Oklahoma 2022 Regular Session

Oklahoma House Bill HB4279 Compare Versions

Version 1 (Old)

Version 2 (New)

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1		-	An Act
2		-	ENROLLED HOUSE
3		-	BILL NO. 4279 By: Sneed and Phillips of the
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	28	+	STATE OF OKLAHOMA
	29	+
	30	+	2nd Session of the 58th Legislature (2022)
	31	+
	32	+	CONFERENCE COMMITTEE
	33	+	SUBSTITUTE
	34	+	FOR ENGROSSED
	35	+	HOUSE BILL NO. 4279 By: Sneed and Phillips of the
4	36		House
5	37
6	38		and
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8	40		Quinn of the Senate
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10	42
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	46	+	CONFERENCE COMMITTEE SUBSTITUTE
14	47
15	48		An Act relating to insurance; amending 36 O.S. 2021,
16	49		Sections 6413, 6414, 6415, 6417, and 6418, which
17	50		relate to the Market Assistance Associatio n Act;
18	51		modifying the definition of insurer; modifying the
19	52		definition of member; modifying policies of insurance
20	53		required by members to issue; clarifying that act
21	54		applies to homeowners' liability insurance; modifying
22	55		notification requirements of m ember insurers;
23	56		modifying procedure for amendments to the plan of
24	57		operation; modifying Market Assistance Association
25	58		Board of Directors membership; modifying the term of
26	59		members; specifying that the remaining Board of
27	60		Directors shall fill vacancies; directing that the
28	61		Board of Directors shall consider whether all
29	62		Association member insurers are fairly represented;
30	63		clarifying that the Ass ociation shall submit instead
31	64		of file a statement; clarifying that liabi lity
32	65		insurance means homeowners' liability insurance; and
33	66		providing an effective date.
34	67
35	68
36	69
37	70
38		-	SUBJECT: Insurance
39	71
40	72		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLA HOMA:
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42	99		SECTION 1. AMENDATORY 36 O.S. 2021, Section 6413, is
43	100		amended to read as follows :
44		-
45	101		Section 6413. As used in the Market Assistance Association Act:
46		-	ENR. H. B. NO. 4279 Page 2
47	102		1. "Association" means the Market Assistance Associat ion
48	103		established pursuant to this act;
49		-
50	104		2. "Board" means the Board of Directors of the Market
51	105		Assistance Association;
52		-
53	106		3. "Commissioner" means the Insurance Commissioner;
54		-
55	107		4. "Insurer" means any entity licensed to issue homeowners' or
56	108		homeowners' liability insurance; and
57		-
58	109		5. "Member" means all property and casualty insurers licensed
59	110		in the State of Oklahoma or writing homeowners' or liability
60	111		insurance in the this state for both property and casualty lines of
61	112		business. These entities are required to be a participant in the
62	113		Association as a condition of doing business i n Oklahoma.
63		-
64	114		SECTION 2. AMENDATORY 36 O.S. 2021, Section 6414, is
65	115		amended to read as follows:
66		-
67	116		Section 6414. A. The Association created pursuant to the
68	117		Market Assistance Associ ation Act shall have the power on behalf of
69	118		its members to:
70		-
71	119		1. Require members to issue policies of insurance , including
72	120		primary, excess, and incidental coverages, to applicants, subject to
73	121		limitations specified in the plan of operation required by the
74	122		Market Assistance Association Act; irregardless of the typ e of
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75	149		insurance coverage, the limits of liability for homeowners'
76	150		liability insurance, shall be governed by the amounts specified in
77	151		subsection A of Section 154 of Title 51 of the Oklahoma Statutes;
78	152		and
79		-
80	153		2. Call upon member insurers who have expertise or fa miliarity
81	154		with a particular line of homeowners' liability insurance to assist
82	155		in underwriting such insurance.
83		-
84	156		B. The Board after consultation with the Association, the
85	157		Insurance Commissioner and other affected entities, shall promulgate
86	158		a plan of operation consistent with the provisions of this section,
87	159		to become effective no later than n inety (90) days after the date of
88	160		the inception of the Associa tion.
