CHAPTER 281

An Act to amend and reenact §§ 2-1, 2-77.10, 2-77.11 and 2-77.12, as
amended, of the Code of Virginia, relating to departments of State
government and the Department of Property Records ana Insurance,
heretofore known as the Bureau of Property Records and Insurance.

[H 452]
Approved March 31, 1966

Be it enacted by the General Assembly of Virginia:
That §§ 2-1, 2-77.10, 2-77.11 and 2-77.12, as amended, of the Code of
rinia be amended and reenacted as follows:
§ 2-1. There shall be, in addition to such others as may be estab-
d by law, the following administrative departments and divisions of
State government.
(1) Department of Accounts.
(2) Department of Agriculture and Immigration.
(3) Department of Alcoholic Beverage Control.
(4) Department of Conservation and Economic Development.
(5) Department of Corporations.
(6) Department of Education.
(7) Department of Health.
(8) Department of Highways.
(9) Department of Labor and Industry.
(10) Department of Law.
(11) Department of Mental Hygiene and Hospitals.
(12) Department of Military Affairs. ;
(18) Department of Professional and Occupational Registration.
(14) Department of State Police.
(15) Department of Taxation.
(16) Department of the Treasury.
(17) Department of Welfare and Institutions.
(18) Department of Workmen’s Compensation.
19) Division of Motor Vehicles.
20) Department of Purchases and Supply.
(21) Department of Technical Education.
(22) Department of Property Records and Insurance.
§ 2-77.10. (a) The Bureau of Property Records and Insurance,
tofore created and * established as a separate agency of the State
rnment, ts hereby designated as the Department of Property Records
Insurance, hereinafter sometimes referred to as the Department. The
partment shall establish and maintain a permanent file showing the
and cost of construction of State-owned buildings and contents (here-
er inclusively referred to as buildings or properties) and the actual
value thereof and the amount of fire and extended coverage, includ-
vandalism and malicious mischief insurance coverage thereon.
(b) * An administrator, who is familiar with property insurance and
neering, * shall be in charge of the Department. He shall be appointed
nd serve at the pleasure of the State Insurance Board. It shall be the
of the Administrator to supervise and keep the information and
ds required by this section; to inspect the properties and confer with
roper officials or employees of the several agencies of the State and
‘mine for them the insurance coverages which shall be carried on or
respect to properties under their control; and to determine the man-
whereby savings in the cost of such insurance may be made. He shall
the assistance of insurance companies, and their representatives, the
Marshal of the State and the State Insurance Board in devising
is by which hazards may be reduced or eliminated to the end that the
3t possible insurance costs may obtain with respect to State-owned
ings and their contents.
(bl) The State Insurance Board shall have the authority to change
or discontinue fire and extended coverage, including vandalism and mali-
cious 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 in-
surance agency or agencies, unless so authorized by the proper officials
of the agency affected. The Board shall have final responsibility with re-
spect 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 * Department informed as
to the status of all properties under their control in order that the * De-
partment maintain the records as specified in paragraph (a) of this sec-
tion. On properties that are insured, the * Department shall also be in-
formed 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 * Department. The * Department shall notify each
agency, at least * thirty days in advance of the date of expiration of in-
surance and any modifications required thereon. * Prior to such expiration
date each agency shall notify the * Department as to compliance with the
* Department’s instructions along with the insurance information required
in this paragraph.

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 * Department shall determine the savings in insurance each
year by said agencies, departments, divisions or institutions on the follow-
ing basis: As to structures existing on January one, nineteen hundred sixty-
one, the insurance savings will be the savings in insurance made over in-
surance costs prior to that date on such structures, exclusive of any extra
insurance coverages added subsequent to that date. As to structures
coming into existence after January one, nineteen hundred sixty-one,
including structures acquired or initially insured subsequent to that date,
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 ex-
piration occur in June in the second year of a biennium, the * Department
may compute the amount of the insurance savings on the basis of informa-
tion then on record. Whenever 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, de-
partments, divisions and institutions in pro rata amounts.

§ 2-77.11. The Insurance Advisory Board, heretofore created, is con-
tinued and is hereby designated as the State Insurance Board. The Board
shall consist of six members who shall be qualified by their experience in
the fields of insurance, self-insurance, business, law or engineering. Five
of the members shall be appointed by the Governor. The sixth member
shall be the Administrator of the * Department 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. Suc-
ceeding 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 * Department of Property Records and
Insurance or any four members of the Board. Four members of the Board
shall constitute a quorum. The members of the Board except the Adminis-
trator 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 mem-
bers 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 ad-
visability of blanket coverage, noncoverage, deductible program, the rate
credit entitlement of the State due to diversity of risk and any other as-
pects of property insurance which might lead to a more favorable in-
surance coverage of State property. The Board shall instruct the * Depart-
ment 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 *
Department 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 * Department 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

rance recovery or limited insurance recovery as a consequence of any
action by the * Department of Property Records and Insurance, resulting
in noncoverage, reduced insurance, elimination of insured perils or other-
wise, the Administrator shall determine the amount, if any, payable out
of the Fund, and such amount, when approved by the Governor, shall be
fmal. The amount payable shall be used for the purpose of restoring the
damaged structure, or rebuilding the same, as the circumstances may re-
quire, 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 pay-
able when added to the insurance recovered exceed the actual cash value
of the property, as recorded in the * Department of Property Records
and Insurance.

(d) In addition to the amounts payable under (c) above, the costs of
operating the * Department 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.