Chapter 015
2009 -- H 5275 SUBSTITUTE A
Enacted 06/09/09
A N A C T
RELATING TO
INSURANCE - FIRE INSURANCE POLICIES AND RESERVES
Introduced By: Representatives Kennedy, Walsh, D Caprio, Gallison, and Azzinaro
Date Introduced: February 04, 2009
It is enacted by the
General Assembly as follows:
SECTION 1. Section 27-5-3.7 of the General Laws in Chapter
27-5 entitled "Fire
Insurance Policies and
Reserves" is hereby amended to read as follows:
27-5-3.7.
Hurricane deductibles, triggers and policyholder notice. -- (a) The
provisions of this section shall be applicable to policies
issuing or renewing on or after July 1,
2008.
(b) In all instances
where an insurance company licensed to do business in this state
offers or includes any deductible and/or mitigation measure
related to such deductible for any
type of personal lines residential property insurance on
dwelling houses, the insurance company
shall provide prominent and clear notice to insureds, that shall be included in the policy issuance
or renewal package and shall fully disclose all details
pertaining to any such deductible and/or
mitigation measure.
(c) The insurer may
apply a deductible specific to windstorm coverage where:
(1) The deductible is
specifically approved by the director and shall not exceed five
percent (5%) of the insured value.
(2) The deductible
shall be applicable to losses due to a hurricane during the period
commencing with the issuance of a hurricane warning bulletin for
any part of the state by the
hurricane warning bulletin for any part of the state.
(3) The deductible,
whether it is a flat dollar deductible or a percentage deductible shall
be presented by at least two (2) examples that
illustrate the application of the deductible to the
insured. Nothing herein shall prohibit the insurer from
providing any additional information to the
insured to assist in the insured's understanding of the
deductible to be applied to the insured's
policy.
(4) The deductible set
forth above shall not be applied to any insured, if the insured has
installed approved mitigation measures to protect against
windstorm damage and the insurer has
either inspected the property or the insured has submitted
satisfactory proof of installation of the
approved mitigation measures. The insurance commissioner, in
consultation with the state
building code commissioner, shall adopt and may amend or
revise a list of mitigation measures,
based so far as reasonably feasible on national standards
for such measures and practices in other
comparable states. The list of mitigation measures adopted by
the insurance commissioner shall
be considered approved mitigation measures for purposes
of this subdivision.
(5) For the
application of the hurricane deductible in
hurricane when a hurricane results in hurricane force sustained
winds as reported by the national
weather service for
of the state, losses are due to a hurricane when a
hurricane results in hurricane force sustained
winds as reported by the national weather service for any
other location in the state. All terms are
as defined by the national weather service.
(d) Premium credits
shall be applied to policies with deductibles as set forth in
subsection 27-5-3.7(c).
(e) (1) An insurer may require mitigation measures to protect
against windstorm damage
only after specific approval of the substance of such
mitigation measures by the director;
(2) Mitigation measures
to be taken by an insured are clearly explained, including a
complete illustration of the dollar impact upon the premiums
to be charged to insureds if the
requested mitigation activities are undertaken;
(3) No mandatory
deductible for windstorm damage shall be included in the policy;
(4) An insurer shall
write the requested coverage at the premium rate that includes the
premium credit to be realized with the completion of the
mitigation efforts;
(5) The insurer shall
affirmatively state the length of time during which discount given
for the mitigation efforts will apply; and
(6) No insurer shall
subsequently non-renew an insured who has taken the mitigation
steps requested by the insurer for reasons of the insurers
exposure to catastrophe loss, unless for
non-payment of premium, fraud, breach by the insured of a
provision of the policy, reversal or a
lack of maintenance of the mitigation steps, or insurer
solvency concerns or adverse loss history.
(f) Penalties for
failure to comply with the provisions of this section shall be
administered by the director in accordance with the provisions of
section 42-14-16.
(g) The department of
business regulation shall have authority to adopt such rules,
including emergency rules, as may be necessary or desirable to
effectuate the purposes of this
section.
SECTION 2. This act shall take effect on August 1, 2009.
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LC00899/SUB A
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