New insurance law allows premium collection before policy period ends


INDIANAPOLIS – Ohio Gov. Bob Taft recently signed legislation with provisions benefiting farm mutual insurance companies and their policyholders, according to the National Association of Mutual Insurance Companies.
The bill. House Bill 442, introduced by State Rep. Matthew J. Dolan, addresses multiple insurance-related issues including regulation of mutual protective associations.
Approved by the Ohio General Assembly on May 25, it was signed by 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 … insurance … in Ohio’s … rural communities …,” said Joe Thesing.
Thesing is NAMIC’s State Affairs Manager for the North Central Region.
The law. Current law allows mutual protective associations to write first party property coverages for non-commercial risks.
The property coverages include: dwellings, farm structures and household and farm personal property, however coverages are 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.
The change. Enactment of the new legislation allows associations to provide customers with property and liability coverages more in-line with the rest of the industry.
The legislation also allows mutual protective associations to collect premiums for coverage in anticipation of assessment.
Current law dictates the collection of premiums at the end of the policy period.
This change will allow companies to have a more consistent flow of premiums and will allow them to satisfy bank, lending and mortgage company needs for a current declarations page.
The bill becomes effective 90 days from the date of signature.


Up-to-date agriculture news in your inbox!