As Passed by the House

125th General Assembly
Regular Session
Am. H. B. No. 425

REPRESENTATIVES J. Stewart, Aslanides, Hollister, Schaffer, Seitz, Skindell, Cirelli, Domenick, Niehaus, Blasdel, Carano, Collier, Daniels, DeBose, C. Evans, D. Evans, Gibbs, Otterman, Slaby, D. Stewart, Wilson, Wolpert

To amend sections 3929.50, 3929.51, 3929.52, 3929.56, 1
3929.58, and 3929.59 of the Revised Code to remove 2
current limits on mine subsidence coverage, to 3
increase the cap on the amount of reinsurance 4
coverage that the mine subsidence underwriting 5
association may offer, to end the annual 6
distribution of excess moneys in the mine 7
subsidence insurance fund to policyholders, to 8
permit a representative to be elected to the mine 9
insurance governing board without a meeting of the 10
members, and to specify the Ohio counties in which 11
mine subsidence insurance must be offered in 12
connection with property and homeowners insurance.13


       Section 1. That sections 3929.50, 3929.51, 3929.52, 3929.56, 14
3929.58, and 3929.59 of the Revised Code be amended to read as 15

       Sec. 3929.50.  As used in sections 3929.50 to 3929.61 of the 17
Revised Code:18

       (A) "Mine subsidence" means loss caused by the collapse or19
lateral or vertical movement of structures resulting from the20
caving in of underground mines, including coal mines, clay mines,21
limestone mines, and salt mines. "Mine subsidence" does not22
include loss caused by earthquake, landslide, volcanic eruption,23
or collapse of strip mines, storm and sewer drains, or rapid24
transit tunnels.25

       (B) "Structure" means any one- to four-family dwellings as26
defined and limited in standarddwelling fire, homeowners, and 27
farm policies and other structures as described, defined, or 28
limited in the mine subsidence insurance form.29

       (C) "Basic property insurance" means insurance against direct 30
loss to property as defined and limited in standarddwelling fire, 31
homeowners, and farm policies and extended coverage endorsements 32
thereon, as approved by the superintendent of insurance, and 33
insurance for such types, classes, and locations of property 34
against the perils of vandalism, malicious mischief, burglary, or 35
theft, as the superintendent shall designate.36

       (D) "Homeowners insurance" means insurance on owner-occupied 37
dwellings providing personal multi-peril property and liability 38
coverages commonly known as homeowners insurance, and is subject 39
to such reasonable underwriting standards, exclusions, 40
deductibles, rates, and conditions as are customarily used by 41
member insurers for similar coverages.42

       (E) "Mine subsidence coverage" means the limits and type of 43
coverage as defined by the mine subsidence insurance governing 44
board in the coverage form and approved by the superintendent.45

       (F) "Farm insurance" means insurance providing property 46
coverage on farm dwelling buildings.47

       (G) "Dwelling fire insurance" means a policy providing 48
property coverage on residential buildings for the perils of fire 49
and lightning and additional coverages.50

       Sec. 3929.51.  (A) The Ohio mine subsidence insurance51
underwriting association is hereby created, consisting of all52
insurers authorized to write and engaged in writing within the53
state, on a direct basis, basic property insurance or any54
component thereof in multi-peril policies, to operate in55
accordance with the plan of operation adopted pursuant to section56
3929.53 of the Revised Code. Every such insurer shall be a member 57
of the association and shall remain a member as a condition of its 58
authority to write such insurance in this state.59

       (B) The association, pursuant to sections 3929.50 to 3929.61 60
of the Revised Code, and any plan of operation thereunder with 61
respect to mine subsidence insurance, may assume and cede62
reinsurance on insurable risks written by its members.63

       (C) For the purpose of governing the mine subsidence64
insurance underwriting association, there is hereby created a mine 65
subsidence insurance governing board consisting of the director of 66
natural resources or histhe director's designee, as chairman67
chairperson, the treasurer of state or histhe treasurer of 68
state's designee, the superintendent of insurance or histhe 69
superintendent's designee, and one representative from member70
companies. The representative from member companies shall be an71
Ohio domiciled member, elected every three years by members of the 72
association. The representative shall be elected at a meeting of 73
the members or their authorized representatives, which shall be 74
held at a time and place designated by the superintendent. All 75
actions of the mine subsidence insurance underwriting association 76
shall be approved by the governing board. The board may employ, 77
compensate, and prescribe the duties and powers of such employees 78
and consultants as are necessary to carry out sections 3929.50 to 79
3929.61 of the Revised Code, and is authorized to enter into a 80
contract with the Ohio fair plan underwriting association for 81
administrative and claims adjusting services.82

       Sec. 3929.52.  There is hereby created the mine subsidence83
insurance fund, which shall be administered by the mine subsidence84
insurance governing board for the purpose of making available85
insurance coverage against mine subsidence as to any structure86
within this state. All of the following apply to the fund:87

       (A) The moneys in the fund shall be derived from88
appropriations by the state and premiums for reinsurance assumed89
by the mine subsidence insurance underwriting association on90
policies written by members of the association.91

       (B) Premiums on mine subsidence coverage in policies written92
by members of the association shall be established by the plan of93
operation at a rate or within a schedule of rates sufficient to94
satisfy all foreseeable claims upon the fund during the period of95
coverage, giving due consideration to relevant loss or claim96
experience or trends, to cover normal costs of operation of the97
fund, and to provide a reasonable reserve for unexpected98
contingencies. No deviation shall be allowed from the premium99
established by the plan, but the mine subsidence insurance100
governing board shall periodically review the premium level and101
the experience data applicable to operation of the fund and, with102
the approval of the superintendent of insurance, make changes as103
required. However, the premium level for mine subsidence coverage104
in any policy delivered, issued for delivery, or renewed in a105
county designated for optional coverage by the board in accordance106
with division (B)(1)(A)(2) of section 3929.56 of the Revised Code 107
shall not exceed an annual rate that is greater than twenty108
dollars, and the premium level for mine subsidence coverage in any 109
policy delivered, issued for delivery, or renewed in a county110
listed in division (A)(1) of section 3929.56 of the Revised Code111
shall not exceed an annual rate that is greater than five dollars.112

