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SENATE FLOOR VERSION
April 11, 2022
COMMITTEE SUBSTITUTE
FOR ENGROSSED
HOUSE BILL NO. 4279 By: Sneed and Phillips of the
House
and
Quinn of the Senate
An Act relating to insurance; amendin g 36 O.S. 2021,
Sections 6413, 6414, 6415, 641 7, and 6418, which
relate to the Market Assistance Association Act;
modifying the definition of insurer; modifying the
definition of member; modifying policies of insurance
required by members to issue; clarify ing that act
applies to homeowners ' liability insurance; modifying
notification requirements of member insurers;
modifying procedure for amendments to the plan of
operation; modifying Market Assistance Association
Board of Directors membership; modifying t he term of
members; specifying that the remain ing Board of
Directors shall fill vacancies; directing that the
Board of Directors shall consider whether all
Association member insurers are fairly represented;
clarifying that the Association shall submit ins tead
of file a statement; clarifying that liab ility
insurance means homeowners' liability insurance;
updating statutory language; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 6413, is
amended to read as follows:
Section 6413. As used in the Market Assistance Association Act:
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1. "Association" means the Market Assistance Associat ion
established pursuant to this act the Market Assistance Association
Act;
2. "Board" means the Board of Directors of the Market
Assistance Association;
3. "Commissioner" means the Insurance Commissioner;
4. "Insurer" means any entity licensed to issue homeowners ' or
homeowners' liability insurance; and
5. "Member" means all property and casualty insurers licensed
in the State of Oklahoma or this state and writing homeowners' or
homeowners' liability insurance in the state. These entities are
required to be a participant in the Association as a condition of
doing business in Oklahoma.
SECTION 2. AMENDATORY 36 O.S. 2021, Section 6414, is
amended to read as follows:
Section 6414. A. The Association created pursuant to the
Market Assistance Associ ation Act shall have the power on behalf of
its members to:
1. Require members to issu e policies of insurance, including
primary, excess, and incidental coverages, to applicants, subject to
limitations specified in the plan of operation required by the
Market Assistance Association Act; irregardless regardless of the
type of insurance cover age, the limits of liability for homeowners'
liability insurance, shall be governed by the amounts specified in
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subsection A of Section 154 of Title 51 of the Oklahoma Statutes;
and
2. Call upon member insurer s who have expertise or familiarity
with a particular line of homeowners' liability insurance to assist
in underwriting such insurance.
B. The Board after consultation with the Association, the
Insurance Commissioner and other affected entities, shall pro mulgate
a plan of operation consistent with th e provisions of this section,
to become effective no late r than ninety (90) days after the date of
the inception of the Associa tion.
1. The plan of operation shall provide for economic, fair and
nondiscriminatory administration and for prompt and efficien t
provision of insurance, and shall contain other provisi ons
including, but not limited to, the following:
a. preliminary assessment of all members for initial
expenses necessary to commence operations of the
Association,
b. establishment of necessary faci lities,
c. management of the Association,
d. assessment of members, and assessment of policyholders
if a market assistance asso ciation for professionals
is declared, to defray losses and expenses,
e. establishment of committees as may be necessary to
facilitate the administration of the Association,
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f. procedures providing that an insured shall have proof
that he or she has coverage that has been canceled or
nonrenewed by his or her current carrier and has
subsequently requested and been refused homeowners' or
homeowners' liability coverage from two insurers
licensed to do business in this state, or that his or
her premium has been increased by seventy -five percent
(75%) or more from the previous year, before
requesting insurance coverage from the Associatio n,
g. appointment of members of the Association on a
rotating basis to provide homeowners' and homeowners'
liability insurance coverage based upon dire ct
premiums for homeowners' and homeowners' liability
insurance, written in the state in the preceding
calendar year,
h. procedures for determining amounts of in surance to be
provided by members of the Association, and
i. procedures for two or more member insu rers to share an
insured risk if coverage for that risk is beyond the
ability for one insurer ,
j. procedures requiring member insurers to notify their
insureds not less than forty-five (45) days prior to
the renewal date for a policy, if the premium to be
assessed will be increased to a rate greater than the
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rate assessed for the previous year. If such
notification is not timely, then the premium shall be
the same as the premium which was assessed for the
coverage in the previous year .
2. The plan of operation shall provide that any balance
remaining in the funds of the Association at the close of its fi scal
year shall be added to the reserves of the Associati on and may be
used for expenses of the Association or any successor association.
3. Amendments to the plan of operation may be made by the
board, subject to the approval of the Commissioner Board.
C. All insurers who are members of the Association shall
participate in the Association's writings, expenses, and losses in
the proportion that the net direct pre miums of each such member
written during the pre ceding calendar year bears to the aggregate
net direct premiums written in this state by all members of the
Association. Each insurer's proportion of participation in the
Association shall be determined annu ally on the basis of such net
direct premiums written during the preceding calendar year, as
reported in the annual statements and other reports filed by the
insurer that may be required by the board of directors Board of
Directors. No member shall be obligated in any one ( 1) year to
write liability insurance business from the Association which that
would result in the member insurer writing more than ten percent
(10%) of its total annual liability insurance, from all lines of
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liability insurance, from the Association. Likewise, no member
shall be obligated in any one (1) year to write homeowners '
insurance business from the Association which that would result in
the member insurer writing more than ten percent (10%) of its total
annual homeowners' insurance, from the Associa tion.
