The Mississippi Residential Property Insurance Underwriting Association was established by H.B. 1113, amending Sections 83-38-1 through 83-38-21 of the 2003 session of the Mississippi Legislature to provide a program to assure an adequate market for residential fire and extended coverage insurance in all areas of Mississippi.

1. "Essential property insurance," in all counties of the state except the coastal area as defined in item 10., means insurance against direct loss to residential property as provided by a standard fire policy and extended coverage endorsement thereon, with terms, limits, deductibles, endorsements and exclusions as approved by the Mississippi Insurance Commissioner.

 

"Essential property insurance" in the coastal area as defined in item 10. means insurance against direct loss to

residential property as provided by a standard fire policy and extended coverage endorsement thereon, with terms, limits, deductibles, endorsements and exclusions as approved by the Mississippi Insurance Commissioner, except for the risks of wind and hail storm, which shall be excepted from coverage.

 

The Mississippi Residential Property Insurance Underwriting Association is not required to insure the risks of wind and hail storm in the coastal area as defined in item 10.

 

Essential property insurance coverage shall be limited to ninety-five percent (95%) of the market value of real and personal property that is insured by the association, excluding the value of land.

2. "Association" means the Mississippi Residential Property Insurance Underwriting Association established pursuant to the provisions of H.B. 1113 of the 2003 Legislature.

3. "Plan of Operation" means the Plan of Operation of the Association approved or promulgated by the Commissioner pursuant to the provisions of H.B. 1113 of the 2003 Legislature.

4. "Insurable Property" means residential builder’s risk and residential real dwelling property at fixed locations throughout the state or the contents located therein, (but shall not include insurance on motor vehicles) which property is determined by the Association, after inspection and pursuant to the criteria specified in the Plan of Operation, to be in an insurable condition; Exhibit "A".

5. "Rural Area" means all of that area in the State of Mississippi designated as Fire Protection Class 9 & 10 by the Mississippi State Rating Bureau.

6. "Net Direct Premiums" means gross direct premiums excluding reinsurance assumed and ceded, written on property in this state for residential Fire and Extended Coverage insurance and including Fire and Extended Coverage components of the Comprehensive Dwelling Policy and Homeowner Policies, less return premiums on canceled contracts, dividends paid or credited to policyholders or the unused or unabsorbed portion of premium deposits excluding premiums on farm property.

7. "Insurer" means any licensed insurance company authorized to write and engaged in writing property insurance, including the property insurance components of Multiple Peril Policies, on a direct basis in this State.

8. "Servicing Insurer" means an insurer who enters into an agreement with the Association to issue and service policies on risks referred to it by the Association.

9. "Inspection Bureau" means the Mississippi State Rating Bureau or other organizations designated by the Association with the approval of the Commissioner to make inspections as required under this Plan of Operation and to perform such other duties as may be authorized by the Association.

10. "Coastal areas" means Hancock, Harrison and Jackson Counties.

1. Any person having an insurable interest in insurable property eligible for coverage in the Mississippi Residential Property Insurance Underwriting Association may be entitled to apply to the Association for such coverage and for an inspection of the property by the Inspection Bureau. Such applications shall be submitted on forms prescribed by the Association and may be made on behalf of the applicant by a broker or agent authorized by him, and shall contain a statement as to whether or not there are any unpaid premiums due from the applicant for insurance on the property. The term "insurable interest" shall be deemed to include any lawful and substantial economic interest in the safety or preservation of property from loss, destruction or pecuniary damage.

2. The manner and scope of the inspection shall be prescribed by the Association with the approval of the Commissioner.

3. The Inspection Bureau must be provided full access to the building, but the presence of the owner of a building may not be required for a tenant seeking insurance.

4. An inspection report shall be made for each property inspected. The report shall cover pertinent structural and occupancy features as well as the general condition of the building. A representative photograph of the property may be taken during the inspection.

5. After the inspection, a copy of the completed inspection report (and any photograph) indicating the pertinent features of the building, construction, maintenance, and occupancy, shall be sent within fifteen days to the Association.

6. All reports of inspections performed by or on behalf of the Association shall be made available to members of the Association, applicants, agent or broker, and the Commissioner upon request.

1. The Association shall, within a reasonable time after receipt of the inspection report and application, advise the agent or applicant that:

a. the risk is acceptable and coverage will be bound upon receipt by the Association of the full amount of the premium; or

b. the risk is not accepted but will be acceptable if improvements noted in the action report are made by the applicant and confirmed by Reinspection; or

c. the risk is not acceptable for the reasons stated in the action report.

