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 the
insurance 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 forth
in 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 the
collapse of inactive underground coal mines abandoned before
August 3, 1977, resulting in damage to a structure. The term does not
include loss caused by earthquake, landslide, volcanic eruption, or
collapse 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 set
forth 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 does
not include land, trees, crops, or other plants, nor does the term
include a dwelling, building, or fixture that is owned by a public or
governmental 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 the
Pennsylvanian system.
The mine subsidence insurance provided under this chapter is
available only to cover structures located in counties identified by the
department 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 for
the purpose of making mine subsidence insurance available to
owners of property located in counties identified under section 6 of
this chapter. The fund shall be administered by the commissioner.
Money shall be deposited in the fund from:
(1) premiums for mine subsidence insurance remitted by
insurers to the commissioner; and
(2) funds obtained through federal grants or any other source.
(b) The expenses of administering the fund shall be paid from
money in the fund.
(c) The treasurer of state shall invest the money in the fund not
currently needed to meet the obligations of the fund in the same
manner as other public funds may be invested. Interest that accrues
from these investments shall be deposited in the fund.
(d) Money in the fund at the end of a particular fiscal year does
not 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 be
available as an additional form of coverage under any insurance
policy providing the type of insurance described in Class 3(a) of
IC 27-1-5-1 to directly cover one (1) or more structures located in a
county identified under section 6 of this chapter. The mine
subsidence coverage must be available in an amount adequate to
indemnify the insured to the extent of the loss in actual cash value of
the covered structure due to mine subsidence, less a deductible equal
to two percent (2%) of the insured value of the structure under the
policy. However, the deductible must be no less than two hundred
fifty dollars ($250) and no more than five hundred dollars ($500).
(b) An insurer proposing to issue a policy providing the type of
insurance described in Class 3(a) of IC 27-1-5-1 to cover one (1) or
more structures located in a county identified under section 6 of this
chapter shall inform the prospective policyholder of the availability
of mine subsidence coverage under this section. An insurer shall
inform the prospective policyholder of the availability of mine
subsidence coverage under this subsection when a policy described
in this subsection is issued.
(c) When an insurer informs a prospective policyholder of the
amount of the premium for the mine subsidence coverage that is
available as an additional form of coverage under a policy as
required by subsection (a), the premium for the mine subsidence
coverage must be stated separately from the premium for the other
coverage provided by the policy. The amount of the premium for
mine subsidence coverage provided by an insurer under this section
must be set according to the premium level set by the commissioner
under section 10 of this chapter.
(d) Except as provided in subsection (f), an insurance policy
providing the type of insurance described in Class 3(a) of
IC 27-1-5-1 to directly cover one (1) or more structures located in a
county identified under section 6 of this chapter must include the
mine subsidence coverage provided for under subsection (a) if the
prospective insured (before issuance of the policy) or the insured
(before renewal of the policy) indicates that the coverage is to be
included in the policy.
(e) An insurer is not required to provide mine subsidence
coverage under subsection (a) under any insurance policy in an
amount exceeding the amount that is reimbursable from the fund
under section 9(a)(4) of this chapter.
(f) An insurer must decline to make the mine subsidence coverage
provided for under subsection (a) available to cover a structure
evidencing unrepaired mine subsidence damage, until necessary
repairs are made. An insurer may also decline to make the mine
subsidence coverage available under an insurance policy if the
insurer has:
(1) declined to issue the policy;
(2) declined to renew the policy; or
(3) canceled all coverage under the policy for underwriting
reasons 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 added
under this chapter as an additional form of coverage to a policy
providing the coverage described in Class 3(a) of IC 27-1-5-1, the
mine subsidence coverage of the policy must apply to structures in
the 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 insurance
that:
(1) is in force with respect to the structure or structures
damaged 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) mine
subsidence occurrence.
(c) Neither an insurer, an agent of an insurer, nor an employee of
an insurer is obligated to investigate for mine subsidence damage
that may have occurred before the issuance or renewal of a policy
including mine subsidence coverage under this chapter, unless
specifically informed of such damage by the insured or prospective
insured.
(d) Neither an insurer, an agent of an insurer, nor an employee of
an insurer is liable for mine subsidence damage that occurs before
the issuance of a policy including mine subsidence coverage under
this 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 in
Class 3(a) of IC 27-1-5-1 shall enter into a reinsurance agreement
with the commissioner. The reinsurance agreement must include the
following terms:
(1) The insurer agrees to cede to the commissioner one hundred
percent (100%) of any mine subsidence coverage issued under
this chapter, subject to a maximum limit of two hundred
thousand dollars ($200,000) per structure insured.
