H. B. 3274
(By Delegates Morgan, Craig, Skaff,
Reynolds, Swartzmiller, C. Miller,
and Miley)
[Introduced March 23, 2009; referred to the
Committee on the Judiciary.]
A BILL to repeal §33-17-9a of the Code of West Virginia, 1931, as
amended; and to amend and reenact §33-17-9 and §33-17-9b of
said code, all relating to fire and marine insurance; and
disbursement of proceeds for total and partial fire loss.
Be it enacted by the Legislature of West Virginia:
That §33-17-9a of the Code of West Virginia, 1931, as amended,
be repealed; and that §33-17-9 and §33-17-9b of said code be
amended and reenacted, all to read as follows:
ARTICLE 17. FIRE AND MARINE INSURANCE.
§33-17-9. Total or partial fire loss.
All insurers providing fire insurance on real property in West
Virginia shall be liable, in case of total loss by fire or
otherwise, as stated in the policy, for the whole amount of
insurance stated in the policy, upon
such the real property; and in
case of partial loss by fire or otherwise, as aforesaid, of the
real property insured, the liability shall be for the total amount of the partial loss, not to exceed the whole amount of insurance
upon the real property as stated in the policy
: Provided, That if
the insurance policy requires actual repair or replacement of the
property to be completed in order for the policyholder to be paid
the full cost of repair or replacement, up to the limits of the
policy, then the amount to be paid shall be that as prescribed by
the terms of the insurance policy contract. This section does not
apply where such insurance has been procured from two or more
insurers covering the same interest in such real property.
§33-17-9b. Disbursement of insurance proceeds.
No proceeds shall be paid by an insurance company which has
issued a policy which provides coverage for debris removal for
cleanup, removal of refuse, debris, remnants, or remains of a
dwelling or structure upon a claim of total loss unless and until
the insurance company receives certification that the refuse,
debris, remnants, or remains of the dwelling or structure have been
cleaned up, removed or otherwise disposed of. In the event the
insurance company receives, within six months of the date of loss,
certification that such cleanup, removal or disposal costs have
been incurred by a municipality, county or other governmental
entity, rather than the policyholder, such debris removal and
cleanup proceeds shall be paid to the municipality, county or other
government entity which has incurred such costs.
No insurance company subject to this section which complies with this section may be held liable for any claim that may arise
out of the cleanup, removal or disposal of debris pursuant to this
section.
An insurance company subject to this section which complies
with this section shall be deemed to have fully satisfied all
contractual obligations to the policyholder regarding debris
removal.
In no event shall an insurance company be required to pay
moneys in excess of policy limits for debris removal.
(a) An insurer licensed under this chapter may not pay a claim
of a named insured for fire damage to a structure located within a
municipality where the amount recoverable for the fire loss to the
structure equals or exceeds sixty percent of the aggregate limits
of liability on all fire policies covering the building or
structure, commonly referred to as "Coverage A" limits, unless the
insurer is furnished with a certificate pursuant to subsection (b)
of this section and unless there is compliance with the procedures
set forth in subsections (c) and (d) of this section.
(b) (1) This section applies to those insured fire losses
located in municipalities which have adopted an ordinance
authorizing the procedure described in subdivisions (c) and (d) of
this section and have filed a certified copy of the ordinance for
public record with the Offices of the Insurance Commissioner, and
applies only to insured fire losses that occur after the filing of the certified copy of the ordinance. The ordinance shall designate
the municipal officer authorized to carry out the duties of this
section.
(2) The municipal treasurer, upon the written request of the
named insured or the insurer which contains the tax description of
the property, the name and address of the insurer, and the date
agreed upon by the insurer and the named insured as the date of the
receipt of a loss report of the claim, shall furnish the insurer
with one of the following certificates within fourteen working days
of receipt of the request:
(A) A certificate or, at the discretion of the municipality,
a verbal notification which shall be confirmed in writing to the
insurer to the effect that, as of the date specified in the
request, the municipality has not incurred any costs for the
removal, repair or securing of a building or structure on the
property; or
(B) A certificate and bill showing the amount, as of the date
of the Treasurer's certificate, the amount of the total costs, if
any, certified to the Treasurer that have been incurred by the
municipality for the removal, repair or securing of a building or
structure on the property. For the purposes of this paragraph (B),
the municipality shall certify to the Treasurer the total amount,
if any, of the costs.
(3) The insurer shall pay the claim of the named insured in accordance with subsections (c) and (d) of this section, upon the
receipt of a certificate pursuant to subdivision (2) of this
section. This section may not be construed to prevent any insurer
from making payment to an insured for personal property, loss of
use, liability, living expenses or any other claims not directly
related to the loss of the insured building or structure itself.
