HB 589 — An Act establishing the Landslide and Sinkhole Insurance Program and the Landslide and Sinkhole Insurance Fund; establishing and providing for the powers and duties of the Landslide and Sinkhole Insurance Board; providing for duties of the Auditor General; imposing a penalty; and making transfers.

PRINTER'S NO.    1069

                    THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        HOUSE BILL
                        No. 589
                                              Session of
                                                2025

     INTRODUCED BY KINKEAD, GAYDOS, SANCHEZ, KHAN, BENHAM, VENKAT,
        BRENNAN, KUZMA, CEPEDA-FREYTIZ, MALAGARI, FREEMAN, HILL-
        EVANS, FLEMING, OTTEN, DEASY, STEELE, GREEN, KENYATTA,
        GUENST, SCHWEYER, PASHINSKI, INGLIS, MATZIE, ABNEY,
        SALISBURY, POWELL, KULIK, MAYES, D. MILLER, MARKOSEK AND
        McANDREW, MARCH 20, 2025

     REFERRED TO COMMITTEE ON ENVIRONMENTAL AND NATURAL RESOURCE
        PROTECTION, MARCH 20, 2025


                                     AN ACT
 1   Establishing the Landslide and Sinkhole Insurance Program and
 2      the Landslide and Sinkhole Insurance Fund; establishing and
 3      providing for the powers and duties of the Landslide and
 4      Sinkhole Insurance Board; providing for duties of the Auditor
 5      General; imposing a penalty; and making transfers.
 6                            TABLE OF CONTENTS
 7   Chapter 1.   Preliminary Provisions
 8   Section 101.   Declarations.
 9   Section 102.   Definitions.
10   Chapter 3.   Landslide and Sinkhole Insurance Program
11   Section 301.   Program goals.
12   Section 302.   Landslide and Sinkhole Insurance Program.
13   Section 303.   Board authority.
14   Section 304.   Land-use controls.
15   Section 305.   Landslide and Sinkhole Insurance Board.
16   Chapter 5.   Landslide and Sinkhole Insurance Fund
17   Section 501.   Landslide and Sinkhole Insurance Fund.
 1   Section 502.   Expenses.
 2   Section 503.   State Treasurer custodian of insurance fund.
 3   Section 504.   Schedule of premiums.
 4   Section 505.   Surplus.
 5   Section 506.   Investment of surplus.
 6   Section 507.   Disbursements from insurance fund.
 7   Section 508.   Application for insurance, terms of insurance and
 8                penalty for false statement.
 9   Section 509.   Application for increase in insurance.
10   Section 510.   Automatic inflation protection increase.
11   Section 511.   Insurance for structures under construction.
12   Section 512.   Claims.
13   Section 513.   Audit by Auditor General.
14   Section 514.   Claims against insurance fund.
15   Section 515.   Defenses against claims, suits, procedure and
16                investigations of claims.
17   Section 516.   Subrogation to rights of claimants.
18   Section 517.   Insurance companies may cover this type of risk.
19   Chapter 7.   Administration and Funding
20   Section 701.   Rules and regulations.
21   Section 702.   Escrow of premium payments.
22   Section 703.   Properties in violation of State or local law.
23   Section 704.   Board report.
24   Section 705.   Appropriation.
25   Section 706.   Appeals.
26   Section 707.   Cost of administration.
27   Chapter 9.   Miscellaneous Provisions
28   Section 901.   Effective date.
29      The General Assembly of the Commonwealth of Pennsylvania
30   hereby enacts as follows:

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 1                                   CHAPTER 1
 2                           PRELIMINARY PROVISIONS
 3   Section 101.    Declarations.
 4      The General Assembly finds and declares as follows:
 5          (1)     Geologists have studied with increasing concern the
 6      underground movement of the geological formations in this
 7      Commonwealth and its impeding effects on vertical and
 8      horizontal natural and manmade surfaces.
 9          (2)     Landslides and sinkholes have historically been the
10      norm throughout most parts of this Commonwealth.
11          (3)     Landslides and sinkholes occur without regard for
12      municipal boundaries, ordinances, planning codes, politics
13      and economies, making it difficult for local officials to
14      deal effectively with the development and implementation of
15      methods and standards to control the devastation that these
16      natural forces can cause.
17          (4)     Landslides and sinkholes have caused an enormous
18      amount of damage to homes and roadways in this Commonwealth,
19      particularly the southwestern region of the State.
20          (5)     Landslides and sinkholes will continue to plague
21      southwestern Pennsylvania.
22          (6)     Landslides and sinkholes affect every state in the
23      nation, causing an estimated $2,000,000,000 to $4,000,000,000
24      in damages per year.
25          (7)     Landslide and sinkhole damage caused by flooding is
26      not covered by the National Flood Insurance Program.
27          (8)     Problems associated with landslide and sinkhole
28      damage are becoming more widespread.
29   Section 102.    Definitions.
30      The following words and phrases when used in this act shall

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 1   have the meanings given to them in this section unless the
 2   context clearly indicates otherwise:
 3      "Board."       The Landslide and Sinkhole Insurance Board
 4   established under section 305.
 5      "Community."       A political subdivision that has zoning and
 6   building code jurisdiction over an area having landslide and
 7   sinkhole features.
 8      "Department."       The Department of Community and Economic
 9   Development of the Commonwealth.
10      "GIS."       Geographic information systems.
11      "Insurance fund."       The Landslide and Sinkhole Insurance Fund
12   established under section 501.
13      "Landslide."       A detached mass of soil, rock, earth or debris
14   that moves down a slope and is of sufficient size to cause
15   damage.
16      "Landslide features."       The term includes rockfall areas,
17   creep, red beds and historic landslides.
18      "Program."       The Landslide and Sinkhole Insurance Program
19   established under section 302.
20      "Sinkhole."       A closed topographic depression or basin,
21   generally draining underground, including a doline, uvala, blind
22   valley or sink.
23                                   CHAPTER 3
24                    LANDSLIDE AND SINKHOLE INSURANCE PROGRAM
25   Section 301.      Program goals.
26      The goals of the program shall be to:
27             (1)    Provide actuarially sound insurance coverage.
28             (2)    Make program policies universally available and
29      competitively priced.
30             (3)    Make use of the most effective scientific and

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 1      technological advances available, including, but not limited
 2      to, technology such as GIS.
 3            (4)   Process claims promptly, fairly and consistently.
 4            (5)   Collaborate with other organizations that operate in
 5      the public interest to assist in achieving the program's
 6      goals.
 7   Section 302.    Landslide and Sinkhole Insurance Program.
 8      The Landslide and Sinkhole Insurance Program is established
 9   within the department. The program shall be administered by the
10   board. The department shall provide administrative services and
11   staff to the board for the purposes specified under this act.
12   The board shall reimburse the department for the cost incurred
13   for providing the administrative services and staff, including
14   legal counsel. The board shall enter into an agreement with the
15   department specifying the rights and obligations that the board
16   and department have in administering their duties required under
17   this act.
18   Section 303.    Board authority.
19      (a)   Intergovernmental cooperation.--The board shall:
20            (1)   Work closely with Federal, State and local agencies
21      and any other government agencies, including those of other
22      states, to accomplish program goals.
23            (2)   Collaborate with the Department of Conservation and
24      Natural Resources, Department of Transportation, educational
25      institutions and Federal agencies to complete a survey of
26      this Commonwealth to define landslide and sinkhole features
27      and identify areas of this Commonwealth most at risk of
28      landslides and sinkholes and develop a Statewide map of
29      landslide and sinkhole risk.
30            (3)   Develop best management practices, including