2. In the event a risk is declined because it fails to meet reasonable underwriting standards, the Association shall notify the applicant or his designated representative. Reasonable underwriting standards shall include, but not be limited to, the following:

a. the amount of insurance requested, together with other insurance, is within reasonable relationship to the actual cash value of the property involved;

b. physical condition of the property, such as its construction, heating, wiring, evidence of previous fires or general deterioration;

c. its present use or housekeeping, such as vacancy, overcrowding, storage of rubbish or flammable materials;

d. violation of law, public policy, morals, and the character or integrity of the property owner or occupant.

3. Any one (1) or two (2) family dwelling built in substantial accordance with the local building code, which is not otherwise rendered uninsurable by reason of use, occupancy or state of repair shall be an insurable risk within the meaning of the Plan.

4. A risk shall not be declined for neighborhood, area, location, or environmental hazards beyond the control of the applicant.

5. In any case where a risk, not accepted because the property does not meet reasonable underwriting standards, can be improved to meet such standards, the Association shall promptly advise the applicant what improvements, noted in the action report, should be made to the property to make it acceptable. Upon notice to the Association of completion of such improvements, the Association shall promptly arrange to have the property reinspected and if, after such reinspection, the property is found insurable, the Association shall upon receipt of the full amount of the premium designate a Servicing Insurer to issue a policy.

6. If the inspection of the property reveals the existence of substandard conditions, charges shall be applied in conformity with rating plans approved by the Commissioner.

7. If the risk is declined, or if the applicant is notified that coverage will be written if stated improvements are made, the Association shall advise the property owner of his right to appeal and the procedure therefor. A copy of the report of inspection shall be made available to the applicant upon request.

1. Upon approval by the Association of an application for insurance and upon receipt by the Association of the full amount of the required premium by check, or money order, the Association shall issue a binding receipt and instruct a Servicing Insurer to issue a policy of Insurance.

2. Any insurer, upon application and approval of the Board of Directors, may elect to act as a Servicing Insurer by entering into an agreement with the Association to act in such capacity.

3. On property located in Mississippi, the Association shall undertake through Servicing Insurers, to place insurance up to the reasonable insurable value of the property, subject to a maximum of $200,000 on dwellings, not exceeding two (2) families and $75,000 on contents of these dwellings.

1. All policies issued shall be for Essential Property Insurance on standard policy forms for Fire and Extended Coverage and shall be issued for a term of one year.

2. Any policy issued pursuant to the provisions of this Plan shall be renewed if upon application therefor the property meets the definition of "Insurable Property" and reasonable underwriting standards and if applicant has an "insurable interest" therein.

1. No policy issued under this Plan of Operation shall be cancelled by a Servicing Insurer without prior approval of the Association. Grounds for such cancellation shall be limited to:

a. non-payment of premium; or

b. evidence of incendiarism; or

c. misrepresentation or concealment of any material fact either before or after loss; or

d. cause which would have been grounds for non-acceptance of the risk under the Plan of Operation had such cause been known at the time of acceptance; or

e. cause arising subsequent to the inspection which would have been grounds for non-acceptance of the risk under this Plan of Operation had such cause existed at the time of acceptance.

2. Notice of cancellation, together with a statement of the reason therefore, shall be sent to the insured and a copy sent to the Association. Such notice shall be accompanied by a statement explaining that the insured has a right of appeal as hereinafter provided.

1. Any applicant for insurance and any person insured under the Plan of Operation or any affected insurer may appeal to the Board of Directors within fifteen days after final ruling, action or decision of the Association, the Inspection Bureau or a Servicing Insurer. The Board or an Appeals Committee designated by the Board shall hear and determine such appeal within fifteen days after the same is filed. Such determination may be appealed to the Commissioner within thirty days as provided by Statute.

2. Orders of the Commissioner shall be subject to judicial review as provided by Statute.

1. The Underwriting Association shall be authorized to assume reinsurance and to cede reinsurance of eligible risks written by Servicing Insurers under the Plan. It is also authorized to purchase reinsurance on behalf of its members, provided such reinsurance is authorized by a majority of the Directors. The reinsurance so assumed by the Association on behalf of all insurers shall be one hundred percent (100%) cessions. Servicing Insurers shall cede to the Association 100% of each risk accepted.

2. Each member of the Association shall participate in the writings, expenses, profits and losses in the proportion that the net direct premiums of such member written in the State during the preceding calendar year bear to the aggregate net direct premiums written in the State by all members of the Association . The Commissioner shall certify to the Association, after review of annual statements, other reports, and any other statistics it shall deem necessary, the aggregate net direct premiums written by all members. However, a member shall annually receive credit for Essential Property Insurance including components of CDP and Homeowners policies voluntarily written and its participation in the writings of the Association shall be reduced in accordance with the amount of such premium written on a voluntary basis in the state in Fire Protection Class 9 & 10 and in the coastal counties of Hancock, Harrison and Jackson. Members participation in the administrative expenses shall not be reduced accordingly. Each member’s participation in the Association shall be determined annually in the same manner as the initial determination.

