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Senate Study Bill 1183 - IntroducedA Bill ForAn Act 1relating to private flood insurance, making penalties
2applicable, and including applicability and future repeal
3provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 515J.1 Title.
2This chapter shall be known and may be cited as the “Iowa
3Private Flood Insurance Act”.
4 Sec. 2. NEW SECTION. 515J.2 Purpose.
5The purpose of this chapter is to foster innovation in
6private flood insurance, allow insurers to test private flood
7insurance products in the market, and to provide consumers with
8more flood insurance options.
9 Sec. 3. NEW SECTION. 515J.3 Definitions.
10For purposes of this chapter, unless the context otherwise
11requires:
121. “Advisory organization” means an organization that
13develops and files advisory loss costs and standard policy
14forms, and provides other services for property liability
15insurers, regulators, and others.
162. “Commissioner” means the commissioner of insurance.
173. “Eligible surplus lines insurer” means the same as
18defined in section 515I.2.
194. “Flood” means a general and temporary condition of
20partial or complete inundation of two or more acres of normally
21dry land area, or of two or more properties, at least one of
22which is the policyholder’s property, caused by any of the
23following:
24a. The overflow of inland, tidal, or boundary waters.
25b. The unusual and rapid accumulation or runoff of surface
26waters from any source.
27c. Mudflow.
28d. Collapse or subsidence of land along the shore of a
29lake, river, or similar body of water as a result of erosion
30or undermining caused by waves or currents of water exceeding
31anticipated cyclical levels.
325. “Flood insurance rate map” means the official map of a
33community on which the federal emergency management agency
34has delineated the special flood hazard areas, the base flood
35elevations, and the risk premium zones applicable to the
-1-1community.
26. “Forms” means policies, applications, and amendments to
3policies or applications, used in connection with the sale of
4private flood insurance under this chapter.
57. “Insurance producer” means the same as defined in section
6522B.1.
78. “Insurer” means any person authorized by the commissioner
8to engage in the business of insurance in this state.
99. “Mudflow” means a river of liquid and flowing mud on the
10surfaces of normally dry land areas, as when earth is carried
11by a current of water. “Mudflow” shall not include other earth
12movements such as landslide, slope failure, or a saturated soil
13mass moving by liquidity down a slope.
1410. “National flood insurance program” means the program
15authorized under the National Flood Insurance Act of 1968, as
16amended, Pub.L.No.90-48, 42 U.S.C.§4001 et seq.
1711. “Non-standard flood insurance” means a private flood
18insurance policy that does not meet the definition of “standard
19flood insurance” as defined in this section.
2012. “Policy” means an insurance policy, an insurance
21contract, or an insurance endorsement.
2213. “Policyholder” means a person who is identified as
23the legal owner of an insurance policy under the terms of the
24policy, or who is otherwise vested with legal title to the
25policy through a valid assignment completed in accordance
26with the terms of the policy and is properly recorded as the
27legal owner of the policy in the records of the insurer.
28“Policyholder” does not include a person who has a mere
29beneficial interest in an insurance policy.
3014. “Private flood insurance” means a personal lines policy
31or a commercial policy issued by an insurer to provide coverage
32to the policyholder for the peril of flood.
3315. “Special flood hazard area” means an area having special
34flood, mudflow, or flood-related erosion hazards as shown on a
35flood insurance rate map.
-2- 116. “Standard flood insurance” means a private flood
2insurance policy that provides coverage that is at least
3equivalent to the coverage provided under a standard flood
4insurance policy issued under the national flood insurance
5program for the same type of property, including when
6considering deductibles, exclusions, and conditions offered by
7the insurer.
8 Sec. 4. NEW SECTION. 515J.4 Standard flood insurance.
9Standard flood insurance written by an insurer must meet all
10of the following requirements:
111. The policy must contain a provision that advises the
12policyholder of the availability of flood insurance coverage
13under the national flood insurance program.
142. The policy must contain a mortgage interest clause
15substantially similar to the mortgage interest clause in a
16standard flood insurance policy issued under the national flood
17insurance program.
183. The policy must contain a provision that allows the
19policyholder to file suit not later than one calendar year
20after the date of a written denial of all or part of a claim
21made by the policyholder under the policy. The provision must
22state that if the policyholder files a complaint with the
23division prior to one calendar year after the date of a written
24denial of all or part of a claim, the one calendar year in which
25the policyholder may file suit shall commence on the first day
26following the date on which the division closes the complaint.
274. The policy must contain cancellation provisions that are
28as restrictive as the cancellation provisions in a standard
29flood insurance policy issued under the national flood
30insurance program.
315. All deductibles and policy limits must be prominently
32displayed in a minimum ten point type on the policy
33declarations page, or on the face page of the policy.
34 Sec. 5. NEW SECTION. 515J.5 Non-standard flood insurance.
35An insurer may issue non-standard flood insurance that:
-3- 11. Provides supplemental flood insurance to a standard
2flood insurance policy issued under the national flood
3insurance program, or to standard flood insurance issued
4pursuant to section 515J.4.
52. Defines “flood” more broadly than the term is defined in
6section 515J.3.
73. Does not meet the requirements for discretionary
8acceptance under 12 C.F.R.§208.25(c)(3)(iii)(A-D).
