Hawkins v. Ford Motor Co
In Hawkins v. Ford Motor Co., 211 W.Va. 487, 566 S.E.2d 624 (2002), the Court considered the meaning of the phrase "business of insurance," and whether a self-insured company met that definition.
The Court focused its analysis on the legislatively-stated definitions of "insurance," "insurer," and "transacting insurance:"
The West Virginia Code defines insurance as "a contract whereby one undertakes to indemnify another or to pay a specified amount upon determinable contingencies." W.Va. Code 33-1-1 (1957). An "insurer is every person engaged in the business of making contracts of insurance." W.Va. Code 33-1-2 (1957). Specifically, "transacting insurance includes solicitation and inducement, preliminary negotiations, effecting a contract of insurance and transaction of matters subsequent to effecting the contract and arising out of it." W.Va. Code 33-1-4 (1957).
(211 W.Va. at 491, 566 S.E.2d at 628.)
Putting these definitions together, the Court concluded that even though a company may choose to insure its own losses, if the primary purpose of the company is some venture other than dealing in insurance - that is, the company is under no contractual obligation to pay a claim and does not "transact insurance" as defined by law - then the company is not in the "business of insurance" and not subject to the regulation of the UTPA.
The Court stated, in Syllabus Point 2 of Hawkins, that:
"The Unfair Trade Practices Act, W.Va. Code 33-11-1 to - 10, and the tort of bad faith apply only to those persons or entities and their agents who are engaged in the business of insurance."
The Court held in Hawkins that the self-insured company at issue - Ford Motor Company - primarily manufactured and sold cars and did not engage in the business of insurance, and was therefore not subject to the UTPA.