Senate Bill No. 488
(By Senators Minard, Jenkins, Minear, Sharpe and Ross)
[Introduced February 11, 2003; referred to the Committee on
Banking and Insurance; and then to the Committee on Finance.]
A BILL to amend and reenact sections ten and twelve, article
twenty-two, chapter thirty-three of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, all relating
to the contingent liability of members of farmers' mutual fire
insurance companies; and limiting the amount of risk such
companies may undertake.
Be it enacted by the Legislature of West Virginia:
That sections ten and twelve, article twenty-two, chapter
thirty-three of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted, all to
read as follows:
ARTICLE 22. FARMERS' MUTUAL FIRE INSURANCE COMPANIES.
§33-22-10. Contingent liability of member.
The contingent liability of a member of such company may, with
the approval of the commissioner, be limited to one or more times
the annual premium as computed for the policy and the company may issue a policy without contingent liability to the member if at the
time of issuance the net premium written to surplus as to
policyholders does not exceed four to one
it has surplus of not
less than one hundred thousand dollars and the company maintains
unearned premium and other reserves on the same basis as that
required of domestic insurers transacting like kinds of insurance.
In the absence of such limitation of contingent liability each
member shall be liable for his or her pro rata share of losses and
expenses of the company, including a reasonable contribution to a
§33-22-12. Limit of risk.
No such company shall insure any single risk comprising a
building and contents or other property so located as to be subject
to destruction by a single fire for a greater amount than one
thousand dollars until its insurance in force shall be as much as
five hundred thousand dollars, nor shall it then insure any such
risks for an amount greater than one fifth of one percent of the
net insurance in force under its policies or ten percent of its
surplus, whichever is greater, unless the risks insured by the
company in excess of the amounts above stipulated are
simultaneously covered by reinsurance.
Any company having received an extension of its license to
permit it to issue policies of insurance pursuant to subsection
(c), section eight of this article shall be subject to the
provisions of section sixteen, article four of this chapter.