CHAPTER 125

An Act to amend and reenact § 2-48, and §§ 2-77.10, 2-77.11, 2-77.12, as
amended, of the Code of Virginia, relating to budget estimates by State
agencies, the Insurance Reserve Trust Fund, and the terms and con-
ditions of administration thereof; establishing a Bureau of Property
Records and Insurance, and a State Insurance Board, and defining the
powers and duties of each; and appropriating funds. rH 82]

Approved March 2, 1964

Be it enacted by the General Assembly of Virginia:

1. That § 2-48, and §§ 2-77.10, 2-77.11 and 2-77.12, as amended, of the
Code of Virginia be amended and reenacted as follows:

§ 2-48. (a) On or before the first day of November biennially in
the odd numbered years each of the several State departments, bureaus,
divisions, officers, commissions, institutions, and other agencies and under-
takings receiving or asking financial aid from the State shall report to the
Governor, on official estimate blanks furnished for such purpose, an esti-
mate in itemized form showing the amount needed for each year of the
ensuing biennial period beginning with the first day of * July thereafter.
The official estimate blanks which must be used in making these reports
shall be furnished by the Governor, shall be uniform and shall clearly
designate the kind of information to be given thereon.

(b) To facilitate regular payments into the Insurance Reserve Trust
Fund, the official estimate blanks provided each agency by the Governor
shall contain a column headed “State Insurance Reserve Trust Fund.”
Each agency shall set forth in this column the amount of the savings, tf
ae: for each year of the biennium based on the formulas set forth in

2-77.10.

§ 2-77.10 (a) The Bureau of Property Records and Insurance,
heretofore created and now existing within the Division of the Budget, *
is continued, and is hereby established as a separate agency of the State
Government. The Bureau shall establish and maintain a permanent file
showing the date and cost of construction of State-owned buildings and
contents (hereinafter inclusively referred to as buildings or properties)
and the * actual cash value thereof and the amount of fire and extended
coverage, including vandalism and malicious mischief insurance coverage

ereon.

(b) The * State Insurance Board shall appoint a person, hereafter
called the Administrator, who is familiar with property insurance and *
engineering to be Administrator of the Bureau. Nevertheless, any person
in charge of the Bureau heretofore appointed * and in office on the effec-
tive date of this act shall be deemed to have been appointed Administrator
hereunder. It shall be the duty of the Administrator to supervise and keep
the information and records required by this section; to inspect the proper-
tres and confer with the proper officials or employees of the several agencies
of the State and determine for them the insurance coverages which shall
be carried on or with respect to * properties * under their control ; and to
determine the manner * whereby savings in the cost of such insurance may
be made. He shall seek the assistance of insurance companies, and their
representatives, the * Fire Marshal of the State and the State Insurance *
Board in devising means by which hazards may be reduced or eliminated
to the end that the lowest possible insurance costs may obtain with respect
to State-owned buildings and their contents.

* (b-1) The State Insurance Board shall have the authority to change
or discontinue fire and extended coverage, including vandalism and ma-
licious mischief insurance coverage carried pursuant to bond indentures
and other contractual requirements, provided such change or discontinu-
ance meets with the written approval of the trustee or trustees of the
bond indenture and those signatory to the contracts.

The * Board shall not have the authority to place or to recommend
that insurance, which is or may be carried by the several agencies of the
State on the properties under their control, be placed with any particular
insurance agency or agencies, * unless so authorized by the proper officials
of the agency affected. The Board shall have final responsibility with
respect to coverage, noncoverage, provisions of policies, quantity, and type
of fire and extended coverage, including vandalism and malicious mischief
insurance coverage. * ; such responsibility shall be consonant with sound
insuring practices.

Whenever * the Board determines it is practicable and economical to
do so, * insurance to be carried on State-owned properties shall be placed
with insurance agents whose principal offices are located within reasonable
proximity to the properties to be insured.

(c) All agencies of the State shall * keep the Bureau informed as to
the status of all properties under their control in order that the Bureau
maintain the records as specified in paragraph (4) of this section. On
properties that are insured, the Bureau shall also be informed as to the
type and amounts of insurance, the term, premium, the dates when such
insurance will expire and such other information as may be required by
the Bureau. The Bureau shall notify each agency, at least * sixty days in
advance of the date of expiration of * insurance * and any modifications re-
quired thereon. Not * less than * five days * before such expiration date
each agency shall notify the Bureau * as to compliance with the Bureau’s
mstructions along with the insurance information required in this para-
grap