(2) The insurer shall collect the premiums for mine subsidence
insurance, may retain a ceding commission in an amount set by
the commissioner, and shall remit the remainder of the
premiums to the commissioner for deposit in the mine
subsidence insurance fund.
(3) The insurer, in consideration of the ceding commission,
shall:
(A) undertake the adjustment of losses under the mine
subsidence coverage issued under this chapter by the insurer,
with technical assistance provided under section 9.5 of this
chapter; and
(B) pay the taxes and absorb all other expenses necessarily
incurred by the insurer in the sale of policies and the
administration of the mine subsidence insurance program
under this chapter.
(4) The commissioner shall reimburse the insurer from the mine
subsidence insurance fund for all amounts paid to policyholders
for mine subsidence insurance claims.
(5) The insurer is not required to pay a claim for any mine
subsidence loss insured under this chapter if the amount
available in the mine subsidence insurance fund is insufficient
to reimburse the insurer for the claim.
(b) The determination of the commissioner as to the amount of the
ceding commission that an insurer may retain under subsection (a)(2)
must be based on a consideration of the insurer's reasonable
administrative 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; costs
paid from fund
Sec. 9.5. (a) The commissioner shall provide insurers with
assistance from one (1) or more individuals with technical expertise
in mine subsidence for the purpose of assisting with the adjusting of
claims under coverage issued under this chapter. To comply with this
section, the commissioner may:
(1) expand the staff of the department of insurance; or
(2) enter into contracts providing for the services of persons
with the necessary technical expertise to provide assistance to
insurers in the determination of subsidence events.
(b) The adjustment of a claim against a policy that includes mine
subsidence coverage under this chapter is the sole responsibility of
the insurer until the insurer makes a preliminary determination that
the 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 in
determining the existence of a mine subsidence event and the costs
therein shall be paid from the fund established by section 7 of this
chapter.
As added by P.L.124-1992, SEC.8.
IC 27-7-9-10
Premiums
Sec. 10. (a) Premiums for mine subsidence insurance under this
chapter shall be established by the commissioner, who shall review
at least annually the premium level and the experience data
concerning operation of the fund and make changes in the premiums
as required.
(b) Premiums shall be established at a rate or within a schedule of
rates sufficient to:
(1) satisfy all foreseeable claims on the mine subsidence
insurance fund during the period of coverage, giving due
consideration to relevant loss or claims experience or trends;
(2) cover normal costs of operation of the mine subsidence
insurance fund; and
(3) provide a reasonable reserve fund for unexpected
contingencies.
(c) Deviations from the premium level or premiums set by the
commissioner 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 with
the commissioner under section 9 of this chapter shall:
(1) report the amounts of premiums collected, at times
designated by the commissioner; and
(2) present an itemized list of losses paid, including the policy
number and the location of the structures, semiannually on
dates 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 due
under section 9(a)(4) of this chapter within ninety (90) days after
receiving a loss report. The commissioner shall require that each loss
report include:
(1) an itemized statement of the damage, repairs made, and the
cost of each repair; and
(2) any other documentation the commissioner believes will
substantiate 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 this
chapter do not constitute a debt, liability, or obligation of the state or
a pledge of faith and credit of the state, except to the extent that the
mine subsidence insurance fund has accumulated reserves from
premiums, state or federal grants, investment income, or state
appropriations.
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 mine
subsidence insurance under this chapter have the right of
subrogation. In enforcing this subrogation right, the commissioner or
the insurer shall be considered the real party in interest and shall
pursue any action under the insurer's or commissioner's own name.
(b) The insurer shall include in its semiannual report under
section 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 policy
violations
Sec. 15. (a) Except in case of fraud by an insurer, the
commissioner has no right of recourse against an insurer. An insurer
may settle losses under this chapter in the customary manner.
(b) The commissioner may require an insurer to attempt to recover
from a policyholder for amounts paid to the policyholder if, in the
judgment of the commissioner, the policyholder was not entitled to
the amounts paid because of fraud or violation of the policy
conditions. The cost of a recovery attempt under this subsection shall
be 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 the
powers conferred upon the commissioner under this chapter to
officers of the department of insurance or other persons. However,
the commissioner remains fully responsible for the proper execution
of 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 necessary
to implement this chapter, the commissioner shall have authority to
adopt 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) years
beginning not later than November 1, 2001, publish a report
regarding 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 fund
established under section 7 of this chapter;
since the date of the previous publication of the report under this
section.
As added by P.L.182-2001, SEC.5.