Senate Bill 2244

AN ACT TO PROVIDE THAT NO INSURER SHALL BE ENTITLED TO ADDITIONAL PREMIUM FOR ANY PROPERTY AND CASUALTY POLICY IN EFFECT FOR A CERTAIN PERIOD OF TIME WHEN THERE HAS BEEN NO MATERIAL CHANGE IN THE CIRCUMSTANCES OF THE INSURED FROM THOSE STATED IN THE APPLICATION FOR THE POLICY; TO REQUIRE 30 DAYS' NOTICE FOR A PREMIUM INCREASE WHEN THERE HAS BEEN A MATERIAL CHANGE IN THE CIRCUMSTANCES OF THE INSURED FROM THOSE STATED IN THE APPLICATION FOR THE POLICY; TO PROHIBIT AN INSURER FROM CANCELLING A PROPERTY AND CASUALTY POLICY AFTER THE INITIAL POLICY HAS BEEN IN EFFECT FOR 60 DAYS OR MORE, EXCEPT IN CERTAIN INSTANCES; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) No insurer shall be entitled to additional premium for any commercial property, casualty or liability insurance policy which has been in effect for more than ninety (90) days, or for any noncommercial property, casualty or liability insurance policy which has been in effect for more than sixty (60) days, when there has been no material change in the circumstances of the insured from those stated by the insured in his application for the policy. For an insurance company to be entitled to any additional premium, the insured must receive a billing notice and either an explanation of any premium increase, or a statement that asks the insured to contact the insurance company or its agent if the insured has any questions about the billing notice or the premium increase, within the first sixty (60) days of the effective date of the policy. If the company or agent fails to bill the insured within the first sixty (60) days of the effective date of the policy, the insured shall not be responsible for payment of such additional premium nor for nonpayment of that additional premium, and his policy shall not be cancelled for failure to pay such additional premium.

(2) A notice of an additional premium for any commercial property, casualty or liability insurance policy which has been in effect for less than ninety (90) days, or for any noncommercial property, casualty or liability insurance policy which has been in effect for less than sixty (60) days, when there has been a material change in the circumstances of the insured from those stated by the insured in his application for the policy, shall be mailed or delivered to the insured at least thirty (30) days prior to the date that the additional premium is due.

(3) For purposes of this section, "material change" means any change in any matter which, if stated on the application, would have resulted in a different initial premium for the policy.

(4) Nothing in this section shall be construed to prevent an insurer from making rate changes at subsequent renewal dates of the policy.

(5) This section shall not apply to audit type policies where the actual premium is to be determined at a later date.

SECTION 2. No insurer may cancel a policy offering property and casualty insurance after the initial policy with the insurer has been in effect for sixty (60) days or more, unless: (a) the insured does not pay the premium when due; (b) the insured files a fraudulent claim; or (c) the Mississippi Department of Insurance determines that the continuation of the policy would result in violation of insurance laws. Any insurer that violates the provisions of this section shall be subject to the penalty provided in Section 83-5-85 in addition to any other penalty, fine or sanction which the Commissioner of Insurance may be authorized to use to enforce the insurance laws of this state.

SECTION 3. This act shall take effect and be in force from and after July 1, 2010.