H.F. 583 Section 1. NEW SECTION . 515J.1 Title. 1 This chapter shall be known and may be cited as the “Private 2 Primary Residential Flood Insurance Model Act” . 3 Sec. 2. NEW SECTION . 515J.2 Purpose. 4 The purpose of this chapter is to provide for the protection 5 of lives and property from the peril of flood, and to encourage 6 a robust private primary residential flood insurance market 7 to provide consumer choices and alternatives to the existing 8 national flood insurance program. 9 Sec. 3. NEW SECTION . 515J.3 Intent. 10 It is the intent of the legislature that this chapter shall 11 not restrict the use of existing filings by an insurer, or 12 limit the ability of authorized insurers to provide flood 13 insurance coverage in this state of any type other than primary 14 residential flood insurance. 15 Sec. 4. NEW SECTION . 515J.4 Definitions. 16 For purposes of this chapter, unless the context otherwise 17 requires: 18 1. “Authorized insurer” means an insurer authorized by 19 the commissioner to write insurance under a certificate of 20 authority issued by the commissioner to transact insurance in 21 this state. 22 2. “Commissioner” means the commissioner of insurance. 23 3. “FAIR plan” means the plan to assure fair access to 24 insurance requirements established pursuant to section 515F.33. 25 4. “National flood insurance program” means the program of 26 flood insurance coverage and floodplain management administered 27 under the National Flood Insurance Act of 1968, as amended, 28 Pub. L. No. 90-48, 42 U.S.C. §4001 et seq., and applicable 29 regulations promulgated in 44 C.F.R. 30 5. “Primary residential flood insurance” means an insurance 31 policy covering losses from flood to residential property, 32 other than commercial property, written in this state by any 33 authorized insurer and that is not written to apply coverage in 34 excess of the coverage provided under another flood insurance 35 -1- LSB 1337HV (2) 89 ko/rn 1/ 7

H.F. 583 policy, including a policy issued by a private insurer or by 1 the national flood insurance program. 2 Sec. 5. NEW SECTION . 515J.5 Rates. 3 1. Rates established pursuant to this section for flood 4 insurance issued pursuant to this chapter shall not be subject 5 to prior approval by the commissioner. An insurer shall attest 6 that all rates are based on actuarial data, methodologies, 7 standards, and guidelines relating to floods that are not 8 excessive, inadequate, or unfairly discriminatory. The 9 commissioner may audit an insurer’s flood rates to ensure 10 compliance with applicable state laws and administrative rules. 11 2. An insurer shall file with the commissioner all rates 12 and any changes to such rates which the insurer proposes to 13 use. A filing must state the proposed effective date, indicate 14 the character and extent of the coverage contemplated, include 15 the name of the insurer, and include the average statewide 16 percentage change in rates. Actuarial data with regard to 17 rates for flood coverage must be maintained by the insurer for 18 two years after the effective date of a rate change. 19 Sec. 6. NEW SECTION . 515J.6 Forms. 20 The commissioner may require, through the application of the 21 state’s existing regulatory system, all of the following: 22 1. That an authorized insurer file all forms for primary 23 residential flood insurance coverage. 24 2. That an authorized insurer may issue an insurance policy, 25 contract, or endorsement. 26 3. That flood insurance on a residential property that 27 is located in a special flood hazard area designated by the 28 federal emergency management agency provides coverage that at 29 a minimum complies with 42 U.S.C. §4012a(b) and applicable 30 regulations in 84 FR 4953. 31 Sec. 7. NEW SECTION . 515J.7 Notice to commissioner. 32 At least thirty calendar days prior to writing primary 33 residential flood insurance in this state, an authorized 34 insurer shall comply with the following requirements: 35 -2- LSB 1337HV (2) 89 ko/rn 2/ 7