9 Sec. 6. NEW SECTION. 515J.6 Rate filings.
10An admitted insurer that writes private flood insurance
11pursuant to this chapter shall establish and file rates in
12compliance with all applicable provisions of section 515F.5.
13 Sec. 7. NEW SECTION. 515J.7 Form filings — prior approval.
141. An admitted insurer that writes private flood insurance
15pursuant to this chapter shall file with the commissioner a
16copy of all forms at least thirty calendar days prior to the
17effective date of each form. Private flood insurance shall not
18be issued or delivered to any person in this state until all
19forms have been approved by the commissioner.
202. The commissioner may at any time review an insurer’s
21forms, records of an insurer pertinent to the forms, and
22relevant market conditions. The commissioner may disapprove
23a form at any time and shall notify the insurer of the
24disapproval. The commissioner may require an insurer to
25provide, at the insurer’s expense, all information deemed
26necessary by the commissioner to review a form. Within
27sixty calendar days of notification by the commissioner of
28disapproval of a form, the insurer shall file all information
29with the commissioner that establishes that the form is in
30compliance with this chapter and other applicable laws. The
31insurer shall bear the burden of proving by a preponderance of
32the evidence that a form complies with this chapter and other
33applicable laws. Pursuant to section 515.152, an insurer may
34appeal a final determination of the commissioner.
353. An advisory organization may file forms, in compliance
-4-1with subsection 1, on behalf of an insurer. If upon
2preliminary review, the commissioner finds that a form does
3not comply with this chapter or other applicable laws, the
4commissioner shall disapprove the form and notify the advisory
5organization that filed the form. Within sixty calendar
6days of notification by the commissioner of disapproval of a
7form, the advisory organization shall file all information
8with the commissioner that establishes that the form is
9in compliance with this chapter and other applicable laws.
10The advisory organization shall bear the burden of proving
11by a preponderance of the evidence that a form complies
12with this chapter and other applicable laws. Pursuant to
13section 515.152, an advisory organization may appeal a final
14determination of the commissioner.
154. All form filings shall be confidential until the
16effective date of the form. After the effective date of a
17form, the form shall be posted on the division’s internet site
18and available to the public.
19 Sec. 8. NEW SECTION. 515J.8 Continuity of coverage —
20notification to applicants.
211. An insurance producer shall provide a written notice
22to an applicant for private flood insurance whose property is
23located in a special flood hazard area and is covered by flood
24insurance issued under the national flood insurance program
25before the insurance producer places private flood insurance
26with an insurer or with an eligible surplus lines insurer for
27the applicant’s property. The notice must advise the applicant
28that if the applicant discontinues flood insurance under the
29national flood insurance program, and later wants to reinstate
30coverage under the program, the applicant may be charged the
31full-risk rate and no longer qualify for a subsidized rate
32under the national flood insurance program.
332. An insurance producer, and an insurer or an eligible
34surplus lines insurer with whom the insurance producer places
35private flood insurance, shall retain a copy of the notice
-5-1under subsection 1 for a minimum of five years.
2 Sec. 9. NEW SECTION. 515J.9 Surplus lines — private flood
3insurance.
4If after conducting a diligent search a surplus lines
5producer confirms that the full amount of private flood
6insurance, or a specific type of private flood insurance,
7cannot be obtained from an insurer, the surplus lines producer
8may place a policy providing flood coverage with an eligible
9surplus lines insurer. The surplus lines producer and the
10eligible surplus lines insurer must each comply with the
11applicable provisions of chapter 515I.
12 Sec. 10. NEW SECTION. 515J.10 Policy certification.
131. An insurer that writes private flood insurance under
14this chapter may certify that private flood insurance issued
15by the insurer meets or exceeds flood coverage provided under
16the national flood insurance program by including the following
17language on a declarations page or other policy documentation
18provided to a policyholder:
19This policy meets the definition of “private flood insurance”
20contained in 42 U.S.C.§4012a(b)(7) and the corresponding
21regulations.
222. An insurer may reference a certification pursuant to
23subsection 1 in marketing materials, or in communications with
24insurance producers, lending institutions, policyholders, or
25prospective policyholders.
26 Sec. 11. NEW SECTION. 515J.11 Notice of renewal.
271. If an insurer offers to renew private flood insurance
28that has a term of one year or less, the insurer shall provide
29the policyholder with a notice that states the renewal terms,
30the renewal premium, and the renewal premium due date at least
31forty-five calendar days before the expiration date of the
32private flood insurance.
332. If an insurer offers to renew private flood insurance
34that has a term of more than one year, or an indefinite term,
35the insurer shall provide the policyholder with a notice that
-6-1states the renewal terms, the renewal premium, and the renewal
2premium due date at least forty-five calendar days before the
3anniversary date of the private flood insurance.
43. If notice is required pursuant to subsection 1 or 2, the
5notice must be in writing and shall be sent to the policyholder
6or to the broker of record at the policyholder’s or broker’s
7last known mailing address or electronic mail address on file
8with the insurer. All notices and documents that are delivered
9by electronic means shall comply with the applicable provisions
10of chapter 505B.