3. Any insurer authorized to write and engaged in writing Essential Property Insurance after the effective date of this Plan, shall become a member of the Association. Immediately following such authorization and the determination of such insurer’s participation in the Association, shall be made as of the date of such membership in the same manner as for all other members of the Association.

4. The Board of Directors, acting on behalf of the Association, are authorized to make assessments upon all insurers as may be deemed necessary.

1. Commission to the licensed agent or broker designated by the applicant shall be equal to ten percent (10%) of the premium collected. Agents or brokers will receive their commission check from the MRPIUA on a

monthly basis.

2. The unearned portion of canceled liability and on reductions in premiums, agents’ commission will be adjusted accordingly at the same rate at which such commissions were originally paid.

3. Commission is not payable on inspection fees.

1. This Plan shall be administered by a Board of Directors (hereinafter referred to as the Board) of the Mississippi Residential Property Insurance Underwriting Association, subject to the review of the Commissioner.

2. The Board shall consist of five (5) representatives of members of the Association elected annually by the insurers of the Association. The Board shall also include two (2) licensed Mississippi agents.

3. The current MRRUA Board shall serve until such time as the MRPIUA Board is appointed or elected or reappointed or re-elected. The Board consisting of five (5) members of the Association and two (2) licensed Mississippi agents shall prepare and submit a Plan of Operation to the Commissioner for approval.

1. The annual meeting of the insurers for the election of the Board and such other business as may be necessary shall be held in the State of Mississippi at a time and place to be determined by the Board each year. At any regular or special meeting at which the vote of the insurers is or may be required on any proposal, voting may be in person or by proxy. Any vote of the insurers may be taken by mail. A proposal shall become effective when approved by the majority of the votes cast.

2. As soon as practicable after election to membership of the Board, and thereafter from time to time as it may elect, an insurer may designate a qualified representative and an alternate of such representative to serve for it and shall immediately notify in writing the Manager of the Association of such designation.

3. Officers - The Board shall elect a Chairman, Vice-Chairman, Secretary - Treasurer, and Manager.

a. The Chairman shall preside over all meetings of the Board and at all meetings of the insurers. He shall discharge such other duties as may be incidental to his office or as shall be required of him by these rules or by the Board.

b. The Vice-Chairman shall preside at any meeting of the Board in the absence of the Chairman. In the event of death or incapacity or disability of the Chairman, the Vice - Chairman shall perform duties of the Chairman until such office has been filled by the Board.

c. The Secretary - Treasurer shall issue all notices of meetings, record minutes of all meetings, keep the records of the Board, and discharge such other duties as may be incidental to his office or as shall be required of him by these rules or by the Board.

d. The Manager shall discharge such duties as may be incidental to his office or as shall be required of him by these rules or by the Board.

4. Special Meetings - Special meetings of the Board or of the insurers may be held upon the call of the Chairman or in the event of their resignation, death or incapacity, upon the call of the Vice -Chairman. Any five (5) members of the Board, acting by their designated representatives, may request the Chairman to call a meeting of the Board or of the insurers at such time and place and for such purposes as may be set out in writing in such request. Should the Chairman decline to call such meetings, the same may be called by the five (5) members making the request. Such special meetings may be held at the principal office of the Association or at such other place within the State of Mississippi as may be designated in the call.

5. Notices of Meetings - Notices of all meetings shall be given by the Secretary - Treasurer to the members of the Board, and in the case of meetings of the insurers, to the insurers, and shall state the time and place and the principal purposes therefor, except that no notice of the annual meeting shall be given to newly - elected insurers in order to legally constitute the meeting, provided a majority of the designated representatives of the insurers shall be present at such meeting. Such notices may be given electronically or by mail, direct to the attention of the designated representatives of the insurers and shall be sent or mailed at least ten days in advance of the meeting. Any insurer or the designated representative of any insurer may waive notice of any meeting, and the presence of such representative at any meeting shall constitute a waiver of notice as to such insurer.

6. Advance Agenda - The Secretary, after consultation with the Chairman, shall prepare in advance of each meeting of the Board and each meeting of the insurers an agenda which, with such supporting data and information as may be conveniently assembled, shall be forwarded to the members of the Board or their designated representatives or to the insurers, as the case may be, in advance of any such meeting.

7. Committees - Subject to the Articles of Agreement, the Chairman of the Board may appoint or the Board may elect such standing committees or such temporary or special committees as may be deemed necessary for the transaction of its business.

8. Ex - Officio Members - The Chairman and Vice Chairman of the Board shall be ex - officio members of all standing or special committees, with right to vote.

9. Subject to the approval of the Commissioner the Directors of the Association may amend the Plan of Operation at anytime.

The purpose of these Articles of Agreement is to evidence agreement by the Mississippi Residential Property Insurance Underwriting Association to administer the Plan of Operation in Compliance with the provisions of House Bill 1113, Laws of 2003, and as amended.