SCS/SB 1543 - This act modifies provisions relating to homeowner's insurance. TRANSFER OF FUNDS TO MISSOURI'S STRONGER HOMES FUND (Section 33.080) Current law provides that ten million dollars shall be transferred from the Insurance Dedicated Fund and placed to the credit of the Rebuild Damaged Infrastructure Fund. This act provides that twelve million dollars shall be transferred from the Insurance Dedicated Fund and placed to the credit of the newly created Missouri's Stronger Homes Fund on July 1, 2027. Funds will be placed on an annual basis commencing July 1, 2028 and ending on July 30, 2037, in amounts as provided in the act. COMPENSATION OF PUBLIC ADJUSTERS (Section 325.052) This act provides that a public adjuster may receive a commission of an hourly fee, a flat rate, a percentage of the total amount paid by an insurer to resolve a claim, or another method of compensation. The total amount of compensation shall not exceed ten percent of the total amount of the insurance settlement on the claim. A public adjuster shall not receive a fee or commission based on a percentage of the total amount paid by an insurer to settle a claim if, within ten days of reporting the loss, the insurer either pays or commits in writing to pay the insured the policy limits. A public adjuster shall not sign or endorse any payment draft or check on behalf of the insured, or represent himself or herself in any communication as the insured. All contracts with a public adjuster shall include a disclaimer as defined in the act. Any violation of this provision is a level two violation under current insurance laws. LIMITATIONS TO PUBLIC ADJUSTER SERVICES (Section 325.055) This act prohibits a public adjuster from advertising or soliciting business by representing they will or can adjust, negotiate or settle and insurance claim for which the contractor is providing or may provide contracting services, regardless of whether the contractor holds a license or is authorized to act on behalf of the insured under a power of attorney or other agreement. A public adjuster may not represent to unjustifiably increase or inflate the value of an insurance claim or to waive, absorb, refund, rebate, pay or not collect the deductible amount agreed to under or imposed by the terms of the insurance policy. The director of the Department of Commerce and Insurance shall pursue enforcement actions and order relief as set forth under current law. ASSIGNMENT OF POST-LOSS INSURANCE BENEFIT (Section 375.939) This act prohibits assignment of post-loss benefits under any policy of insurance covering property, including, but not limited to, any right of action against the insurer or any proceeds acquired from the insurer. A person shall not solicit or accept an assignment, in whole or in part, of any post-loss insurance benefit for property damage under a contract of insurance. Any agreement to assign post-loss benefits is null and void. The provisions of this act shall not apply to an assignment, transfer, pledge, or conveyance granted to a financial institute, mortgagee, lienholder, or a subsequent purchaser of the property. A violation of this act shall be considered a level 2 violation. FRAUDULENT INSURANCE ACTS (Section 375.991) This act provides that a fraudulent insurance act includes, the false billing practice of "inflating", as defined in the act. The Department of Commerce and Insurance may issue an order to cease and desist, or issue a curative or summary order as set forth in current law. INSURER'S LEGAL TITLE TO CLAIM PAID (Section 379.135) Upon payment by an insurer of all or any part of a claimant's property damage claim, legal title to the portion of the claim paid shall vest in the insurer to the extent of such payment. No assignment or other action by the claimant shall be required for the insurer to enforce its legal title. The claimant shall retain legal title only to that portion of the property damage claim not paid by the insurer. An insured under a policy of insurance shall not, before or after a claimed or covered loss, assign or otherwise transfer, in whole or in part, the insured's duties under the policy or any rights or benefits arising from the policy or any duties owed by the insurer under the policy. Any contract entered into in violation of this act shall be void and unenforceable. This act does not prohibit an insured from authorizing direct payment to, or to pay, a person for services, materials, or any other thing that may be, or is, covered under the policy. INSURANCE AS IT PERTAINS TO ROOFING (Sections 379.162 to 379.163) This act prohibits an insurer from refusing, cancelling, refusing to renew a homeowner's insurance policy on a residential structure with a roof less than fifteen years old solely because of the age of the roof. For roofs over the age of fifteen years, a homeowner may have an inspection done at their own expense before an insurer requires replacement of the roof as a condition of issuing, continuing, or renewing a homeowner's policy. After this inspection, an insurer shall not refuse to issue, cancel, or refuse to renew a homeowner's policy solely because of roof age if the inspection indicates the roof has five years or more of useful life remaining. Calculation of a roof's age is outlined in the act. An insurer's ability to refuse to issue, cancel, or refuse to renew any homeowner's policy still applies to situations including, but not limited to, structures that do not otherwise meet underwriting criteria applicable to replacement cost, law and ordinance coverage, or for other reasons not prohibited by Missouri law. Insurers will not be prohibited from limiting their liability through a deductible or to direct physical loss caused by a covered peril. Until an insurer receives reasonable proof of payment by the policyholder of any deductible applicable to the roof claim, the insurer may refuse to pay a claim for withheld recoverable appreciation or a replacement cost holdback. MISSOURI DISASTER MEDIATION ACT (Sections 379.3000 to 379.3055) This act creates the Missouri Disaster Mediation Act. The alternative dispute resolution program handles claims arising out of damage to a residential property caused by an event for which a state of disaster is declared within sixty days of the event. The alternative dispute resolution program is available to Missouri residents who carry first-party insurance and the home