114. If an insurer fails to comply with the forty-five
12calendar day notice requirement under subsection 1 or 2, a
13policyholder or a broker of record may elect, within forty-five
14calendar days following the receipt of notice, to cancel the
15renewal policy. Earned premium for any period of coverage
16during the forty-five calendar day period shall be calculated
17pro rata based upon the premium applicable to the original
18private flood insurance policy
19 Sec. 12. NEW SECTION. 515J.12 Cancellation or nonrenewal.
201. Standard flood insurance shall only be canceled by an
21insurer pursuant to the cancellation provisions in section
22515J.4, subsection 4.
232. Written notice of cancellation or nonrenewal of private
24flood insurance, other than standard flood insurance, shall
25be given by the insurer a minimum of forty-five calendar days
26before the date of cancellation or nonrenewal, and shall be
27given to each of the following:
28a. The policyholder.
29b. The federally insured institution that made the
30designated loan secured by the property covered by the private
31flood insurance, or to the servicer acting on the federally
32insured institution’s behalf.
333. A notice under subsection 2 must:
34a. State the date that the private flood insurance is
35canceled or not renewed, and the date shall be no sooner
-7-1than forty-five calendar days from the date of the notice of
2cancellation or nonrenewal.
3b. Advise the policyholder of the policyholder’s right
4to request that the division review the cancellation or
5nonrenewal.
6c. Be filed with the commissioner subject to the use and
7file requirements.
8d. Be in writing and shall be sent to the policyholder and
9to the federally insured institution at the policyholder’s and
10the federally insured institution’s last known mailing address
11or electronic mail address on file with the insurer. All
12notices and documents that are delivered by electronic means
13shall comply with the applicable provisions of chapter 505B.
14 Sec. 13. NEW SECTION. 515J.13 Unfair acts and deceptive
15practices.
16An insurer or an insurance producer that knowingly does any
17of the following commits an unfair or deceptive act or practice
18pursuant to section 507B.4, subsection 3, and shall be subject
19to orders and penalties under chapter 507B:
201. Misrepresents a private flood insurance policy as
21certified pursuant to section 515J.10, subsection 1.
222. Misrepresents the scope of coverage of private flood
23insurance in marketing materials or an advertisement, or
24in any communication with an insurance producer, a lending
25institution, a policyholder, or a prospective policyholder.
26 Sec. 14. NEW SECTION. 515J.14 Writing private flood
27insurance — miscellaneous requirements.
281. At least thirty calendar days prior to writing private
29flood insurance, an admitted insurer shall, pursuant to rules
30adopted by the commissioner:
31a. Notify the commissioner of the insurer’s intent to write
32private flood insurance.
33b. File a plan of operation and financial projections, or
34revisions to a plan of operation and financial projections,
35with the commissioner.
-8- 12. An insurer writing private flood insurance shall comply
2with all applicable requirements of Title XIII, subtitle 1.
33. An insurer writing private flood insurance is subject to
4examination pursuant to chapter 507.
54. An insurer writing private flood insurance shall
6notify the commissioner, pursuant to rules adopted by the
7commissioner, within forty-five calendar days of exiting the
8private flood insurance market.
9 Sec. 15. NEW SECTION. 515J.15 Nondiscrimination.
101. An insurer shall not refuse to issue private flood
11insurance, cancel private flood insurance, or refuse to
12renew private flood insurance based on an applicant’s or a
13policyholder’s status related to any of the following:
14a. Age.
15b. Sex.
16c. Race.
17d. Color.
18e. Religion.
19f. National origin.
20g. Marital status.
21h. Income level.
22i. Occupation.
23j. Military status.
24k. Creed.
252. This section shall not prohibit an insurer from limiting
26the issuance of private flood insurance under this chapter
27to individuals who have engaged in, or are engaged in, a
28particular profession or occupation.
293. An insurer may refuse to issue or to renew private flood
30insurance based on a property’s exposure to flood.
31 Sec. 16. NEW SECTION. 515J.16 Rules.
32The commissioner may adopt rules pursuant to chapter 17A as
33necessary to administer this chapter.
34 Sec. 17. FUTURE REPEAL. Section 515J.8, subsection 1, is
35repealed effective thirty calendar days after enactment of
-9-1federal legislation mandating that for purposes of applying
2any statutory, regulatory, or administrative continuous
3coverage requirement, including under 42 U.S.C. §4014(g), the
4administrator of the federal emergency management agency shall
5consider any period during which a property was continuously
6covered by flood insurance, either through the national flood
7insurance program or the private market, that was used to
8satisfy the requirements under 42 U.S.C. §4012a(a) to be a
9period of continuous coverage. The commissioner of insurance
10shall notify the Iowa Code editor upon the occurrence of this
11condition.
12 Sec. 18. APPLICABILITY.
131. This Act applies sixty calendar days after the date
14of enactment to private flood insurance initially delivered,
15issued for delivery, continued, or renewed in this state on or
16after the date of enactment.
172. This Act applies one hundred eighty calendar days after
18the date of enactment to private flood insurance that has been
19initially delivered, issued for delivery, continued, or renewed
20in this state prior to the date of enactment.
21EXPLANATION
22The inclusion of this explanation does not constitute agreement with
23the explanation’s substance by the members of the general assembly.
24This bill establishes the “Iowa Private Flood Insurance Act”
25to foster innovation in private flood insurance, allow insurers
26to test private flood insurance products in the market, and to
27provide consumers with more flood insurance options.
