West Virginia Code of State Rules Agency 114 - Insurance Commission
West Virginia Code of State Rules – Agency 114 (Insurance Commissioner)
Agency 114 governs insurance regulation in West Virginia. These are administrative rules created by the West Virginia Insurance Commissioner under authority from Chapter 33 of the West Virginia Code. The rules carry the force of law and apply to insurers, insurance agents/producers, adjusters, and other insurance-related entities operating in West Virginia.
1. Structure of Agency 114
Agency 114 is divided into series that focus on specific topics:
114‑01: Governance of domestic stock insurers.
114‑02: Licensing and conduct of insurance producers and agencies.
114‑03: Cancellation and nonrenewal of automobile liability policies.
114‑10: Advertising of accident and sickness insurance.
114‑11: Advertising of life insurance and annuities.
114‑14: Unfair trade practices.
114‑25: Insurance adjusters.
114‑40: Credit for reinsurance.
114‑42: Continuing education for producers and adjusters.
Each series contains rules that implement statutory requirements, clarify regulatory expectations, and set procedures for compliance.
2. Major Areas of Regulation
A. Licensing and Producer Conduct (Series 114‑02)
Establishes eligibility requirements for insurance producers (agents), agencies, and adjusters.
Requires submission of background information and ethical compliance.
Includes rules for disciplinary action if a licensee violates standards.
B. Advertising (Series 114‑10 & 114‑11)
Ensures insurance advertising is truthful and non-misleading.
Requires disclosure of important policy terms.
Prohibits deceptive statements that could mislead consumers.
C. Unfair Trade Practices (Series 114‑14)
Defines prohibited practices, such as:
Failing to disclose material policy provisions.
Delaying claims unfairly.
Misrepresenting coverage or benefits.
Establishes standards for claim investigation and settlement, ensuring insurers act fairly and promptly.
D. Claims Handling
Rules supplement statutory requirements.
Insurers must investigate claims fairly, avoid unreasonable delays, and settle in good faith.
E. Other Areas
Credit for Reinsurance (114‑40): Governs when insurers can count reinsurance for financial reporting.
Continuing Education (114‑42): Requires agents, producers, and adjusters to maintain professional knowledge.
3. Legal Effect
Rules have the force of law once adopted.
They guide compliance and are enforceable by the Insurance Commissioner.
Violations can result in fines, license suspension, or corrective orders.
4. Relevant Case Law
While courts rarely interpret Agency 114 rules directly, they often address the underlying statutes (like West Virginia’s Unfair Trade Practices Act) that the rules implement.
A. Taylor v. Nationwide Mutual Insurance Co.
Issue: Whether a private cause of action exists for unfair claims practices.
Holding: Policyholders can sometimes bring claims against insurers for violations of unfair trade practices, even if administrative remedies exist.
Principle: Agency 114 rules (especially 114‑14) support standards insurers must follow.
B. Linn & Rose v. St. Paul Fire & Marine Co.
Issue: Who is covered under the Unfair Trade Practices Act.
Holding: Only those “in the business of insurance” are directly covered. Delegating duties does not remove insurer liability.
Principle: Agency 114 rules cannot be circumvented; insurers remain accountable.
C. Bad Faith/Claims Handling Cases
Courts repeatedly affirm that insurers have a statutory duty to investigate and settle claims fairly.
Violations can lead to both administrative action and private litigation.
5. Enforcement
The Insurance Commissioner can:
Conduct investigations and market conduct examinations.
Hold administrative hearings for alleged violations.
Impose fines, license suspensions, or corrective orders.
Regulated parties have the right to notice and hearing before final sanctions are imposed.
6. Interaction with Statutes
Agency 114 implements Chapter 33 of the West Virginia Code, including:
Licensing requirements for producers and adjusters.
Consumer protection statutes.
Standards for advertising and claims handling.
The rules operationalize statutory duties, providing practical guidance for insurers and agents.
7. Summary Table
| Topic | Explanation |
|---|---|
| Purpose | Regulate insurance business and protect consumers in WV. |
| Scope | Licensing, advertising, claims handling, unfair trade practices, adjusters, continuing education. |
| Legal Force | Rules have the force of law and are enforceable administratively. |
| Enforcement | By Insurance Commissioner via investigations, hearings, fines, and license actions. |
| Case Law Significance | Courts interpret statutes that Agency 114 implements; private lawsuits may arise for unfair claims practices. |
RELATED Blog
comments