Storm-Resistant Technology and Roofing Overhauls for Neighborhoods Grant (STRONG) Act

Task Forces: Commerce, Insurance and Economic Development

Issue Areas: Housing and Land Use

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Summary

The Storm-resistant Technology and Roofing Overhauls for Neighborhoods Grant (STRONG) Act would create a mitigation grant program helping consumers put on storm resistant roofs, leading to the possibility of lower insurance rates, fewer incurred deductibles, and a trained workforce in resilient construction techniques. Similar programs in states have resulted in thousands of more resilient roofs, oftentimes being installed without grant funds.

Model Policy

Section 1. Title.
This Act shall be referred to as the “[State] Storm-resistant Technology and Roofing Overhauls for Neighborhoods Grant (STRONG) Act.”

Section 2. Purpose. The purpose of this Act is to:
(a) Promote resilient home construction and science-based mitigation improvements to reduce the likelihood of damage from wind and hail; and


(b) Foster awareness among builders and roofers about the benefits of resilient construction techniques and technologies.

Section 3. Grant Program.
(a) The [State] STRONG Program is hereby created within the [state agency]. The [agency head], as program administrator, may make financial grants to retrofit roofs of insurable property, as defined in Section 4(B)(6) of this Act, with a homestead exemption to resist loss due to hurricane, tornado, or other catastrophic windstorm events and to meet or exceed the “fortified roof” standard of the Insurance Institute for Business and Home Safety.


(b) The [agency head] shall promulgate rules governing eligibility requirements for grants and the administration of the program, which shall include application forms and procedures for seeking a grant. The rules shall set forth that applications will be accepted on a first-come, first-served basis within each income tier established by the [state agency], with priority 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 [agency head] determines is appropriate to meet the purpose of the program.


(c) In order to receive a grant pursuant to this Section, the grantee shall do all of the following:

  1. Obtain all permits required by law or ordinance for construction.
  2. Arrange and pay for inspections required by law or ordinance and the terms of the grant, which shall include inspection pursuant to Section 4(B)(2) of this Act.
  3. Comply with applicable building codes.
  4. Maintain records as required by Section 4(B)(3) of this Act and the terms of the grant.

(d) The name of a recipient of a grant received pursuant to this Section, the amount of the grant, and the municipal address of the retrofitted insurable property shall be a public record.

(e) There is hereby established in the state treasury as a special fund the [State] STRONG Program Fund, hereafter referred to in this Section as the “fund”.

  1. The following shall be deposited into the fund:
    • i. All grants and funds received or raised by the [agency head] under paragraph (6) of this subsection.
    • ii. Any discretionary appropriations made to the fund by the Legislature.
  2. Monies appropriated or transferred to the fund shall be deposited by the state treasurer after compliance with the provisions of [xxx] of the Constitution of [State].
  3. Monies in the fund shall be invested in the same manner as monies in the state general fund, and any interest earned on monies in the fund shall be credited to the fund.
  4. All unexpended and unencumbered monies in the fund at the end of the fiscal year shall remain in the fund.
  5. Monies in the fund shall be used to provide grants pursuant to this Section and for no other purpose. Grant funding may be used for inspections, evaluations, certifications, and other verification activities required under the Program.
  6. The [agency head] shall use his or her best efforts to obtain grants or funds from the federal government or other funding sources for deposit into the fund to supplement any appropriations to the fund made by the Legislature.
  7. Notwithstanding any other provision in this section, [agency head] may not accept funds from any source conditioned upon the state requiring insurers to take any action pertaining rates, underwriting, policy forms or endorsements.

(f) Implementation of the Program is subject to the receipt of federal grants or funds or from other sources of grants or funds.

(g) To be eligible to work as a contractor on a project funded by a grant under this Section, the contractor must meet all of the following program requirements and must maintain a current copy of all certificates, licenses, and proof of insurance coverage with the Program office. An eligible contractor must:

  1. hold a valid residential building contractor and residential remodeler license issued by the [insert reference to the appropriate state licensing/accrediting body];
  2. not be subject to disciplinary action by the [insert reference to the appropriate state licensing/accrediting body];
  3. hold any other state or jurisdictional business license, registration, or work permits required by law;
  4. possess an in-force general liability policy with $1,000,000 in liability coverage;
  5. possess an in-force workers compensation policy;
  6. maintain certification as a Trained Service Provider with the Insurance Institute for Business and Home Safety;
  7. maintain Internet access and keep a valid email address on file with the Program; and
  8. agree to follow Program procedures and rules established under this section and satisfy any additional requirements established by the [agency head].

