House File 583 - Reprinted HOUSE FILE 583 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HSB 165) (As Amended and Passed by the House March 25, 2021 ) A BILL FOR An Act relating to private flood insurance, and including 1 future repeal provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 HF 583 (3) 89 ko/rn/md

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- HF 583 (3) 89 ko/rn/md 1/ 5

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- HF 583 (3) 89 ko/rn/md 2/ 5

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- HF 583 (3) 89 ko/rn/md 3/ 5

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- HF 583 (3) 89 ko/rn/md 4/ 5

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 -5- HF 583 (3) 89 ko/rn/md 5/ 5