Thomas R. Michael
Michael & Kupec
Clarksburg, West Virginia
Attorney for the Appellant
Linda Gay, Associate Counsel
B. Keith Huffman, General Counsel
Office of the Insurance Commissioner
of West Virginia
Charleston, West Virginia
Attorneys for the Appellee
JUSTICE BROTHERTON delivered the Opinion of the Court.
JUSTICE MILLER concurs and reserves the right to file a concurring opinion.
SYLLABUS BY THE COURT
1. West Virginia Code § 33-30-7 (1992) states that the
"insurer may refuse to provide subsidence coverage (1) on a
structure evidencing unrepaired subsidence damage, until necessary
repairs are made, . . ." and, in addition, dictates that "an
insurer shall refuse to provide subsidence coverage on a structure
which evidences a loss or damage in progress."
2. "Applicable standards for procedural due process,
outside the criminal area, may depend upon the particular
circumstances of a given case. However, there are certain
fundamental principles in regard to procedural due process embodied
in Article III, Section 10 of the West Virginia Constitution, which
are: First, the more valuable the right sought to be deprived, the
more safeguards will be interposed. Second, due process must
generally be given before the deprivation occurs unless a
compelling public policy dictates otherwise. Third, a temporary
deprivation of rights may not require as large a measure of
procedural due process protection as a permanent deprivation."
Syllabus point 2, North v. West Virginia Board of Regents, 160
W.Va. 248, 233 S.E.2d 411 (1977).
3. Even where mine subsidence coverage has initially
been extended to a policyholder pursuant to statutory directive,
the retroactive cancellation of an insured's coverage for one of
the reasons set forth in W.Va. Code § 33-30-7 may be interpreted as
a refusal to provide mine subsidence coverage. Such refusal to
provide coverage is subject to review by the insurance
commissioner, who has subject-matter jurisdiction under the hearing
and appeal provisions of W.Va. Code § 33-2-1 et seq., as noted in
W.Va. Code § 33-30-7.
The appellant, Marshall Higginbotham, appeals from an
April 22, 1992, ruling of the Circuit Court of Kanawha County which
affirmed the Insurance Commissioner's decision to dismiss the
appellant's claim of alleged mine subsidence damage to his home for
lack of subject matter jurisdiction. The specific issue now before
this Court is whether the Insurance Commissioner has subject matter
jurisdiction to review either the West Virginia Board of Risk and
Insurance Management's denial of a claim filed under the
appellant's homeowner's policy or the insurer's subsequent
cancellation of coverage.
Legislation enacted in West Virginia in 1982 provided
that mine subsidence insurance coverage would be made available to
all state residents through the office of the State Board of Risk
and Insurance ManagementSee footnote 1 ("Board of Risk"), which serves in an
administrative capacity as the Manager and Trustee of the West
Virginia Mine Subsidence Fund.See footnote 2 In 1983, the appellant renewed his
homeowner's insurance policy with State Farm Fire and Casualty
Company ("State Farm"), and, as required by W.Va. Code § 33-30-6,
State Farm added mine subsidence coverage to the policy.See footnote 3 The
"coverage" portion of the policy explains that "the dwelling must
have sustained the damage after the mine subsidence endorsement was
added to the policy. The burden of proof is on the policyholder."
There was no inspection of the home to determine if it
had sustained any pre-existing mine subsidence damage. At a
hearing on January 26, 1989, the appellant's State Farm agent, Joe
Woodward, noted that the mine subsidence coverage was offered
"across the board to all policyholders. It would have been
physically quite difficult to look at homes to try to determine
mine subsidence damage." Thus, State Farm sent the appellant an
endorsement which acknowledged his receipt of mine subsidence
coverage, and he was charged for the coverage. He paid the premium
and the coverage was effective for the period from September 28,
1983, to August 16, 1984.
