West Virginia State Regulations & NAIC Insurance Law
Licensing
To apply for a West Virginia resident producer’s license, you must:
- Be at least 18 years old
- Be a resident of West Virginia before you submit your application
Pre-licensing course and exam
West Virginia requires 20 hours of prelicensing education for each line of authority (life, accident and sickness, property, casualty and personal lines) before the producer examination (WV Offices of the Insurance Commissioner).
The passing score on a West Virginia producer examination is a scaled score of 70 (Pearson VUE, West Virginia Insurance Candidate Handbook).
Fingerprints/background check
West Virginia requires a criminal history record check on each applicant for a resident producer license, and each applicant must submit a full set of fingerprints for the FBI check (W. Va. Code § 33-12-37(d)).
Controlled business
Controlled business is insurance written on the producer’s own life, property or interests, or on those of the producer’s family, employer or a business the producer controls. A producer may insure themselves and their family, but a license exists to sell insurance to the public, so states generally restrict obtaining or using a license principally to write controlled business.
Before issuing a West Virginia producer license, the Commissioner must find that the applicant does not intend to use the license principally to insure themselves, their family or relatives, or (outside life and accident and sickness insurance) the property or interests of their family, relatives, employer, employees or a firm or corporation in which they own a substantial interest (W. Va. Code § 33-12-6(a)(7)).
Non-resident license
A producer licensed in another state can obtain a West Virginia nonresident license without taking West Virginia’s examination. Under the NAIC’s Producer Licensing Model Act, which most states have adopted in some form, a nonresident receives the license if the person:
- Is currently licensed as a resident, and in good standing, in the home state
- Has applied (the home-state application or the Uniform Application) and paid the fees
- Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)
Under the same model, a producer who moves to another state files a change of address, with certification from the new home state, within 30 days. A licensed producer who moves into a state applies for a resident license there within 90 days and does not repeat prelicensing education or the examination for lines already held.
Temporary license
Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:
- The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
- A member or employee of a business entity producer, on the death or disability of its designated producer
- The designee of a producer entering active military service
The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.
The West Virginia Insurance Commissioner may issue a temporary producer license for up to 180 days, without an examination, when one is necessary to service an insurance business (W. Va. Code § 33-12-16(a)).
Military service
A West Virginia producer who cannot comply with license renewal procedures because of military service, or another extenuating circumstance such as a long-term medical disability, may request a waiver of those procedures and of any examination requirement, fine or sanction for failing to comply with them (W. Va. Code § 33-12-9(d)).
Renewal and reinstatement
A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.
West Virginia producer licenses expire on the last day of the licensee’s birth month, every two years (WV Offices of the Insurance Commissioner, Licensing and Education Division).
A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.
A producer who lets a West Virginia license lapse may reinstate the same license within 12 months of the renewal fee’s due date without passing a written examination, paying a penalty of double the unpaid renewal fee (W. Va. Code § 33-12-9©).
Continuing education
All states, including West Virginia, have continuing education requirements that must be met to renew any major lines (life, health, property, liability) insurance license. Individuals licensed in West Virginia must complete continuing education before renewing their license. The number of hours required is set by state law and published by the state insurance department.
Notice of change of name or address
A West Virginia licensee must inform the Commissioner of a change of name, physical address, mailing address or email address within 30 days of the change (W. Va. Code § 33-12-9(f)).
The model also requires a producer to report to the regulator within 30 days any administrative action taken against the producer in another state or by another government agency, counted from the final disposition, and any criminal prosecution in any jurisdiction, counted from the initial pretrial hearing date. A producer who does business under any name other than their legal name must notify the regulator before using it.
Company regulations
An insurance company must be authorized by the Offices of the Insurance Commissioner to conduct business in West Virginia. To receive a certificate of authority, the company applies to the Commissioner and files its charter or articles of incorporation, financial statements showing that it meets the state’s capital and surplus requirements, and the other documents and fees the state requires.
