NAMIC Praises W. Va. Anti-Fraud Bill Enactment

March 19, 2004

The National Association of Mutual Insurance Companies (NAMIC) said that its member companies were pleased that before West
Virginia lawmakers adjourned Saturday they enacted House Bill 4004, an omnibus insurance bill that includes provisions to create an anti-fraud unit.

“Creation of an anti-fraud unit has been a top priority for both the West Virginia Insurance Federation and the state’s Insurance Department for years. They should be commended for succeeding this year in persuading lawmakers of the need to create such a unit,” said NAMIC State Affairs Manager, David Reddick. “A fraud unit will help stem some of the problems that have made West Virginia such a difficult place for insurers to do business over the last several years.”

Gov. Bob Wise listed enactment of an anti-fraud unit as one of his administration’s top legislative priorities for the year in his state-of-the-state address Jan. 14.

HB 4004, which still awaits the Governor’s signature, contains other provisions important to the insurance industry. They include:

· A requirement that, by February 2005, the insurance commissioner shall submit to the Legislature a report on the economic effect of third party causes of action on insurance premiums, as well as a report on the work of the office of consumer
advocate and the possibility of expanding it beyond helping only consumers with health issues;

· Language that allows an insurer to withdraw from offering auto liability insurance for personal, private passenger automobiles; and

· A requirement that insurers provide a 45-day reinstatement period as well as a provision that lets insurers choose between either agreeing to a set of specific conditions for non-renewal of a policy after it has been in effect for two consecutive years or agreeing to a percentage cap on non-renewals they make on an annual basis.

“The other provisions in HB 4004 represent small, yet hopeful, signs that lawmakers finally are beginning to understand that a new climate is needed in West Virginia in order to help produce a healthier, more competitive insurance marketplace,” added Reddick.

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