On June 11, 1984, the appellant filed a claim for mine
subsidence damage in which he listed an October 10, 1983, date of
loss. Pursuant to regulations governing the adjustment of such
claims, State Farm reported the claim to the Board of Risk, and the
appellant's claim was then assigned to the General Adjustment
Bureau for investigation. This independent adjuster interviewed
the appellant and inspected the property on July 24, 1984. In a
February 6, 1985, letter to the General Adjustment Bureau, the
Board of Risk advised that they did not feel that there was
coverage. The Board of Risk met on February 19, 1985, and the
minutes of that meeting reflect that with respect to the
appellant's claim, "[t]he Board denied reinsurance coverage because
the subsidence began in 1981, long before the mine subsidence
coverage was requested."
In a letter dated March 18, 1985, Board of Risk Claim
Manager T. K. Snyder told State Farm Claim Superintendent Joseph
Rheney that "the Board [of Risk] met on March 12, 1985 and again
decided that no reinsurance is available for homes where there is
ongoing mine subsidence. The damage to [appellant Higginbotham's]
house began many years ago. We are instructing [General Adjustment
Bureau Adjuster] John Roberts to close his file and you may proceed
as your corporate policy dictates."
State Farm subsequently requested an independent
investigation, which took place in June, 1985. An investigator for
Triad Engineering concluded that "we believe the distress cracking
and movement in the house have been caused by soil movements on the
uphill side of the house. We do not believe it is caused by
subsidence, but the possibility of subsidence causing the movement
will be investigated in a detailed study by the West Virginia DNR
in the future."
State Farm denied the appellant's claim on July 15, 1985,
but the reason given at that time was not prior mine subsidence.
Instead, the appellant was informed that the "earth movement"
damage to his home was not covered under his homeowner's policy.See footnote 4
State Farm also told the appellant that the Abandoned Mine Lands
Program would perform a detailed investigation of his house within
the next two to three years: "When that report is completed, we
will review its findings at that time. If that report does
indicate that your damages are caused by mine subsidence, we will
reconsider this matter."
Several years later, the appellant submitted additional
evidence and requested that his claim be reconsidered. In a letter
to the appellant dated March 23, 1987, State Farm Claim
Superintendent Joseph L. Rheney again mentioned "earth movement" as
a possible reason why State Farm might deny coverage for a loss:
. . . In any question of coverage relating to the mine subsidence portion of the policy, the State Board of Insurance [Board of Risk] has the authority for resolution of such question and not State Farm itself.
It is further not uncommon for the damage
stated in the loss report completed by you to
be as a result of some type of earth movement
other than mine subsidence. This type of
damage is excluded under your policy. If the
investigation of your claim should determine
that the damage to your residence was caused
by perils such as earth movement as described
in your policy, State Farm reserves its right
to deny coverage to you for such loss.
In a March 31, 1987, letter, Board of Risk Claims Manager
James L. Boone informed State Farm Claim Superintendent Rheney that
"[a] review of the [appellant's] claim file reveals it was
established, this insured does not qualify for Coal Mine Subsidence
Insurance Coverage, because he had subsidence prior to the
inception of the policy. Our position has not changed, and you
should so advise Mr. Higginbotham."
Although the insurer has no recourse in this situation
and is bound by the Board of Risk's determination, State Farm
apparently felt that any subsidence damage that occurred after the
insurance coverage was purchased should be covered.See footnote 5 Nonetheless,
State Farm had to deny coverage and offered the appellant the
following explanation in a May 19, 1987, letter from Claim
As per your request, we reopened your mine subsidence claim and resubmitted it to the State Board of Risk and Insurance Management. As you will recall, as per the regulations governing the processing of mine subsidence claims, it is entirely up to the State Board to determine whether the mine subsidence coverage will apply to such claims. The State Board has responded to the request to reopen this claim and to determine whether mine subsidence coverage can be extended. The State Board has indicated that your loss does not qualify for Coal Mine Subsidence Insurance Coverage because the subsidence experienced at your dwelling occurred prior to the inception of your Mine Subsidence Endorsement. A copy of the State Board's letter is enclosed for your review.
