Public Act 102-0720
 
HB2739 EnrolledLRB102 12791 BMS 18130 b


  
    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.