28“Private flood insurance” is defined in the bill as a
29personal lines or commercial policy issued by an insurer to
30provide coverage to the policyholder for the peril of flood.
31“Flood” is also defined in the bill.
32The bill permits insurers to write standard flood insurance
33if the policy advises the policyholder of the availability of
34flood insurance coverage under the national flood insurance
35program (NFIP), it contains a mortgage interest clause
-10-1substantially similar to the mortgage interest clause in a
2standard flood insurance policy (SFIP) issued under the NFIP,
3it advises the policyholder of the process for filing suit
4over a denied claim, it contains cancellation provisions as
5restrictive as the cancellation provisions in an SFIP issued
6under the NFIP, and all deductibles and policy limits are
7prominently displayed on the policy declarations page or the
8face page of the policy. “Standard flood insurance policy” is
9defined in the bill as a private flood insurance policy that
10provides coverage that is at least equivalent to the coverage
11provided under a standard flood insurance policy issued under
12the national flood insurance program for the same type of
13property, including when considering deductibles, exclusions,
14and conditions offered by the insurer.
15The bill also permits insurers to issue non-standard flood
16insurance that provides supplemental flood insurance to an SFIP
17issued under the NFIP or to standard flood insurance issued by
18an insurer under the bill; or that defines “flood” more broadly
19than the term is defined in the bill; or that does not meet
20the requirements for discretionary acceptance under 12 C.F.R.
21§208.25(c)(3)(iii)(A-D).
22An admitted insurer that writes private flood insurance must
23establish and file rates in compliance with all applicable
24provisions of Code chapter 515F and, as detailed in the bill,
25receive prior approval from the commissioner of insurance
26(commissioner) on form filings.
27An insurance producer must provide a written notice to
28an applicant for private flood insurance whose property is
29located in a special flood hazard area and is covered by flood
30insurance under the NFIP before the producer places private
31flood insurance with an insurer or an eligible surplus lines
32insurer for the applicant’s property. “Special flood hazard
33area” is defined in the bill. The notice must advise the
34applicant that if the applicant discontinues flood coverage
35under the NFIP and later wants to reinstate coverage, the
-11-1applicant may be charged the full-risk rate and no longer
2qualify for a subsidized rate under the NFIP. Under the bill,
3this requirement is repealed effective 30 calendar days after
4enactment of federal legislation mandating that for purposes
5of applying any statutory, regulatory, or administrative
6continuous coverage requirement, including under 42 U.S.C.
7§4014(g), the administrator of the federal emergency management
8agency must consider any period during which a property was
9continuously covered by flood insurance, either through the
10NFIP or the private market, that was used to satisfy the
11requirements under 42 U.S.C.§4012a(a) to be a period of
12continuous coverage. The commissioner is required to notify
13the Iowa Code editor upon the occurrence of this condition.
14The bill permits a surplus lines producer, after conducting
15a diligent search that confirms that the full amount of private
16flood insurance, or a specific type of private flood insurance,
17cannot be obtained from an insurer, to place a policy providing
18flood coverage with an eligible surplus lines insurer. The
19bill requires the surplus lines producer and the eligible
20surplus lines insurer to comply with the applicable provisions
21of Code chapter 515I.
22An insurer that writes private flood insurance may certify
23that a policy issued by the insurer meets or exceeds flood
24coverage provided under the NFIP by including language as
25specified in the bill on a declarations page or other policy
26documentation provided to a policyholder. The insurer may
27reference the certification in marketing materials, and
28communications with insurance producers, lending institutions,
29policyholders, and prospective policyholders.
30The requirements for renewal, nonrenewal, and cancellation
31of private flood insurance are detailed in the bill.
32An insurer or an insurance producer that knowingly
33misrepresents a policy as being certified, or misrepresents
34the scope of coverage of private flood insurance in marketing
35materials, advertisements, or in a communication with an
-12-1insurance producer, a lending institution, a policyholder, or
2a prospective policyholder commits an unfair or deceptive act
3or practice, and is subject to orders and penalties under Code
4chapter 507B.
5The bill requires that an admitted insurer, at least 30
6days prior to writing private flood insurance, notifies the
7commissioner and files a plan of operation and financial
8projections. An insurer must also notify the commissioner
9within 45 days of exiting the private flood insurance market.
10An insurer that writes private flood insurance must comply with
11all applicable requirements of Code Title XIII, subtitle 1, and
12is subject to examination pursuant to Code chapter 507.
13The bill prohibits an insurer from refusing to issue or
14renew private flood insurance, or from canceling private
15flood insurance, based on an applicant’s or a policyholder’s
16age, sex, race, color, religion, national origin, marital
17status, income level, occupation, military status, or creed.
18An insurer may, however, limit the issuance of private flood
19insurance to individuals who have engaged in, or are engaged
20in, a particular profession or occupation, and may refuse to
21issue or renew private flood insurance due to a property’s
22exposure to flood.
23The commissioner may adopt rules pursuant to Code chapter
2417A as necessary to administer the bill.
25The bill applies 60 calendar days after the date of enactment
26to private flood insurance initially delivered, issued for
27delivery, continued, or renewed in this state on or after the
28date of enactment. The bill applies 180 calendar days after
29the date of enactment to private flood insurance that has been
30initially delivered, issued for delivery, continued, or renewed
31in this state prior to the date of enactment.