89		-
90	161		1. The plan of operation shall provide for economic, fair and
91		-	nondiscriminatory administration and for prompt and efficient ~~ENR. H. B. NO. 4279 Page 3~~
	162	+	nondiscriminatory administration and for prompt and efficient
92	163		provision of insurance, and shall contain other provisions
93	164		including, but not limited to, the following:
94		-
95	165		a. preliminary assessment of all members for initial
96	166		expenses necessary to commence operations of the
97	167		Association,
98		-
99	168		b. establishment of necessary facilities,
100		-
101	169		c. management of the Association,
102		-
103	170		d. assessment of member s, and assessment of policyholders
104	171		if a market assistance asso ciation for professionals
105	172		is declared, to defray losses and expenses,
106	173
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107	199		e. establishment of committees as may b e necessary to
108	200		facilitate the administration of th e Association,
109		-
110	201		f. procedures providing that an insured shall have proof
111	202		that he or she has coverage that has been canceled or
112	203		nonrenewed by his or her current carrier and has
113	204		subsequently requested and been refused homeowners' or
114	205		homeowners' liability coverage from two insurers
115	206		licensed to do business in this state, or that his or
116	207		her premium has been increas ed by seventy-five percent
117	208		(75%) or more from the previous year, before
118	209		requesting insurance coverage from the Association,
119		-
120	210		g. appointment of members of the Association on a
121	211		rotating basis to provide homeowners' and homeowners'
122	212		liability insurance coverage based upon direct
123	213		premiums for homeowners' and homeowners' liability
124	214		insurance, written in the state in the preceding
125	215		calendar year,
126		-
127	216		h. procedures for determining amounts of insurance to be
128	217		provided by members of the Association, and
129		-
130	218		i. procedures for two or more member insu rers to share an
131	219		insured risk if coverage for that risk is beyond the
132	220		ability for one insurer,
133		-
134	221		j. procedures requiring member insurers to notify their
135	222		insureds not less than forty-five (45) days prior to
136		-	the renewal date for a policy, if the premium to be ENR. H. B. NO. 4279 Page 4
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	249	+	the renewal date for a policy, if the premium to be
137	250		assessed will be increased to a rate greater than the
138	251		rate assessed for the prev ious year. If such
139	252		notification is not timely, then the premium shall be
140	253		the same as the premium which was assessed for the
141	254		coverage in the previous year .
142		-
143	255		2. The plan of operation shall provide that any balance
144	256		remaining in the funds of the Association at the close of its fiscal
145	257		year shall be added to the reserves of the Association and m ay be
146	258		used for expenses of the Association or any successor associatio n.
147		-
148	259		3. Amendments to the plan of operation may be made by the
149	260		board, subject to the approval of the C ommissioner Board.
150		-
151	261		C. All insurers who are members of the Association shall
152	262		participate in the Association's writings, expenses, and losses in
153	263		the proportion that the net direct pre miums of each such member
154	264		written during the preceding calendar year bears to the aggregate
155	265		net direct premiums written in this state by all members of the
156	266		Association. Each insurer's proportion of participation in the
157	267		Association shall be determined annu ally on the basis of such net
158	268		direct premiums written during the preceding calendar year, as
159	269		reported in the annual statements and other reports filed by the
160	270		insurer that may be required by the board of directors. No member
161	271		shall be obligated in any one ( 1) year to write liability insurance
162	272		business from the Association which that would result in the member
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163	299		insurer writing more than ten percent (10%) of its tot al annual
164	300		liability insurance, from all lines of liability insurance, from the
165	301		Association. Likewise, no member shall be obligated in any one (1)
166	302		year to write homeowners ' insurance business from the Association
167	303		which that would result in the member insur er writing more than ten
168	304		percent (10%) of its total annual homeowners ' insurance, from the
169	305		Association.
170		-
171	306		D. An applicable insurer ceasing to be licensed or authorized
172	307		to transact insurance business pursuant to the Insurance Code shall
173	308		automatically cease t o be a member of the Association effective at
174	309		12:01 a.m. on the day fo llowing the termination or e xpiration of its
175	310		certificate of authority and shall no longer be subject to the plan
176	311		of operation or requirements of the Association; provided, however,
177	312		such insurer shall remain liable for any annual assessments of the
178	313		Association based on expenses incur red by the Association while such
179	314		license or authority was in effect.
180		-	ENR. H. B. NO. 4279 Page 5
181	315		SECTION 3. AMENDATORY 36 O.S. 2021, Section 6415, is
182	316		amended to read as follows:
183		-
184	317		Section 6415. A. The business and functions of the A ssociation
185	318		shall be managed and administered by a board Board of eleven (11)
186	319		directors composed of tw o directors selected by the American
187	320		Insurance Association, who are representatives o f Association
188	321		members; two directors selected by the Alliance of Ameri can
189	322		Insurers, who are repre sentatives of Association members; two
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190	349		directors selected by the National Association of Independent
191	350		Insurers, who are representatives of Association members; two
192	351		directors appointed by the Commissioner, who are representatives o f
193	352		Oklahoma domestic insurer s who are Association members; one director
194	353		who shall be the President of the Oklahoma Surplus Lines
195	354		Association; and two directors appointed by the Commission er, who
196	355		are representatives of nonaffiliated foreign or alien insurers who
197	356		are Association member s eight (8) directors composed of four
198	357		directors representing Association members, two directors who are
199	358		representatives of Oklahoma domestic insurers who are Association
200	359		members, one director who represents a surplus lines carrier who is
201	360		an Association member, and the Oklahoma Insurance Commissioner or an
202	361		Oklahoma Insurance Dep artment staff member chosen as a designee by
203	362		the Oklahoma Insurance Commissioner. Each director shall designate
204	363		a full-time salaried employee of the insur er to represent the
205	364		director as an alternate in the absence of the director on the
206	365		Board. Each director shall serve for a term of two (2) years or
207	366		until the Association is terminated, w hichever comes first. The
208	367		appointment to the board of directors shall be subject to approval
209	368		by the Commissioner. The term of office of each director shall
210	369		continue until the appointment and qualification of a successor.
