CHAP. 163.—An ACT to provide for the organization, operation and supervision
of fire insurance ratemaking bureaus ; to provide for a review of rates
and rules fixed by such bureaus for insurance upon property in this State;
to prohibit discrimination in such rates; to regulate all agreements between
fire insurance companies or their agents affecting such rates; and empow-
ering the commissioner of insurance to reduce fire insurance rates, and
providing for penalty for violation. [S B 73]

Approved March 10, 1920.

1. Be it enacted by the general assembly of Virginia, That every
ire insurance company or other insurer authorized to effect insurance
igainst the risk of loss or damage by fire or lightning in this State
hall maintain or be a member of a rating bureau, or shall subscribe
or and adopt the rates of the regular recognized rating bureau. No
uch insurer shall be a member of or subscribe to more than one rating
ureau for the purpose of rating the same risk.

The provisions of this act shall not apply to insurance upon or
1 connection with marine or transportation risks or hazards other
nan automobile insurance.

2. A rating bureau may consist of one or more insurers, and when
onsisting of two or more insurers, shall admit to membership any
uthorized insurer applying therefor, and agreeing to abide by its
ules and regulations.

3. Every fire insurance company or other insurer aforesaid shall,
1 its annual application for license, specify each rating bureau making
ates upon property located within this State of which it is a member,
r subscriber, and during the vear, file written notice of any other
ich rating bureaus of which it shall become a member or subscriber.

4. Every rating bureau engaged in making rates or estimates for
fire insurance on property in this State shall inspect or cause to be
inspected every risk specifically rated by it upon schedule and make
a written survey of such risk, which shall be filed as a permanent
record in the office of such bureau. A copy of such survey shall be
furnished to the owner of any risk upon request without expense to
such owner. Every such rating bureau or insurer shall also file in its
office as a permanent record all flat rates and rates on farm property
within this State, and shall also file with the commissioner of insur-
ance a copy thereof.

5. The commissioner of insurance may address inquiries to any
individual, association, bureau or committee which is or shall be en-
gaged in making rates or estimates for rates for fire insurance upon
property in this State, in relation to the organization, maintenance or
operation, or any other matter connected with its transactions, and
may require the filing of schedules, rates, forms, regulation, or such
other information as may be required and it shall be the duty of
every such individual, association, bureau or committee or some officer
thereof, to promptly make such filing or reply to such inquiries in
writing; but surveys and completed schedules upon individual risks
may be required only where written complaint is filed with the com-
missioner of insurance.

6. The commissioner of insurance shall have power to examine
any such rating bureaus as often as he deems it expedient to do so,
and a report of such examination shall be filed in the insurance de-
partment. |
_ “. No fire insurance company or other insurer against the risk of
hre or lightning, nor any rating bureau, shall fix or charge any rate for
hre insurance upon property in this State which discriminates unfairly
between risks in the application of like charges and credits, or which
discriminates unfairly between risks of essentially the same hazards,
territorial classifications and having substantially the same degree of
protection against fire.

8. Any variation of any company or insurer from the schedule
of rates established and maintained by the bureau which it maintains,
or of which it is a member or subscriber, shall be uniform in its
application to all of the risks in the class for which the variation
is made, and no such uniform variation shall be made unless notice
thereof shall be filed with the bureau of which the insurer is a
member or subscriber and with the commissioner of insurance at least
hfteen days before such uniform variation is in effect, and schedules
providing for such variation shall be filed with the rating bureau and
the commissioner of insurance showing the amended basis rate and
amended charges and credits and application of the amended schedules
to individual risks in the class or classes affected.

9. Except as contained in the policy and the usual agreement for
other insurance, no such insurance company or insurer or rating
bureau shall make any contract or agreement with any person in-
sured or to be insured that the whole or any part of any insurance
shall be written by or placed with any particular company, insurer,
agent or any group of companies, insurers or agents.
Provided that nothing in this act shall prohibit an agent from
contracting or agreeing with an assured respecting his insurance.

10. The commissioner of insurance may upon written complaint
that discrimination in rates exists between risks in the application of
like charges or credits, or discrimination between risks of essentially
the same moral and physical hazard and having substantially the
same degree of protection against fire, order a hearing for the pur-
pose of determining such questions of discrimination, and the review
of such questions and the rates complained of before said commis-
sioner of insurance shall be had only after fifteen (15) days’ notice
to all parties interested, and if upon such hearing the commissioner of
insurance shall determine that the rate complained of is discrimina-
tory, he shall have power to order the discrimination removed and a
rate substituted by the rating bureau or insurer which is not dis-
criminatory. Any such order of the commissioner of insurance shall
be subject to review by the State corporation commission, on motion
of any party in interest, 1f said motion is made within fifteen (15)
days from the issuance of such order and notice thereof. During
the pendency of such review the order shall be suspended, and in the
event of final determination against any insurer, any overcharge dur-
ing the pendency of such proceedings shall on demand be refunded
by the insurer to the persons entitled thereto.