-13-ko/rn
2applicable, and including applicability and future repeal
3provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 515J.1 Title.
2This chapter shall be known and may be cited as the “Iowa
3Private Flood Insurance Act”.
4 Sec. 2. NEW SECTION. 515J.2 Purpose.
5The purpose of this chapter is to foster innovation in
6private flood insurance, allow insurers to test private flood
7insurance products in the market, and to provide consumers with
8more flood insurance options.
9 Sec. 3. NEW SECTION. 515J.3 Definitions.
10For purposes of this chapter, unless the context otherwise
11requires:
121. “Advisory organization” means an organization that
13develops and files advisory loss costs and standard policy
14forms, and provides other services for property liability
15insurers, regulators, and others.
162. “Commissioner” means the commissioner of insurance.
173. “Eligible surplus lines insurer” means the same as
18defined in section 515I.2.
194. “Flood” means a general and temporary condition of
20partial or complete inundation of two or more acres of normally
21dry land area, or of two or more properties, at least one of
22which is the policyholder’s property, caused by any of the
23following:
24a. The overflow of inland, tidal, or boundary waters.
25b. The unusual and rapid accumulation or runoff of surface
26waters from any source.
27c. Mudflow.
28d. Collapse or subsidence of land along the shore of a
29lake, river, or similar body of water as a result of erosion
30or undermining caused by waves or currents of water exceeding
31anticipated cyclical levels.
325. “Flood insurance rate map” means the official map of a
33community on which the federal emergency management agency
34has delineated the special flood hazard areas, the base flood
35elevations, and the risk premium zones applicable to the
-1-1community.
26. “Forms” means policies, applications, and amendments to
3policies or applications, used in connection with the sale of
4private flood insurance under this chapter.
57. “Insurance producer” means the same as defined in section
6522B.1.
78. “Insurer” means any person authorized by the commissioner
8to engage in the business of insurance in this state.
99. “Mudflow” means a river of liquid and flowing mud on the
10surfaces of normally dry land areas, as when earth is carried
11by a current of water. “Mudflow” shall not include other earth
12movements such as landslide, slope failure, or a saturated soil
13mass moving by liquidity down a slope.
1410. “National flood insurance program” means the program
15authorized under the National Flood Insurance Act of 1968, as
16amended, Pub.L.No.90-48, 42 U.S.C.§4001 et seq.
1711. “Non-standard flood insurance” means a private flood
18insurance policy that does not meet the definition of “standard
19flood insurance” as defined in this section.
2012. “Policy” means an insurance policy, an insurance
21contract, or an insurance endorsement.
2213. “Policyholder” means a person who is identified as
23the legal owner of an insurance policy under the terms of the
24policy, or who is otherwise vested with legal title to the
25policy through a valid assignment completed in accordance
26with the terms of the policy and is properly recorded as the
27legal owner of the policy in the records of the insurer.
28“Policyholder” does not include a person who has a mere
29beneficial interest in an insurance policy.
3014. “Private flood insurance” means a personal lines policy
31or a commercial policy issued by an insurer to provide coverage
32to the policyholder for the peril of flood.
3315. “Special flood hazard area” means an area having special
34flood, mudflow, or flood-related erosion hazards as shown on a
35flood insurance rate map.
-2- 116. “Standard flood insurance” means a private flood
2insurance policy that provides coverage that is at least
3equivalent to the coverage provided under a standard flood
4insurance policy issued under the national flood insurance
5program for the same type of property, including when
6considering deductibles, exclusions, and conditions offered by
7the insurer.
8 Sec. 4. NEW SECTION. 515J.4 Standard flood insurance.
9Standard flood insurance written by an insurer must meet all
10of the following requirements:
111. The policy must contain a provision that advises the
12policyholder of the availability of flood insurance coverage
13under the national flood insurance program.
142. The policy must contain a mortgage interest clause
15substantially similar to the mortgage interest clause in a
16standard flood insurance policy issued under the national flood
17insurance program.
183. The policy must contain a provision that allows the
19policyholder to file suit not later than one calendar year
20after the date of a written denial of all or part of a claim
21made by the policyholder under the policy. The provision must
22state that if the policyholder files a complaint with the
23division prior to one calendar year after the date of a written
24denial of all or part of a claim, the one calendar year in which
25the policyholder may file suit shall commence on the first day
26following the date on which the division closes the complaint.
274. The policy must contain cancellation provisions that are
28as restrictive as the cancellation provisions in a standard
29flood insurance policy issued under the national flood
30insurance program.
315. All deductibles and policy limits must be prominently
32displayed in a minimum ten point type on the policy
33declarations page, or on the face page of the policy.
34 Sec. 5. NEW SECTION. 515J.5 Non-standard flood insurance.
35An insurer may issue non-standard flood insurance that:
-3- 11. Provides supplemental flood insurance to a standard
2flood insurance policy issued under the national flood
3insurance program, or to standard flood insurance issued
4pursuant to section 515J.4.
52. Defines “flood” more broadly than the term is defined in
6section 515J.3.
73. Does not meet the requirements for discretionary
8acceptance under 12 C.F.R.§208.25(c)(3)(iii)(A-D).