Capital and surplus requirement
A company authorized to conduct insurance business in West Virginia must meet minimum corporate standards. The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required. In West Virginia, the Commissioner, after notice and hearing, must refuse to renew or must suspend or revoke the license of an insurer that no longer meets the requirements for the license originally granted, because of deficiency of assets or otherwise (W. Va. Code § 33-3-10). To be licensed, a stock insurer must have fully paid capital, and a mutual insurer surplus, of at least $1 million, and each must also keep additional surplus of at least $1 million (W. Va. Code § 33-3-5b(a)).
Duties of the Insurance Commissioner
The West Virginia Insurance Commissioner is a state executive position. The Commissioner is the chief executive of the West Virginia Offices of the Insurance Commissioner, which regulates insurance companies operating in West Virginia.
In West Virginia, the Insurance Commissioner is an appointed position. The governor nominates a candidate to the state Senate, and the state Senate confirms the nominee. Each appointment is for a term of six years, and an appointment to fill a vacancy runs for the rest of the term (W. Va. Code § 33-2-1).
The Commissioner establishes and enforces regulations in the West Virginia insurance market in a manner that protects consumers and encourages economic development.
Duties of the Commissioner include:
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Investigate all claims and complaints of legal violations relating to insurance.
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If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
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Monitor transactions of all companies including domestic, foreign, and alien insurance companies.
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Audit the books and records of any resident producer as frequently as necessary. In West Virginia this reaches any licensed agent, broker, excess lines broker or solicitor (W. Va. Code § 33-2-9(g)).
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Collect all fees associated with producers and insurers.
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Determine and administer fines associated with violations for insurers and producers.
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Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
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Approve documentation used by insurance companies such as forms and rates.
Suspend, revoke or non-renew
The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:
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Providing false information on the application for an insurance license.
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Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.
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Being found guilty of a violation or the noncompliance of insurance regulations and laws…
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Committing fraud while attempting to obtain an insurance license.
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Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business.
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Providing false information in reference to the terms and conditions of an insurance contract.
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Having been convicted of or pleaded nolo contendere to any felony, or to a misdemeanor in connection with activities as an agent, solicitor or excess line broker (W. Va. Code § 33-12-24(b)(6)-(7)).
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Having admitted or been found to have committed any insurance unfair trade practice or fraud.
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Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.
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Having had a prior insurance license revoked or suspended in a state other than West Virginia.
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Using another person’s identity and forging their name on an insurance application.
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Being found guilty of using unethical practices or cheating on an examination for an insurance license.
Cease and desist
If the Commissioner finds that a producer has violated the state’s insurance laws, the Commissioner may order the producer to cease and desist. Receiving a cease and desist order does not automatically mean the producer’s registration has been suspended or revoked, but it does require the producer to stop or limit the activity addressed in the order.
Hearing and penalties
A person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by West Virginia law, and may ask a court to review the final order. Under West Virginia’s unfair trade practices law the hearing comes first: if, after notice and hearing, the Commissioner finds a violation, the Commissioner must order the person to cease and desist (W. Va. Code § 33-11-6).
An applicant or licensee whose license is refused or not renewed may demand a hearing in writing within 10 days, and the hearing is held within 45 days (W. Va. Code § 33-12-24©).
A violation of the insurance laws can bring a civil penalty in addition to action against a license. State law sets the maximum, usually per violation and often with a cap on the total, and a higher tier commonly applies to a violation that was knowing or flagrant. Some violations are also crimes.
For an unfair trade practice, the Commissioner may impose a penalty of up to $1,000 per violation, not more than $10,000 in all, or, if the person knew or reasonably should have known of the violation, up to $5,000 per violation and $100,000 in any six months (W. Va. Code § 33-11-6(a)). In a license action, the Commissioner may impose a civil penalty of up to $5,000 in addition to or instead of other discipline (W. Va. Code § 33-12-24(e)).
Unfair claims settlement practices
Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. West Virginia’s statute reaches these practices when committed with such frequency as to indicate a general business practice (W. Va. Code § 33-11-4(9)).
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The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.
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Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.
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Failure to provide claims without launching a thorough investigation is a violation of regulation.
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Making settlement claims based on information contained on an application that has been altered without the insured’s consent is a violation of regulation.
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Denying a claim without conducting a thorough investigation.
