H. B. 3079
(By Delegates Hrutkay and H. White)
[Introduced February 20, 2003; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact sections two and eight, article
twenty-two, chapter thirty-three of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, all relating
to requiring farm mutual fire insurance companies to file
their rates with the offices of the insurance commissioner;
broadening the 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 sections two and 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.
§33-22-2. Applicability of other provisions.
Each company to the same extent that provisions are applicable
to domestic mutual insurers shall be governed by and be subject to
the following articles of this chapter: Article one (definitions);
article two (insurance commissioner); article four (general
provisions) except that section sixteen of said article may not be
applicable thereto; article seven (assets and liabilities); article
eight-a (use of clearing corporations and federal reserve
book-entry system); article ten (rehabilitation and liquidation)
except that under the provisions of section thirty-two of said
article assessments may not be levied against any former member of
a farmers' mutual fire insurance company who is no longer a member
of the company at the time the order to show cause was issued;
article eleven (unfair trade practices); article twelve (agents,
brokers and solicitors) except that the agent's license fee shall
be five dollars; the filing but not the prior approval provisions
of subsections (a), (b), (c), (d), (j) and (k) of section four,
article twenty, (rate filings); article twenty-six (West Virginia
insurance guaranty association act); article twenty-seven
(insurance holding company systems); article thirty (mine
subsidence insurance) except that under the provisions of section
six of said article, a farmers' mutual insurance company shall have
the option of offering mine subsidence coverage to all of its
policyholders but may not be required to do so; article thirty-three (annual audited financial report); article thirty-four
(administrative supervision); article thirty-four-a (standards and
commissioner's authority for companies considered to be in
hazardous financial condition); article thirty-five (criminal
sanctions for failure to report impairment); article thirty-six
(business transacted with producer-controlled property-casualty
insurer); article thirty-seven (managing general agents); article
thirty-nine (disclosure of material transactions); article forty
(risk-based capital for insurers); and article forty-one
(privileges and immunity); but only to the extent these provisions
are not inconsistent with the provisions of this article.
§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;
(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. To any homeowner, insuring primarily owner
occupied real property and personal property located therein, which
policy may contain any combination of coverages defined as fire in
subsection (c), section ten of article one, liability in
subdivision (2), subsection (e), section ten of article one,
burglary and theft in subdivision (3), subsection (e), section ten
of article one, personal property floater in subdivision (4),
subsection (e), section ten of article one, glass in subdivision
(5), subsection (e), section ten of article one, mine subsidence in
subdivision (11), subsection (e), section ten of article one or
miscellaneous in subdivision (12), subsection (e), section ten of
article one.
(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. To any farm owner, insuring
primarily farm and related residential property and improvements to
real property owned, leased or operated as a farm, personal
property located in the residential units thereof, and other real
or personal property essential to the operation of a farm, or any
combination thereof, which policy may contain any combination of
coverages defined as fire in subsection (c), section ten of article
one, vehicle insurance in subdivision (1), subsection (e), section
ten of article one (but limited to vehicles not subject to
financial responsibility under section two, article four, chapter
seventeen-d), liability in subdivision (2), subsection (e), section
ten of article one, burglary and theft in subdivision (3),
subsection (e), section ten of article one, personal property
floater in subdivision (4), subsection (e), section ten of article
one, glass in subdivision (5), subsection (e), section ten of
article one, mine subsidence in subdivision (11), subsection (e),
section ten of article one or miscellaneous in subdivision (12),
subsection (e), section ten of article one.
(3) Personal property floater insurance. To any tenant,
insuring primarily personal property contained in a residential
unit or any interest in real property under a land contract, or
both, containing any combination of coverages defined as fire in
subsection (c), section ten of article one, liability in
subdivision (2), subsection (e), section ten of article one, burglary and theft in subdivision (3), subsection (e), section ten
of article one, personal property floater in subdivision (4),
subsection (e), section ten of article one, glass in subdivision
(5), subsection (e), section ten of article one, mine subsidence in
subdivision (11), subsection (e), section ten of article one or
miscellaneous in subdivision (12), subsection (e), section ten of
article one.
(4) To any church or small business owner with gross receipts
of two hundred fifty thousand dollars or less and payroll of one
hundred thousand dollars or less per year insuring primarily real
and personal property owned, leased or operated as a church or
business incidental to the operation thereof, which policy may
contain any combination of coverages defined as fire in subsection
(c), section ten of article one, liability in subdivision (2),
subsection (e), section ten of article one, burglary and theft in
subdivision (3), subsection (e), section ten of article one,
personal property floater in subdivision (4), subsection (e),
section ten of article one, glass in subdivision (5), subsection
(e), section ten of article one, mine subsidence in subdivision
(11), subsection (e), section ten of article one or miscellaneous
in subdivision (12), subsection (e), section ten of article one.
(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, in areas of the state of West
Virginia that have a public fire protection classification of seven
or higher according to a rating organization licensed pursuant to
section six, article twenty of this chapter. 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 add the requirement that
farm mutual fire insurance companies file their rates with the
offices of the insurance commissioner; to broaden the lines of
authority farm mutual fire insurance companies are allowed to
write; and to require that 75% of the insurance written by farm
mutual fire insurance companies be in areas of the state with
elevated public fire protection classifications 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.