The Board has consistently taken the position
that if mine subsidence has occurred prior to
the inception of the policy, then the Mine
Subsidence Insurance Coverage will not be
extended to cover the loss. The State Board
has indicated that they have based their
decision upon the determination that the mine
subsidence damage at your dwelling occurred in
1979 while the Mine Subsidence Coverage was
not in effect until August 1983.
Once again, the Company is bound by the
Board's decision. Therefore, we regretfully
inform you that your claim for mine subsidence
damage is denied.
Whenever the State Board determines that
denial of a mine subsidence claim is in order
because the subsidence damage preceded the
effective date of the endorsement, this
Company has taken the position that the
insured's premiums paid for the Mine
Subsidence Endorsement shall be returned.
Therefore, we are presently informing our
Underwriting and Accounting Departments of our
decision to return the premiums you have paid
for your Mine Subsidence Coverage.
The appellant appealed this decision to the Insurance
Commissioner and demanded a hearing on the matter pursuant to W.Va.
Code § 33-2-13,See footnote 6 and § 33-30-7 (1992), which addresses the "limited
right of insurers to refuse to provide subsidence coverage:"
An insurer may refuse to provide subsidence coverage (1) on a structure evidencing unrepaired subsidence damage, until necessary repairs are made; or (2) where the insurer has declined, nonrenewed or cancelled all coverage under a policy for underwriting reasons unrelated to mine subsidence: Provided, That an insurer shall refuse to provide subsidence coverage on a structure which evidences a loss or damage in progress.
Any dispute arising under this section
shall be subject to the hearing and appeal
provisions of article two [§ 33-2-1 et seq.]
of this chapter.
At a January 26, 1989, hearing before examiner Michael A.
Braun, the appellant presented evidence to dispute the Board of
Risk's finding that subsidence had occurred prior to the inception
of the insurance policy. For example, after the appellant first
noticed small cracks in their home in 1978, they complained to the
West Virginia Department of Mines and the United States Office of
Surface Mining. The State determined that the cracks were due to
construction defects, not mine subsidence, while the Office of
Surface Mining concluded, "There is unanimous agreement that the
problems with your home are not mine caused or related."
These investigations took place before the appellant
acquired the mine subsidence insurance coverage. However, after
the appellant obtained this insurance, the house began to move,
which prompted him to file the mine subsidence claim with State
Farm in 1985.
In 1987, a West Virginia Department of Energy
investigation was conducted through a contract with CTL Engineering
of West Virginia, Inc. The president of this firm, Patrick
Gallagher, inspected the appellant's house, the surrounding area,
and the mine map, and he performed a subsurface investigation by
drilling. An expert on mine subsidence, Gallagher testified at the
January 26, 1989, hearing that he saw old "construction type
cracks" as well as "very fresh" and "active" cracks in the house.
He stated that the fresh cracks were typical of subsidence damage,
that "the house was undergoing a tremendous amount of tension," and
damage to the house was severe. Gallagher also expressed his basic
agreement with the opinions in the 1978-79 reports from the
Department of Energy and Office of Surface Mining that the damage
witnessed at that time was not related to mine subsidence but to
some type of construction defect.
Board of Risk Claims Manager James Lee Boone also
testified at the January 26, 1989, hearing. He indicated that it
was the Board's policy to deny insurance coverage when the Board
determines that subsidence occurred prior to the inception of the
insurance policy. Boone wrote the March 31, 1987, letter to State
Farm in which he advised that "this insured does not qualify for
Coal Mine Subsidence Insurance Coverage . . . ." Boone was cross-examined on this point at the hearing and asked how it could be
that the appellant did not qualify for coverage when, in fact, he
was already covered. Boone replied, "They were covered. What the
letter intended was that they did not qualify to be paid a claim
under the policy."
Upon completion of the hearing, the hearing examiner sua
sponte recommended that the Insurance Commissioner dismiss the
appellant's claim for lack of subject matter jurisdiction. In an
order entered May 15, 1989, the examiner opined that:
[I]t would be inappropriate for the Insurance Commissioner to attempt to review decision of the Board based in part on rules and regulations adopted by the Board and not the Insurance Commissioner. A party aggrieved by what he perceives is a wrong decision by a state board or agency exercising its quasi judicial powers cannot appeal to another state agency, board or commission.
