CHAPTER 178

An Act to amend the Code of Virginia by adding in Chapter 8 of Title 2,
an article numbered 8 consisting of sections numbered 2-77.10, 2-
77.11 and 2-77.12, which article relates to property records and tn-
surance, and which sections relate, respectively, to the Bureau of
Property Records and Insurance, to the Insurance Advisory Board, its
creation, powers and duties; and to the Insurance Reserve Trust Fund,
its creation, and terms and conditions of administration thereof; and
to repeal § 2-66.1 of the Code of Virginia, relating to the Bureau of
Property Records and Insurance.

[H 285]

Approved March 2, 1962

Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia be amended by adding in Chapter 8 of
Title 2, an article numbered 3, consisting of sections numbered 2-77.10,
2-77.11 and 2-77.12, as follows:

ARTICLE 3

Property Records and Insurance
§ 2-77.10. (a) The Bureau of Property Records and Insurance, here-
tofore created within the Division of the Budget and under the supervision
of the Director thereof, is continued. The Bureau shall establish and main-
tain a permanent file showing the date and cost of construction of State-
owned buildings and contents (hereinafter inclusively referred to as build-
ings), and the replacement value thereof and the amount of fire and ex-
tended coverage insurance thereon.

(b) The Governor shall appoint a person who is familiar with prop-
erty insurance and its application to be Administrator of the Bureau.
Nevertheless, any person in charge of the Bureau heretofore appointed
pursuant to § 2-66.1 and in office on the effective 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 rec-
ords required by this section; to confer with the proper officials or em-
ployees of the several agencies of the State and determine for them the
insurance coverages which shall be carried on or with respect to building
properties, and the contents thereof, under their control; and to determine
the manner, including insurance coverage subject to deductible provisions
as approved for use in the State, whereby savings in the cost of such in-
surance may be made. He shall seek the assistance of insurance companies,
and their representatives, the Chief Fire Marshal of the State and the
Insurance Advisory 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.

The Bureau shall have no power to alter in any way the insurance
obligations of the various State agencies undertaken pursuant to bond in-
dentures and other contractual requirements.

The Administrator shall not have the authority to place or to recom-
mend 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 particu-
lar insurance agency or agencies, but he shall have final responsibility with
respect to coverage, non-coverage, provisions of policies, quantity, and
type of fire and extended coverage insurance. He shall take into consid-
eration the recommendations of the Insurance Advisory Board in deter-
mining insurance to be required.

Whenever practical and economical to do so, the several agencies of
the State shall place the insurance to be carried on the properties under
their control with insurance agents whose principal offices are located
within reasonable proximity to the properties to be insured.

(c) All agencies of the State shall furnish the Bureau on or before
July one, nineteen hundred sixty-two, with information showing the types
and amounts of fire and extended coverage insurance on buildings under
their jurisdiction and control as of January one, nineteen hundred sixty-
one, the premium thereon, the dates when such insurance will expire and
such other information concerning such buildings as the Bureau may re-
quire. The Bureau shall notify each agency, at least thirty days in advance
of the date of expiration of the insurance on any property of the date of
such expiration and any modification required; not more than thirty days
after such date each agency shall notify the Bureau of the type of insur-
ance effected thereon and the amount and premium thereof. For the pur-
pose of determining the amount each agency, department, division or in-
stitution of the State government having jurisdiction and control over
State structures and their contents shall pay into the Insurance Reserve
Trust Fund, the Bureau shall determine the saving in insurance, by said
agencies, departments, divisions or institutions on the following basis: As
to structures existing on January one, nineteen hundred sixty-one, the in-

surance saving will be the saving in insurance made over insurance costs
prior to that date on such structures. As to structures coming into exist-
ence after January one, nineteen hundred sixty-one, the saving will be the
difference between the cost of the actual coverage carried by the State on
such structures and the cost of insuring the actual value of said structures.

§ 2-77.11. The Insurance Advisory Board is hereby created as an
agency of the Commonwealth. The Board shall consist of five members
who shall be qualified by their experience in the fields of insurance, self-
insurance or engineering. They shall be appointed by the Governor.

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. Suc-
ceeding appointments shall be for terms of five years each but other va-
cancies shall be filled by appointment for the unexpired term.

The Board shall annually select a chairman from its membership. The
Board shall meet at least once every six months; other meetings may be
held upon call of the chairman or the Administrator of the Bureau of
Property Records and Insurance or any three members of the Board. Three
members of the Board shall constitute a quorum. Members of the Board
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 re-
ceive 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 insurance, the advisability of blanket coverage, non-coverage, de-
ductible program, the rate credit entitlement of the State due to diversity
of risk and any other aspects of fire and extended coverage insurance which
might lead to a more favorable insurance coverage of State property.

The Board shall advise the Bureau of Property Records and Insur-
ance as to policies, the application of which would be in the best interest
of the State. The Board’s recommendations shall be considered by, but shall
not be binding upon, the Bureau of Property Records and Insurance.

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 jurisdiction and control over any State struc-
ture and contents thereof shall pay into the fund hereinafter created an
amount equivalent to its saving 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 of Property Records and Insurance 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 pay-
ments required in paragraph (a) of this section. Such Fund shall be under
the management and control of the Director of the Budget, and any claims
for losses payable out of such Fund shall be at the direction of the Direc-
tor of the Budget. Such Fund shall be invested in the manner provided for
in § 2-154.1 of the Code of Virginia.

(c) In the case of uninsured loss by fire or other peril, the Director
of the Budget shall determine the amount payable out of the Fund and such
determination, when approved by the Governor, shall be final. The amount
payable, subject to the control of the Director of the Budget, with respect
to the allocation and expenditure of capital outlays, 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 maximum amount of the insurable value
of the property, nor shall the amount payable when added to the insurance
recovered exceed the maximum amount of the insurable value of the prop-
erty, as determined by the Bureau of Property Records and Insurance.
(d) The administrative cost of operating the Bureau of Property
Records and Insurance which are properly allocated to its insurance func-
tions and the cost of operating the Insurance Advisory Board shall be
paid out of the State Insurance Reserve Trust Fund.
2. That § 2-66.1 of the Code of Virginia is repealed.