Customers About Ohio FAIR Plan Statute Information

Statute Information

Section 3929.41 | Purposes.

The purposes of sections 3929.41 to 3929.49 of the Revised Code are to:

(A)

Assure stability in the property insurance market;

(B)

Assure the availability of basic property insurance as defined by sections 3929.41 to 3929.49 of the Revised Code;

(C)

Assure the availability, at the option of the applicant, of homeowners insurance as defined in division (B) of section 3929.42 of the Revised Code;

(D)

Encourage maximum use, in obtaining basic property insurance, of the normal insurance market provided by authorized insurers;

(E)

Provide for the equitable distribution among authorized insurers of the responsibility for insuring eligible property, for which basic property insurance cannot be obtained through the normal insurance market;

(F)

Authorize the establishment of a FAIR plan (fair access to insurance requirements), and the Ohio FAIR Plan Underwriting Association.

Section 3929.42 | Urban homeowners insurance definitions.

As used in sections 3929.41 to 3929.49 of the Revised Code, or any regulations adopted pursuant thereto:

(A)

"Basic property insurance" means insurance against direct loss to property as defined and limited in standard fire policies and extended coverage endorsements thereon, as approved by the superintendent of insurance, and insurance for such types, classes and locations of property against the perils of vandalism, malicious mischief, burglary, or theft, as the superintendent shall designate. Such insurance shall not include automobile insurance nor insurance on such types of manufacturing risks as may be excluded by the superintendent.

(B)

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

(C)

"Insurer" includes any insurance company or group of companies under common ownership which is authorized to engage in the business of property insurance in this state.

(D)

"Association" means the Ohio FAIR Plan Underwriting Association created by section 3929.43 of the Revised Code.

(E)

"Fair plan" means a plan to assure fair access to insurance requirements.

(F)

"Premiums written" means gross direct premiums, including that portion of premium which is attributable to a riot loading or factor, excluding that portion of premium on risks ceded to the association, charged with respect to property in the state on all policies of basic property insurance and homeowners insurance and the basic property insurance premium components of all multi-peril policies, as computed by the association, covering property in this state, less all premiums and dividends returned, paid, or credited to policyholders, or the unused or unabsorbed portions of premium deposits.

(G)

"Inspection bureau" means any fire insurance rating bureau or other organization designated by the association to assist in the collection of information necessary to determine eligibility and rating for basic property insurance or homeowners insurance.

Section 3929.43 | Ohio FAIR Plan Underwriting Association.

(A)

The Ohio FAIR Plan Underwriting Association is hereby created consisting of all insurers authorized to write within this state, on a direct basis, basic property insurance or any component thereof in multi-peril policies, to assist applicants to secure basic property insurance or homeowners insurance, and to formulate and administer a program for the equitable apportionment of basic property insurance or homeowners insurance which cannot be obtained in the normal market. Every such insurer shall be a member of the association and shall remain a member as a condition of its authority to write any of such insurance in this state.

(B)

The association, pursuant to sections 3929.41 to 3929.49 of the Revised Code, and the plan of operation, with respect to basic property insurance or homeowners insurance, may assume and cede reinsurance on insurable risks written by its members.

(C)

The plan of operation, approved by the superintendent of insurance, shall provide for economical, fair, and nondiscriminatory administration of a program for the equitable apportionment among members of basic property insurance or homeowners insurance which may be afforded to applicants whose property is insurable in accordance with reasonable underwriting standards, but who are unable to procure such insurance through normal channels. The association is under no obligation to issue basic property insurance or homeowners insurance to any person, unless that person and that person's property would constitute an insurable risk in accordance with reasonable underwriting standards. The plan of operation shall provide that the association, in determining whether the property is insurable, shall give no consideration to the condition of surrounding property or properties, where such condition is not within the control of the applicant. Rates for basic property insurance and homeowners insurance shall be subject to the approval of the superintendent. The plan of operation may also provide for assessment of all members in amounts sufficient to operate the association, maximum limits of liability per location to be placed through the program, reasonable underwriting standards for determining insurability of a risk, and the commission to be paid to the licensed producer designated by the applicant. The superintendent shall adopt such plan and all amendments thereto pursuant to Chapter 119. of the Revised Code.

If amendment of the plan of operation is requested by the superintendent or the board of governors, the board of governors shall submit to the superintendent, for approval, such amendments. If such amendments are not approved by the superintendent, the board of governors shall, within fifteen days, submit for approval an appropriately revised amendment. If the board of governors fails to do so, or if the amendment is not approved by the superintendent, the superintendent shall promulgate such amendment as the superintendent finds necessary.

(D)

(1)

The plan of operation may provide for periodic advance assessments against member insurers in amounts considered necessary to cover any deficit or projected deficit arising out of the operation of the association. Any provision in the plan for implementation of such advance assessments shall be approved by the superintendent. Any such provision in the plan shall also provide for quarterly or other periodic installment payment of such assessments upon request.

