West Virginia P&C Study Guide

The combined West Virginia paper reaches past the coverage lines into the regulatory material: who regulates producers, what happens when a property and casualty insurer fails, and what a producer may lawfully give a client. It also passed at 42 percent in 2025 — the lowest rate of any producer exam in the Commissioner’s report. Almost all of that difficulty is state law, and most of it is in this chapter.

When a property and casualty insurer fails

The West Virginia Guaranty Association pays covered claims under §33-26-8(a)(1), and the caps are not uniform:

• $300,000 per claim for covered claims generally.
• Workers’ compensation claims are paid in full — except deliberate intention claims, which are capped at $300,000 per claim.
• Unearned premium returns are capped at $10,000 per policy.

Then the anti-stacking rule, which is quoted often enough to be worth learning verbatim: “all claims of any kind whatsoever arising out of, or related to, bodily injury or death to any one person constitutes a single claim.” One person, one claim, one cap — however many theories are pleaded.

Claims must be filed by the earlier of 25 months after the final order of liquidation or the final date set by the court. Member insurers are assessed per account in proportion to net direct written premiums, capped at 2% of that insurer’s net direct written premiums annually.

The net worth exclusion

A claim is not a covered claim if it is a first-party claim by an insured whose net worth exceeds $25 million on December 31 of the year next preceding the date the insurer became insolvent, computed on a consolidated basis including subsidiaries and affiliates (§33-26-5). The exclusion reaches certain third-party claims as well.

Read the carve-out, because it is where the exam goes: workers’ compensation claims required by state law remain protected notwithstanding the net-worth limitation. A large employer loses guaranty protection on its own first-party property claim and keeps it on its injured worker’s claim.

The regulator

The Insurance Commissioner is appointed by the Governor, by and with the advice and consent of the Senate, for a term of six years (§33-2-1). The Commissioner must be a citizen and resident of this state, and before taking office must sever all connections, direct or indirect, with any insurer subject to supervision — “except as a policyholder or claimant.” That final clause is the end of the sentence and it is routinely dropped. Domestic insurers are examined at least once every five years (§33-2-9).

Unfair claim settlement practices — fifteen of them, one standard

§33-11-4(9) lists fifteen unfair claim settlement practices, lettered (a) through (o). The chapeau supplies the standard for all of them at once: “No person shall commit or perform with such frequency as to indicate a general business practice any of the following.” Every one of the fifteen carries the general-business-practice element at the statutory level.

Two provisions then tell you what that element means in practice. §33-11-4a(f): a finding that conduct constitutes a general business practice “may only be based on the existence of substantially similar violations in a number of separate claims or causes of action.” And §33-11-4a(g): “A good faith disagreement over the value of an action or claim or the liability of any party to any action or claim is not an unfair claims settlement practice.”

Note also that only item (o) carries figures — the 15-day accept-or-deny clock, 30-day updates, a 90-day outside limit and interest at prime plus one percent — and it is the only item limited to a class of business, being confined to accident and sickness and hospital and medical service corporation policies. The other fourteen carry no numbers at all.

The penalty ladder, and what each figure is for

§33-11-6 carries four penalties and they do different jobs. The section’s opening paragraph applies the whole of it to “any person.”

• $1,000 per act or violation, with a $10,000 aggregate — the ordinary fine.
• $5,000 per violation where the person knew or reasonably should have known, aggregating to $100,000 in any six-month period.
• $10,000 for a single intentional violation of §33-11-4(9), even though a general business practice has not been established.
• $250,000 where the insurer committed unfair claims settlement practices with such frequency as to indicate a general business practice. Subsection (c) is the only limb narrowed to an insurer — so this is not a producer penalty.

The producer’s own figure is elsewhere entirely: §33-12-24(e) allows a civil penalty not to exceed $5,000, and failure to pay within 30 days of notice means the Commissioner shall revoke or suspend the licence.

First party and third party are not the same

In 2005 West Virginia abolished the third-party bad-faith private cause of action. §33-11-4a(a) is categorical: “A third-party claimant may not bring a private cause of action or any other action against any person for an unfair claims settlement practice.” The sole remedy is an administrative complaint to the Commissioner, filed no later than one year following the actual or implied discovery of the practice, and a third-party claimant may not include such allegations in the underlying litigation against the insured.

What the section does not do is reach a first-party claimant. Nothing in §33-11-4a purports to. Say “third party” every time — the distinction is usually the question. Note too that §33-11-6(i) switches the whole regime off for medical professional liability claims and for workers’ compensation policies governed by chapter 23, article 2C.

What you may give a client

The rebate prohibition is statutory, but the dollar threshold is in the rule. §114-70-3.1 provides that “valuable consideration” and “anything of value” do not include educational materials, promotional materials or articles of merchandise costing twenty-five dollars ($25.00) or less — and adds the clause that matters: “regardless of whether a policy or contract is purchased.” West Virginia’s safe harbour is not conditioned on the prospect declining to buy.

A nominal fee for a referral is likewise a one-time fee of $25.00 or less (§114-70-4.1), and §114-70-4.2 adds the condition that decides most questions: “The payment of any referral fee cannot depend on whether the referral results in the sale or issuance of an insurance product or service.” Contingent referral compensation is out regardless of amount.

Two clocks you owe personally

§33-12-34 gives a producer two reporting duties with the same number of days and different triggers. An administrative action in another jurisdiction is reported within 30 days of the final disposition of the matter. A criminal prosecution is reported within 30 days of the initial pretrial hearing date. One clock runs from the end of the matter, the other from near its beginning.