Ohio Governor Signs Farm Mutual Modernization Law

Ohio Gov. Bob Taft recently signed legislation which includes provisions benefiting farm mutual insurance companies and their policyholders, according to the National Association of Mutual Insurance Companies’ (NAMIC) written statement.

House Bill 442, introduced by State Rep. Matthew J. Dolan, R-Novelty, addresses multiple insurance-related issues including regulation of mutual protective associations organized under Ohio Revised Code, Chapter 3939. It was approved by the Ohio General Assembly on May 25 and signed by Gov. Taft on July 11.

“Governor Taft and the General Assembly are to be commended for taking steps to ensure that Ohio’s mutual protective associations can continue providing affordable insurance products in Ohio’s small towns and rural communities well into the future,” said Joe Thesing, NAMIC State Affairs manager for the North Central Region.

Current law allows mutual protective associations to write first party property coverages for non-commercial risks including dwellings, farm structures, household contents and farm personal property, however, coverage is limited to specific perils. If additional casualty and liability coverages are desired by the policyholder, they must be provided by property/casualty companies and attached to the mutual protective’s policy. Enactment of HB 442 will allow mutual protective associations to provide their customers with coverages more in-line with the rest of the industry.

“Representative Dolan, the Ohio Department of Insurance and the Ohio Association of Mutual Insurance Companies (OAMIC)-especially, Blaine Budd (Washington Mutual), Jim Silver (Pike Mutual) and Jon Younker (Woodville Mutual)-deserve a great deal of credit for leading the effort to craft a fair and balanced proposal that allows mutual protectives to respond to the needs of their customers,” Thesing said.

The legislation also allows mutual protective associations to collect premium for coverage in anticipation of assessment. Current law dictates the collection of premium at the end of the policy period. This change will allow companies to have a more consistent flow of premium and will allow them to satisfy bank, lending and mortgage company needs for a current declarations page.

“Ohio’s thirty mutual protective associations insure over $11 billion in property for over 85,000 policyholders and have been doing business for over 100 years. Passage of HB 442 is important to the continued prosperity of Ohio’s mutual protective associations as well as to the overall health of the state’s property insurance market,” Thesing added.

The bill becomes effective 90 days from date of signature.

NAMIC identifies itself as a full-service national trade association with more than 1,400 member companies that underwrite 43 percent ($196 billion) of the property/casualty insurance premium in the U.S.

Source: National Association of Mutual Insurance Companies