CHAPTER 9. MINE SUBSIDENCE INSURANCE
IC 27-7-9
Chapter 9. Mine Subsidence Insurance
IC 27-7-9-1
"Commissioner" defined
Sec. 1. As used in this chapter, "commissioner" refers to theinsurance commissioner.
As added by P.L.164-1986, SEC.1.
IC 27-7-9-2
"Insurer" defined
Sec. 2. As used in this chapter, "insurer" has the meaning set forthin IC 27-1-2-3(x).
As added by P.L.164-1986, SEC.1.
IC 27-7-9-3
"Mine subsidence" defined
Sec. 3. As used in this chapter, "mine subsidence" means thecollapse of inactive underground coal mines abandoned beforeAugust 3, 1977, resulting in damage to a structure. The term does notinclude loss caused by earthquake, landslide, volcanic eruption, orcollapse of storm or sewer drains.
As added by P.L.164-1986, SEC.1. Amended by P.L.124-1992,SEC.1.
IC 27-7-9-3.5
"Peril" defined
Sec. 3.5. As used in this chapter, "peril" means the cause of a loss,such as a fire, an explosion, or a flood.
As added by P.L.124-1992, SEC.2.
IC 27-7-9-4
"Premium" defined
Sec. 4. As used in this chapter, "premium" has the meaning setforth in IC 27-1-2-3(w).
As added by P.L.164-1986, SEC.1.
IC 27-7-9-5
"Structure" defined
Sec. 5. As used in this chapter, "structure" means any dwelling,building, or fixture permanently fixed to real property. The term doesnot include land, trees, crops, or other plants, nor does the terminclude a dwelling, building, or fixture that is owned by a public orgovernmental entity.
As added by P.L.164-1986, SEC.1. Amended by P.L.124-1992,SEC.3.
IC 27-7-9-6
List of counties in which mine subsidence insurance available
Sec. 6. The department of natural resources shall identify and
maintain a list of counties that are:
(1) at least partially within the Illinois Coal Basin; or
(2) underlain by coal-bearing rock formations of thePennsylvanian system.
The mine subsidence insurance provided under this chapter isavailable only to cover structures located in counties identified by thedepartment of natural resources under this section.
As added by P.L.164-1986, SEC.1.
IC 27-7-9-7
Mine subsidence insurance fund; deposits; investment
Sec. 7. (a) The mine subsidence insurance fund is established forthe purpose of making mine subsidence insurance available toowners of property located in counties identified under section 6 ofthis chapter. The fund shall be administered by the commissioner.Money shall be deposited in the fund from:
(1) premiums for mine subsidence insurance remitted byinsurers to the commissioner; and
(2) funds obtained through federal grants or any other source.
(b) The expenses of administering the fund shall be paid frommoney in the fund.
(c) The treasurer of state shall invest the money in the fund notcurrently needed to meet the obligations of the fund in the samemanner as other public funds may be invested. Interest that accruesfrom these investments shall be deposited in the fund.
(d) Money in the fund at the end of a particular fiscal year doesnot revert to the state general fund.
As added by P.L.164-1986, SEC.1.
IC 27-7-9-8
Extent of coverage necessary; deductible
Sec. 8. (a) Coverage for damage due to mine subsidence must beavailable as an additional form of coverage under any insurancepolicy providing the type of insurance described in Class 3(a) ofIC 27-1-5-1 to directly cover one (1) or more structures located in acounty identified under section 6 of this chapter. The minesubsidence coverage must be available in an amount adequate toindemnify the insured to the extent of the loss in actual cash value ofthe covered structure due to mine subsidence, less a deductible equalto two percent (2%) of the insured value of the structure under thepolicy. However, the deductible must be no less than two hundredfifty dollars ($250) and no more than five hundred dollars ($500).
(b) An insurer proposing to issue a policy providing the type ofinsurance described in Class 3(a) of IC 27-1-5-1 to cover one (1) ormore structures located in a county identified under section 6 of thischapter shall inform the prospective policyholder of the availabilityof mine subsidence coverage under this section. An insurer shallinform the prospective policyholder of the availability of minesubsidence coverage under this subsection when a policy describedin this subsection is issued. (c) When an insurer informs a prospective policyholder of theamount of the premium for the mine subsidence coverage that isavailable as an additional form of coverage under a policy asrequired by subsection (a), the premium for the mine subsidencecoverage must be stated separately from the premium for the othercoverage provided by the policy. The amount of the premium formine subsidence coverage provided by an insurer under this sectionmust be set according to the premium level set by the commissionerunder section 10 of this chapter.
(d) Except as provided in subsection (f), an insurance policyproviding the type of insurance described in Class 3(a) ofIC 27-1-5-1 to directly cover one (1) or more structures located in acounty identified under section 6 of this chapter must include themine subsidence coverage provided for under subsection (a) if theprospective insured (before issuance of the policy) or the insured(before renewal of the policy) indicates that the coverage is to beincluded in the policy.