damaged is the primary dwelling of the resident. The alternative dispute resolution program is not available to commercial insurance, property insurance covering multiple family dwellings, motor vehicle insurance, or liability coverage contained within property insurance policies. The alternative dispute resolution program shall remain available until the director makes the determination that the need for the program has decreased due to sufficient progress of recovery efforts and issues an order terminating the program. Insurers are required to give written notice by electronic mail or written mail to insureds in the state of Missouri who have claimed damage to their residential properties. This notice shall be given within five days of the time the insured or the administrator notifies the insurer, by mail or electronic mail, of a dispute of the insured's claim. This provision applies to all disputed claims including instances where partial or full payment has been issued by the insurer to the insured. If an insurer has not been notified of a disputed claim before the insurer notifies the insured that a claim has been denied in whole or in part, the insurer shall provide a notice of the right to mediate to the insured in the same mailing as the notice of denial. Notification shall be provided in writing or by electronic transmission. An insurer is not required to send a notice of the right to mediate if a claim is denied because the amount of the claim is less than the insured's deductible. Specified language of the notice, information required to be attached to the notice, and required formatting of the notice is outlined in the act. Failure to request mediation within the sixty day time period shall only bar the right to demand mediation. It shall not prejudice any other legal right or remedy of the insured nor shall it prohibit the insurer from voluntarily accepting the request for mediation. If an insurer receives a request for mediation, the insurer has three business days to electronically transmit the request to the administrator. If the director receives any request for mediation, the director has three business days to electronically transmit the request to the administrator. The administrator shall notify the insurer within three business days of receipt of the request that has been filed with the director. The director may contract with qualified administrators to oversee the mediation program. This may be done by means of a formal bid process, or if a state of emergency has been declared, without a formal bid process. All bid processes must comply with current law. Expenses and fees of the mediator and of the administrator will be borne by the insurer. All other mediation costs, fees, or expenses shall be borne by the party incurring such costs, fees, or expenses unless otherwise provided in the settlement agreement. The director shall establish fee schedules for moneys to be paid directly to the administrator by the insurer for the services of the administrator, the mediator, and for cancellation. Cancellation fees shall be borne by the canceling party. Fee schedules shall be established through promulgation of emergency rules to be in effect no later than January 1, 2027. The director shall select a qualified mediator with appropriate training and experience in alternative dispute resolution. The mediator is required to advise the parties of the mediation process and their rights and duties therein. The mediation will terminate if the mediator determines that either party is unable or unwilling to participate meaningfully in the process or upon mutual agreement by the parties. A party may move to disqualify a mediator for good cause prior to the conference. Good cause consists of conflict of interest, inability of the mediator to handle the mediation competently, or other reasons that might impair the mediation conference. Within five business days after the conclusion of the mediation conference, the mediator shall file a mediator's status report indicating whether the parties reached a settlement. Within those five days, if a settlement is reached, the insurer shall disburse the funds in accordance with the settlement agreement. A settlement agreement may be rescinded if the insured has not received the settlement funds by electronic means or has not cashed or deposited any check or draft disbursed to the insured in payment of the settlement funds. If a settlement agreement is reached, and not rescinded, all specific claims that were presented in the mediation conference shall be released. If a settlement agreement is not reached, the insured may choose to proceed by other legal means under the appraisal process set forth in the insurance policy, litigation, or by any other dispute resolution procedure available under Missouri law. Should a settlement agreement be rescinded by the insured, the director may review the settlement agreement to determine its fairness. If the director determines the settlement agreement was fair, the director has ten business days from notice of the recision to give notice to the insured that the settlement agreement was fair. Upon notice from the director of the fairness, the insured has five business days to withdraw the rescission, and the settlement agreement is reinstated as if no rescission had taken place. All statements made and documents produced at mediation are confidential settlement communications. All documents and records produced prior or during the mediation shall be considered closed records under the Missouri Sunshine Law. No person who serves as administrator or mediator, nor any agent or employee of that person, shall be subpoenaed or otherwise compelled to disclose any matter disclosed in the process of setting up or conducting the mediation. This act does not require either party to divulge legally privileged information or documents. The provisions in this act are effective on January 1, 2027 and shall expire June 30, 2038. MISSOURI STRONGER HOMES ACT (Sections 379.3100 to 379.3140) This act creates the Missouri Stronger Homes Act. The Missouri Stronger Homes Act does not create an entitlement for property owners to obligate this state to fund the inspection, construction, or retrofitting of residential property in this state. Grant moneys provided under this act shall be provided to assist Missouri residents retrofitting or constructing insurable