House Bill 1319

(COMMITTEE SUBSTITUTE)

AN ACT TO PROVIDE THAT ANY INSURER PROVIDING A HOMEOWNERS PROTECTION POLICY, WIND POLICY, WINDSTORM POLICY, HURRICANE POLICY, OR LIKE POLICY FOR A DWELLING LOCATED IN HANCOCK, HARRISON OR JACKSON COUNTIES WHICH EXEMPTS FLOOD DAMAGE FROM COVERAGE, WHETHER OR NOT DRIVEN BY WIND, MUST OBTAIN FROM THE INSURED A STATEMENT OF EXPLANATION OF FLOOD EXCLUSION; TO PROVIDE THAT SUCH STATEMENT MUST BE IN WRITING AND EXECUTED BY THE INSURED IN WHICH THE INSURED ACKNOWLEDGES AN UNDERSTANDING THAT SUCH HOMEOWNERS PROTECTION POLICY DOES NOT PROVIDE FOR FLOOD PROTECTION; TO PROVIDE CIVIL PENALTIES FOR FAILURE TO COMPLY WITH THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. As used in this act, the following words and phrases shall have the meanings ascribed herein unless the context clearly indicates otherwise:

(a) "Coastal area" means Hancock, Harrison, and Jackson Counties of the State of Mississippi.

(b) "Commissioner" means the State Commissioner of Insurance.

(c) "Dwelling" means a structure and land located at the address stated on the insured’s policy declaration which is covered under the policy.

(d) "Insurer" means an insurance company and any person authorized to represent the insurer with respect to a claim and who is acting within the scope of the person’s authority.

SECTION 2. An insurer providing a homeowners protection policy, wind policy, windstorm policy, hurricane policy, or like policy, for a dwelling located in the coastal area which exempts from coverage damages caused by a flood, including, but not limited to, surface water, storm surge, rising water from a storm, waves, tidal water or overflow of any body of water, or spray from any of these, whether or not driven by wind, shall obtain from the insured a "statement of explanation of flood exclusion." This statement shall be in a written form prescribed by the commissioner and executed by the insured in which the insured acknowledges an understanding that such homeowners protection policy does not provide for flood protection. The statement of explanation of flood exclusion is to explicitly list the above stated terms if such occasions or situations are excluded under the policy. The statement of explanation of flood exclusion is to be separate and apart from the policy and is to be typed in bold print with no smaller than ten-point type. The statement of explanation of flood exclusion is to be executed by the insured before the insured pays the initial premium and is to be obtained at each renewal of the homeowners policy. Execution by the insured is not delegable to the insurer or any representative of the insurer. Failure or refusal of an insured to execute the statement, either at the initial time the policy is purchased or upon the policy's renewal, shall not be grounds for the insurer to cancel the policy. Failure or refusal of an insured to execute the statement upon the policy's renewal shall not constitute a violation of this act on the part of the insurer, provided that the insurer has provided the insured with information explaining that execution of the statement is required under this act at least sixty (60) days before the renewal date.

SECTION 3. Any insurer required to obtain a statement of explanation of flood exclusion under this act who fails to secure such statement shall be subject to a civil penalty to be assessed by the commissioner for each violation, in an amount to be determined by the commissioner on a case by case basis, but not to exceed Ten Thousand Dollars ($10,000.00) per violation. Any civil penalty levied and collected by the commissioner shall be deposited into the State General Fund, and any penalty not voluntarily paid may be collected, along with the expenses of collection including attorney's fees, by civil suit brought by the commissioner or the Attorney General. The civil penalties assessed against an insurer under this act may not be included in determining the cost of a premium charged to an insured for any policy as described in Section 2 of this act.

SECTION 4. This act shall take effect and be in force from and after July 1, 2006.