(e) An insurer is not required to provide mine subsidencecoverage under subsection (a) under any insurance policy in anamount exceeding the amount that is reimbursable from the fundunder section 9(a)(4) of this chapter.
(f) An insurer must decline to make the mine subsidence coverageprovided for under subsection (a) available to cover a structureevidencing unrepaired mine subsidence damage, until necessaryrepairs are made. An insurer may also decline to make the minesubsidence coverage available under an insurance policy if theinsurer has:
(1) declined to issue the policy;
(2) declined to renew the policy; or
(3) canceled all coverage under the policy for underwritingreasons unrelated to mine subsidence.
As added by P.L.164-1986, SEC.1. Amended by P.L.29-1987, SEC.2;P.L.150-1990, SEC.1; P.L.124-1992, SEC.4; P.L.1-1993, SEC.206;P.L.116-1994, SEC.57; P.L.91-1998, SEC.9; P.L.132-2001, SEC.3;P.L.182-2001, SEC.3.
IC 27-7-9-8.4
Additional forms of coverage; application to structures
Sec. 8.4. If coverage for damage due to mine subsidence is addedunder this chapter as an additional form of coverage to a policyproviding the coverage described in Class 3(a) of IC 27-1-5-1, themine subsidence coverage of the policy must apply to structures inthe same manner as coverage for other perils under the policy.
As added by P.L.124-1992, SEC.5.
IC 27-7-9-8.5
Limitation on amount payable; one mine subsidence occurrence;damage occurring before issuance of policy; duty to investigate;liability
Sec. 8.5. (a) The amount payable through mine subsidence
insurance provided under this chapter for all damage caused by one(1) mine subsidence occurrence is limited to the amount of insurancethat:
(1) is in force with respect to the structure or structuresdamaged in the occurrence; and
(2) is reinsured under section 9 of this chapter;
at the time when the damage to the structure or structures occurs.
(b) For the purposes of this section, all damage that is caused by:
(1) a single mine subsidence event; or
(2) two (2) or more mine subsidence events that are continuous;
shall be considered as having been caused by one (1) minesubsidence occurrence.
(c) Neither an insurer, an agent of an insurer, nor an employee ofan insurer is obligated to investigate for mine subsidence damagethat may have occurred before the issuance or renewal of a policyincluding mine subsidence coverage under this chapter, unlessspecifically informed of such damage by the insured or prospectiveinsured.
(d) Neither an insurer, an agent of an insurer, nor an employee ofan insurer is liable for mine subsidence damage that occurs beforethe issuance of a policy including mine subsidence coverage underthis chapter.
As added by P.L.150-1990, SEC.2. Amended by P.L.124-1992,SEC.6.
IC 27-7-9-9
Reinsurance; terms; ceding commission
Sec. 9. (a) An insurer making the type of insurance described inClass 3(a) of IC 27-1-5-1 shall enter into a reinsurance agreementwith the commissioner. The reinsurance agreement must include thefollowing terms:
(1) The insurer agrees to cede to the commissioner one hundredpercent (100%) of any mine subsidence coverage issued underthis chapter, subject to a maximum limit of two hundredthousand dollars ($200,000) per structure insured.
(2) The insurer shall collect the premiums for mine subsidenceinsurance, may retain a ceding commission in an amount set bythe commissioner, and shall remit the remainder of thepremiums to the commissioner for deposit in the minesubsidence insurance fund.
(3) The insurer, in consideration of the ceding commission,shall:
(A) undertake the adjustment of losses under the minesubsidence coverage issued under this chapter by the insurer,with technical assistance provided under section 9.5 of thischapter; and
(B) pay the taxes and absorb all other expenses necessarilyincurred by the insurer in the sale of policies and theadministration of the mine subsidence insurance programunder this chapter. (4) The commissioner shall reimburse the insurer from the minesubsidence insurance fund for all amounts paid to policyholdersfor mine subsidence insurance claims.
(5) The insurer is not required to pay a claim for any minesubsidence loss insured under this chapter if the amountavailable in the mine subsidence insurance fund is insufficientto reimburse the insurer for the claim.
(b) The determination of the commissioner as to the amount of theceding commission that an insurer may retain under subsection (a)(2)must be based on a consideration of the insurer's reasonableadministrative costs (including insurance producers' commissions).
As added by P.L.164-1986, SEC.1. Amended by P.L.150-1990,SEC.3; P.L.124-1992, SEC.7; P.L.189-1996, SEC.1; P.L.182-2001,SEC.4; P.L.178-2003, SEC.48.
IC 27-7-9-9.5
Assistance with adjusting of claims; responsibility of insurer; costspaid from fund
Sec. 9.5. (a) The commissioner shall provide insurers withassistance from one (1) or more individuals with technical expertisein mine subsidence for the purpose of assisting with the adjusting ofclaims under coverage issued under this chapter. To comply with thissection, the commissioner may:
(1) expand the staff of the department of insurance; or
(2) enter into contracts providing for the services of personswith the necessary technical expertise to provide assistance toinsurers in the determination of subsidence events.
