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.