| ||||
| Public Act 102-0720 | ||||
| ||||
| ||||
AN ACT concerning regulation.
| ||||
Be it enacted by the People of the State of Illinois,
| ||||
represented in the General Assembly:
| ||||
Section 1. Short title. This Act may be cited as the | ||||
Private Primary Residential Flood Insurance Act. | ||||
Section 3. Purpose. To provide protection of lives and | ||||
property from the peril of flood, this Act is designed to | ||||
encourage a robust private primary residential flood insurance | ||||
market to provide consumer choices and alternatives to the | ||||
existing National Flood Insurance Program. | ||||
Section 5. Definitions. As used in this Act:
| ||||
"Authorized insurer" means an insurer that is authorized | ||||
by the Department of Insurance to write insurance under a | ||||
certificate of authority issued by the Department of Insurance | ||||
to transact insurance in this State.
| ||||
"Department" means the Department of Insurance.
| ||||
"National Flood Insurance Program" means the program of | ||||
flood insurance coverage and floodplain management | ||||
administered under the National Flood Insurance Act of 1968 | ||||
(42 U.S.C. 4001 et seq.) and applicable federal regulations | ||||
promulgated in Title 44 of the Code of Federal Regulations.
| ||||
"Primary residential flood insurance" means an insurance | ||||
policy covering losses from flood to residential property, | ||
other than commercial property insurance, written in this | ||
State by any insurer authorized to do business that is not | ||
written to apply coverage in excess of the coverage provided | ||
under another flood insurance policy, whether issued by a | ||
private insurer or the National Flood Insurance Program.
| ||
Section 10. Forms. The coverage for residential properties | ||
required to have flood insurance that are in a special flood | ||
hazard area designated by the Federal Emergency Management | ||
Agency shall meet the private flood insurance requirements | ||
specified in subsection (b) of 42 U.S.C. 4012a and applicable | ||
federal regulations.
| ||
Section 15. Regulatory notice of intent. Authorized | ||
insurers must: | ||
(1) notify the Department of plans to sell primary | ||
residential flood insurance products in accordance with | ||
the State's rate filing laws at least 30 days before | ||
writing primary residential flood insurance in this State; | ||
and | ||
(2) obtain the approval of the Director of Insurance | ||
for a plan of operation or material revisions to such | ||
plan, including plans to sell primary residential flood | ||
insurance. | ||
Section 20. Notice to consumers.
| ||
(a) If a consumer currently has no coverage under the | ||
National Flood Insurance Program, the consumer applicant must | ||
be informed of the existence of the National Flood Insurance | ||
Program before being placed with private flood insurance.
| ||
(b) All consumers must be informed that the coverage under | ||
the National Flood Insurance Program may be provided at a | ||
subsidized rate and that the full-risk rate for flood | ||
insurance may apply to the property if the applicant later | ||
seeks to reinstate coverage under the program. The insurance | ||
producer, the surplus lines broker, or the insurer, upon its | ||
election or if there is no insurance producer or surplus lines | ||
broker, must provide the notice under subsection (a).
| ||
(c) This Section only applies if the applicant lives in a | ||
special flood hazard area. This Section is inoperative if | ||
federal legislation is enacted allowing the insured to switch | ||
between private flood insurance and National Flood Insurance | ||
Program coverage without risk of penalty.
| ||
Section 25. Other provisions.
| ||
(a) With respect to the regulation of private flood | ||
insurance coverage written in this State by authorized | ||
insurers, this Section supersedes any other provision of the | ||
Illinois Insurance Code in the event of a conflict.
| ||
(b) An insurer shall certify that the insurance policy | ||
meets the definition of "private flood insurance", as | ||
specified in paragraph (7) of subsection (b) of 42 U.S.C. | ||
4012a and applicable federal regulations.
| ||
(c) Nothing in this Act is intended to restrict the use of | ||
existing filings by an insurer or limit the ability of private | ||
insurers to provide flood insurance coverage of any type not | ||
addressed in this Act. | ||
Section 30. Rules. The Department may adopt rules to | ||
implement this Act.
| ||