(b) The adjustment of a claim against a policy that includes minesubsidence coverage under this chapter is the sole responsibility ofthe insurer until the insurer makes a preliminary determination thatthe loss may involve mine subsidence. Upon such a determination,those persons retained by the commissioner as set out in subsection(a) of this section shall assist the commissioner and insurer indetermining the existence of a mine subsidence event and the coststherein shall be paid from the fund established by section 7 of thischapter.
As added by P.L.124-1992, SEC.8.
IC 27-7-9-10
Premiums
Sec. 10. (a) Premiums for mine subsidence insurance under thischapter shall be established by the commissioner, who shall reviewat least annually the premium level and the experience dataconcerning operation of the fund and make changes in the premiumsas required.
(b) Premiums shall be established at a rate or within a schedule ofrates sufficient to:
(1) satisfy all foreseeable claims on the mine subsidenceinsurance fund during the period of coverage, giving dueconsideration to relevant loss or claims experience or trends; (2) cover normal costs of operation of the mine subsidenceinsurance fund; and
(3) provide a reasonable reserve fund for unexpectedcontingencies.
(c) Deviations from the premium level or premiums set by thecommissioner may not be allowed.
As added by P.L.164-1986, SEC.1.
IC 27-7-9-11
Report to commissioner
Sec. 11. An insurer that enters into a reinsurance agreement withthe commissioner under section 9 of this chapter shall:
(1) report the amounts of premiums collected, at timesdesignated by the commissioner; and
(2) present an itemized list of losses paid, including the policynumber and the location of the structures, semiannually ondates selected by the commissioner.
As added by P.L.164-1986, SEC.1.
IC 27-7-9-12
Payment to insurer upon receipt of loss report
Sec. 12. The commissioner shall pay an insurer all amounts dueunder section 9(a)(4) of this chapter within ninety (90) days afterreceiving a loss report. The commissioner shall require that each lossreport include:
(1) an itemized statement of the damage, repairs made, and thecost of each repair; and
(2) any other documentation the commissioner believes willsubstantiate the reported loss.
As added by P.L.164-1986, SEC.1.
IC 27-7-9-13
Nature of claims
Sec. 13. Mine subsidence insurance claims made under thischapter do not constitute a debt, liability, or obligation of the state ora pledge of faith and credit of the state, except to the extent that themine subsidence insurance fund has accumulated reserves frompremiums, state or federal grants, investment income, or stateappropriations.
As added by P.L.164-1986, SEC.1.
IC 27-7-9-14
Subrogation rights; reports
Sec. 14. (a) The commissioner and each insurer issuing minesubsidence insurance under this chapter have the right ofsubrogation. In enforcing this subrogation right, the commissioner orthe insurer shall be considered the real party in interest and shallpursue any action under the insurer's or commissioner's own name.
(b) The insurer shall include in its semiannual report undersection 11(2) of this chapter an itemized list of all losses in
subrogation. An insurer shall remit to the commissioner all money,less expenses, recovered as a result of subrogation actions.
As added by P.L.164-1986, SEC.1.
IC 27-7-9-15
Recourse against insurer or policyholder; fraud or policyviolations
Sec. 15. (a) Except in case of fraud by an insurer, thecommissioner has no right of recourse against an insurer. An insurermay settle losses under this chapter in the customary manner.
(b) The commissioner may require an insurer to attempt to recoverfrom a policyholder for amounts paid to the policyholder if, in thejudgment of the commissioner, the policyholder was not entitled tothe amounts paid because of fraud or violation of the policyconditions. The cost of a recovery attempt under this subsection shallbe borne equally by the insurer and the commissioner.
As added by P.L.164-1986, SEC.1.
IC 27-7-9-16
Delegation of powers
Sec. 16. The commissioner may delegate the task of executing thepowers conferred upon the commissioner under this chapter toofficers of the department of insurance or other persons. However,the commissioner remains fully responsible for the proper executionof those powers.
As added by P.L.164-1986, SEC.1.
IC 27-7-9-17
Authority to adopt rules
Sec. 17. In order to establish guidelines and procedures necessaryto implement this chapter, the commissioner shall have authority toadopt rules pursuant to IC 4-22-2.
As added by P.L.124-1992, SEC.9.
IC 27-7-9-18
Reports; claims
Sec. 18. The department of insurance shall, every three (3) yearsbeginning not later than November 1, 2001, publish a reportregarding mine subsidence insurance provided under this chapter,including the:
(1) number of claims filed;
(2) amount paid for each claim; and
(3) amount remaining in the mine subsidence insurance fundestablished under section 7 of this chapter;
since the date of the previous publication of the report under thissection.
As added by P.L.182-2001, SEC.5.