(2)

Such plan shall provide a method whereby member insurers may recoup assessments levied by the association. In order to recoup such assessments the plan may also provide for the calculation and use of rates or rating factors to be applied to direct premiums for basic property insurance and homeowners insurance located in this state. Such a provision is subject to the approval of the superintendent. Member insurers of the association implementing a change in rates pursuant to this section shall file such changes with the superintendent. Such changes shall not increase rates more than the amount authorized by the association and approved by the superintendent pursuant to the plan. The association may consult with member insurers or licensed rating bureaus in connection with the establishment and operation of any such provision.

(E)

Any insurer which is a member of the association shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written bear to the aggregate premiums written by all members of the association, except that this division shall not be construed to preclude the board of governors from taking action to adjust assessments in accordance with a program adopted pursuant to division (I) of this section.

(F)

Such plan shall require the issuance of a binder or policy providing coverage for which the applicant tenders an amount equal to the annual premium as estimated by the association, or an appropriate percentage of that annual premium as determined by the association. The binder or policy shall take effect, at the earliest, the day after the association receives the application, provided that the application meets the underwriting standards of the association, for such term, and under such conditions as are determined by the superintendent. The superintendent may alter such time requirement on a specific risk under such conditions as the superintendent finds appropriate.

(G)

The association shall be governed by a board of governors consisting of twelve members, four of whom shall be appointed by the governor with the advice and consent of the senate. One of such members shall be a licensed agent writing basic property insurance for more than one insurer. None of the other three such members shall be a director, officer, salaried employee, agent, or substantial shareholder of any insurance company and not more than two of these three members shall be members of the same political party. Terms of office of members appointed by the governor shall be for two years, commencing on the nineteenth day of September and ending on the eighteenth day of September. Each member shall hold office from the date of appointment until the end of the term for which the member was appointed. Any member appointed to fill a vacancy occurring prior to the expiration of the term for which the member's predecessor was appointed shall hold office for the remainder of such term. Any appointed member shall continue in office subsequent to the expiration date of the member's term until the member's successor takes office, or until a period of sixty days has elapsed, whichever occurs first. The remaining eight members shall be representatives from member companies, at least five of whom shall be Ohio domiciled members, elected annually by accumulated voting by members of the association whose votes shall be weighed in accordance with each member's premiums written during the second preceding calendar year. Not more than one insurer in a group under the same management or ownership shall serve on the board of governors at the same time. The eight representatives of member companies shall be elected at a meeting of the members or their authorized representatives, which shall be held at a time and place designated by the superintendent.

(H)

The plan shall be administered under the supervision of the superintendent.

(I)

The board of governors shall adopt a written program for decreasing the overall utilization of the association as a source of insurance. The program shall set forth actions that the board shall take to decrease such utilization, including actions intended to reduce the number of policies issued, the number of persons whose properties are insured, and the total amount and kinds of insurance written by the association, provided this division does not authorize the board to take action intended to decrease utilization of the association as a source of insurance if such action would substantially conflict with the purposes set forth in divisions (A), (B), and (D) of section 3929.41 of the Revised Code or the plan of operation of the association.

(J)

(1)

Except as provided in division (J)(2) of this section, records created, held by, or pertaining to the association are not public records under section 149.43 of the Revised Code, are confidential, and are not subject to inspection or disclosure.

(2)

Division (J)(1) of this section does not apply to the plan of operation and other information required to be filed with the superintendent under this chapter unless otherwise prohibited from release by law.

Section 3929.44 | Application by person unable to obtain basic property or homeowners insurance.

(A)

Any person having an insurable interest in real property or tangible personal property, or both, at a fixed location, who has been unable to obtain basic property insurance or homeowners insurance may apply to the Ohio FAIR Plan Underwriting Association.

(B)

The association may engage an inspection bureau or other organization to assist in collection of information necessary to underwrite risk for basic property insurance or homeowners insurance.

(C)

The association, if it finds the property to be insurable by meeting the reasonable underwriting standards contained in the plan of operation approved by the superintendent of insurance, shall cause a policy or binder of basic property insurance or homeowners insurance to be issued to the applicant upon payment of the premium.

(D)

As part of an application for a policy of basic property insurance or homeowners insurance, an applicant shall, in accordance with procedures and requirements set forth in rules promulgated by the superintendent, certify at least two insurance companies had been contacted and from whom coverage was not available.

(E)

As a condition of the issuance of a binder or policy of basic property insurance or homeowners insurance, an applicant shall, in accordance with procedures and requirements set forth in rules promulgated by the superintendent, certify to the association that there are no outstanding taxes, assessments, penalties, or charges with respect to the property to be insured.