The Insurance Commissioner entered an order affirming the hearing
examiner's recommendation on May 18, 1989, and the appellant
appealed to the Circuit Court of Kanawha County.
In a final order entered on April 21, 1992, the Circuit
Court of Kanawha County affirmed the Insurance Commissioner's
decision. The lower court explained that the jurisdiction granted
to the Insurance Commissioner by W.Va. Code § 33-30-7 is limited to
disputes in which an insurer has refused to provide mine subsidence
insurance coverage. The court found that this was not such a
situation because "State Farm issued the [appellant] mine
subsidence coverage and the [appellant] does not dispute this fact.
Therefore, the petitioner has admitted that this is not a dispute
involving the refusal of State Farm to provide mine subsidence
coverage but whether or not a claim should or should not be honored
under such coverage."
The circuit court concluded that once State Farm provided
coverage, "the jurisdiction of the Insurance Commissioner ended.
Therefore, the [appellant's] proper remedy as to the denial of his
claim by the Board of Risk was to appeal to either the Kanawha
County or the Marion County Circuit Court . . . ."
However, on appeal, the appellant maintains it was error
for the Insurance Commissioner to refuse to resolve the mine
subsidence coverage dispute after State Farm retroactively
cancelled his mine subsidence coverage and tendered a premium
refund. The appellant now argues that ultimately, State Farm's
actions constitute a refusal to provide insurance coverage, which
brings this dispute squarely within the Insurance Commissioner's
jurisdiction under W.Va. Code § 33-30-7.
In his brief, the appellant points out that W.Va. Code
§ 33-30-7 "plainly and explicitly provides that disputes arising
upon an insurer's refusal to provide subsidence coverage are
subject to hearing before the Insurance Commissioner." Therefore,
we must determine whether the appellant was effectively denied
coverage within the meaning contemplated by W.Va. Code § 33-30-7,
or whether this was simply a matter of the appellant's claim being
rejected, in this particular instance, pursuant to the authority
vested in the Board of Risk to settle and adjust claims.
As we noted above, the statutory scheme which regulates
mine subsidence insurance in this State gives the Insurance
Commissioner authority to conduct hearings when an insurer refuses
to provide coverage for one of the reasons set forth in W.Va. Code
§ 33-30-7: "Any dispute arising under this section shall be
subject to the hearing and appeal provisions of Article two [§ 32-2-1 et seq.] of this chapter." By contrast, the Board of Risk's
jurisdiction extends to settlement questions and the adjustment of
claims. Pursuant to regulations promulgated by the Board of Risk,
claims are administered in the following manner:
4.1 Administration of claims. All mine subsidence claims shall be reported to the Board for assignment to qualified independent adjusting firms in accordance with claim procedures as outlined on Appendix D. The selected adjusting firm will send all reports simultaneously to the insurer and the Board with all settlement authority, coverage questions and related matters being resolved by the Board. The Board will reimburse the insurer for all sums expended in accordance with the provisions of the reinsurance agreement.
115 W.V.C.S.R. 1-4.1.
This regulation makes it clear that the insurer acts
merely as an agent of the State and is bound by the Board's
decisions, because "all settlement authority, coverage questions
and related matters" are to be resolved by the Board. What is not
at all clear, however, is what recourse an insured has if aggrieved
by a Board of Risk decision.
The lack of clarity on this point can probably be
attributed, at least in part, to the fact that the parties
repeatedly refer to the Board of Risk's mine subsidence arrangement
with insurers as "reinsurance," even though this is not a
traditional reinsurance agreement. For this reason, we feel it is
necessary for the Board of Risk to set forth in its regulations
some procedural guidelines applicable to this variation on the
Reinsurance is defined as "insurance purchased by one
underwriter from another, the latter wholly or partially
indemnifying the former against the risks that it has assumed. The
rights as between the underwriters are governed by the terms of thereinsurance contract." Allan D. Windt, Insurance Claims and
Disputes § 7.10 (2d ed. 1998).
