House File 583 - Enrolled
House File 583
AN ACT
RELATING TO PRIVATE FLOOD INSURANCE, AND INCLUDING FUTURE
REPEAL PROVISIONS.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. NEW SECTION. 515J.1 Title.
This chapter shall be known and may be cited as the “Private
Primary Residential Flood Insurance Model Act”.
Sec. 2. NEW SECTION. 515J.2 Purpose.
The purpose of this chapter is to provide for the protection
of lives and property from the peril of flood, and to encourage
a robust private primary residential flood insurance market
to provide consumer choices and alternatives to the existing
national flood insurance program.
Sec. 3. NEW SECTION. 515J.3 Intent.
It is the intent of the legislature that this chapter shall
not restrict the use of existing filings by an insurer, or
limit the ability of authorized insurers to provide flood
insurance coverage in this state of any type other than primary
residential flood insurance.
Sec. 4. NEW SECTION. 515J.4 Definitions.
For purposes of this chapter, unless the context otherwise
requires:
1. “Authorized insurer” means an insurer authorized by
the commissioner to write insurance under a certificate of
authority issued by the commissioner to transact insurance in
this state.
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2. “Commissioner” means the commissioner of insurance.
3. “FAIR plan” means the plan to assure fair access to
insurance requirements established pursuant to section 515F.33.
4. “National flood insurance program” means the program of
flood insurance coverage and floodplain management administered
under the National Flood Insurance Act of 1968, as amended,
Pub. L. No. 90-48, 42 U.S.C. §4001 et seq., and applicable
regulations promulgated in 44 C.F.R.
5. “Primary residential flood insurance” means an insurance
policy covering losses from flood to residential property,
other than commercial property, written in this state by any
authorized insurer and that is not written to apply coverage in
excess of the coverage provided under another flood insurance
policy, including a policy issued by a private insurer or by the
national flood insurance program.
Sec. 5. NEW SECTION. 515J.5 Rates.
1. Rates established pursuant to this section for flood
insurance issued pursuant to this chapter shall not be subject
to prior approval by the commissioner. An insurer shall attest
that all rates are based on actuarial data, methodologies,
standards, and guidelines relating to floods that are not
excessive, inadequate, or unfairly discriminatory. The
commissioner may audit an insurer’s flood rates to ensure
compliance with applicable state laws and administrative rules.
2. An insurer shall file with the commissioner all rates
and any changes to such rates which the insurer proposes to
use. A filing must state the proposed effective date, indicate
the character and extent of the coverage contemplated, include
the name of the insurer, and include the average statewide
percentage change in rates. Actuarial data with regard to rates
for flood coverage must be maintained by the insurer for two
years after the effective date of a rate change.
Sec. 6. NEW SECTION. 515J.6 Forms.
The commissioner may require, through the application of the
state’s existing regulatory system, all of the following:
1. That an authorized insurer file all forms for primary
residential flood insurance coverage.
2. That an authorized insurer may issue an insurance policy,
contract, or endorsement.
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3. That flood insurance on a residential property that is
located in a special flood hazard area designated by the federal
emergency management agency provides coverage that at a minimum
complies with 42 U.S.C. §4012a(b) and applicable regulations
in 84 FR 4953.
Sec. 7. NEW SECTION. 515J.7 Notice to commissioner.
At least thirty calendar days prior to writing primary
residential flood insurance in this state, an authorized
insurer shall comply with the following requirements:
1. Notify the commissioner of the insurer’s intent to sell
primary residential flood insurance.
2. File a plan of operation and financial projections,
or material revisions to a plan of operation and financial
projections, with the commissioner.
Sec. 8. NEW SECTION. 515J.8 Notice to consumers —— special
flood hazard areas.
1. Before placing an applicant whose property is located
in a special flood hazard area with private flood insurance,
an insurance producer, surplus lines broker, or an authorized
insurer upon the authorized insurer’s election or if there is
not an insurance producer or surplus lines broker, shall provide
notice to the applicant of the following:
a. Of the existence of the national flood insurance program
if the applicant does not currently have flood coverage under
the national flood insurance program.
b. That flood coverage under the national flood insurance
program may be provided at a subsidized rate, and that the
full-risk rate for flood insurance may apply to the applicant’s
property if the applicant later seeks to reinstate coverage
under the program.
2. This section is repealed effective thirty calendar
days after enactment of federal legislation mandating that an
insured may switch between private flood insurance and flood
insurance under the national flood insurance program without
risk of penalty. The commissioner shall notify the Iowa Code
editor upon the occurrence of this condition.
Sec. 9. NEW SECTION. 515J.9 Cancellation and nonrenewal ——
notice.
1. Notice of cancellation or nonrenewal of private
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residential flood insurance, other than for nonpayment of
premium, shall be made and provided to the policyholder
a minimum of forty-five days before the cancellation or
nonrenewal of the flood insurance, and in compliance with the
applicable provisions of sections 515.129A, 515.129B, and
515.129C.
2. Notwithstanding subsection 1, notice of cancellation
of private residential flood insurance for nonpayment of the
premium, or fraud or misrepresentation on the application
for the flood insurance, shall be made and provided to the
policyholder in compliance with the applicable provisions of
sections 515.129A, 515.129B, and 515.129C.
Sec. 10. NEW SECTION. 515J.10 Surplus lines placements.
Diligent search requirements pursuant to section 515I.3,
subsection 1, paragraph “c”, shall not apply to flood coverage
under an insurance policy issued by an eligible surplus lines
insurer until such time that the commissioner certifies in a
commissioner’s bulletin or by order that the admitted private
flood insurance market is adequate.
Sec. 11. NEW SECTION. 515J.11 Property insurance market
participation.
Writing private flood insurance shall not constitute
participation in the property insurance market for purposes of
determining membership in the FAIR plan pursuant to section
515F.34.
Sec. 12. NEW SECTION. 515J.12 Certification —— private
flood insurance.
An insurer that writes flood insurance under this chapter
may certify that the insurance policy meets the definition of
“private flood insurance” as specified in 42 U.S.C. §4012a(b)(7)
and corresponding federal regulations.
Sec. 13. NEW SECTION. 515J.13 Public records.
Upon disposition, all rates, supplementary rate information,
and supporting information filed with the commissioner pursuant
to this chapter shall be a public record under chapter 22,
except any information marked by the insurer or the filer as
confidential, trade secret, or proprietary pursuant to section
22.7, and that is accepted by the commissioner.
Sec. 14. NEW SECTION. 515J.14 Conflict of laws.
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Notwithstanding any law to the contrary, with respect
to regulation of flood coverage written in this state by an
authorized insurer, this chapter shall control.
Sec. 15. NEW SECTION. 515J.15 Rules.
The commissioner may adopt rules pursuant to chapter 17A as
necessary to administer this chapter.
______________________________ ______________________________
PAT GRASSLEY JAKE CHAPMAN
Speaker of the House President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 583, Eighty-ninth General Assembly.
______________________________
MEGHAN NELSON
Chief Clerk of the House
Approved _______________, 2021 ______________________________
KIM REYNOLDS
Governor