H.F. 583 1. Notify the commissioner of the insurer’s intent to sell 1 primary residential flood insurance. 2 2. File a plan of operation and financial projections, 3 or material revisions to a plan of operation and financial 4 projections, with the commissioner. 5 Sec. 8. NEW SECTION . 515J.8 Notice to consumers —— special 6 flood hazard areas. 7 1. Before placing an applicant whose property is located 8 in a special flood hazard area with private flood insurance, 9 an insurance producer, surplus lines broker, or an authorized 10 insurer upon the authorized insurer’s election or if there 11 is not an insurance producer or surplus lines broker, shall 12 provide notice to the applicant of the following: 13 a. Of the existence of the national flood insurance program 14 if the applicant does not currently have flood coverage under 15 the national flood insurance program. 16 b. That flood coverage under the national flood insurance 17 program may be provided at a subsidized rate, and that the 18 full-risk rate for flood insurance may apply to the applicant’s 19 property if the applicant later seeks to reinstate coverage 20 under the program. 21 2. This section is repealed effective thirty calendar 22 days after enactment of federal legislation mandating that an 23 insured may switch between private flood insurance and flood 24 insurance under the national flood insurance program without 25 risk of penalty. The commissioner shall notify the Iowa Code 26 editor upon the occurrence of this condition. 27 Sec. 9. NEW SECTION . 515J.9 Cancellation and nonrenewal —— 28 notice. 29 1. Notice of cancellation or nonrenewal of private 30 residential flood insurance, other than for nonpayment of 31 premium, shall be made and provided to the policyholder 32 a minimum of forty-five days before the cancellation or 33 nonrenewal of the flood insurance, and in compliance with the 34 applicable provisions of sections 515.129A, 515.129B, and 35 -3- LSB 1337HV (2) 89 ko/rn 3/ 7

H.F. 583 515.129C. 1 2. Notwithstanding subsection 1, notice of cancellation 2 of private residential flood insurance for nonpayment of the 3 premium, or fraud or misrepresentation on the application 4 for the flood insurance, shall be made and provided to the 5 policyholder in compliance with the applicable provisions of 6 sections 515.129A, 515.129B, and 515.129C. 7 Sec. 10. NEW SECTION . 515J.10 Surplus lines placements. 8 Diligent search requirements pursuant to section 515I.3, 9 subsection 1, paragraph “c” , shall not apply to flood coverage 10 under an insurance policy issued by an eligible surplus lines 11 insurer until such time that the commissioner certifies in a 12 commissioner’s bulletin or by order that the admitted private 13 flood insurance market is adequate. 14 Sec. 11. NEW SECTION . 515J.11 Property insurance market 15 participation. 16 Writing private flood insurance shall not constitute 17 participation in the property insurance market for purposes of 18 determining membership in the FAIR plan pursuant to section 19 515F.34. 20 Sec. 12. NEW SECTION . 515J.12 Certification —— private 21 flood insurance. 22 An insurer that writes flood insurance under this chapter 23 may certify that the insurance policy meets the definition of 24 “private flood insurance” as specified in 42 U.S.C. §4012a(b)(7) 25 and corresponding federal regulations. 26 Sec. 13. NEW SECTION . 515J.13 Public records. 27 Upon disposition, all rates, supplementary rate information, 28 and supporting information filed with the commissioner pursuant 29 to this chapter shall be a public record under chapter 22, 30 except any information marked by the insurer or the filer as 31 confidential, trade secret, or proprietary pursuant to section 32 22.7, and that is accepted by the commissioner. 33 Sec. 14. NEW SECTION . 515J.14 Conflict of laws. 34 Notwithstanding any law to the contrary, with respect to 35 -4- LSB 1337HV (2) 89 ko/rn 4/ 7

