Senate Bill No. 628

(By Senator Minard)


[Originating in the Committee on Banking and Insurance;

reported February 25, 2003.]


A BILL to amend and reenact section eight, article twenty-two, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to farm mutual fire insurance companies; kinds of insurance coverage farm mutual fire insurance companies may write; requiring minimum percentages of business written in designated rating classes; and imposing a penalty for failure to comply.

Be it enacted by the Legislature of West Virginia:
That section eight, article twenty-two, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:

§33-22-8. Kinds of coverage authorized; minimum percentage in certain public fire protection classifications; penalty.

(a) Any company subject to the provisions of this article may issue policies of insurance on property, signed by its president and secretary, providing insurance against:
(1) Loss or damage to dwelling houses, stores and all kinds of buildings and household furniture, goods, merchandise and chattels of every description, and all other property by fire, and allied coverages, including lightning, aircraft, windstorm, tornado, cyclone, hail, frost or snow, smoke, weather or climatic conditions, including excess or deficiency of moisture, flood, rain or drought, business interruptions, riot attending a strike or civil commotion, riot, vehicle and by explosion whether fire ensues or not; caused by direct physical loss, and consequential loss therefrom;
(2) Loss or damages damage by insects or disease to farm crops or products and loss of rental value of land used in producing those crops or products;
(3) Loss or damage by water or other fluid to any goods or premises arising from the breakage or leakage of sprinklers, pumps or other apparatus erected for extinguishing fires, or of other conduits or containers, or by water entering through leaks or openings in buildings and of water pipes, and against accidental injury to such sprinklers, pumps, apparatus, conduits, containers or water pipes;
(4) Loss or damage to domestic farm animals by dogs or wild animals.
(b) The commissioner may, for good cause shown or on application of the company, limit the license of a company to make insurance to any one or more of the perils or coverages set forth in subsection (a) of this section.
(c) In addition any such company may apply to the commissioner for an extension of its license, and upon complying with reasonable standards established by the commissioner to assure the solvency of the company and the protection of its policyholders, may in the discretion of the commissioner be granted an extension of its license to permit the company to issue policies of insurance, signed by its president and secretary, to on risks insuring against one or more of the following:
(1) Legal liability for the death, injury, or disability of any human being, or for damage to property, excluding liability resulting from the ownership, maintenance, or use of vehicles or aircraft; and provisions for medical, hospital, surgical and disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to the liability coverage.
(2) Loss or damage to property by burglary, theft, larceny, robbery, vandalism, malicious mischief, or wrongful conversion, or any attempt at any of the foregoing.
(3) Personal property floater insurance.
(d) A company insuring property located outside this state must meet the capital and surplus requirements of section five-b, article three of this chapter.
(e) Any company subject to the provisions of this article shall, on and after the first day of January, two thousand four, have at least seventy-five percent of its book of business, as determined by gross direct premiums or policy count, in underserved areas of the insurance market in the State of West Virginia. For purposes of this article, "underserved areas of the insurance market in the state of West Virginia" means any of the following or any combination thereof: persons or property insured that have a public fire protection classification of six or higher according to a rating organization licensed pursuant to section six, article twenty of this chapter; residential structures or dwellings insured on an actual cash value basis; residential structures or dwellings over forty years of age; vacant or seasonally occupied residential structures or dwellings; property or persons who have had insurance cancelled or declined by any insurance company licensed to do business in this state; and farm property or structures. Upon determination, after notice and hearing, that any farm mutual fire insurance company has failed to comply with this subsection, the commissioner may require the company to pay all taxes, additional taxes, surcharges and fees pursuant to article three of this chapter, require conversion under section nineteen of this article, or revoke its license under section four of this article, or any combination thereof.

NOTE: The purpose of this bill is to require that 75% of the insurance written by farm mutual fire insurance companies be in underserved areas of the state and add a penalty for the failure thereof.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.