An example of why there is confusion on this issue is
evident when one tries to determine exactly what rights, if any, an
insured has against the Board of Risk. Where a typical reinsurance
contract is involved, "there is no privity . . . between the
original insured and the reinsurer; as a result, it is generally
recognized that the original insured cannot recover directly from
the reinsurer." Id.
Nonetheless, in this case, the Board of Risk argues, and
the court below also stated, that, finding himself aggrieved by the
Board's decision and State Farm's subsequent retroactive
cancellation of his mine subsidence coverage, the appellant should
have appealed to circuit court, pursuant to W.Va. Code § 29A-5-4,
instead of demanding the hearing before the Insurance Commissioner.
However, this type of judicial review of the Board's decision would
seem to suggest that the appellant should have at least an
administrative hearing below at which an evidentiary record can be
Unfortunately, the administrative framework promulgated
by the Board of Risk lacks any specific procedures which give
insureds the opportunity to be heard or otherwise present evidence
relevant to their claims. In this case, we can only assume the
appellant had some open line of communication with the Board of
Risk through his insurer, State Farm, and thus, that the Board was
made aware of the evidence the appellant had which supported his
position that his home had not sustained subsidence damage prior to
the inception of his policy. Although the record indicates that
the appellant submitted additional evidence to support a request
for reconsideration of his claim, exactly how this was done is not
at all clear. Given that the appellant stood to lose insurance
coverage that he believed he was entitled to for over two years, we
find a certain element of unfairness in the process by which the
Board decided that even though he had paid premiums and received a
mine subsidence coverage endorsement, he was, in fact, not
qualified to receive such coverage.
Fundamental principles of due process require that the
Board of Risk set forth procedures whereby insureds may present
evidence and establish a record upon which the Board can base any
decision regarding a claim. "This Court in the past has required
the application of due process standards in proceedings where
governmental bodies have deprived a person of a property right."
North v. West Virginia Board of Regents, 160 W.Va. 248, 233 S.E.2d
411, 416 (1977). While this Court "has generally been content to
approach the question of due process on a case by case basis . . .
certain fundamental principles in regard to procedural due process
can be stated." Id. at 416-17.
First, the more valuable the right sought to be deprived, the more safeguards will be interposed. Second, due process must generally be given before the deprivation occurs unless a compelling public policy dictates otherwise. Third, a temporary deprivation of rights may not require as large a measure of procedural due process protection as a permanent deprivation.
Id. at syl. pt. 2, in part.
Because of the way in which the supposed "rejection" of
his initial claim was handled, and because he continued to pay
premiums, the appellant herein continued to believe for over two
years that he actually had mine subsidence insurance coverage. The
inherent unfairness of this type of situation for an insured whose
coverage is eventually cancelled is obvious and thus we believe
some procedural safeguards are necessary. Since it is the Board of
Risk, not the insurer, that ultimately decides the fate of an
insured's mine subsidence claim, or, as in this case, tells the
insurer that insurance never should have been provided, procedures
should be implemented to afford an insured the opportunity to
present the Board with any evidence he may have in support of his
Having briefly noted our problems with the lack of
procedural specificity in the Board's regulations, we turn now to
address the primary issue before the Court, which is whether the
Insurance Commissioner had jurisdiction to hear the appellant's
appeal after his mine subsidence insurance coverage was cancelled.
There is no question but that this case presents a unique set of
facts. The appellant's initial claim was rejected by the Board of
Risk. Then, acting in its capacity as the Board of Risk's agent
and pursuant to the Board's directive, State Farm informed the
appellant of this decision. Nonetheless, the appellant continued
to pay premiums to State Farm and believe that he had mine
subsidence insurance. However, when the appellant requested a
reconsideration of his claim over two years later, State Farm not
only denied coverage once again, but also cancelled the appellant's
mine subsidence coverage and tendered a refund of his premiums.