9 Sec. 6. NEW SECTION. 515J.6 Rate filings.
10An admitted insurer that writes private flood insurance
11pursuant to this chapter shall establish and file rates in
12compliance with all applicable provisions of section 515F.5.
13 Sec. 7. NEW SECTION. 515J.7 Form filings — prior approval.
141. An admitted insurer that writes private flood insurance
15pursuant to this chapter shall file with the commissioner a
16copy of all forms at least thirty calendar days prior to the
17effective date of each form. Private flood insurance shall not
18be issued or delivered to any person in this state until all
19forms have been approved by the commissioner.
202. The commissioner may at any time review an insurer’s
21forms, records of an insurer pertinent to the forms, and
22relevant market conditions. The commissioner may disapprove
23a form at any time and shall notify the insurer of the
24disapproval. The commissioner may require an insurer to
25provide, at the insurer’s expense, all information deemed
26necessary by the commissioner to review a form. Within
27sixty calendar days of notification by the commissioner of
28disapproval of a form, the insurer shall file all information
29with the commissioner that establishes that the form is in
30compliance with this chapter and other applicable laws. The
31insurer shall bear the burden of proving by a preponderance of
32the evidence that a form complies with this chapter and other
33applicable laws. Pursuant to section 515.152, an insurer may
34appeal a final determination of the commissioner.
353. An advisory organization may file forms, in compliance
-4-1with subsection 1, on behalf of an insurer. If upon
2preliminary review, the commissioner finds that a form does
3not comply with this chapter or other applicable laws, the
4commissioner shall disapprove the form and notify the advisory
5organization that filed the form. Within sixty calendar
6days of notification by the commissioner of disapproval of a
7form, the advisory organization shall file all information
8with the commissioner that establishes that the form is
9in compliance with this chapter and other applicable laws.
10The advisory organization shall bear the burden of proving
11by a preponderance of the evidence that a form complies
12with this chapter and other applicable laws. Pursuant to
13section 515.152, an advisory organization may appeal a final
14determination of the commissioner.
154. All form filings shall be confidential until the
16effective date of the form. After the effective date of a
17form, the form shall be posted on the division’s internet site
18and available to the public.
19 Sec. 8. NEW SECTION. 515J.8 Continuity of coverage —
20notification to applicants.
211. An insurance producer shall provide a written notice
22to an applicant for private flood insurance whose property is
23located in a special flood hazard area and is covered by flood
24insurance issued under the national flood insurance program
25before the insurance producer places private flood insurance
26with an insurer or with an eligible surplus lines insurer for
27the applicant’s property. The notice must advise the applicant
28that if the applicant discontinues flood insurance under the
29national flood insurance program, and later wants to reinstate
30coverage under the program, the applicant may be charged the
31full-risk rate and no longer qualify for a subsidized rate
32under the national flood insurance program.
332. An insurance producer, and an insurer or an eligible
34surplus lines insurer with whom the insurance producer places
35private flood insurance, shall retain a copy of the notice
-5-1under subsection 1 for a minimum of five years.
2 Sec. 9. NEW SECTION. 515J.9 Surplus lines — private flood
3insurance.
4If after conducting a diligent search a surplus lines
5producer confirms that the full amount of private flood
6insurance, or a specific type of private flood insurance,
7cannot be obtained from an insurer, the surplus lines producer
8may place a policy providing flood coverage with an eligible
9surplus lines insurer. The surplus lines producer and the
10eligible surplus lines insurer must each comply with the
11applicable provisions of chapter 515I.
12 Sec. 10. NEW SECTION. 515J.10 Policy certification.
131. An insurer that writes private flood insurance under
14this chapter may certify that private flood insurance issued
15by the insurer meets or exceeds flood coverage provided under
16the national flood insurance program by including the following
17language on a declarations page or other policy documentation
18provided to a policyholder:
19This policy meets the definition of “private flood insurance”
20contained in 42 U.S.C.§4012a(b)(7) and the corresponding
21regulations.
222. An insurer may reference a certification pursuant to
23subsection 1 in marketing materials, or in communications with
24insurance producers, lending institutions, policyholders, or
25prospective policyholders.
26 Sec. 11. NEW SECTION. 515J.11 Notice of renewal.
271. If an insurer offers to renew private flood insurance
28that has a term of one year or less, the insurer shall provide
29the policyholder with a notice that states the renewal terms,
30the renewal premium, and the renewal premium due date at least
31forty-five calendar days before the expiration date of the
32private flood insurance.
332. If an insurer offers to renew private flood insurance
34that has a term of more than one year, or an indefinite term,
35the insurer shall provide the policyholder with a notice that
-6-1states the renewal terms, the renewal premium, and the renewal
2premium due date at least forty-five calendar days before the
3anniversary date of the private flood insurance.
43. If notice is required pursuant to subsection 1 or 2, the
5notice must be in writing and shall be sent to the policyholder
6or to the broker of record at the policyholder’s or broker’s
7last known mailing address or electronic mail address on file
8with the insurer. All notices and documents that are delivered
9by electronic means shall comply with the applicable provisions
10of chapter 505B.