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 1    recommendations for local governments to mitigate slope
 2    instability and landslide and sinkhole risk.
 3          (4)   Develop and maintain a community rating system based
 4    on landslide and sinkhole risk.
 5          (5)   Develop and maintain a publicly accessible Internet
 6    website that includes all of the following:
 7                (i)    Share the most up-to-date geological surveys in
 8          the form of maps, GIS data or other useful forms and
 9          related information free of charge to government agencies
10          and appropriate representatives of communities and at a
11          reasonable cost to all other persons.
12                (ii)    Landslide and sinkhole insurance map panels.
13                (iii)    A Statewide map of landslide and sinkhole risk
14          and a community rating system.
15          (6)   Inform the Department of Transportation of which
16    highways are at greatest risk from landslides and sinkholes.
17          (7)   Notify local governments in areas with the greatest
18    risk from landslides and sinkholes.
19          (8)   Have the authority to consult, receive information
20    and enter into any agreements or other arrangements in order
21    to identify and publish information with respect to all
22    duties under this act.
23    (b)   Studies and investigations.--
24          (1)   The board is authorized to carry out necessary
25    studies and investigations, utilizing to the maximum extent
26    practicable the existing facilities and services of other
27    Federal and State departments or agencies, local government
28    agencies and any other organizations to implement the board's
29    duties under this act.
30          (2)   The board may enter into any contracts, agreements

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 1      or other appropriate arrangements to carry out its authority
 2      under this subsection. Studies and investigations under
 3      paragraph (1) shall include analysis of the following:
 4                  (i)    Laws.
 5                  (ii)    Regulations.
 6                  (iii)    Ordinances.
 7                  (iv)    Zoning.
 8                  (v)    Building codes.
 9                  (vi)    Building permits.
10                  (vii)    Subdivision or other building restrictions.
11      (c)   State and local measures.--On the basis of studies and
12   investigations under subsection (b), the board shall develop
13   comprehensive criteria designed to encourage, where necessary,
14   the adoption of adequate State and local measures which, to the
15   maximum extent feasible, will:
16            (1)   Constrict the development of land that is exposed to
17      landslide and sinkhole damage, where appropriate.
18            (2)   Guide the development of proposed construction away
19      from locations that are threatened by landslide and sinkhole
20      features.
21            (3)   Assist in reducing damage caused by landslides and
22      sinkholes.
23            (4)   Otherwise improve the long-term land management and
24      use of landslide-prone and sinkhole-prone areas.
25      (d)   Technical assistance.--The board shall work closely with
26   and provide technical assistance to State and local government
27   agencies to encourage the application of the criteria and the
28   adoption and enforcement of the measures under this section.
29   Section 304.     Land-use controls.
30      A local government may adopt land-use controls for the

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 1   benefit of the local government's residents. The following shall
 2   apply:
 3            (1)   No new landslide and sinkhole insurance coverage
 4      shall be provided to new construction without proof of
 5      compliance with local prevention measures adopted by an
 6      appropriate local public body.
 7            (2)   A community rating system shall be employed by the
 8      board as an incentive for community landslide and sinkhole
 9      management. The rating system shall consider where landslide
10      and sinkhole damage is more likely to occur and give higher
11      ratings to those communities that have lower risk of damage
12      either due to low risk of the damage occurring due to the
13      natural characteristics of the community or due to steps
14      taken by the community to prevent the damage. This rating
15      system shall be reflected by the rates assigned to
16      communities.
17   Section 305.    Landslide and Sinkhole Insurance Board.
18      (a)     Establishment.--The Landslide and Sinkhole Insurance
19   Board is established. The board shall include the following
20   members:
21            (1)   The Director of the Pennsylvania Emergency
22      Management Agency or a designee.
23            (2)   The Secretary of Community and Economic Development
24      or a designee who shall serve as chair of the board.
25            (3)   The Secretary of Conservation and Natural Resources
26      or a designee.
27            (4)   The Insurance Commissioner or a designee.
28            (5)   The State Treasurer or a designee.
29            (6)   The Secretary of Transportation or a designee.
30      (b)     Insurance Program.--