       (C) Sections 3929.50 to 3929.61 of the Revised Code do not113
create any liability on the part of the state beyond the amounts114
paid into the fund and earned by the fund, nor is any liability115
created on the part of the mine subsidence insurance underwriting116
association or its members, the Ohio fair plan underwriting117
association, or the Ohio insurance guaranty association or its118

       (D) The treasurer of state shall be the custodian of the120
fund, which shall not be a part of the state treasury. All121
disbursements from the fund shall be paid by the treasurer of122
state upon requisitions signed by the chairmanchairperson of the123
mine subsidence insurance governing board or histhe chairperson's124
designee. The chairmanchairperson of the mine subsidence125
insurance governing board may designate an authorized126
representative of the Ohio fair plan underwriting association to127
sign requisitions on the fund if the mine subsidence insurance128
underwriting association has entered into a contract with the Ohio129
fair plan underwriting association for administrative and claims130
adjusting services. The representative, before signing any131
requisition, shall file with the secretary of state a good and132
sufficient bond payable to the state to insure the faithful133
performance of histhe representative's duty, in such sum as the134
board requires.135

       (E) At the expiration of each fiscal year any amount in the136
fund which the govening board determines to be safely137
distributable, after reimbursing the federal special revenue fund138
for amounts appropriated to the mine subsidence insurance board,139
shall be distributed among current policyholders in proportion to140
the premiums paid by them.141

       Sec. 3929.56.  (A)(1) Every insurer that offers basic142
property and homeowners insurance insuring on a direct basis a143
structure located in the counties of Athens, Belmont, Carroll,144
Columbiana, Coshocton, Gallia, Guernsey, Harrison, Hocking,145
Holmes, Jackson, Jefferson, Lawrence, Mahoning, Meigs, Monroe,146
Morgan, Muskingum, Noble, Perry, Scioto, Stark, Trumbull,147
Tuscarawas, Vinton, and Washington shall include mine subsidence 148
coverage provided by the Ohio mine subsidence insurance 149
underwriting association in each policy of basic property and 150
homeowners insurance that is delivered, issued for delivery, or 151
renewed in any of such counties on or after January 1, 1993.152

       (B)(1) The mine subsidence insurance governing board may153
designate any county, other than a county listed in division (A)154
of this section, in which mine subsidence coverage must be155
offered, on an optional basis, by an insurer in accordance with156
division (B)(2) of this section. Any designation made by the board 157
under division (B)(1) of this section shall be made by the board 158
in the plan of operation of the association and shall be based on 159
a county's risk of loss due to mine subsidence and other criteria 160
established by the board.161

       (2) Every insurer that offers basic property and homeowners 162
insurance insuring on a direct basis a structure located in any 163
county designated by the board in accordance with division (B)(1) 164
of this sectionthe counties of Delaware, Erie, Geauga, Lake, 165
Licking, Medina, Ottawa, Portage, Preble, Summit, and Wayne shall 166
offer to include, on an optional basis, mine subsidence coverage 167
provided by the association in each policy of basic property and 168
homeowers insurance that is delivered, issued for delivery, or 169
renewed in any such designated county on or after January 1, 1993.170

       (C)(B) The premium charged for mine subsidence coverage shall171
be the same as the premium level set by the plan of operation172
formulated pursuant to section 3929.53 of the Revised Code. The173
loss covered shall be the loss in excess of two per cent of the174
policy's total insured valueAny deductible shall be expressed in 175
the mine subsidence coverage form as approved by the mine 176
subsidence insurance governing board and approved by the 177
superintendent of insurance, but at no time shall the deductible178
be less than two hundred fifty dollars or more than five hundred179
dollars, and the total insured value reinsured by the association180
shall not exceed fiftythree hundred thousand dollars. This 181
section does notpreclude any insurance company from selling 182
insurance coverage under this section in excess of fiftythree 183
hundred thousand dollars.184

       Sec. 3929.58.  All companies authorized to write basic185
property insurance in this state shall enter into a reinsurance186
agreement with the Ohio mine subsidence insurance underwriting187
association in which each company agrees to cede one hundred per188
cent, up to fiftythree hundred thousand dollars, of any 189
subsidence insurance underwritten to the association and, in 190
consideration of the ceding commission retained by the company, 191
agrees to undertake payment of taxes and all other expenses of the 192
company necessary for sale of policies. The association shall 193
agree to provide a claims adjusting staff and to pay from the mine 194
subsidence insurance fund all valid policyholder claims resulting 195
from subsidence.196

       Sec. 3929.59.  Thirty per cent of all mine subsidence 197
insurance premiums collected by each insurer for policies 198
delivered, issued for delivery, or renewed in a county designated 199
for optional coverage in accordance with division (B)(1)(A)(2) of 200
section 3929.56 of the Revised Code, excluding premiums collected 201
under such policies for mine subsidence insurance coverage which 202
is not reinsured by the mine subsidence insurance underwriting 203
association, shall be retained by the insurer as a ceding 204
commission. The remainder of such premiums shall be remitted by 205
the insurer to the mine subsidence insurance underwriting 206

       Section 2. That existing sections 3929.50, 3929.51, 3929.52, 208
3929.56, 3929.58, and 3929.59 of the Revised Code are hereby 209