Senate Bill No. 754
(By Senator Minard)
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[Introduced February 20, 2006; referred to the Committee
on Banking and Insurance.]
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A BILL to amend and reenact §33-22-7 and §33-22-8 of the Code of
West Virginia, 1931, as amended, all relating to farmers' mutual
fire insurance companies; clarifying that certain requirements
for the filing of fire and marine policies apply to farm mutual
insurance companies; clarifying types of policies that all such
companies may issue; describing types of policies of liability
insurance for which an extension of a license must be obtained;
permitting commissioner to limit duration of such license
extensions; and establishing criteria by which farm mutual
insurance companies must demonstrate that they serve underserved
areas.
Be it enacted by the Legislature of West Virginia:
That §33-22-7 and §33-22-8 of the Code of West Virginia, 1931, as
amended, be amended and reenacted, all to read as follows:
ARTICLE 22. FARMERS' MUTUAL FIRE INSURANCE COMPANIES.
§33-22-7. Filing and approval of policy; setting out terms and
conditions; limiting liability; standard forms or provisions.
(a) No policy form shall be issued or used by any such company
unless such form has been filed with and approved by the
commissioner. The filing, approval and disapproval of such forms
shall be governed by the provisions of sections eight and nine,
of article six and section eight, article seventeen of this
chapter in the same manner as form filings of other insurers.
(b) All terms and conditions of such policies shall be set forth
in full in the policy or endorsements attached thereto including
the contingent liability, if any, of the policyholder, and no
provision purporting to make any portion of the charter, bylaws
or other documents a part of the policy shall be valid unless
such portion is set forth in full in the policy.
(c) Policies may limit the liability of the company to a fixed
percent of the value of the property insured.
(d) Whenever the commissioner believes the public interest
requires a standard form for a particular kind of coverage, the
commissioner may prescribe a standard form of policy for such
companies, or a standard specific provision to be inserted in
such policies, and all policies thereafter issued by such
companies shall conform to such standard forms or provisions.
§33-22-8. Kinds of coverage authorized.
(a) Any company subject to the provisions of this article may issue
the following types of 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 Fire insurance, which is insurance on real or
personal property of every kind and interest therein, against
loss or damage from any or all hazard or cause, and against loss
consequential upon such loss or damage, other than noncontractual
liability for any such loss or damage;
(2) Loss or 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) (3) Loss or damage to domestic farm animals by dogs or wild
animals;
(4) Loss or damage to property by burglary, theft, larceny,
robbery, vandalism, malicious mischief, or wrongful conversion,
or any attempt at any of the foregoing;
(5) Personal property floater insurance, which is insurance upon
personal effects against loss or damage from any cause; and
(6) Glass insurance, which is insurance against loss or damage to
glass, including its ornamentation and fittings.
(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 to the policies of insurance permitted by
subsection (a) of this section, 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 upon such conditions and for
such period as the commissioner may prescribe to permit the
company to issue policies of insurance 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. For the purposes of this
subsection, the term "vehicles" does not include a "farm tractor"
or "implement of husbandry," as defined in section one, article
one, chapter seventeen-a of this code, or other motorized vehicle
used to service the premises.
(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.
(c) 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) or (b) of this section.
(d) A farm mutual insurance 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 seven, have
at least seventy-five percent of its book of business, as
determined by either 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, or the equivalent thereof, 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 canceled 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 clarify the categories of
risks that farm mutual insurance companies are permitted to
cover; and to establish criteria to measure whether farm mutual
insurance companies are serving underserved areas.
Strike-throughs indicate language that would be stricken from the
present law, and underscoring indicates new language that would
be added.