A long-term NFIP reauthorization
will bring much-needed stability to
the market.”
reform legislation undermined,”
said Jimi Grande, senior vice presi-
dent of federal and political affairs
for NAMIC. “The original bill
contained reforms with broad, bi-
partisan support that would have
started the NFIP on the road back
to financial stability.”
One last-minute amendment strongly opposed by much of the insurance industry and promoted by Rep. Gene Taylor (D-Miss.), would require “Write Your Own” insurers to eliminate so-called “anti-concurrent causation” language from their homeowners insurance policies. The Taylor amendment would negatively impact WYO companies and significantly alter the way in which claims are processed by the NFIP, according to insurers. It was added at the last minute to the bill and significantly dampened insurers’ approval of the overall legislation.
CRANSTON, R.I. — The Rhode Island Department of Business Regulation (DBR) issued a bulletin implementing new fraud reporting requirements.
As introduced, it would have phased in actuarially sound rates and increasing coverage limits. Rep. Waters’ bill also gradually introduced the use of updated flood maps to help homeowners who find themselves in a flood zone adjust their budgets to include flood insurance premiums.
“Adopting the Taylor amendment would force WYO companies to take a hard look at whether they want to continue participating in the program and could actually result in a reduction in NFIP payouts to policyholders even when they are warranted,” added Pusey.
“Rather than attracting new compa-
nies to the NFIP, this amendment
will make it more difficult for in-
surers to write flood coverage and
discourage them from participat-
ing in the program,” Grande said.
“We at NAMIC were eager to see
common sense reforms enacted for
the NFIP, but unfortunately this
bill now discourages participation
in the NFIP. This amendment will
only add to the problems facing the
program, and make coverage more
expensive and difficult to find for
consumers.”
The bulletin states that insurers must
submit all suspected cases of auto-
mobile insurance fraud to the state’s
Office of Automobile Theft and In-
surance Fraud. The bulletin also
states that all vehicle thefts will be re-
ported within 30 days of notice to the
National Insurance Crime Bureau or
another DBR-approved organization.
Insurers must submit reports of suspi-
cious fire losses to the state fire marshal
and instances of suspected workers’
compensation fraud should be sent to
the Rhode Island Department of Labor
and Training Workers’ Compensation
Fraud Prevention Unit.
“At the last minute, Rep. Gene Taylor succeeded in attaching a concurrent causation amendment to the flood bill that could make private insurers pay for the obligations of the federal government,” Ben McKay, senior vice president of federal government relations for the Property Casualty Insurers Association of America (PCI) said in a prepared statement. “ Ultimately, the language Rep. Taylor added would prove unworkable, and we will work to convince the Senate to remove this troublesome language. But it is never a good idea to throw out three-quarters of a loaf of good bread, and overall, we are pleased that the House has taken a much-needed step toward extending and preserving the NFIP.”
■
The bill was passed by a vote of 329 to 90 and now heads to the Senate.
■
Also, insurers must include on all claims forms and insurance applications the statement, “Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison.”
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Barbara Simpson, CPCU, AIS, ASLI, ARM
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BSimpson@RussellBond.com
(800) 333-7226 Ext. 241
That amendment would ultimately hurt consumers, agreed the National Association of Mutual Insurance Companies (NAMIC).
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“It’s extremely disappointing to see, once again, meaningful, needed
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