Bill Text: MS SB2132 | 2010 | Regular Session | Introduced
Bill Title: Residential property insurance; require rate filings to include discounts when certain construction techniques are used.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2010-02-02 - Died In Committee [SB2132 Detail]
Download: Mississippi-2010-SB2132-Introduced.html
MISSISSIPPI LEGISLATURE
2010 Regular Session
To: Insurance
By: Senator(s) Baria
Senate Bill 2132
AN ACT TO REQUIRE RATE FILINGS FOR RESIDENTIAL PROPERTY INSURANCE TO INCLUDE DISCOUNTS, CREDITS OR OTHER RATE DIFFERENTIALS FOR PROPERTIES ON WHICH CONSTRUCTION TECHNIQUES THAT HAVE BEEN DEMONSTRATED TO REDUCE THE AMOUNT OF LOSS IN A WINDSTORM HAVE BEEN INSTALLED OR IMPLEMENTED; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) It is the intent of the Legislature that insurers must provide savings to consumers who install or implement windstorm damage mitigation techniques, alterations or solutions to their properties to prevent windstorm losses. Effective July 1, 2010, a rate filing for residential property insurance must include discounts, credits or other rate differentials, or appropriate reductions in deductibles, for properties on which fixtures or construction techniques demonstrated to reduce the amount of loss in a windstorm have been installed or implemented. The fixtures or construction techniques shall include, but not be limited to, fixtures or construction techniques that enhance roof strength, roof covering performance, roof-to-wall strength, wall-to-floor-to-foundation strength, opening protection, and window, door and skylight strength. Credits, discounts or other rate differentials for fixtures and construction techniques that meet the minimum requirements of the International Residential Code or the International Building Code must be included in the rate filing. All insurance companies must make a rate filing that includes the credits, discounts or other rate differentials by July 1, 2010. By July 1, 2011, the Department of Insurance shall reevaluate the discounts, credits, other rate differentials and appropriate reductions in deductibles for fixtures and construction techniques that meet the minimum requirements of the International Residential Code or the International Building Code, based upon actual experience or any other loss relativity studies available to the department. The department shall determine the discounts, credits, other rate differentials and appropriate reductions in deductibles that reflect the full actuarial value of that revaluation, which may be used by insurers in rate filings.
(2) (a) A rate filing for
residential property insurance made on or before the implementation of
paragraph (b) may include rate factors that reflect the manner in which
building code enforcement in a particular jurisdiction addresses the risk of
wind damage. However, that rate filing also must provide for variations from
those rate factors on an individual basis based on an inspection of a
particular structure by a licensed home inspector, which inspection may be at
the cost of the insured.
(b) A rate filing for residential property insurance made more than
one hundred fifty (150) days after approval by the department of a building
code rating factor plan submitted by a statewide rating organization shall
include positive and negative rate factors that reflect the manner in which
building code enforcement in a particular jurisdiction addresses risk of wind
damage. The rate filing shall include variations from standard rate factors on
an individual basis based on inspection of a particular structure by a licensed
home inspector. If an inspection is requested by the insured, the insurer may
require the insured to pay the reasonable cost of the inspection. This
paragraph applies to structures constructed or renovated after the
implementation of this paragraph.
(c) The premium notice shall specify the amount by which the rate has
been adjusted as a result of this subsection and also shall specify the maximum
possible positive and negative adjustments that are approved for use by the
insurer under this subsection.
(3) A rate filing made on or after July 1, 2010, for mobile homeowner's insurance must include appropriate discounts, credits or other rate differentials for mobile homes constructed to comply with American Society of Civil Engineers Standard ANSI/ASCE 7-88, adopted by the United States Department of Housing and Urban Development, and that also comply with all applicable tie-down requirements provided by state law.
(4) The Legislature finds that separate consideration and notice of hurricane or windstorm insurance premiums will assist consumers by providing greater assurance that hurricane or windstorm insurance premiums are lawful and by providing more complete information regarding the components of property insurance premiums. Effective July 1, 2010, a rate filing for residential property insurance shall be separated into two (2) components: rates for hurricane or windstorm coverage and rates for all other coverages. A premium notice reflecting a rate implemented on the basis of such a filing shall separately indicate the premium for hurricane coverage and the premium for all other coverages. As used in this subsection:
(a) "Hurricane coverage" means coverage for loss or damage caused by the peril of windstorm during a hurricane. The term includes ensuing damage to the interior of a building, or to property inside a building, caused by rain, snow, sleet, hail, sand or dust if the direct force of the windstorm first damages the building, causing an opening through which rain, snow, sleet, hail, sand or dust enters and causes damage.
(b) "Windstorm" for purposes of paragraph (a) means wind, wind gusts, hail, rain, tornadoes, or cyclones caused by or resulting from a hurricane that results in direct physical loss or damage to property.
(c) "Hurricane" for purposes of paragraphs (a) and (b) means a storm system that has been declared to be a hurricane by the National Hurricane Center of the National Weather Service.
(5) In order to provide an appropriate transition period, an insurer, in its sole discretion, may implement an approved rate filing for residential property insurance over a period of years. An insurer electing to phase in its rate filing must provide an informational notice to the department setting out its schedule for implementation of the phased-in rate filing.
(6) An insurer may not write a residential property insurance policy without providing hurricane or windstorm coverage, as defined in subsection (4) of this section. This subsection does not apply with respect to risks located in the coast area that are eligible for coverage by the Mississippi Windstorm Underwriting Association established under Section 83-34-1 et seq.
(7) Any rate filing that is based in whole or part on data from a computer model may not exceed fifteen percent (15%) unless there is a public hearing.
(8) An insurer may implement appropriate discounts or other rate differentials of up to ten percent (10%) of the annual premium to mobile homeowners who provide to the insurer evidence of a current inspection of tie-downs for the mobile home, certifying that the tie-downs have been properly installed and are in good condition.
(9) Discounts must be used without any modifications, unless they are supported by detailed alternative studies.
SECTION 2. This act shall take effect and be in force from and after July 1, 2010.