11. Every fire insurance company shall on or before the first day
of July, A. D., nineteen hundred and twenty-one, and of each calendar
year thereafter, file in the office of the commissioner of insurance a
classification of premium receipts and losses for the State of Virginia
during the preceding calendar year. Immediately upon this act being
in effect the commissioner of insurance shall also require the filing
of such classification for a period of five years ending December
thirty-first, nineteen hundred and nineteen, such annual and five-year
classification to conform as nearly as possible to the classification
kept and provided by the national board of fire underwriters. Failure
to promptly comply with the order of the commissioner of insurance
in this regard shall subject any company to the penalty provided in
section sixteen hereof. If at any time it shall appear to the commis-
sioner of insurance that the rates charged for fire insurance in this
State are excessive or unreasonable, in that the results of business of
stock fire insurance companies in this State during the five years next
preceding the year in which the investigation is made, as indicated
by the annual statements of the insurance companies made under
oath to the insurance department, show an aggregate underwriting
profit in excess of a reasonable amount, then the said commissioner
of insurance shall have power to order a reduction in the rates on
those classes which are yielding an excessive rate as will reduce
the underwriting profit to a reasonable amount.

In determining the question of a reasonable underwriting profit
the commissioner of insurance, as a protection to policyholders, shall
give proper and reasonable consideration to the conflagration liability
within and without this State. Any action of the commissioner of
msurance in this connection shall be subject to review by the State
corporation commission as provided in section ten hereof.

12. No fire insurance company or any other insurer, and no rating
bureau, or any representative of any fire insurance company or other
isurer or rating bureau, shall enter into or act upon agreement with
regard to the making, fixing or collecting of any rate for fire insurance
upon property within this State except in compliance with this act.

13. Any such agreement may be made and enforced, provided the
same be not contrary to law and is in writing, and, prior to its taking
effect, a copy thereof shall be filed with the commissioner of insur-
ance and with each rating bureau of which any of the parties thereto
shall be a member.

14. The commissioner of insurance, after due notice and hearing,
upon complaint or upon his own motion, may make an order dis-
approving any such agreement. No such agreement shall be in force,
nor shall any rights be based thereon, after service of a copy of
such order upon each of the parties to such ‘an agreement, and upon
each bureau with which such agreement is required to be filed. Ser-
vice may be made by mail and shall be completed upon the expiration
of a reasonable time for transmission fixed in such order. Any
order or refusal to make an order by the commissioner of insurance
in this connection shall be subject to review by the State corporation
commission, on motion of any person in interest, if said motion is
made within thirty (30) days from the issuance of such order or re-
fusal and notice thereof.

15. This act shall not apply to mutual insurance companies or-
ganized under the laws of this State and operating upon the assess-
ment plan; nor to property protected in whole or in part by automatic
sprinklers and insured in connection with an inspection service; nor
to the rolling stock of railroad corporations or property in transit
while in the possession of railroad companies or other common car-
fers nor to the property of such common carriers used or employed
by them in their business of carrying freight, merchandise or pas-
sengers, nor to insurance upon or in connection with marine or
transportation risks or hazards other than automobile insurance.

16. Any violation of the provisions of this act by any fire in-
surance company or other insurer authorized to effect insurance
against the risk of loss or damage by fire or lightning in this State,
or by any rate-making bureau, or officer or agent of either, shall
be a misdemeanor and on conviction shall be punished by a fine of
not less than twenty-five ($25.00) dollars nor more than two hundred
($200.00) dollars for each such violation and in the event any in-
surer, insurance company, individual or rating bureau shall be found
guilty of violation of the provisions of this act and subjected to penalty
herein provided and the same shall not be paid within thirty days
after final judgment the commissioner of insurance may, in his
discretion, revoke the license of such insurer or insurance company
and suspend the certificate of authority of such person or rating
bureau until such fine has been paid.
17. Any expense incurred by the commissioner of insurance m
carrying out the provisions of this act shall be paid out of the fuad
provided for the maintenance of the bureau of insurance.

18. All acts and parts of acts in conflict herewith are hereby
repealed.