properties to resist loss due to tornado, other catastrophic windstorm events, or hail. Implementation of this program is subject to receipt of grants or funds. The Department of Commerce and Insurance shall use its best efforts to obtain grants or funds from the federal government or other sources. The program may make grants to nonprofit organizations to construct or retrofit insurable residential properties to resist loss due to tornado, other catastrophic windstorm events, or hail. The director shall establish a maximum grant award amount by rule and adjust the award amount to reflect changes in construction costs. The maximum amount of any grant awarded to an individual shall not exceed fifteen thousand dollars. The Missouri Stronger Homes Fund is created. This fund shall consist of moneys deposited to the fund from receipt of federal grants or funds, or from other sources of grants or funds. The Department of Commerce and Insurance may budget and expend the funds for the purpose of assisting the Missouri Stronger Homes Program in its duties. Moneys collected under this act shall not be redistributed or transferred to the insurance examination fund or general revenue. Moneys in this fund shall not lapse unless otherwise specified under federal funding or federal grant, or other sources from which funding is received. Twelve million dollars shall be transferred from the Insurance Dedicated Fund and placed to the credit of the Missouri Stronger Homes Fund on July 1, 2027. Beginning July 1, 2028, and annually thereafter until July 1, 2037, up to twenty percent of the remaining balance in the Insurance Dedicated Fund as of June thirtieth of the preceding fiscal year, in an amount not to exceed two million dollars in any one year, shall be transferred to and placed to the credit of the Missouri Stronger Homes Fund. The provisions in this act creating the fund shall expire on June 30, 2038. Any moneys remaining in the Missouri Stronger Homes Fund upon expiration of the fund, shall be transferred to the Insurance Dedicated Fund. To be eligible for a grant under this act, residential property owners shall meet the eligibility requirements set forth by the director by rule for each grant type and as described in this act. Applications for grants under this act shall be filed electronically with the Department, along with any transaction fees. Grant applications, materials, and other information submitted are closed records under the Missouri Sunshine Law. Applications are approved on a first-come first-served basis. Priority is given to lower-income applicants, applicants who live in locations that, based on historical data, have a higher susceptibility to catastrophic weather events, and applicants meeting any other criteria the director determines is appropriate to meet the purpose of the program. Retrofit projects should be completed within six months of the date the residential property owner receives notice of the grant approval. New construction shall be completed within the time frame approved by the director. Failure to complete the project within the prescribed time frames may result in forfeiture of the grant. Residential property owners using moneys from this act shall hire an Insurance Institute for Business and Home Safety (IBHS)-certified and eligible contractor who is capable of performing work that satisfies the standards prescribed by this act. The residential property owner is responsible for any amount owed to a contractor that exceeds awarded grant moneys. Contractor and evaluator eligibility standards are outlined in the act. For homeowner's insurance policies issued, continued, or renewed on or after January 1, 2027, insurers shall provide a premium discount or insurance rate reduction to insureds who retrofit the insurable property located in this state under this act. Insurers shall be required to offer a premium discount or rate reduction only when the insurer has deemed the adjustments to be actuarially justified and there is significant and credible evidence of cost savings. To be eligible for a premium discount, rate reduction, or other adjustment, an insurable property shall be retrofitted to the FORTIFIED Home High Wind and Hail Standards as adopted by the IBHS. An insurable property may only be certified as conforming to the standards after evaluation and certification by an evaluator certified pursuant to the Standards. An insured claiming a premium discount, rate reduction, or other adjustment shall maintain sufficient certification records, construction records, and receipts from contractors and for materials. The insured must present to the insurer copies of the certification and construction records prior to the premium discount, rate reduction, or other adjustment becoming effective. Insurers that write homeowner's insurance polices that are subject to the premium discount or rate reduction shall submit rating plans as provided under current law. A premium discount, rate reduction, or other adjustment shall only apply to policies that provide wind or hail coverage. If an insurer already offers an actuarially justified hail resistance discount, that hail-resistance discount shall be deemed as having met the requirements of this act and no additional hail-related discount or rate reduction shall be required. The same pertains to actuarially justified discounts for IBHS FORTIFIED Home Standards already offered by an insurer. Insurers may apply the premium discount, rate reduction, or other adjustment to the premium at the policy renewal that follows submission of the certification to the insurer. At the time of policy renewal for which the premium discount, rate reduction, or other adjustment have previously been applied, the insurer may request documentation or recertification that the fortified standards continue to be met. The provisions of this act expire on June 30, 2038. Any company operating under current Missouri mutual insurance company laws shall comply with the Missouri Disaster Mediation Act. Companies operating under current Missouri mutual insurance company laws may develop programs eligible for financial grants under the Missouri Stronger Homes Act. These same companies shall not be required to submit rating plans under this act, or otherwise submit actuarial justifications substantiating any discount or rate associated with the program described in the act. TAYLOR MIDDLETON