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 1             (1)   The board shall develop and administer the program,
 2      including assessing a premium for participating in the
 3      program.
 4             (2)   Payments for premiums assessed under paragraph (1)
 5      shall be deposited into the insurance fund.
 6             (3)   Money deposited into the insurance fund under
 7      paragraph (2) shall only be used for the program.
 8      (c)    Duties of board.--The board shall have the following
 9   duties:
10             (1)   Bring civil actions in courts of competent
11      jurisdiction as the board deems necessary and defend the
12      board against civil claims brought against the board.
13             (2)   Establish bylaws for the management and regulation
14      of the board's internal affairs.
15             (3)   Engage and contract with attorneys, accountants and
16      financial experts and any other advisors, consultants and
17      agents as the board deems necessary and fix their
18      compensation.
19             (4)   Engage in any other act as the board deems necessary
20      to implement the board's duties under this act.
21                                  CHAPTER 5
22                    LANDSLIDE AND SINKHOLE INSURANCE FUND
23   Section 501.     Landslide and Sinkhole Insurance Fund.
24      (a)    Establishment.--The Landslide and Sinkhole Insurance
25   Fund is established as a restricted fund in the State Treasury.
26      (b)    Purpose.--The insurance fund shall be used to insure
27   against damages resulting from landslide and sinkhole damage.
28      (c)    Claim or liability.--A claim against or a liability of
29   the insurance fund shall not be deemed to constitute a debt or
30   liability of the Commonwealth or a charge against the General

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 1   Fund.
 2   Section 502.    Expenses.
 3      The expenses of the administration of the insurance fund
 4   shall be paid out entirely from the insurance fund.
 5   Section 503.    State Treasurer custodian of insurance fund.
 6      The State Treasurer shall be the custodian of the insurance
 7   fund and all disbursements from the insurance fund shall be paid
 8   by the State Treasurer upon request by the board. The following
 9   shall apply:
10            (1)   The State Treasurer shall not be required to audit
11      accounts from which the board requests payments.
12            (2)   The State Treasurer shall not be liable for any
13      payment made under this act.
14   Section 504.    Schedule of premiums.
15      (a)   Publication.--At any time during each year, the board
16   shall prepare and publish on the board's publicly accessible
17   Internet website a schedule of premiums or rates of insurance
18   for subscribers for the program according to the following:
19            (1)   The schedules shall be printed and distributed free
20      of charge to individuals who request a schedule.
21            (2)   A subscriber may pay to the State Treasurer the
22      amount of premium appropriate and, upon payment, shall be
23      insured in accordance with this act for the year for which
24      the premium is paid.
25            (3)   The insurance acquired under paragraph (2) shall
26      cover all payments becoming due for which the premium is
27      paid.
28      (b)   Amount of premium.--The premium for the program is fixed
29   and shall be adequate to enable payment of all sums that may
30   become due and payable under the provisions of this act, and

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 1   adequate reserve sufficient to carry all policies and claims to
 2   maturity.
 3      (c)   Fixing premiums.--In fixing a premium payable by a
 4   subscriber, the board may:
 5            (1)   take into account the condition of the premises of
 6      the subscriber as shown by the report of any inspector
 7      appointed by the board;
 8            (2)   annually assess the amount of the premium charged
 9      and the needs of maintaining the insurance fund under this
10      act. In addition, the board may change the amount of premiums
11      payable by any subscriber as the condition of the premises of
12      the subscriber may justify; and
13            (3)   increase the premiums of any subscriber whose loss
14      experience warrants the change.
15      (d)   Effective date of insurance.--The insurance of any
16   subscriber shall not be effective until the subscriber has paid
17   in full the premium fixed and determined under this section.
18      (e)   Credits.--Rate structures shall provide incentives for
19   measures that reduce the risk of landslide and sinkhole damage
20   and evaluate the measures. The program shall provide incentives
21   in the form of credits on premium rates for landslide and
22   sinkhole insurance coverage in communities that the board
23   determines have adopted and enforced measures that reduce the
24   risk of landslide and sinkhole damage. A credit on premium rates
25   for landslide and sinkhole insurance coverage shall be based on
26   the estimated reduction in damage risks resulting from the
27   measures adopted by a community under the program.
28   Section 505.    Surplus.
29      (a)   Set aside percentage.--The board shall set aside 5% of
30   all premiums collected under this act until the board determines