As we noted above, a provision in the Coal Mine
Subsidence Coverage part of the appellant's policy states that
"[t]he coverage afforded by this coverage part may not be cancelled
by the company unless the entire policy is cancelled." This point
is not raised by either party, so we have no explanation for why
this apparently did not occur in this case. Perhaps State Farm did
not consider its refund of the appellant's premiums to constitute
a cancellation of his mine subsidence coverage. We know of no
other way to describe it. In the final analysis, however, this
does not alter our conclusion: not only did the Board of Risk
exercise its authority to adjust a claim -- and, in this case,
reject it -- pursuant to W.V.C.S.R. 1-4.1, but, acting in
accordance with the Board's determination, the insurer, State Farm,
retroactively denied the appellant any mine subsidence coverage at
all for one of the limited reasons set forth in W.Va. Code § 33-30-7.
The language contained in the two Board of Risk letters to State Farm leave no doubt that the Board never intended for the appellant to receive mine subsidence insurance coverage. However, because the statutory directive in W.Va. Code § 33-30-6 required that coverage be provided automatically unless waived, State Farm did not get an opportunity to tell the appellant, in effect, "We won't ever provide coverage for this house because you have pre-existing subsidence damage," until after he filed his first claim under the policy on June 11, 1984. Even then, State Farm did not tell the appellant that a claim on this house would never be covered because of the prior damage.
Nonetheless, the first March 18, 1985, letter from the
Board of Risk to State Farm which addressed the appellant's
situation stated succinctly that "no reinsurance is available for
homes where there is ongoing mine subsidence," and that because
damage to the appellant's home "began many years ago," his file
would be closed. State Farm was instructed to "proceed as your
corporate policy dictates."
However, State Farm apparently took no action beyond
denying the appellant's initial claim. So, while the appellant
continued to pay his premiums, he also continued to believe that he
had mine subsidence insurance coverage. Finally, however, after he
requested a reconsideration of the denial of his claim, the Board
of Risk again reiterated its position to State Farm, stating in a
March 31, 1987, letter, that "[a] review of the [appellant's] claim
file reveals it was established, this insured does not qualify for
Coal Mine Subsidence Insurance Coverage . . . ."
State Farm finally related this information to the
appellant in a May 19, 1987, letter. However, this time State Farm
also explained that in these situations, "this Company has taken
the position that the insured's premiums paid for the Mine
Subsidence Endorsement shall be returned."
It is now obvious that the appellant no longer has mine
subsidence insurance coverage at all. Consequently, the appellant
requests that this Court remand this case to the Insurance
Commissioner for a decision on the coverage issue, i.e., whether
the appellant is entitled to mine subsidence insurance, or whether
the insurance company is within its limited right to refuse
coverage as provided in W.Va. Code § 33-30-7. The appellant argues
that if he receives a favorable decision from the Insurance
Commissioner, the Board of Risk must then adjust his claim.
We agree with the argument advanced by the appellant on
this issue. The effect of State Farm's cancellation of the
appellant's mine subsidence coverage and its refund of his premiums
is the same, retroactively, as if the appellant had never been
offered the insurance coverage at all. When the Board of Risk
determined that "this insured does not qualify for Coal Mine
Subsidence Insurance Coverage," it was instructing the insurance
company, acting as its agent, to refuse to provide the appellant
with this type of coverage because of subsidence damage his house
had allegedly sustained prior to the effective date of the policy.
West Virginia Code § 33-30-7 states that the "insurer may refuse to
provide subsidence coverage (1) on a structure evidencing
unrepaired subsidence damage, until necessary repairs are made . .
. ," but also explains that "an insurer shall refuse to provide
subsidence coverage on a structure which evidences a loss or damage
in progress." (Emphasis added.)
We realize, of course, that initially State Farm did not
refuse the appellant mine subsidence coverage. Technically, State
Farm did issue the appellant a policy. However, any guarantee of
actual coverage was an illusion facilitated by the mandate in W.Va.
