Section 99B. The commissioner may approve for use within the commonwealth any form of policy for property insurance which is issued to insure a business, professional or governmental operation, and which does not correspond to the standard fire insurance policy as set forth in section ninety-nine; provided, however, that the approved policy assures to the policyholders and claimants protection no less favorable than they would be entitled to under said section ninety-nine.

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The commissioner shall approve for use within the commonwealth, if filed by a rating organization licensed under chapter one hundred and seventy-four A on behalf of its members and subscribers or filed independently by any company licensed to write such insurance under authority of subclause (g) of section fifty-one, clause (g) of section fifty-four or section fifty-four E, any form of policy of homeowners multi-peril insurance which is to be issued to insure an owner-occupied condominium unit or dwelling structure of four or fewer units, or a tenant in such a condominium or dwelling structure, and which:

(a) contains a loss settlement clause which provides coverage for property loss to the extent of the actual cash value of the damage to the insured unit or structure; or

(b) contains a loss settlement clause which provides coverage for property loss on the basis of like-kind-and-quality replacement cost; or

(c) contains, in accordance with clause Twelfth A of section ninety-nine

(1) a loss settlement clause which provides functional replacement or repair cost coverage;

(2) which otherwise limits an insurer’s liability for property loss to the tax assessment value of the insured unit or structure; or

(3) which otherwise requires actual cash value loss settlement calculations to be based upon the fair market value of the insured unit or structure, net of land value, without consideration of replacement cost less accrued depreciation due to physical deterioration and functional and economic obsolescence; provided, however, such policy forms shall not be issued or renewed when the market value of the unit or structure proposed to be insured is less than the total amount of mortgage liens outstanding upon such unit or structure at the time of policy issuance or renewal.

The commissioner shall compose and require, as a condition of approval of any alternative loss settlement clause pursuant to clause (c), appropriate consumer disclosure forms to be used by companies issuing such policy forms in the commonwealth. Policy forms approved under this section need not correspond to the standard fire insurance policy set forth in section ninety-nine, but shall, except for the loss settlement provisions of any such approved policy, assure to the policyholders and claimants protection no less favorable than such policyholders would be entitled to under section ninety-nine and shall otherwise conform to the substantive requirements of that section.