MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Insurance; Municipalities

By: Senator(s) Jordan (24th)

AN ACT TO REQUIRE THE COMMISSIONER OF INSURANCE TO ADOPT RULES AND REGULATIONS THAT PROHIBIT PROPERTY AND CASUALTY INSURANCE COMPANIES FROM USING THE FIRE LOSS EXPERIENCE OF UNINCORPORATED AREAS WITHOUT FIRE PROTECTION AS A DETERMINANT WHEN ESTABLISHING THE FIRE INSURANCE PREMIUM FOR RESIDENTS OF MUNICIPALITIES; TO BRING FORWARD SECTIONS 83-3-5 THROUGH 83-3-24, MISSISSIPPI CODE OF 1972, WHICH RELATE TO THE RATING BUREAU; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. The Commissioner of Insurance shall adopt rules and regulations that prohibit property and casualty insurance companies authorized to do business in the State of Mississippi from using the fire loss experience of unincorporated areas of the state without full fire protection as a determinant when establishing the fire insurance premium for residents of municipalities with full fire service.

SECTION 2. Section 83-3-5, Mississippi Code of 1972, is brought forward as follows:

83-3-5. All fire insurance companies organized or admitted to do business in this state shall maintain a Rating Bureau, to be composed of such number of persons resident in this state as shall be desired and who shall be skilled in the business of fire insurance rating, fire hazard, fire protection engineering, and fire insurance inspection. Said Rating Bureau may be chartered or operated as a corporation, or association, or limited partnership, and shall provide for such officers, board of directors, and bylaws as it may deem proper, and change or alter the same from time to time as may be necessary. The Rating Bureau shall maintain an office in the Jackson metropolitan area; and all of the correspondence, files, papers, and documents of such Rating Bureau shall be preserved by said bureau, and shall be opened at all times to the inspection and examination of any insured or any person interested.

SECTION 3. Section 83-3-7, Mississippi Code of 1972, is brought forward as follows:

83-3-7. Each fire insurance company licensed to do business in this state shall become a member of the Rating Bureau and shall pay its proportion of the expenses of organization, maintenance, and operation of said bureau, as provided in Section 83-3-9.

SECTION 4. Section 83-3-9, Mississippi Code of 1972, is brought forward as follows:

83-3-9. The expense of the organization, maintenance, and operation of the Rating Bureau shall be paid by the members of the bureau, and no part of said expense shall in any event be paid by the state or by any county or municipality. The expense not covered by user fees shall be shared by all members through an annual assessment as established by the board of directors with due consideration given to the extent of utilization of bureau services. Upon failure of any company to pay its lawful proportion of said expense within thirty (30) days after the same is due and payable, the Rating Bureau may refuse to furnish its service to such delinquent member, and shall report such delinquency to the Commissioner of Insurance, who for such delinquency may suspend or revoke the license of such delinquent company. The bureau shall establish equitable fees for its services sufficient to cover the operations required under Section 83-2-1 et seq.

SECTION 5. Section 83-3-11, Mississippi Code of 1972, is brought forward as follows:

83-3-11. It shall be the duty of the Rating Bureau to provide a fund sufficient to enable it to inspect every risk specifically rated, to make a written survey of such risks, to pay the salary or expense of its officers and employees, and to cover any other expense which may be necessary or proper to enable it to comply with and enforce the provisions of this article. All of the expense fund shall be provided and paid by the fire insurance companies doing business in this state.

SECTION 6. Section 83-3-13, Mississippi Code of 1972, is brought forward as follows:

83-3-13. The Rating Bureau, through its members and employees, shall inspect every risk specifically rated by it on schedule, and make a written survey of such risk, which shall be filed as a permanent record in such Rating Bureau. A copy of such survey shall be furnished to the owner, other person in interest, or the Commissioner of Insurance upon request.

SECTION 7. Section 83-3-17, Mississippi Code of 1972, is brought forward as follows:

83-3-17. The Rating Bureau, or any of its officers, shall not make any contract or agreement, express or implied, with any person, insurer, or party insured, that the whole, or any part, of the insurance shall be written or placed with any particular insurer.

SECTION 8. Section 83-3-19, Mississippi Code of 1972, is brought forward as follows:

83-3-19. The Rating Bureau is required to answer any inquiries that may be made by the Commissioner of Insurance touching its organization, maintenance, operation, or any other matter connected with its transactions; and said commissioner may require the filing of such other information as the commissioner may deem proper. It shall be the duty of such bureau to promptly make reply to such inquiries, in writing, and to furnish the information requested by the Commissioner of Insurance.

SECTION 9. Section 83-3-21, Mississippi Code of 1972, is brought forward as follows:

83-3-21. The Commissioner of Insurance shall have the power to examine the Rating Bureau as often as he deems expedient, at the expense of the bureau. The commissioner shall report his findings in writing, which shall be filed in his office and made a part of the annual report of his office; and a copy thereof shall be filed with the Attorney General for the information of the legal department of the state.

SECTION 10. Section 83-3-23, Mississippi Code of 1972, is brought forward as follows:

83-3-23. The Rating Bureau shall not recommend any rate for insurance upon property in this state which discriminates unfairly in the same territorial classification between risks in the application of like charges and credits, or which discriminates unfairly between risks of essentially the same hazard and having substantially the same degree of protection against fire.

SECTION 11. Section 83-3-24, Mississippi Code of 1972, is brought forward as follows:

83-3-24. When rating a municipality or fire district, the Rating Bureau shall consider the mileage, condition and maintenance of the fire truck rather than the age of such fire truck. For the purpose of grading fire departments, the alternative water supply standard shall be two hundred fifty (250) gallons per minute for a sustained period of one (1) hour.

SECTION 12. This act shall take effect and be in force from and after July 1, 1999.