H. B. 4707
(By Delegates H. White and Kominar)
[Introduced February 22, 2006; referred to the
Committee on Banking and Insurance then Finance.]
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.