(F)

An applicant shall, in accordance with rules promulgated by the superintendent, certify to the association whether or not the applicant has received written notice from an authorized public entity stating that the applicant's property is in violation of any building, housing, air pollution, sanitation, health, fire, or safety code, ordinance, or rule. If the applicant has received such written notice of any such violation, the applicant shall also submit to the association a detailed plan that indicates the manner and estimated period of time in which such violations will be corrected. If the association is satisfied that the violations are subject to correction within a reasonable period of time and that the applicant otherwise meets the requirements of this section, it may cause a policy or binder of basic property insurance or homeowners insurance to be issued to the applicant on the condition that the plan be implemented on schedule. The form of the plan submitted by the applicant and the manner in which this division is implemented shall be in accordance with rules promulgated by the superintendent. Nothing in this division shall be construed to make the association responsible for the detection of any violation of a code, ordinance, or rule of the type described in this division.

Section 3929.45 | Examination into operation of association.

The superintendent of insurance or any person designated by him may visit and examine into the operation of the Ohio FAIR Plan Underwriting Association and shall have free access to all the books, records, files, papers, and documents that relate to the operation of the association, and may summon, qualify, and examine as witnesses all persons having knowledge of such operations, including officers, agents, or employees thereof.

Section 3929.46 | Superintendent may require reports from insurers.

The superintendent of insurance may require such reports from insurers concerning risks insured under any plan approved pursuant to sections 3929.41 to 3929.49 of the Revised Code, as he finds necessary.

Section 3929.47 | Appeals - judicial review.

Any person or insurer aggrieved by any action or decision of the administrator of the plan, the Ohio FAIR Plan Underwriting Association, or of any insurer as a result of its participation therein, may appeal to the board of governors. The decision of the board of governors may be appealed to the superintendent of insurance within thirty days from the date of the action or the decision. The superintendent shall, after hearing held upon proper notice, issue an order approving or disapproving the action or decision, with respect to the matter which is the subject of appeal. All final orders and decisions of the superintendent are subject to judicial review as provided in Chapter 119. of the Revised Code.

Section 3929.48 | Immunity.

There shall be no liability on the part of, and no cause of action of any nature shall arise against any insurer, inspection bureau, or the Ohio fair plan underwriting association, or a director, agent, or employee of any of these, or the superintendent of insurance or his authorized representatives, for any inspections undertaken or statements made by any of them concerning the property to be insured, or any acts or omissions in connection therewith. Any reports and communications in connection therewith are not public documents.

Section 3929.481 | Issuing fair plan policies.

The Ohio FAIR Plan Underwriting Association is authorized to issue fair plan policies of insurance in its own name and to perform acts relative thereto in accordance with the plan of operation. The association is exempt from all license fees, and income, franchise, premium, and privilege taxes levied or assessed by this state or any political subdivision of this state, except that premium receipts from policies issued directly by the association are subject to the tax imposed by section 3737.71 of the Revised Code, computed upon the basis of a statement to be filed annually on or before the first day of March by the association with the superintendent of insurance in the form prescribed by the superintendent.

Section 3929.482 | Contracts to provide administrative and claims adjusting services.

(A)

The Ohio FAIR Plan Underwriting Association by action of its board of governors, with the approval of the superintendent of insurance, is authorized to enter into a contract with the Ohio mine subsidence insurance underwriting association to provide administrative and claims adjusting services required by it. Such contract shall provide indemnification by the Ohio mine subsidence insurance underwriting association to the Ohio FAIR Plan Underwriting Association, its members, members of its board of governors, and its officers, employees, and agents against all liability, loss, and expense resulting from acts done or omitted in good faith in performing such contract. Such contract shall also provide that the Ohio FAIR Plan Underwriting Association will be reimbursed for its actual expenses incurred in performing such services. Common expenses applicable both to the Ohio FAIR Plan and to the mine subsidence insurance underwriting association shall be allocated between them on an equitable basis approved by the superintendent of insurance.

(B)

The Ohio FAIR Plan Underwriting Association by action of its board of governors, with the approval of the superintendent of insurance, is authorized to enter into a contract with the Ohio commercial joint underwriting association to provide administrative and claims adjusting services required by it. Such contract shall provide indemnification by the Ohio commercial joint underwriting association to the Ohio FAIR Plan Underwriting Association, its members, members of its board of governors, and its officers, employees, and agents against all liability, loss, and expenses resulting from acts done or omitted in good faith in performing such contract. Such contract shall also provide that the Ohio FAIR Plan Underwriting Association will be reimbursed for its actual expenses incurred in performing such services. Common expenses applicable both to the Ohio FAIR Plan and to the Ohio commercial joint underwriting association shall be allocated between them on an equitable basis approved by the superintendent of insurance.

Section 3929.49 | Furnishing information to show compliance with law.

The superintendent of insurance may, at any time, require any property insurer to furnish him with such information as he finds necessary in order to determine whether such insurer is complying with sections 3929.41 to 3929.49 of the Revised Code.