H.F. 583 regulation of flood coverage written in this state by an 1 authorized insurer, this chapter shall control. 2 Sec. 15. NEW SECTION . 515J.15 Rules. 3 The commissioner may adopt rules pursuant to chapter 17A as 4 necessary to administer this chapter. 5 EXPLANATION 6 The inclusion of this explanation does not constitute agreement with 7 the explanation’s substance by the members of the general assembly. 8 This bill establishes the “Private Primary Residential Flood 9 Insurance Model Act” to provide for the protection of lives 10 and property from floods, and to encourage a private primary 11 residential flood insurance (primary flood) market to provide 12 consumer choices and alternatives to the existing national 13 flood insurance program (NFIP). “Primary flood” is defined in 14 the bill as an insurance policy covering losses from flood to 15 residential property, other than commercial property, written 16 in this state by any authorized insurer (insurer) and that 17 is not written to apply coverage in excess of the coverage 18 provided under another flood insurance policy, including 19 one issued by a private insurer or by the NFIP. “NFIP” and 20 “authorized insurer” are also defined in the bill. 21 The bill does not restrict the use of existing filings by 22 insurers, or limit the ability of insurers to provide flood 23 insurance coverage of any type other than primary flood. 24 Rates established for flood insurance are not subject to 25 prior approval by the commissioner of insurance (commissioner). 26 An insurer must attest that all rates are based on criteria 27 as detailed in the bill, and the commissioner may audit an 28 insurer’s rates to ensure compliance. An insurer must file all 29 rates and any changes to rates as detailed in the bill. 30 The commissioner may require, through the application of the 31 state’s existing regulatory system, that an insurer file all 32 forms for primary flood; that an insurer may issue an insurance 33 policy, contract, or endorsement; and that flood insurance on 34 a residential property located in a special flood hazard area 35 -5- LSB 1337HV (2) 89 ko/rn 5/ 7

H.F. 583 (hazard area) provides coverage that at a minimum complies with 1 42 U.S.C. §4012a(b) and applicable regulations. 2 At least 30 days prior to writing primary flood, an insurer 3 must notify the commissioner of the insurer’s intent to sell 4 primary flood, and file a plan of operation and financial 5 projections. 6 Before placing an applicant whose property is located in 7 a hazard area with primary flood, an insurance producer, 8 surplus lines broker, or an insurer must provide notice to 9 the applicant of the existence of the NFIP if the applicant 10 does not currently have flood coverage under the NFIP; and 11 that coverage under the NFIP may be provided at a subsidized 12 rate and that the full-risk rate may apply to the applicant’s 13 property if the applicant later seeks to reinstate coverage 14 under the NFIP. These requirements are repealed 30 days after 15 enactment of federal legislation mandating that an insured may 16 switch between private flood insurance and flood insurance 17 under the NFIP without penalty. The commissioner must notify 18 the Iowa Code editor if such legislation is enacted. 19 The requirements for the cancellation and nonrenewal of 20 primary flood are detailed in the bill. Diligent search 21 requirements do not apply to flood coverage under an insurance 22 policy issued by an eligible surplus lines insurer until the 23 commissioner certifies in a bulletin or an order that the 24 admitted private flood insurance market is adequate. 25 Writing flood insurance does not constitute participation 26 in the property insurance market for purposes of determining 27 membership in the FAIR plan. “FAIR plan” is defined in the 28 bill. 29 The bill permits an insurer that writes flood insurance 30 to certify that the policy meets the definition of “private 31 flood insurance” as specified in 42 U.S.C. §4012a(b)(7) and 32 corresponding federal regulations. 33 Upon disposition, all rates, supplementary rate information, 34 and supporting information filed with the commissioner are a 35 -6- LSB 1337HV (2) 89 ko/rn 6/ 7

H.F. 583 public record under Code chapter 22, except information marked 1 by the insurer or the filer as confidential, trade secret, or 2 proprietary, and that is accepted by the commissioner. 3 Notwithstanding any law to the contrary, with respect to 4 regulation of flood coverage written in this state by an 5 insurer, the bill controls. 6 The commissioner may adopt rules to administer the bill. 7 -7- LSB 1337HV (2) 89 ko/rn 7/ 7