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 1   that the surplus is large enough to cover the catastrophe hazard
 2   of all the subscribers to the insurance fund and to guarantee
 3   the solvency of the insurance fund.
 4      (b)   Reevaluation.--If the board determines that the surplus
 5   is large enough under subsection (a), the board shall reevaluate
 6   the set aside under subsection (a) and investment of the surplus
 7   and, if approved by a two-thirds majority of the board, adjust
 8   the percentage of premiums to set aside.
 9   Section 506.    Investment of surplus.
10      (a)   Duty of board.--The board shall direct the investment of
11   the insurance fund as authorized by the investment policy
12   approved by the board.
13      (b)   State Treasurer custodian.--The State Treasurer shall be
14   custodian of the insurance fund and the following shall apply:
15            (1)   The State Treasurer shall have full and exclusive
16      power to invest moneys of the insurance fund, as may be
17      directed by the board, with that degree of judgment, skill
18      and care under the circumstances then prevailing which
19      persons of prudence, discretion and intelligence, who are
20      familiar with such matters, exercise in the management of
21      their own affairs, not related to speculation, but to the
22      permanent disposition of the money, considering the probable
23      income to be derived and the probable safety of their
24      capital. Investments shall be made in accordance with a
25      written investment policy approved by the board. The
26      investment policy shall address liquidity, diversification,
27      safety of principal, yield, maturity and quality and the
28      capability of investment management with primary emphasis on
29      safety and liquidity.
30            (2)   The State Treasurer shall be responsible for

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 1      executing and overseeing all insurance fund investments and
 2      may hire investment advisers, asset managers, actuaries and
 3      other financial professional consultants or investment
 4      experts that, in the opinion of the State Treasurer, as
 5      necessary, to assist in the management of the insurance fund.
 6            (3)   The State Treasurer may pay for all investment and
 7      management expenses from the insurance fund.
 8            (4)   The State Treasurer shall provide an annual
 9      investment report to the board and make all reports available
10      online.
11   Section 507.    Disbursements from insurance fund.
12      (a)   Operation of insurance fund.--Money from the general
13   appropriation shall be available for the expense of
14   administering the insurance fund, including the purchase of
15   surety bonds, supplies, materials and motor vehicles, providing
16   for administrative expenses, workmen's insurance covering the
17   officers and employees of the board and any other expenses to
18   enable the operation of the insurance fund as deemed necessary
19   by the board.
20      (b)   Treasury Department.--Money from a general appropriation
21   shall also be available for payment to the Treasury Department
22   for the cost of making disbursements out of the insurance fund
23   on behalf of the insurance fund at amounts as the Treasury
24   Department, with the approval of the board, shall determine.
25      (c)   Accounting.--
26            (1)   The board shall keep an accurate account of the
27      money paid in premiums by subscribers and the disbursements
28      on account of damages to the subscribers' premises. The board
29      may engage the services of professionals to manage the
30      accounting under this subsection.

