Opinion ID: 1747074
Heading Depth: 1
Heading Rank: 3

Heading: The Statutory-Interpretation Issue.

Text: Iowa Code section 515.150(1), the statute in question, provides: An insurer shall reserve ten thousand dollars or ten percent, whichever amount is greater, of the payment for damages to the property excluding personal property on which the insurer has issued a fire and casualty insurance policy as demolition cost reserve if the following are applicable: a. The property is located within the corporate limits of a city. The issue of whether Iowa Code section 515.150 applies outside of chapter 515 has never been decided. The city argues for a melding of section 515.150 into chapter 518 because, according to it, it makes good policy sense. Black Hawk responds it cannot be done if the legislature did not intend it. We begin with the observation that neither chapter 515 nor chapter 518 suggests that any of their provisions are interchangeable. Chapter 515 is broad in scope, covering all corporations formed for the purpose of providing insurance other than life insurance. Iowa Code § 515.1. Chapter 515 is a much older chapter, first appearing in the 1873 Code, while chapter 518 was first enacted in 1965. See 1965 Iowa Acts ch. 401. Associations under chapter 518 have a more restricted scope of authority. Under section 518.11, they are authorized to insure only against loss or damage by (1) any perils resulting in physical loss or damage to property, (2) theft of personal property, and (3) [i]njury, sickness or death of animals and the furnishing of veterinary services. These associations are not authorized to write liability insurance. Also, under chapter 518, the properties that may be insured are limited to (1) farm properties including residences and other buildings; (2) buildings used in agricultural processing; (3) city residences; and (4) churches, schools, and community buildings. Iowa Code § 518.12. Just as the types of insurance and property covered by chapter 518 associations are more abbreviated, so is the scope of the statutory provisions themselves. Approximately seventy sections under chapter 515 have no equivalent provisions under chapter 518. If we were to accept the city's argument that we should read section 515.150 into chapter 518 because it would be good public policy, the same argument could be made to adopt other provisions from chapter 515. For example, section 515.138 provides a standardized policy form and provides for permissible variations from it; chapter 518 has no similar provision. It might be argued that, from a policy standpoint, such a provision should be engrafted on chapter 518. However, transplanting provisions of chapter 515 into chapter 518 would blur the distinctions between two separate chapters without any indication from the legislature that this was intended. When Iowa Code section 515.150 was adopted in 1988, both chapters 515 and 518 were in existence. Yet, the legislature added the demolition-reserve provision only to chapter 515. See 1988 Iowa Acts ch. 1176, § 1. If the legislature had intended to apply the demolition-reserve requirement to county mutuals under chapter 518, we believe it would have added a similar provision to that chapter. Iowa Code section 518.11 lends further support to Black Hawk's claim that chapter 518 should not be read to include the demolition provision of section 515.150. Section 518.11 provides in part: Such contracts of insurance [by county mutuals] shall be subject only to such provisions as are contained in this chapter and shall consist of: An application on blanks furnished by the association and signed by the insured or the insured's representatives; A policy issued by the association in accordance with its rules, and approved by the commissioner of insurance. (Emphasis added.) The stipulation of facts submitted by the parties included a letter from the insurance division of the Iowa Department of Commerce. This letter expressed the view that, based on a memorandum of intent provided by the legislature and accompanying the bill creating chapter 518, [i]t was not the intent of the Iowa General Assembly to impose regulations other than those explicitly noted in chapter 518 upon county mutual associations. Under our rules of interpretation, we may consider administrative construction of a statute. Iowa Code § 4.6(6); In re G.J.A., 547 N.W.2d 3, 6 (Iowa 1996). For the reasons discussed, we hold we have jurisdiction of the appeal and that the district court correctly ruled that Black Hawk is not subject to the demolition-reserve provisions of Iowa Code section 515.150. Accordingly, we affirm. AFFIRMED. All justices concur except CARTER, J., who takes no part.