SSHB577 4282 3175
HOUSE SUMMARY OF SENATE AMENDMENTS
HB 577 2021 Regular Session McKnight
INSURANCE/FLOOD: Provides relative to residential flood coverage
Synopsis of Senate Amendments
1.Removes the requirement that an insurer provide written notice to an applicant
if the policy deviates from the flood insurance policy types described in R.S.
22:1344.
2.Provides that the certifications in residential flood insurance policies are
contained in separate statements, relative to whether the policy meets the
definition of private flood insurance in federal law and whether the policy
provides at least the amount of coverage of the standard flood insurance policy
under the National Flood Insurance Program.
3.Removes redundant language.
Digest of Bill as Finally Passed by Senate
Proposed law defines the terms "flood", "hurricane", "named storm", "residential flood
coverage", "separate named storm or hurricane deductible", and "standard flood deductible".
Proposed law provides that proposed law shall not apply to commercial lines insurance and
surplus lines insurance.
Proposed law provides that the La. Citizens Property Insurance Corporation shall not provide
residential flood coverage.
Proposed law provides that insurers providing residential flood coverage shall do all of the
following:
(1)Notify the commissioner at least 30 days before writing residential flood coverage
in this state.
(2)File a plan of operation, financial projections, and any revisions of such with the
commissioner.
(3)Note the residential flood coverage premiums, deductibles, and policy limits
prominently on the policy declarations page.
(4)Notify the commissioner in writing at least 60 days prior to the market end date of
residential flood coverage and to advise regarding all of the following:
(a)When an approved policy form will no longer be marketed in this state.
(b)When an approved policy form will be permanently withdrawn from this
state.
(c)Whether or not residential flood coverage issued in this state under a
discontinued or withdrawn policy form shall remain in force.
(d)Whether existing residential flood coverage issued in this state under a
discontinued or withdrawn policy form shall continue to be renewed.
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(e)The policy form numbers being discontinued or withdrawn and the dates of
original approval.
Proposed law provides that in addition to excess flood insurance, insurers may issue any of
the following types of residential flood coverage:
(1)Standard flood coverage.
(2)Preferred flood insurance, which shall include the same coverage as standard flood
insurance, losses from water intrusion originating from outside the structure that are
not otherwise covered by flood damage, coverage for additional living expenses, and
a requirement that any loss under personal property be adjusted only on the basis of
replacement costs up to the policy limits.
(3)Customized flood insurance which includes coverage that is broader than the
coverage provided under standard flood insurance.
(4)Flexible flood insurance, which covers losses from the peril of flood.
(5)Supplemental flood insurance, which may provide coverage designed to supplement
a flood policy obtained from the National Flood Insurance Program or from an
insurer issuing standard or preferred flood insurance.
Proposed law authorizes insurers writing residential flood policies to issue flood insurance
that covers losses from the peril of flood using a definition of "flood" other than that
provided in proposed law (R.S. 22:1341) and authorizes the use of terms and conditions
other than those specified in proposed law (R.S. 22:1344).
Proposed law provides that insurers offering private flood insurance may continue using
policy forms filed and approved before January 1, 2022.
Proposed law provides that insurers writing residential flood coverage shall establish flood
coverage rates in accordance with present law, and if filed with the commissioner before
January 1, 2027, the following shall apply:
(1)An insurer may establish and use rates in accordance with the rates, rating schedules,
or rating manuals filed by the insurer with the commissioner.
(2)Rates established pursuant to this proposed law are not subject to present law.
(3)Within 30 days after the effective date of the change, the insurer shall notify the
commissioner of any change to previously established rates and of the average
statewide percentage change in rates.
(4)Actuarial data shall be maintained by the insurer for two years after the effective date
of the rate change and is subject to examination by the commissioner.
(5)If the commissioner determines that a rate is excessive or unfairly discriminatory, the
commissioner shall require the insurer to provide appropriate credit to affected
policyholders and an appropriate refund to affected former policyholders.
Proposed law provides that a producer shall provide written notice to be signed by the
applicant before the producer places residential flood coverage with an authorized or surplus
lines insurer for a property receiving flood coverage from the National Flood Insurance
Program.
Proposed law provides that notice shall inform the applicant of the following:
(1)Coverage under the National Flood Insurance Program is provided at a subsidized
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rate.
(2)If an applicant discontinues coverage under the National Flood Insurance Program,
the full risk rate may apply to the property.
Proposed law provides that if an applicant does not have flood coverage, a producer shall
inform the applicant of the National Flood Insurance Program.
Proposed law provides that insurers writing standard flood insurance policies, preferred flood
insurance policies, customized flood insurance policies, flexible flood insurance policies, or
residential flood insurance policies using a different definition of "flood" than that in
proposed law, or residential flood insurance policies with terms and conditions other than
those described in proposed law shall certify on the declarations page of the policy in bold
typed print of at least 14 point font whether the policy meets the definition of "private flood
insurance" in 42 U.S.C. 4012a(b)(7) and whether the policy provides at least the coverage
provided in the standard flood insurance policy under the National Flood Insurance Program.
Effective Jan. 1, 2022.
(Adds R.S. 22:1341-1346)
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