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 1            (2)   If at the expiration of any year there shall be a
 2      balance remaining after deducting the disbursements, the
 3      unearned premiums on undetermined risks and the percentage of
 4      premiums paid or payable to create or maintain the surplus as
 5      required under this section, and after setting aside an
 6      adequate reserve, the balance, as the board may determine to
 7      be safely distributable, may be allocated to the cost of
 8      administering the insurance fund or distributed among the
 9      subscribers in proportion to the premiums paid by them.
10            (3)   For the proportionate share of the subscribers who
11      remain subscribers to the insurance fund, the premiums
12      distributed to subscribers under paragraph (2) shall be
13      credited to the installment of premiums next due by the
14      subscribers. The proportionate share of the subscribers who
15      have ceased to be subscribers in the insurance fund shall be
16      refunded out of the insurance fund in the manner provided
17      under this chapter.
18   Section 508.     Application for insurance, terms of insurance and
19                  penalty for false statement.
20      (a)   Application for insurance.--
21            (1)   An owner of a structure who desires to become a
22      subscriber to the insurance fund for the purpose of insuring
23      the structure against damages from landslide and sinkhole
24      damage shall make a complete application, as prescribed by
25      the board, to the board or the board's agents.
26            (2)   Upon receiving an application under paragraph (1),
27      the board shall:
28                  (i)   Make an investigation as may be necessary if the
29            application complies with the rules and regulations of
30            the board.

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 1                  (ii)   Within 90 days after receiving the application,
 2            issue a certificate showing whether the board approved
 3            the application and the amount of premium payable by the
 4            applicant for the year for which the premium is sought.
 5            (3)   The amount of insurance coverage for which an
 6      applicant is approved under paragraph (2) shall not exceed
 7      the replacement cost of the insured structure or $150,000,
 8      whichever is less. The maximum dollar amount of coverage
 9      established under this paragraph shall be reviewed annually
10      by the board to determine whether the insurance fund has the
11      capacity to increase the amount of insurance available to
12      subscribers. The board may adjust the maximum dollar amount
13      of coverage under this paragraph based on available money and
14      need as determined by the annual review.
15            (4)   Policies issued under this chapter may be issued for
16      one year, for two years or for three years as the board may
17      establish.
18            (5)   Except as provided under subsection (b), no
19      insurance shall become effective until the premiums have been
20      paid. All premiums shall be payable to the State Treasurer,
21      who shall issue a receipt for payment. The receipt for
22      premium together with a certificate of the board shall be
23      evidence that the applicant has become a subscriber to the
24      insurance fund and is insured.
25      (b)   Failure to approve or deny application.--If the board
26   fails to make the necessary investigations or inspection and
27   fails to approve or deny an application as required under
28   subsection (a), the insurance requested by the applicant shall
29   be deemed granted. The insurance shall be effective from the
30   date of the application's submission under subsection (a). The

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 1   following shall apply to insurance coverage:
 2            (1)   The coverage shall be null and void if the applicant
 3      fails to remit the premium payment within 20 days from the
 4      day the bill for the premium was postmarked.
 5            (2)   The insurance may be subjected to later reductions,
 6      and premiums adjusted accordingly, if the board determines
 7      that the amount of insurance coverage requested is in excess
 8      of the current replacement cost of the structure or the
 9      maximum amount of coverage established by the insurance fund,
10      whichever is less.
11            (3)   The insurance shall be void if, upon inspection of
12      the structure, the board determines that:
13                  (i)    landslide and sinkhole damage occurred prior to
14            the request by the applicant for insurance;
15                  (ii)    the applicant, due to an unreasonable action or
16            inaction, is responsible for the failure of the board to
17            inspect the structure within 60 days of receipt of the
18            application in accordance with this section; or
19                  (iii)   landslide and sinkhole damage was the result
20            of a negligent act or omission by the applicant.
21      (c)   Offense.--Whoever shall knowingly furnish or make any
22   false certificate, application or statement as required under
23   this section shall be guilty of a summary offense and, upon
24   conviction, shall be sentenced to pay a fine not to exceed $300.
25   Section 509.     Application for increase in insurance.
26      (a)   Application process.--An application for an increase in
27   the amount of insurance, up to the allowable limits, may be made
28   at any time by the subscriber by submitting a written statement,
29   as determined by the board, to the board, except during a period
30   when a claim filed by the subscriber is open and pending