D. An applicable insurer ceasing to be licensed or authorized
to transact insurance business pursuant to the Insurance Code shall
automatically cease to be a member of the Association effective at
12:01 a.m. on the day following the termination or e xpiration of its
certificate of authority and shall no longer be subject t o the plan
of operation or requirements of the Association; provided, howeve r,
such insurer shall remain liable for any annual assessments of the
Association based on expenses incur red by the Association while such
license or authority was in effect.
SECTION 3. AMENDATORY 36 O.S. 2021, Section 6415, is
amended to read as follows:
Section 6415. A. The business and functions of the Association
shall be managed and administered by a board Board of eleven (11)
directors composed of two directors selected by the American
Insurance Association, who are represent atives of Association
members; two directors selected by the Alliance of American
Insurers, who are repre sentatives of Association members; two
directors selected by the National A ssociation of Independent
Insurers, who are representatives of Association m embers; two
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directors appointed by the Commissioner, who are representatives of
Oklahoma domestic insurer s who are Association members; one director
who shall be the President of t he Oklahoma Surplus Lines
Association; and two directors appointed by the Co mmissioner, who
are representatives of nonaffiliated foreign or alien insurers who
are Association member s eight (8) directors composed of four
directors representing Association m embers, two directors who are
representatives of Oklahoma domestic insurers who are Association
members, one director who represents a surplus lines carrier who is
an Association member, and the Insurance Commissioner or an
Insurance Department staff membe r chosen as a designee by the
Insurance Commissioner. Each director shall designate a full-time
salaried employee of the insurer to represent the director as an
alternate in the absence of the director on the Board. Each
director shall serve for a term o f two (2) years or until the
Association is termi nated, whichever comes first. The appointment
to the board of directors shall be subject to approval by th e
Commissioner. The term of office of each director shall continue
until the appointment and qualif ication of a successor. Any vacancy
on the Board shall be filled for the remaining period of the term by
appointment by the appointing authority which orig inally filled the
vacant post, subject to the approval of the Commissioner the
remaining Board directors. If no directors are selected and
appointed within sixty (60) days after the effective date of the
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inception of the Association, the Commissioner s hall appoint the
initial directors of the Board.
B. The chairman shall call all meetings of the Board and shall
give reasonable notice of meetings to al l directors. At any meeting
of the Board, each Board director or his predesignated alternate
shall have one vote. Six members of the Board or their
predesignated alternates shall constitute a quorum for t he
transaction of business and the acts of a major ity of the Board
members present at a meeting at which a quorum is present shall be
the acts of the Board. The Board shall meet as often as may be
required to perform the general duties of administration o f the
Association, but not less frequently than an nually.
C. In approving selections to the Board, the Commissioner Board
of Directors shall consider, among other things, whether all
Association member insurer s are fairly represented.
D. Members of the Board and their predesignated alternates
shall serve without compensation but may be reimbursed from the
assets of the Association for all actual and necessary expenses
incurred by them in performance of their d uties for the Board.
SECTION 4. AMENDATORY 36 O.S. 2021, Section 6417, is
amended to read as follows:
Section 6417. A. The Association shall file with submit to the
Insurance Commissioner, annu ally, from the date of its inception, a
statement prepared by an independent certif ied public accountant
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which shall contain information with respect to its transactions,
condition, operations, and affairs during the preceding calendar
year. The statement shall contain such matters and infor mation as
are prescribed and shall be in such form as is approved by the
Commissioner. The Commissioner may, at any time, require the
association Association to furnish additional information with
respect to its transactions, cond ition, operations, and affairs, or
any matter connected therewith consi dered to be material and of
assistance in evaluati ng the scope, operation and experience of the
Association.
B. The books of account, records, reports and other doc uments
of the Association shall be open and free for examination to the
Commissioner at all reasonable times.
C. The books of account, records , reports and other documents
of the Association shall be open to inspection by the members at
such times and under such conditions a nd regulations as the Board
shall determine.
D. The Association shall provide for the making of detailed
reports of liability approved or canceled, for the drawing up of
annual budgets of the Association and for the rendering of accoun ts
to each member Board member at least every twelve (12) months.
SECTION 5. AMENDATORY 36 O.S. 2021, Section 6418, is
amended to read as follows:
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Section 6418. Each member insurer shall use the filed rate for
the homeowners' liability and homeowners' insurance being written.
Any variance from such rate , including a variance based upon debit,
shall be submitted or filed with the I nsurance Commissioner.
SECTION 6. This act shall become effective November 1, 2022.
COMMITTEE REPORT BY: COMMITTEE ON RETIREMENT AND INSURANCE
April 11, 2022 - DO PASS AS AMENDED