A-4a. This section provides that a property insurer may nonrenew any property insurance policy after July 1, 2005 “for any reason that is consistent with its underwriting guidelines.”  Of course, each insurer must submit a copy of its underwriting guidelines to the Commissioner to ensure compliance with generally accepted underwriting principles. The insurer’s underwriting policies are deemed confidential and privileged by law from disclosure, discovery, subpoena, and production and are not admissible as evidence.

A limitation is placed on insurer nonrenewals. As of July 1, 2005, an insurer’s nonrenewals may not exceed one percent (1%) per year of the insurer’s total number of policies in effect at the end of the previous calendar year. Additionally, the total number of nonrenewals in any given county may not exceed one percent (1%) of the total number of policies in effect in that county at the end of the previous calendar year. Should this limitation result in less than one policy, then the insurer may nonrenew one policy per year in any given county.

An insured must be provided notice of the nonrenewal at least thirty (30) days before the end of the policy period. The notice must advise the insured of the specific reason(s) for nonrenewal of the policy and that such action is subject to a hearing and review by the Commissioner as to whether the policy was nonrenewed for a discriminatory purpose, upon inadequate notice, improper underwriting standards or in excess of the percentage limitations set forth above. The notice also must advise the insured that he/she may be eligible for coverage through the West Virginia Essential Property Insurance Association.

Insurers are required to provide a report to the Commissioner on or before September 30 of each year regarding the total number of nonrenewals issued per county and the reasons for such action.

West Virginia Code §33-17A-4b (2005) provides that an insurer may elect to utilize the nonrenewal procedures set forth in the newly enacted §33-17A-4a outlined above or those procedures set forth in the previously enacted §33-17A-4(c) (1990). Each insurer licensed in this state as of July 1, 2005 must make this election and will remain bound to that choice for a period of five (5) years. Insurers not licensed to write property insurance policies in this state on or before July 1, 2005, but which become licensed thereafter, must make the election within four (4) years after becoming licensed.

Those insurers making the election to issue nonrenewals pursuant to the previously enacted §33-17A-4(c) (1990) also may nonrenew a policy on which two (2) or more paid claims are made within a three (3) year period occurring after July 1, 2005. This reason for nonrenewal complements the list of reasons for nonrenewal already permitted by West Virginia Code §33-17A-5 (1990).  

West Virginia Code §33-20-4 was amended and redacted to govern rate filings with the Commissioner.  Notably, insurers of “commercial lines property and casualty risks” still must make rate filings with the Commissioner, but approval of those filings is not necessary before the rates may be utilized by the insurer. The Commissioner may requests additional information to ensure legal compliance, but the rate filing becomes effective if the Commissioner does not disapprove the rate filing within thirty (30) days of receiving it. The Commissioner is vested with ongoing discretion to disapprove rate filings, but must provide notice of the same to the insurer and show cause for the disapproval.