Substitute House Bill No. 5263 introduces comprehensive regulations concerning the assignment of post-loss benefits under homeowners and commercial property insurance policies, effective January 1, 2027. The bill mandates that assignment agreements must be in writing and executed by both the assignor and assignee, with specific provisions allowing the assignor to rescind the agreement within designated timeframes. It requires the assignee to provide a copy of the agreement to the insurance company and mortgagees, along with an itemized cost estimate. Additionally, the bill prohibits certain fees in these agreements and limits the amount of post-loss benefits that can be assigned in urgent situations. Any agreement that does not comply with these requirements will be deemed void and unenforceable, placing the burden of proof on the assignee to demonstrate that the insurance company is not prejudiced by any failures related to the agreement.

The bill also revises existing laws governing home improvement contractors, including prohibiting contractors from offering inducements related to insurance deductibles and establishing new requirements for contractor registration. It expands the application process for obtaining a contractor's registration certificate, mandates that contractors keep their registration information updated, and prohibits them from engaging in public adjuster activities. Furthermore, the bill requires the Insurance Commissioner to develop a consumer bill of rights regarding insurance and real estate by September 1, 2026, and to report on claims paid under assignment agreements starting February 1, 2028. Overall, the bill aims to enhance consumer protection, ensure compliance with insurance policies, and clarify the roles and responsibilities of all parties involved in post-loss service agreements.

Statutes affected:
Raised Bill: 20-419, 20-420, 20-429, 20-429a
INS Joint Favorable Substitute: 20-419, 20-420, 20-429a, 42-137
File No. 187: 20-419, 20-420, 20-429a, 42-137