2006 Regular Session
To: Sel Cmte on Hurricane Recovery
By: Representative Compretta, Bentz
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 THE STATE OF MISSISSIPPI WHICH EXEMPTS FLOOD DAMAGE FROM COVERAGE, WHETHER OR NOT DRIVEN BY WIND, MUST OBTAIN FROM THE INSURED A STATEMENT OF EXPLANATION OF FLOOD EXCLUSION; ANY INSURER PROVIDING A HOMEOWNERS PROTECTION POLICY, WIND POLICY, WINDSTORM POLICY, OR LIKE POLICY, FOR A DWELLING LOCATED IN THE STATE OF MISSISSIPPI, WHICH EXEMPTS FROM COVERAGE DAMAGES CAUSED BY AN EARTHQUAKE SHALL OBTAIN FROM THE INSURED A "STATEMENT OF EXPLANATION OF EARTHQUAKE 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 OR EARTHQUAKE 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) "Commissioner" means the State Commissioner of Insurance.
(b) "Dwelling" means a structure and land located at the address stated on the insured's policy declaration which is covered under the policy.
(c) "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. (1) An insurer providing a homeowners protection policy, wind policy, windstorm policy, hurricane policy, or like policy, for a dwelling located in the State of Mississippi 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."
(2) An insurer providing a homeowners protection policy, wind policy, windstorm policy, or like policy, for a dwelling located in the State of Mississippi, which exempts from coverage damages caused by an earthquake shall obtain from the insured a "statement of explanation of earthquake exclusion."
(3) A statement of explanation of either flood or earthquake exclusion 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 or earthquake protection, as the case may be. The statement is to explicitly list the stated terms if such occasions or situations are excluded under the policy. The statement 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 is to be executed by the insured before the insured pays the initial premium and is to be obtained every three (3) years thereafter on the anniversary date of the policy's purchase. 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 on a third-year anniversary date as required in this provision, shall not be grounds for the insurer to cancel the policy. Failure or refusal of an insured to execute the statement on a third-year anniversary date 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 each third-year anniversary date. The notification to the insured by the insurer of the requirement to execute the statement on each third anniversary date of the policy's purchase shall be in a written form prescribed by the commissioner. The insured shall be considered notified under this provision if the written notice is deposited by the insurer in the United States mail and is affixed with first class postage. Any claim that the notice was not in fact received by the insured shall not be grounds to allege that an insurer has violated this act.
If the insurance company is responsible for mailing the notification to the insured, then the agent or other person representing the insurance company with respect to the purchase or renewal of the policy shall not be subject to any civil penalty under this act.
SECTION 3. Any insurer required to obtain a statement of explanation of flood exclusion or a statement of explanation of earthquake 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.