Code § 33-30-6, which provided that subsidence coverage would
automatically be added to policies unless waived. After the
appellant filed his first claim under this policy in which he
alleged mine subsidence damage, the Board clearly told the
insurance company that the appellant did not qualify for mine
subsidence coverage. However, it was not until two years later
that his coverage was cancelled and his premiums refunded. Because
State Farm's reason for ultimately refusing to provide the
appellant with any coverage at all is one of the reasons set forth
in W.Va. Code § 33-30-7, we find that the Insurance Commissioner
does indeed have jurisdiction over this dispute. West Virginia
Code § 33-30-7 states that, "[a]ny dispute arising under this
section shall be subject to the hearing and appeal provisions of
article two [§ 33-2-1 et seq.] of this chapter," which relates to
the Insurance Commissioner.
Contrary to the appellee's assertions, this is not a
review by one agency (the Insurance Commissioner) of the actions of
another (the Board of Risk). Rather than reviewing the Board of
Risk's rejection of the appellant's initial claim, the Insurance
Commissioner is now instructed to review the subsequent retroactive
cancellation of the appellant's mine subsidence coverage. We
realize that this cancellation occurred as a result of the Board of
Risk's directive to the insurer that the appellant did not qualify
for such coverage. However, W.Va. Code § 33-30-7 gives the
Insurance Commissioner jurisdiction to review coverage questions in
several limited instances where coverage has been denied, as was
done retroactively in this case.
To summarize, we conclude that even where mine subsidence
coverage has initially been extended to a policyholder pursuant to
statutory directive, the retroactive cancellation of an insured's
coverage for one of the reasons set forth in W.Va. Code § 33-30-7
may be interpreted as a refusal to provide mine subsidence
coverage. Such refusal to provide coverage is subject to review by
the Insurance Commissioner, who has jurisdiction under the hearing
and appeal provisions of W.Va. Code § 33-2-1 et seq., as noted in
W.Va. Code § 33-30-7.
For the reasons set forth above, we reverse the April 22,
1992, ruling of the Circuit Court of Kanawha County and remand this
case to the Insurance Commissioner for proceedings consistent with
Footnote: 1The Board of Risk is created in W.Va. Code § 29-12-3. Its organization, powers, and duties are explained in W.Va. Code § 29-12-4 and 5.
Footnote: 2West Virginia Code § 33-30-6 (1992) states, in part, that beginning October 1, 1982, "every insurance policy issued or renewed insuring on a direct basis a structure located in this state shall include, at a separately stated premium, insurance for loss occurring on or after [October 1, 1982], caused by mine subsidence unless caused by mine subsidence unless waived by the insured . . . ."
Footnote: 3At a hearing on January 26, 1989, State Farm insurance agent Joe Woodward explained that after the legislation was passed in 1982, "[t]he company automatically gave [mine subsidence] coverage from that point to the policyholder. [State Farm] didn't add the [mine subsidence] coverage in writing until their next due date, which was August 16, 1983. At that time, then, they sent the new Declaration Page, showing the mine subsidence coverage and, also, the charge for it. The customer had the opportunity to refuse the mine subsidence by signing a form, saying, "I don't want it."
Footnote: 4The coal mine subsidence coverage part of the appellant's policy states that "[t]he insurance afforded by this coverage part does not insure against loss caused by (1) Earthquake, landslide, volcanic eruption, collapse of storm and sewer drains and rapid transit tunnels or earth movement other than underground coal mine subsidence; . . . . (Emphasis added.)
Footnote: 5In a letter dated February 26, 1985, State Farm Claim Superintendent Joseph Rheney told Mr. T. K. Snyder of the Board of Risk that ". . . it is State Farm's position that we would owe the policy holder for the damage which occurred since his purchase of the Mine Subsidence Endorsement. Consequently, we ask that the State Board advise us as to how much that damage is so that we may make a proper payment."
Footnote: 6West Virginia Code § 33-2-13 (1992) states, in part, that "[t]he [insurance] commissioner may call and hold hearings for any purpose deemed necessary by him for the performance of his duties."