(c) When the loss agreed to between the named insured and the
insurer equals or exceeds sixty percent of the aggregate limits of
liability on all fire policies covering the building or structure,
commonly referred to as "Coverage A" limits, the insurer shall
transfer from the insurance proceeds to the designated officer of
the municipality in the aggregate $2,000 for each $15,000 and each
fraction of that amount of a claim, or, if at the time of a loss
report the named insured or insurer has submitted a contractor's
signed estimate of the costs of removing, repairing or securing the
building or structure in an amount less than the amount calculated
under the foregoing transfer formula, the insurer shall transfer
from the insurance proceeds the amount specified in the estimate.
(A) The transfer of proceeds shall be on a pro rata basis by
all insurers insuring the building or structure. Policy proceeds
remaining after the transfer to the municipality shall be disbursed
in accordance with the policy terms.
(B) The named insured or insurer may submit a contractor's
signed estimate of the costs of removing, repairing or securing the building or structure after the transfer, and the designated
officer shall return the amount of the fund in excess of the
estimate to the named insured if the municipality has not commenced
to remove, repair or secure the building or structure.
(d) The designated officer shall place the proceeds in a
separate fund to be used solely as security against the total cost
of removing, repairing or securing incurred by the municipality,
upon receipt of proceeds by the municipality as authorized by this
section. When transferring the funds as required in subsection (c)
of this section, an insurer shall provide the municipality with the
name and address of the named insured, whereupon the municipality
shall contact the named insured, certify that the proceeds have
been received by the municipality and notify the named insured that
the procedures under this subsection shall be followed. The funds
shall be returned to the named insured when repairs, removal or
securing of the building or structure have been completed and the
required proof received by the designated officer if the
municipality has not incurred any costs for repairs, removal or
securing of the building or structure. If the municipality has
incurred costs for repairs, removal or securing of the building or
structure, the costs shall be paid from the fund, and, if excess
funds remain, the municipality shall transfer the remaining funds
to the named insured. Nothing in this section may be construed to
limit the ability of a municipality to recover any deficiency. Further, nothing in this subsection may be construed to prohibit
the municipality and the named insured from entering into an
agreement that permits the transfer of funds to the named insured
if some other reasonable disposition of the damaged property has
been negotiated. The designated officer shall provide an
accounting to the named insured within thirty days after the
repairs, removal or securing of the building or structure have been
completed.
(e) Proof of payment by the insurer of proceeds under a policy
in accordance with subsection (c) of this section is conclusive
evidence of the discharge of its obligation to the insured under
the policy to the extent of the payment and of compliance by the
insurer with subsection (c) of this section.
(f) Nothing in this section may be construed to make an
insurer liable for any amount in excess of proceeds payable under
its insurance policy or for any other act performed pursuant to
this section or to make a municipality or public official an
insured under a policy of insurance or to create an obligation to
pay delinquent property taxes or unpaid removal liens or expenses.
(g) An insurer making payments of policy proceeds under this
section for structure removal liens or removal expenses incurred by
a municipality shall have a full benefit of such payment, including
all rights of subrogation and of assignment.
(h) This section shall apply only to municipalities that have adopted an ordinance authorizing the procedure set forth in
subsections (b) through (d) and only to insured fire losses that
occur after the effective date of the ordinance.
(i) When an ordinance is passed, adopted or amended by a
municipality in accordance with this section, an exact copy of the
ordinance shall be filed with the Offices of the Insurance
Commissioner together with the name, position, mailing address,
E-mail address, and phone number of the municipal official
responsible for compliance with this section shall supply the
information required by this subsection to the Offices of the
Insurance Commissioner as part of the implementation of its
ordinance. The Offices of the Insurance Commissioner shall
periodically produce a register listing those municipalities filing
the ordinance. This register shall be made available to the public
at no cost. An insurer may not be required to comply with any
municipal ordinance if the municipality fails to provide a copy of
the ordinance to the Offices of the Insurance Commissioner.
(j) The term "municipality," as used in this section, means
any incorporated city, town, or home rule municipality. The term
"Treasurer," as used in this section, means an elected Treasurer or
other appropriate municipal officer authorized to collect real
property taxes.
(k) This section shall be liberally construed to accomplish
its purpose to deter the commission of arson and related crimes, to discourage the abandonment of property, and to prevent urban blight
and deterioration.
NOTE: The purpose of this bill is to regulate the disbursement
of proceeds for total and partial fire loss for fire damage to a
structure located within a municipality and deter the commission of
arson and related crimes, discourage the abandonment of property,
and to prevent urban blight and deterioration.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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