114. If an insurer fails to comply with the forty-five
12calendar day notice requirement under subsection 1 or 2, a
13policyholder or a broker of record may elect, within forty-five
14calendar days following the receipt of notice, to cancel the
15renewal policy. Earned premium for any period of coverage
16during the forty-five calendar day period shall be calculated
17pro rata based upon the premium applicable to the original
18private flood insurance policy
19 Sec. 12. NEW SECTION. 515J.12 Cancellation or nonrenewal.
201. Standard flood insurance shall only be canceled by an
21insurer pursuant to the cancellation provisions in section
22515J.4, subsection 4.
232. Written notice of cancellation or nonrenewal of private
24flood insurance, other than standard flood insurance, shall
25be given by the insurer a minimum of forty-five calendar days
26before the date of cancellation or nonrenewal, and shall be
27given to each of the following:
28a. The policyholder.
29b. The federally insured institution that made the
30designated loan secured by the property covered by the private
31flood insurance, or to the servicer acting on the federally
32insured institution’s behalf.
333. A notice under subsection 2 must:
34a. State the date that the private flood insurance is
35canceled or not renewed, and the date shall be no sooner
-7-1than forty-five calendar days from the date of the notice of
2cancellation or nonrenewal.
3b. Advise the policyholder of the policyholder’s right
4to request that the division review the cancellation or
5nonrenewal.
6c. Be filed with the commissioner subject to the use and
7file requirements.
8d. Be in writing and shall be sent to the policyholder and
9to the federally insured institution at the policyholder’s and
10the federally insured institution’s last known mailing address
11or electronic mail address on file with the insurer. All
12notices and documents that are delivered by electronic means
13shall comply with the applicable provisions of chapter 505B.
14 Sec. 13. NEW SECTION. 515J.13 Unfair acts and deceptive
15practices.
16An insurer or an insurance producer that knowingly does any
17of the following commits an unfair or deceptive act or practice
18pursuant to section 507B.4, subsection 3, and shall be subject
19to orders and penalties under chapter 507B:
201. Misrepresents a private flood insurance policy as
21certified pursuant to section 515J.10, subsection 1.
222. Misrepresents the scope of coverage of private flood
23insurance in marketing materials or an advertisement, or
24in any communication with an insurance producer, a lending
25institution, a policyholder, or a prospective policyholder.
26 Sec. 14. NEW SECTION. 515J.14 Writing private flood
27insurance — miscellaneous requirements.
281. At least thirty calendar days prior to writing private
29flood insurance, an admitted insurer shall, pursuant to rules
30adopted by the commissioner:
31a. Notify the commissioner of the insurer’s intent to write
32private flood insurance.
33b. File a plan of operation and financial projections, or
34revisions to a plan of operation and financial projections,
35with the commissioner.
-8- 12. An insurer writing private flood insurance shall comply
2with all applicable requirements of Title XIII, subtitle 1.
33. An insurer writing private flood insurance is subject to
4examination pursuant to chapter 507.
54. An insurer writing private flood insurance shall
6notify the commissioner, pursuant to rules adopted by the
7commissioner, within forty-five calendar days of exiting the
8private flood insurance market.
9 Sec. 15. NEW SECTION. 515J.15 Nondiscrimination.
101. An insurer shall not refuse to issue private flood
11insurance, cancel private flood insurance, or refuse to
12renew private flood insurance based on an applicant’s or a
13policyholder’s status related to any of the following:
14a. Age.
15b. Sex.
16c. Race.
17d. Color.
18e. Religion.
19f. National origin.
20g. Marital status.
21h. Income level.
22i. Occupation.
23j. Military status.
24k. Creed.
252. This section shall not prohibit an insurer from limiting
26the issuance of private flood insurance under this chapter
27to individuals who have engaged in, or are engaged in, a
28particular profession or occupation.
293. An insurer may refuse to issue or to renew private flood
30insurance based on a property’s exposure to flood.
31 Sec. 16. NEW SECTION. 515J.16 Rules.
32The commissioner may adopt rules pursuant to chapter 17A as
33necessary to administer this chapter.
34 Sec. 17. FUTURE REPEAL. Section 515J.8, subsection 1, is
35repealed effective thirty calendar days after enactment of
-9-1federal legislation mandating that for purposes of applying
2any statutory, regulatory, or administrative continuous
3coverage requirement, including under 42 U.S.C. §4014(g), the
4administrator of the federal emergency management agency shall
5consider any period during which a property was continuously
6covered by flood insurance, either through the national flood
7insurance program or the private market, that was used to
8satisfy the requirements under 42 U.S.C. §4012a(a) to be a
9period of continuous coverage. The commissioner of insurance
10shall notify the Iowa Code editor upon the occurrence of this
11condition.
12 Sec. 18. APPLICABILITY.
131. This Act applies sixty calendar days after the date
14of enactment to private flood insurance initially delivered,
15issued for delivery, continued, or renewed in this state on or
16after the date of enactment.
172. This Act applies one hundred eighty calendar days after
18the date of enactment to private flood insurance that has been
19initially delivered, issued for delivery, continued, or renewed
20in this state prior to the date of enactment.
21EXPLANATION
22The inclusion of this explanation does not constitute agreement with
23the explanation’s substance by the members of the general assembly.
24This bill establishes the “Iowa Private Flood Insurance Act”
25to foster innovation in private flood insurance, allow insurers
26to test private flood insurance products in the market, and to
27provide consumers with more flood insurance options.