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 1   investigation.
 2      (b)   Approval of request.--
 3            (1)   Upon receipt of the subscriber's written statement
 4      under subsection (a), the board shall reinspect the structure
 5      within 60 days.
 6            (2)   If reinspection under paragraph (1) occurs within
 7      the 60-day period and the structure passes the reinspection,
 8      the new amount of insurance shall be approved and shall be
 9      effective from the date of the first premium payment after
10      reinspection.
11            (3)   If reinspection under paragraph (1) does not occur
12      within the 60-day period, the new amount of insurance shall
13      be deemed approved by the board and shall be effective from
14      the date the subscriber's application for additional
15      insurance was received by the board under subsection (a), but
16      the additional coverage shall be null and void if the
17      subscriber fails to remit the premium payment within 20 days
18      from the day the bill for additional premium is postmarked.
19      (c)   Reduction in additional insurance.--The additional
20   insurance approved under this section may be reduced, with
21   premiums adjusted accordingly, if the board determines that the
22   subscriber's total amount of insurance exceeds the current
23   replacement cost of the structure or the maximum amount of
24   coverage established by the insurance fund, whichever is less.
25      (d)   Voided additional insurance.--Additional insurance
26   approved under this section shall be void if, upon reinspection
27   of the structure, the board determines that:
28            (1)   landslide and sinkhole damage occurred prior to the
29      request of the subscriber for additional insurance;
30            (2)   the subscriber's unreasonable action or inaction is

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 1      responsible for the board's failure to reinspect the insured
 2      structure within 60 days of receipt of the application for
 3      additional insurance under subsection (a); or
 4          (3)     landslide and sinkhole damage was the result of a
 5      negligent act or omission by the subscriber.
 6   Section 510.    Automatic inflation protection increase.
 7      The board shall make available to all subscribers an annual
 8   inflation protection option on the anniversary date of each
 9   policy to uniformly increase subscribers' coverage. A subscriber
10   must elect this option within 30 days. The option shall not be
11   made available more than once annually. An inflation protection
12   increase shall not be subject to a reinspection of the
13   structure.
14   Section 511.    Insurance for structures under construction.
15      The board shall make available landslide and sinkhole
16   insurance to owners of structures under construction. The
17   insurance under this section shall have a term of no more than
18   18 months, or until the structure is 80% complete, whichever is
19   earlier.
20   Section 512.    Claims.
21      A claim for payment due to loss for an insured under the
22   program shall be on a form and in a manner established by the
23   board and made available on the department's publicly accessible
24   Internet website and by mail upon request. Claims shall be for
25   loss of use due to damage from landslide and payment for claims
26   shall be contingent upon inspection by the board.
27   Section 513.    Audit by Auditor General.
28      The following shall apply to an audit by Auditor General:
29          (1)     The Auditor General or a designee shall at least
30      once each year make a complete examination and audit of the

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 1      insurance fund, including all receipts and expenditures, cash
 2      on hand and securities and investments or property held
 3      representing cash or cash disbursements.
 4          (2)     The Auditor General is authorized to employ
 5      consultants, experts, accountants or investigators as
 6      necessary to carry out this section.
 7          (3)     The expense incurred in making an examination and
 8      audit under paragraph (1) shall be certified to the insurance
 9      fund by the Auditor General and shall be paid from the
10      general appropriation.
11          (4)     The first audit of the insurance fund may, in the
12      discretion of the Auditor General, extend back to the
13      establishment of the insurance fund or to any other period in
14      the insurance fund's existence.
15   Section 514.    Claims against insurance fund.
16      A subscriber to the insurance fund must file with the board a
17   true statement of the subscriber's claim for any landslide and
18   sinkhole damage and shall provide the board an opportunity to
19   investigate to determine whether the board must pay the claim.
20   Section 515.    Defenses against claims, suits, procedure and
21                investigations of claims.
22      In each case where a claim is made against the insurance
23   fund, the insurance fund shall be entitled to every defense
24   against the claim under the policy and shall be subrogated to
25   every right of the subscriber arising out of accidents against
26   any third persons. The insurance fund may, in the name of the
27   insurance fund, sue or be sued to enforce any right given
28   against or to any subscriber or other persons under this act.
29   Section 516.    Subrogation to rights of claimants.
30      Nothing in this act shall relieve any person, partnership or

