An amendment numbered 5 printed in House Report 111-537 to prohibit the Write Your Own insurance companies that contract with NFIP from excluding coverage of wind damage under their own policies solely because flooding also caused damage to the property. It would establish requirements for adjustment by WYO insurers when there are claims on the same property, from the same event, for flood damage covered by NFIP and for wind damage covered by the WYO insurer.

1. Adds SEC. __. REQUIREMENTS RELATING TO WINDSTORM AND FLOOD on page 35, line 16

   Adds a sectionPrinted page

   Inserted: SEC. __. REQUIREMENTS RELATING TO WINDSTORM AND FLOOD.

   Inserted: Section 1345 of the National Flood Insurance Act of 1968 (42 U.S.C. 4081) is amended by adding at the end the following new subsections:

   Inserted: "(d) Requirements for Write-Your-Own Insurers Relating to Windstorm and Flood.--

   Inserted: "(1) Written agreement.--The Director may not utilize the facilities or services of any insurance company or other insurer or entity to offer flood insurance coverage under this title unless such company, insurer, or entity enters into a written agreement with the Director that provides as follows:

   Inserted: "(A) Prohibition on exclusion of wind damage coverage.--The agreement shall prohibit the company, insurer, or entity from including, in any policy provided by the company or insurer for homeowners' insurance coverage or coverage for damage from windstorms, any provision that excludes coverage for wind or other damage solely because flooding also contributed to damage to the insured property.

   Inserted: "(B) Fiduciary responsibility.--The agreement shall provide that the company, insurer, or entity--

   Inserted: "(i) has a fiduciary duty with respect to the Federal taxpayers;

   Inserted: "(ii) in selling and servicing policies for flood insurance coverage under this title and adjusting claims under such coverage, will act in the best interests the national flood insurance program rather than in the interests of the company, insurer, or entity; and

   Inserted: "(iii) will provide written guidance to each insurance agent and claims adjuster for the company, insurer, or entity that sets forth the terms of the agreement pursuant to subparagraph (A) and this subparagraph.

   Inserted: "(2) Requirements for adjustment of claims.--The Director shall, in utilizing the facilities of any insurance company or other insurer or entity pursuant to this section to offer flood insurance coverage under this title, the Director shall provide as follows:

   Inserted: "(A) Approval of adjustment procedures.--No such insurance company, other insurer, or entity may offer flood insurance coverage under this title unless the Director has approved, as meeting standards as the Director shall establish, the procedures, protocols, guidelines, standards, or instructions used by the company, insurer, or entity in adjusting claims for identifying, apportioning, quantifying, and differentiating damage caused by flooding and damage caused by wind.

   Inserted: "(B) Treatment of wind and flood claims from same event.--The Director shall require any insurance company or other insurer or entity that, pursuant to this section, provides flood insurance coverage under this title for a property and that also provides insurance coverage for the same property for losses resulting from wind, when claims are made both for damage resulting from flood and for damage resulting from wind involved in a single event, to comply with the following requirements:

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   Inserted: "(i) Contemporaneous adjustment.--The claims for damage to the property under the coverage under this title for losses from flood and under the coverage for losses from wind shall be adjusted contemporaneously.

   Inserted: "(ii) Inclusions in flood claim file.--The insurance company, other insurer, or entity shall obtain and include in the file maintained with respect to any claim under the flood insurance coverage under this title, and make available to the Director upon request, the following information relating to the wind claim:

   Inserted: "(I) The amount paid on the claim and the date of such payment..

   Inserted: "(II) An explanation of rationale used by the company, insurer, or entity in determining which damage resulted from flood and which damage resulted from wind.

   Inserted: "(III) Copies of any photographs, witness statements, and other evidence related to the wind or flood claim.

   Inserted: "(iii) Review.--The Director shall review the information obtained pursuant to clause (ii) to ensure that--

   Inserted: "(I) claims are paid under coverage under this title only for losses resulting from flood; and

   Inserted: "(II) in the adjusting the claims, the insurance company or other insurer or entity complied with procedures, protocols, guidelines, standards, or instructions for identifying, apportioning, quantifying, and differentiating damage caused by flooding and damage caused by wind that have been approved by the Director as meeting the standards established by the Director pursuant to subparagraph (A).

   Inserted: "(iv) Payment under flood coverage when cause of loss cannot be determined.--If the insurance company or other insurer or entity determines that the loss claimed was caused by flooding or wind, but that the evidence is insufficient to differentiate the losses caused by flooding from those caused by wind, the company, insurer, or entity shall pay the claim under the flood insurance coverage for the property as if the entire loss were caused by flooding, and shall submit all information regarding the claim to the Director.

   Inserted: "(v) FEMA determination and recovery.--In the case of any claim paid pursuant to clause (iv), the Director shall review the information related to the claim and determine, in accordance with procedures for making such a determination regarding such claims as the Director shall establish, the losses caused by wind. The Director shall seek to recover any portion of the losses that the Director determines were caused by wind from the insurance company or other insurer or entity that, pursuant to clause (iv), paid such losses as flood losses".

   Original wording

   Page 35, after line 16, insert the following new section:

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As printed