For the purpose of determining the amount each agency, department,
division or institution of the State government having jurisdiction and
control over State * properties shall pay into the Insurance Reserve Trust
Fund, the Bureau shall determine the savings in insurance each year by
said agencies, departments, divisions or institutions on the following basis:
As to structures existing on January one, nineteen hundred sixty-one, the
insurance savings will be the savings in insurance made over insurance
costs prior to that date on such structures, exclusive of any extra imsurance
coverages added subsequent to that date. As to structures coming into
existence after January one, nineteen hundred sixty-one, the savings will
be the difference between the cost of the actual coverage carried by the
State on such structures and the cost of insuring * said structures at one
hundred per centum of actual value. When dates of expiration occur in
June in the second year of a biennium, the Bureau may compute the amount
of the insurance savings on the basis of information then on record. When-
ever the payments provided for herein cause the Insurance Reserve Trust
Fund to exceed the amount specified in § 2-77.12 (b), the excess of such
payments shall be returned to said agencies, departments, divisions and
institutions in pro rata amounts.
§ 2-77.11. The Insurance Advisory Board, * heretofore created, * is
continued and is hereby designated as the State Insurance Board. The
Board shall consist of * siz members who shall be qualified by their experi-
ence in the fields of insurance, self-insurance, business, law or engineering.
* Five of the members shall be appointed by the Governor. The sixth mem-
ber shall be the Administrator of the Bureau of Property Records and
Insurance who shall act as Secretary of the Board.

The first appointed members shall be appointed as follows: One for
a term of five years, one for a term of four years, one for a term of three
years, one for a term of two years, and one for a term of one year. Succeed-
ing appointments shall be for terms of five years each but other vacancies
shall be filled by appointment for the unexpired term.

The Board shall annually select a chairman from its membership. The
Administrator shall not be eligible to serve as Chairman of the Board,
or to vote concerning his own appointment. The Board shall meet at least
once every six months; other meetings may be held upon call of the Chair-
man or the Administrator of the Bureau of Property Records and
Insurance or any * fowr members of the Board. * Four members of the
Board shall constitute a quorum. The members of the Board except the
Administrator shall receive a per diem of ten dollars for each day or
portion thereof on which they are engaged upon business of the Board.
All members shall receive their necessary expenses incurred in attendance
upon meetings or otherwise incurred in the performance of their duties.

The Board shall study and investigate all phases of fire and extended
coverage, including vandalism and malicious mischief insurance, the advis-
ability of blanket coverage, noncoverage, deductible program, the rate
credit entitlement of the State due to diversity of risk and any other
aspects of * property insurance which might lead to a more favorable
insurance coverage of State property. The Board shall * instruct the
Bureau * as to policies, the application of which would be in the best
interest of the State. *

No member of the Board shall participate, directly or indirectly, in
the consideration of the insurance to be effected upon any property when
such property is insured by or through an insurance agency in which
such member has any interest of whatsoever nature.

§ 2-77.12. (a) Each agency, department, division, or institution of
the State government having * control over any State structure and
contents thereof shall pay each year into the Fund hereinafter created, an
amount equivalent to its savings in insurance as determined by the Bureau
of Property Records and Insurance under the formula set out in § 2-77.10,
and such amount shall be paid in such installments as the Administrator
of the Bureau * may require. Whenever any building or structure is under
the control of two or more agencies, departments, divisions or institutions
of the State, the payment required herein shall be prorated upon the basis
of percentage of the area controlled.

(b) There is hereby established and created in the State treasury the
State Insurance Reserve Trust Fund. Such Fund shall consist of the
payments required in paragraph (a) of this section. Such Fund shall be
under the management and control of the * State Insurance Board, and any
claims for losses payable out of such Fund shall be at the direction of the *
Board. Such Fund shall be invested in the manner provided for in § 2-154.1
of the Code of Virginia and interest earned shall be added to the Fund as
earned; provided, however, such fund shall not exceed the total sum of
one million dollars exclusive of interest.

(c) * In the event of loss or damage to property on which there is no
ansurance recovery or limited insurance recovery as a consequence of any
action by the Bureau of Property Records and Insurance, resulting i
moncoverage, reduced insurance, elimination of insured perils or otherwise,
the Administrator shall determine the amount, if any, payable out of the
Fund, and such * amount, when approved by the Governor, shall be final.
The amount payable * shall be used for the purpose of restoring the
damaged structure, or rebuilding the same, as the circumstances may
require, but in no event shall the amount payable on account of such loss
exceed the * actual cash value of the property, nor shall the amount
payable when added to the insurance recovered exceed the * actual cash
value of the property, as * recorded in the Bureau of Property Records
and Insurance.

d) In addition to the amounts payable under (c) above, the * costs
of operating the Bureau * which are properly allocated to its * functions
concerning the State Insurance Reserve Trust Fund and the costs of
operating the * State Insurance Board shall be paid out of the State In-
surance Reserve Trust Fund, for which purposes said Fund is hereby

appropriated.