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 1   corporation from any liability for damages sustained, and the
 2   insurance fund shall be subrogated to the rights of any property
 3   owners' insurance as provided under this chapter.
 4   Section 517.   Insurance companies may cover this type of risk.
 5      An insurance company may issue policies covering the type of
 6   risk covered under this act if the policy is approved by the
 7   Insurance Commissioner as to policy form and rates.
 8                                  CHAPTER 7
 9                       ADMINISTRATION AND FUNDING
10   Section 701.   Rules and regulations.
11      The board may publish guidance and rules and promulgate
12   regulations to carry out the purposes of this act, including
13   reasonable classification of risks eligible for coverage under
14   this act, limits of coverage and rules covering the adjustment
15   and settlement of claims.
16   Section 702.   Escrow of premium payments.
17      A mortgage lender that offers the purchase of insurance under
18   this act shall escrow the premium.
19   Section 703.   Properties in violation of State or local law.
20      No new landslide and sinkhole insurance coverage shall be
21   provided for a property that the board finds has been declared
22   by a State or local zoning authority or other authorized public
23   body to be in violation of State or local laws, regulations or
24   ordinances that are intended to discourage or otherwise restrict
25   land development or occupancy in areas that are prone to
26   landslides and sinkholes.
27   Section 704.   Board report.
28      The board shall make an annual report on the program and on
29   experience with landslide and sinkhole insurance sales through
30   producers to the chairperson and minority chairperson of the

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 1   Environmental Resources and Energy Committee of the Senate and
 2   the chairperson and minority chairperson of the Environmental
 3   and Natural Resource Protection Committee of the House of
 4   Representatives.
 5   Section 705.   Appropriation.
 6      (a)   Annually.--Funding shall be appropriated on an annual
 7   basis to the board for the purposes of this act and expenses of
 8   organization and administration of the insurance fund as
 9   provided under this act.
10      (b)   Additional transfer.--If, upon completion of an annual
11   examination and audit under section 513, the board determines
12   that the total asset value of the insurance fund is less than
13   $10,000,000, an additional sum as may be necessary to increase
14   the total asset value of the insurance fund to $10,000,000 shall
15   be transferred from the General Fund to the insurance fund for
16   the purposes of this act for the fiscal year immediately
17   following the examination and audit.
18      (c)   Fund transfer.--The sum of $10,000,000 is transferred
19   from the General Fund to the insurance fund for the fiscal year
20   July 1, 2025, through June 30, 2026.
21      (d)   Board.--Money in the insurance fund is appropriated to
22   the board in amounts as may be determined annually by the
23   Governor to be used for the specified purposes of this act.
24   Section 706.   Appeals.
25      A party aggrieved by an action of the board shall have the
26   right to appeal in accordance with 2 Pa.C.S. (relating to
27   administrative law and procedure).
28   Section 707.   Cost of administration.
29      The board shall keep an accurate account of money paid in
30   premiums by the subscribers and disbursements on account of

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 1   damages to structures. If, at the expiration of any year, there
 2   is a balance remaining after deducting the disbursements, the
 3   unearned premiums on undetermined risks and the percentage of
 4   premiums paid or payable to create or maintain the surplus
 5   provided under this act, and after setting aside an adequate
 6   reserve, the board may determine to allocate the remaining money
 7   to the cost of administering the insurance fund.
 8                               CHAPTER 9
 9                        MISCELLANEOUS PROVISIONS
10   Section 901.   Effective date.
11      This act shall take effect immediately.




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