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Attempting to settle a claim for less than fair market value.
Policy forms
Insurers file their policy forms with the Commissioner.
In West Virginia, forms for noncommercial lines (insurance for personal, family and household needs) are filed at least 60 days before use and are deemed approved at the end of that period unless the Commissioner has acted on them. Commercial property and casualty forms need only be filed, and take effect unless the Commissioner disapproves them within 30 days (W. Va. Code § 33-6-8(b)).
If a policy provision conflicts with West Virginia law, the policy is read as amended to conform to the law.
Record maintenance
A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.
The producer of record keeps a file for each policy sold, with the work papers and written communications about it, for the current calendar year plus up to five more years, depending on the insurer’s examination cycle (W. Va. Code R. § 114-15-4.2).
Fraudulent producer representation
An insurance producer who represents to the public that they are licensed to conduct insurance business in West Virginia, but has not passed the appropriate licensing examination, is in violation of regulation. This includes any public communication, such as advertisements, letterheads, circulars, business cards, and other methods of representation.
A producer found guilty of conducting business in West Virginia in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.
Misrepresentation
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Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited.
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Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
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Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).
False advertising
Making, publishing or circulating an advertisement, announcement or statement about the business of insurance that is untrue, deceptive or misleading is an unfair trade practice under state law, based on the NAIC’s model act. The medium does not matter: the rule reaches newspapers, magazines, radio and television, and also notices, circulars, pamphlets, letters, posters and any other way of placing the statement before the public. The model act’s test is whether the statement is untrue, deceptive or misleading, not whether the person meant to deceive.
Defamation
Defamation of an insurer is an unfair trade practice under state law, based on the NAIC’s model act: making, publishing or circulating an oral or written statement that is false, or maliciously critical of or derogatory to the financial condition of an insurer, and that is calculated to injure that insurer or any other person engaged in the business of insurance. West Virginia’s definition is broader: it reaches a false or maliciously critical statement about the financial condition of any person that is calculated to injure that person (W. Va. Code § 33-11-4(3)). Spreading an untrue rumor that a competing insurer is about to fail is the classic example.
Boycott, coercion and intimidation
Entering into an agreement to commit, or by concerted action committing, any act of boycott, coercion or intimidation that results or tends to result in unreasonable restraint of, or monopoly in, the business of insurance is prohibited.
False financial statements
Knowingly making or circulating a false material statement of fact about a person’s financial condition, or knowingly making a false entry in a person’s books, is an unfair trade practice in West Virginia (W. Va. Code § 33-11-4(5)), and so is making false or fraudulent statements on or relative to an application for insurance to obtain a fee, commission, money or other benefit (§ 33-11-4(11)).
Illegal inducements
Offering anything of value not specified in the policy (money, a service, a favor or a gift) as an inducement to buy insurance is prohibited unless state law expressly allows it, and any agreement made as part of the sale must be written into the policy.
West Virginia prohibits rebating: no one may pay, allow or give, directly or indirectly, as an inducement to insurance, any rebate of premium or any valuable consideration not specified in the contract (W. Va. Code § 33-11-4(8)).
Educational materials, promotional materials or articles of merchandise that cost $25 or less are not prohibited valuable consideration under West Virginia’s rebating law, whether or not a policy is bought (W. Va. Code R. § 114-70-3.1).
Unfair discrimination
Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:
- Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
- Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
- Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
- In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired
Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind. West Virginia’s own unfair discrimination provision is a same-class test: for life insurance and annuities, for accident and sickness insurance, and for other kinds among insureds with substantially like risk (W. Va. Code § 33-11-4(7)); it names no list of protected characteristics.
Errors & Omissions
Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties. E&O covers only honest mistakes that result in (financial) damage to customers/prospects. There is no coverage for violations of insurance regulation.
Rebating
West Virginia licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance. For property and casualty insurance, a rebate or discount is allowed to the extent an applicable filing with the Commissioner provides for it (W. Va. Code § 33-11-4(8)©).
