II 111th CONGRESS 2d Session S. 3672 IN THE SENATE OF THE UNITED STATES July 29, 2010 Mr. Wicker introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To clarify and improve the payment of multiperil insurance claims, and for other purposes.

1.

Short title

This Act may be cited as the Coordination of Wind and Flood Perils Act of 2010.

2.

Payment of multiperil claims

The National Flood Insurance Act of 1968 is amended by inserting after section 1312 (42 U.S.C. 4019) the following new section:

1312A.

Payment of multiperil claims

(a)

Purposes

The purposes of this section are— (1)to allow an insured individual or small business to commence repairs or replacement, or both, of insured property and to recommence business operations as soon as possible after a natural disaster; and (2)to remove the burden of determining flood and wind loss allocation for the purpose of insurance claims from the insured and to place such burden on the entities that are responsible for the payment of such claims. (b)

Payment of multiperil claims

(1)

In general

In the event of an occurrence of loss resulting from physical damage to or loss of real property or personal property related thereto located in the United States arising from the combined perils of flood and wind, the Administrator and any insurer (including a State-run windpool) that insures the wind peril shall enter into good faith negotiations regarding— (A)the general method or methods by which proven claims for such multiperil losses shall be adjusted and paid; and (B)the allocation of such payments between the insurer, the Administrator, and the insured. (2)

Limitation

(A)

In general

In the event that the Administrator and an insurer (including a State-run windpool) that insures the wind peril cannot agree as to the specific distribution of perils that resulted in a loss described under paragraph (1), the Administrator shall pay 50 percent of the disputed claim until the claim can be settled. (B)

Fair share

The terms of any agreement or negotiations entered into pursuant to paragraph (1) shall require that, in order to fully compensate the insured for his, her, or its loss as soon as practicable after the occurrence of such loss, an insurer (including a State-run windpool) that insures the wind peril pay 50 percent of any disputed claim until the claim can be settled. (C)

No overcompensation

The Administrator and an insurer (including a State-run windpool) that insures the wind peril shall work collaboratively to ensure that an insured policyholder does not receive payments under this section in excess of the amount of the insured's actual loss. (D)

Rule of construction

Nothing in this section shall be construed to negate, set aside, or void any policy limit, including any loss limitation, set forth in a standard flood insurance policy. (c)

Failure To reach agreement on loss allocation

The terms of any agreement or negotiations entered into pursuant to subsection (b)(1) shall require that if an insurer (including a State-run windpool) that insures the wind peril and the Administrator fail to reach an agreement regarding multiperil losses pursuant to subsection (b), including as to the cause or allocation of a multiperil loss, then each such entity shall agree to have any dispute relating to multiperil losses resolved by the arbitration panel established under subsection (d). (d)

Arbitration panel

(1)

Establishment

As allowed under section 1307(e) of the National Flood Insurance Act of 1968 (42 U.S.C. 4104), and notwithstanding any other provision of law, not later than 90 days after the date of enactment of this Act, the Administrator of the Federal Emergency Management Agency shall establish an arbitration panel to efficiently and clearly resolve disputes relating to multiperil losses between the Administrator and an insurer (including a State-run windpool) that insures the wind peril. (2)

Membership

The arbitration panel established under paragraph (1) shall be comprised of 5 members. (3)

Required qualifications

(A)

Administrative law expertise

At least 1 member of the arbitration panel established under paragraph (1) shall have expertise in administrative law. (B)

Water resources expertise

At least 1 member of the arbitration panel established under paragraph (1) shall have expertise in water resources. (C)

Hurricane modeling expertise

At least 1 member of the arbitration panel established under paragraph (1) shall have expertise in hurricane modeling. (4)

No FEMA employees

No member of the arbitration panel established under paragraph (1) may be a current or former employee of the Federal Emergency Management Agency. (5)

Independence

Each member of the arbitration panel established under paragraph (1) shall be independent and neutral.

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