Chapter 169

2007 -- H 6468 SUBSTITUTE B

Enacted 07/02/07





     Introduced By: Representatives Kennedy, Crowley, Shanley, Naughton, and Lally

     Date Introduced: May 31, 2007


It is enacted by the General Assembly as follows:


     SECTION 1. Chapter 27-5 of the General Laws entitled "Fire Insurance Policies and

Reserves" is hereby amended by adding thereto the following section:


     27-5-3.7. Hurricane deductibles, triggers and policyholder notice. –(a) The provisions

of this section shall be applicable to policies issuing or renewing on or after July 1, 2008.

     (b) In all instances where an insurance company licensed to do business in this state

offers or includes any deductible and/or mitigation measure related to such deductible for any

type of personal lines residential property insurance on dwelling houses, the insurance company

shall provide prominent and clear notice to insureds, that shall be included in the policy issuance

or renewal package and shall fully disclose all details pertaining to any such deductible and/or

mitigation measure.

     (c) The insurer may apply a deductible specific to windstorm coverage where:

     (i) the deductible is specifically approved by the director and shall not exceed

     five percent (5%) of the insured value.

     (ii) the deductible shall be applicable to losses due to a hurricane during the

     period commencing with the issuance of a hurricane warning bulletin for any part of the state by

the National Hurricane Center and concluding twenty-four (24) hours after the termination of the

last hurricane warning bulletin for any part of the state.

     (iii) the deductible, whether it is a flat dollar deductible or a percentage

     deductible shall be presented by at least two (2) examples that illustrate the application of the

deductible to the insured. Nothing herein shall prohibit the insurer from providing any additional

information to the insured to assist in the insured’s understanding the deductible to applied to the

insured’s policy.

     (iv) the deductible set forth above shall not be applied to any insured, if the

     insured has installed approved mitigation measures to protect against windstorm damage and the

insurer has either inspected the property or the insured has submitted satisfactory proof of

installation of the approved mitigation measures. The insurance commissioner, in consultation

with the state building code commissioner, shall adopt and may amend or revise a list of

mitigation measures, based so far as reasonably feasible on national standards for such measures

and practices in other comparable states. The list of mitigation measures adopted by the

insurance commissioner shall be considered approved mitigation measures for purposes of this


     (d) Premium credits shall be applied to policies with deductibles as set forth in subsection


     (e) An insurer may require mitigation measures to protect against windstorm damage

only after specific approval of the substance of such mitigation measures by the director;

     (i) mitigation measures to be taken by an insured are clearly explained, including

     a complete illustration of the dollar impact upon the premiums to be charged to insureds if the

requested mitigation activities are undertaken;

     (ii) no mandatory deductible for windstorm damage shall be included in

     the policy;

     (iii) an insurer shall write the requested coverage at the premium rate that


     the premium credit to be realized with the completion of the mitigation efforts;

     (iv) the insurer shall affirmatively state the length of time during which

     discount given for the mitigation efforts will apply; and

     (v) no insurer shall subsequently non-renew an insured who has taken the

     mitigation steps requested by the insurer for reasons of the insurers exposure to catastrophe loss,

unless for non-payment of premium, fraud, breach by the insured of a provision of the policy,

reversal or a lack of maintenance of the mitigation steps, or insurer solvency concerns or adverse

loss history.

     (f) Penalties for failure to comply with the provisions of this section shall be administered

by the director in accordance with the provisions of section 42-14-16.

     (g) The department of business regulation shall have authority to adopt such rules,

including emergency rules, as may be necessary or desirable to effectuate the purposes of this



     SECTION 2. Chapter 23-27.3 of the General Laws entitled "State Building Code" is

hereby amended by adding thereto the following section:


     23-27.3- Hurricane, storm, and flood standards. – The state building code

standards committee has the authority in consultation with the building code commissioner, to

adopt, maintain, amend, and repeal code provisions, which shall be reasonably consistent with

recognized and accepted standards and codes, including for existing buildings, for storm and

flood resistance. Such code provisions shall, to the extent reasonable and feasible, take into

account climatic changes and potential climatic changes and sea level rise. Flood velocity zones

may incorporate freeboard calculations adopted by the Coastal Resources Management Council

pursuant to its power to formulate standards under the provisions of section 46-23-6.


     SECTION 3. This act shall take effect upon passage.



LC03223/SUB B/2