H. B. 4333
(By Delegates Morgan, Stephens, Craig,
Reynolds, Higgins, Klempa and Hutchins)
[Introduced January 30, 2008; referred to the
Committee on Banking and Insurance then Government
Organization.]
A BILL to amend and reenact §33-17-9b of the Code of West Virginia,
1931, as amended, relating to
disbursement of fire insurance
proceeds; requiring an insurance company to pay a portion of
the proceeds to a municipality for fire cleanup costs;
limiting application of provisions to municipalities which
have adopted and filed an ordinance or other valid regulation;
and limiting application of provisions to certain
circumstances.
Be it enacted by the Legislature of West Virginia:
That §33-17-9b of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 17. FIRE AND MARINE INSURANCE.
§33-17-9b. Disbursement of insurance proceeds;
transfer of
portion of proceeds to municipalities for fire
cleanup.
(a) No proceeds shall may 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.
(1) 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 the insurance company shall pay the debris removal and cleanup
proceeds shall be paid to the municipality, county or other
government entity which has incurred such the costs.
No (2) An insurance company subject to this section subsection
which complies with this section subsection may not be held liable
for any claim that may arise out of the cleanup, removal or
disposal of debris pursuant to this section subsection.
(3) An insurance company subject to this section subsection
which complies with this section subsection shall be deemed to have
fully satisfied all contractual obligations to the policyholder
regarding debris removal.
In no event shall (4) An insurance company be is not required
to pay moneys in excess of policy limits for debris removal.
(b) Notwithstanding any provision of this code to the
contrary, when the loss agreed to between a named insured and the
company for fire damage to a structure located within a
municipality equals or exceeds sixty per cent of the aggregate
limits of liability on all fire policies covering the building or
structure, the insurance company shall comply with the procedures
set forth in this subsection.
(1) Except as provided in subdivision (2) of this subsection,
the insurance company shall transfer from the insurance proceeds to
the designated officer of the municipality an amount equal to two
thousand dollars for each fifteen thousand dollars, or a prorated
amount for each fraction of that amount, of the claim.
(2) If, at the time of a proof of loss agreed to between the
named insured and the insurance company, the named insured has
submitted a contractor's signed estimate of the costs of removing,
repairing, or securing the building or other structure, the
insurance company shall transfer from the insurance proceeds the
amount specified in the estimate: Provided, That the municipality
has not commenced to remove, repair, or secure the building or
other structure.
(3) When repairs, removal, or securing of the building or
other structure have been completed and the required proof has been
received by the designated officer, if the municipality has not
incurred any costs for the repairs, removal, or securing the property, the designated officer shall transfer the funds no later
than sixty days after he or she receives the required proof.
(4) If the municipality has incurred any costs for repairs,
removal or securing of the building or other structure, the costs
are to be paid from the funds, and if excess funds remain, the
municipality shall transfer the remaining funds to the named
insured no later than sixty days after all such costs have been
paid.
(5) This subsection applies only to a municipality which has
adopted an ordinance or other valid regulation authorizing the
procedure established by this subsection and has filed a certified
copy of the ordinance or other valid regulation for public record
with the Insurance Commissioner.
(6) This subsection applies only to fire losses that occur
after the filing of the certified copy of the ordinance or other
valid regulation. The resolution or other valid regulation must:
(A) Designate the officer authorized to carry out the duties
of this subsection;
(B) Require the designated officer to 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;
and
(C) Require the transfer of funds as set forth in this
subsection.
(7) The provisions of this subsection do not 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.
(8) Proof of payment by the insurance company of proceeds
under a policy in accordance with this subsection 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
insurance company with this subsection.
(9) Nothing in this subsection:
(A) Makes an insurance company liable for any amount in excess
of proceeds payable under its insurance policy;
(B) Makes a municipality or public official an insured under
a policy of insurance; or
(C) Creates an obligation to pay unpaid removal liens or
expenses other than as provided in this subsection.
NOTE: The purpose of this bill is to require an insurance
company to withhold a specified amount from insurance proceeds to
cover costs of fire cleanup of a structure within a municipality
under certain circumstances.
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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