211	370		Any vacancy on the Board shall be filled for the remaining period of
212	371		the term by appointment by the app ointing authority which orig inally
213	372		filled the vacant post, subject to the approval of the Commissione r
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214	399		the remaining Board directors. If no directors are selected and
215	400		appointed within sixty (60) days after the effective date of the
216	401		inception of the Associ ation, the Commissioner s hall appoint the
217	402		initial directors of the Board.
218		-
219	403		B. The chairman shall call all meetings of the Board and shall
220	404		give reasonable notice of meetings to all direct ors. At any meeting
221	405		of the Board, each Board director or his predesignated alternate
222	406		shall have one vote. Six members of the Board or their
223	407		predesignated alternates shal l constitute a quorum for the
224	408		transaction of business an d the acts of a majorit y of the Board
225		-	members present at a meeting at which a quorum is present ~~shall~~ be ~~ENR. H. B. NO. 4279 Page 6~~
	409	+	members present at a meeting at which a quorum is present sha ll be
226	410		the acts of the Board. The Board shall meet as often as may be
227	411		required to perform the general duties of administration of the
228	412		Association, but not les s frequently than annu ally.
229		-
230	413		C. In approving selections to the Board, the Commissioner Board
231	414		of Directors shall consider, among other things, whether all
232	415		Association member insurers are fairly repres ented.
233		-
234	416		D. Members of the Board and their predesignated alternates
235	417		shall serve without compensation but may be reimbursed from the
236	418		assets of the Associatio n for all actual and necessary expenses
237	419		incurred by them in performance of their duties for the Board .
238		-
239	420		SECTION 4. AMENDATORY 36 O.S. 2021, Section 6417, is
240	421		amended to read as follows:
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242	448		Section 6417. A. The Association shall file with submit to the
243	449		Insurance Commissioner, annu ally, from the date of its inception, a
244	450		statement prepared by an independent certified public accountant
245	451		which shall contain information with respect to its transactions,
246	452		condition, operations, and affairs durin g the preceding calendar
247	453		year. The statement shall contain such matters and information as
248	454		are prescribed and shall be in such form as is approved by the
249	455		Commissioner. The Commissioner may, at any time, require the
250	456		Association to furnish additional infor mation with respect to it s
251	457		transactions, condition, operations, and affairs, or any matter
252	458		connected therewith considered to be material and of assistance in
253	459		evaluating the scope, operation and experience of the Association.
254		-
255	460		B. The books of account, recor ds, reports and other doc uments
256	461		of the Association shall be open and free for examination to the
257	462		Commissioner at all reasonable times.
258		-
259	463		C. The books of account, records , reports and other documents
260	464		of the Association shall be open to inspection by the memb ers at
261	465		such times and under such conditions a nd regulations as the Board
262	466		shall determine.
263		-
264	467		D. The Association shall provide for the making of detailed
265	468		reports of liability approved or canceled, for the drawing up of
266	469		annual budgets of the Association and fo r the rendering of accoun ts
267	470		to each member Board member at least every twelve (12) months .
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269	497		SECTION 5. AMENDATORY 36 O.S. 2021, Section 6418, is
270		-	amended to read as follows: ENR. H. B. NO. 4279 Page 7
271		-
	498	+	amended to read as follows:
272	499		Section 6418. Each member insurer shall use the filed rate for
273	500		the homeowners' liability and homeowners' insurance being written.
274	501		Any variance from such rate, including a variance based upon debit,
275	502		shall be submitted or filed with the Ins urance Commissioner.
276		-
277	503		SECTION 6. This act shall become effec tive November 1, 2022.
278	504
279		-	ENR. H. B. NO. 4279 Page 8
280		-
281		-	Passed the House of Representatives the 19th day of May, 2022.
	505	+	58-2-11541 MJ 05/11/22
282	506
283	507
284		-
285		-
286		-	Presiding Officer of the House
287		-	of Representatives
288		-
289		-
290		-	Passed the Senate the 20th day of May, 2022.
291		-
292		-
293		-
294		-
295		-	Presiding Officer of the Senate
296		-
297		-
298		-
299		-	OFFICE OF THE GOVERNOR
300		-	Received by the Office of the Governor this ____________________
301		-	day of ___________________, 20_______, at _______ o'clock _______ M.
302		-	By: _________________________________
303		-	Approved by the Governor of the State of Oklahoma this _____ ____
304		-	day of ___________________, 20_______, at _______ o'clock _______ M.
305		-
306		-
307		-	_________________________________
308		-	Governor of the State of Oklahoma
309		-
310		-	OFFICE OF THE SECRETARY OF STATE
311		-	Received by the Office of the Secretary of State this __________
312		-	day of ___________________, 20_______, at _______ o'clock _______ M.
313		-	By: _________________________________