28“Private flood insurance” is defined in the bill as a
29personal lines or commercial policy issued by an insurer to
30provide coverage to the policyholder for the peril of flood.
31“Flood” is also defined in the bill.
32The bill permits insurers to write standard flood insurance
33if the policy advises the policyholder of the availability of
34flood insurance coverage under the national flood insurance
35program (NFIP), it contains a mortgage interest clause
-10-1substantially similar to the mortgage interest clause in a
2standard flood insurance policy (SFIP) issued under the NFIP,
3it advises the policyholder of the process for filing suit
4over a denied claim, it contains cancellation provisions as
5restrictive as the cancellation provisions in an SFIP issued
6under the NFIP, and all deductibles and policy limits are
7prominently displayed on the policy declarations page or the
8face page of the policy. “Standard flood insurance policy” is
9defined in the bill as a private flood insurance policy that
10provides coverage that is at least equivalent to the coverage
11provided under a standard flood insurance policy issued under
12the national flood insurance program for the same type of
13property, including when considering deductibles, exclusions,
14and conditions offered by the insurer.
15The bill also permits insurers to issue non-standard flood
16insurance that provides supplemental flood insurance to an SFIP
17issued under the NFIP or to standard flood insurance issued by
18an insurer under the bill; or that defines “flood” more broadly
19than the term is defined in the bill; or that does not meet
20the requirements for discretionary acceptance under 12 C.F.R.
21§208.25(c)(3)(iii)(A-D).
22An admitted insurer that writes private flood insurance must
23establish and file rates in compliance with all applicable
24provisions of Code chapter 515F and, as detailed in the bill,
25receive prior approval from the commissioner of insurance
26(commissioner) on form filings.
27An insurance producer must provide a written notice to
28an applicant for private flood insurance whose property is
29located in a special flood hazard area and is covered by flood
30insurance under the NFIP before the producer places private
31flood insurance with an insurer or an eligible surplus lines
32insurer for the applicant’s property. “Special flood hazard
33area” is defined in the bill. The notice must advise the
34applicant that if the applicant discontinues flood coverage
35under the NFIP and later wants to reinstate coverage, the
-11-1applicant may be charged the full-risk rate and no longer
2qualify for a subsidized rate under the NFIP. Under the bill,
3this requirement is repealed effective 30 calendar days after
4enactment of federal legislation mandating that for purposes
5of applying any statutory, regulatory, or administrative
6continuous coverage requirement, including under 42 U.S.C.
7§4014(g), the administrator of the federal emergency management
8agency must consider any period during which a property was
9continuously covered by flood insurance, either through the
10NFIP or the private market, that was used to satisfy the
11requirements under 42 U.S.C.§4012a(a) to be a period of
12continuous coverage. The commissioner is required to notify
13the Iowa Code editor upon the occurrence of this condition.
14The bill permits a surplus lines producer, after conducting
15a diligent search that confirms that the full amount of private
16flood insurance, or a specific type of private flood insurance,
17cannot be obtained from an insurer, to place a policy providing
18flood coverage with an eligible surplus lines insurer. The
19bill requires the surplus lines producer and the eligible
20surplus lines insurer to comply with the applicable provisions
21of Code chapter 515I.
22An insurer that writes private flood insurance may certify
23that a policy issued by the insurer meets or exceeds flood
24coverage provided under the NFIP by including language as
25specified in the bill on a declarations page or other policy
26documentation provided to a policyholder. The insurer may
27reference the certification in marketing materials, and
28communications with insurance producers, lending institutions,
29policyholders, and prospective policyholders.
30The requirements for renewal, nonrenewal, and cancellation
31of private flood insurance are detailed in the bill.
32An insurer or an insurance producer that knowingly
33misrepresents a policy as being certified, or misrepresents
34the scope of coverage of private flood insurance in marketing
35materials, advertisements, or in a communication with an
-12-1insurance producer, a lending institution, a policyholder, or
2a prospective policyholder commits an unfair or deceptive act
3or practice, and is subject to orders and penalties under Code
4chapter 507B.
5The bill requires that an admitted insurer, at least 30
6days prior to writing private flood insurance, notifies the
7commissioner and files a plan of operation and financial
8projections. An insurer must also notify the commissioner
9within 45 days of exiting the private flood insurance market.
10An insurer that writes private flood insurance must comply with
11all applicable requirements of Code Title XIII, subtitle 1, and
12is subject to examination pursuant to Code chapter 507.
13The bill prohibits an insurer from refusing to issue or
14renew private flood insurance, or from canceling private
15flood insurance, based on an applicant’s or a policyholder’s
16age, sex, race, color, religion, national origin, marital
17status, income level, occupation, military status, or creed.
18An insurer may, however, limit the issuance of private flood
19insurance to individuals who have engaged in, or are engaged
20in, a particular profession or occupation, and may refuse to
21issue or renew private flood insurance due to a property’s
22exposure to flood.
23The commissioner may adopt rules pursuant to Code chapter
2417A as necessary to administer the bill.
25The bill applies 60 calendar days after the date of enactment
26to private flood insurance initially delivered, issued for
27delivery, continued, or renewed in this state on or after the
28date of enactment. The bill applies 180 calendar days after
29the date of enactment to private flood insurance that has been
30initially delivered, issued for delivery, continued, or renewed
31in this state prior to the date of enactment.
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