COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 628
(By Senator Minard)
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[Originating in the Committee on Banking and Insurance;
reported February 25, 2003.]
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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:
ARTICLE 22. FARMERS' MUTUAL FIRE INSURANCE COMPANIES.
§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.
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