Sharing commission
The splitting or sharing of commissions with a licensed producer is allowed. Both parties must be licensed in the line of business in which the proposed commission is to be split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance. West Virginia’s own law bars any producer from receiving or sharing any commission arising from the sale, solicitation or negotiation of an insurance contract for which that person is not then licensed (W. Va. Code § 33-12-3©). An individual producer may pay a commission on a West Virginia sale only to another licensed individual producer, or to a licensed business-entity producer (W. Va. Code R. § 114-2-4.1; W. Va. Code § 33-12-23(b)); an unlicensed person who refers a customer may receive no fee or only a nominal one, a one-time fee of $25 or less that does not depend on a sale (W. Va. Code R. §§ 114-2-6.1, 114-70-4).
Twisting
Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law. West Virginia’s rule requires a misrepresentation made to induce or tend to induce the lapse, forfeiture, exchange, conversion or surrender of a policy (W. Va. Code § 33-11-4(1)(f)); a true statement is not twisting. Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information is prohibited.
Under the NAIC’s model act, twisting is a misrepresentation made to induce a policyholder to lapse, forfeit, surrender, exchange or convert a policy. A false or maliciously critical statement about a competing insurer’s finances, made to injure it, is defamation.
Unfair marketing practices
The Offices of the Insurance Commissioner is responsible for establishing minimum standards for full and fair disclosure of policy content. The Department also requires standardization and simplification of the terms used to describe insurance coverage. Advertising may not involve the following:
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Any statement or implication that policies are approved, or that the financial condition of a company is endorsed, by any government agency or by any independent group, individual, organization or society, unless that is the fact.
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Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.
Gramm-Leach Bliley Act (GLBA)
This law repealed the Glass-Steagall Act of 1933, allowing consolidation of commercial banks, investment institutions, and insurance companies. GLBA established a framework of responsibilities for federal and state regulators across these financial industries. It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.
McCarran-Ferguson Act
Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level. Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013©).
National Association of Insurance Commissioners (NAIC)
The U.S. standard-setting and regulatory support organization is created and governed by the chief insurance regulators from the 50 states, the District of Columbia, and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.
Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA, 15 U.S.C. 1681) regulates consumer reporting agencies and the use of consumer reports, such as credit reports, MIB records and investigative reports, including in insurance underwriting.
- When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
- When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information
Privacy Act of 1974
The federal Privacy Act of 1974 governs how federal agencies handle personal information. It does not apply to private insurers. An insurer’s use of an applicant’s personal information is governed by the FCRA, the Gramm-Leach-Bliley Act and state insurance privacy law.
Under West Virginia’s insurance privacy rule, an authorization to disclose a consumer’s nonpublic personal health information must state how long it is valid, which may be no more than 24 months (W. Va. Code R. § 114-57-16.1(e)).
Telemarketing
The National Do Not Call Registry is a list of telephone numbers whose owners do not want to receive telemarketing calls. Telemarketers may not call registered numbers without the person’s permission or an established business relationship, and unsolicited sales calls:
- May be made only between 8 a.m. and 9 p.m. in the recipient’s local time
- Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale
CAN-SPAM
A commercial email must:
- Be identified clearly as an advertisement
- Carry accurate header information and a subject line that is not deceptive
- Include the sender’s valid physical postal address
- Offer a way to opt out, and the sender must honor an opt-out within 10 business days
Insurance guaranty association
Every state has a property and casualty insurance guaranty association that pays covered claims when a member insurer becomes insolvent. Insurers licensed to write the covered lines in the state must belong to it, and it is funded by assessments on its members.
The West Virginia Insurance Guaranty Association pays most covered claims up to $300,000 per claim, counting all claims arising from one person’s bodily injury or death as a single claim (W. Va. Code § 33-26-8(a)(1)).
Auto insurance state minimum
A state’s financial responsibility law sets the minimum liability an auto policy must carry, written as a split limit: the first number is bodily injury liability per person, the second bodily injury liability per accident, and the third property damage liability per accident, each in thousands of dollars.
West Virginia’s minimum auto liability limits are $25,000 for bodily injury to one person, $50,000 per accident and $25,000 for property damage, or 25/50/25 (W. Va. Code § 17D-4-2(b)).