House Bill 1319

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 AND WHICH POLICY EXEMPTS FROM COVERAGE FLOOD DAMAGE, 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 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) "Dwelling" means a structure and land located at the address stated on the insured’s policy declaration which is covered under the policy.

(b) "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 and which policy exempts from coverage 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 writing 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.

SECTION 3. (1) Any insurer required to obtain a statement of explanation of flood exclusion under this act who fails to secure such statement is guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than One Thousand Dollars ($1,000.00), or by imprisonment for not more than one (1) year, or by both such fine and imprisonment. If the insurer is a corporation, the president, secretary and treasurer thereof shall be also severally liable to such fine or imprisonment as herein provided for failure of such corporation to secure the statement of explanation of flood exclusion; and such president, secretary and treasurer shall be severally personally liable, jointly with such corporation, for any damage to said dwelling from flooding as defined by the homeowners policy that occurs at any time the statement of explanation of flood exclusion was not obtained.

(2) In addition to the criminal penalties set forth in subsection (1) of this section, and under the same circumstances, terms, and conditions as set forth in Section 2 of this act, the Commissioner of Insurance may assess a civil penalty 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). Any civil penalty levied and collected by the Commissioner of Insurance shall be deposited in the State General Fund, and any penalty not voluntarily paid may be collected by civil suit brought by the commissioner or the Attorney General.

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