(h) An eligible contractor must not have a financial interest, other than payment on behalf of the homeowner, in any project for which the eligible contractor performs work toward a fortified roof designation under the Program. An eligible contractor is prohibited from acting as the evaluator for a fortified designation on any project funded by the Program. An eligible contractor must report to the [agency head] regarding any potential conflict of interest before work commences on any job funded by the Program.

(i) To be eligible to act as an evaluator on a project funded by a grant under this Section, the evaluator must:

  1. meet all program eligibility requirements established by the Commissioner;
  2. maintain an active certification as a fortified home evaluator for high wind and hail or a successor certification with the Insurance Institute for Business and Home Safety;
  3. not have a financial interest in any project that the evaluator inspects for designation purposes for the Program;
  4. not be an eligible contractor or supplier of any material, product, or system installed in any home that the evaluator inspects for designation purposes for the Program;
  5. not be a sales agent for any home being designated for the Program; and
  6. inform the Commissioner of any potential conflict of interest impacting the evaluator’s participation in the Program.

(j) The Commissioner may establish additional rules addressing financial, employment, referral, ownership, compensation, or other arrangements that could impair evaluator independence.

(k) This Section does not create any of the following:

  1. An entitlement for property owners to receive funding to inspect or retrofit residential property.
  2. An obligation for the state to appropriate funding to inspect or retrofit residential property.

Section 4. Premium Discount or Insurance Rate Reduction.

(a) All insurance companies writing property insurance for any property located in [State] that has been certified as complying with the most recent version of the “fortified roof” standard of the Insurance Institute for Business and Home Safety:

  1. may provide a premium discount or rate reduction on the coverage if the discount or reduction is actuarially justified and there is sufficient and credible evidence of cost savings that can be attributed to the construction standards, including catastrophe modeling, engineering analysis, claims experience, or other actuarially sound methodologies;
  2. may provide a premium discount or rate reduction on the coverage in accordance with any standard discount amounts, targets, or benchmarks established under Section 4(C)(1) of this section, and any other adjustment on the coverage; and
  3. notwithstanding any law in this state, shall file any rates and supplementary rate information required under applicable state rating laws.
  4. Any standard discount amounts, targets, benchmarks, or guidance established pursuant to this Act are advisory only and shall not create a minimum, maximum, presumed, or required discount level. Nothing in this Act shall be construed to require an insurer to offer a premium discount, rate reduction, deductible modification, or other mitigation-related insurance incentive.
  5. Nothing in this Act shall be construed to require an insurer to develop, use, or rely exclusively upon any particular catastrophe model, vendor model, engineering methodology, or analytical framework.

(b)

  1. To obtain a credit or discount pursuant to this Subsection, an insurable property located in this state shall have a current certification as constructed in accordance with the fortified roof standards provided by the Insurance Institute for Business and Home Safety.
  2. An insurable property shall be certified as in conformance with the fortified roof standards only after inspection and certification by an Insurance Institute for Business and Home Safety certified inspector.
  3. An owner of insurable property claiming a credit or discount shall maintain the Insurance Institute for Business and Home Safety certification documents, which shall be considered evidence of compliance with the fortified home standards. Upon request, the certification shall be presented to the insurer or potential insurer of a property owner before the adjustment becomes effective for the insurable property. An expired certification does not constitute a valid certification document.
  4. Any credit or discount shall reflect the expected reduction in losses associated with the wind-related peril being mitigated and may apply either to the portion of premium attributable to wind coverage or, where operationally appropriate, to the policy premium as a whole. The adjustment shall apply exclusively to the premium designated for the improved insurable property. The adjustment is not required to be in addition to other mitigation adjustments provided by the insurer and shall be in lieu of those other adjustments, including those in place prior to [xxx], if they are deemed to be duplicated.
  5. Nothing in this Section shall prohibit insurers from offering additional adjustments in deductible, other credit rate differentials, or a combination thereof. These adjustments may be available under the terms specified in this Section to any owner who builds or locates a new insurable property in this state to resist loss due to hurricane, tornado, or other catastrophic windstorm events.
  6. For the purposes of this Act, insurable property means residential property that is an owner-occupied, single-family, primary residence, that is eligible to be retrofitted under guidelines set by the Insurance Institute for Business and Home Safety.

(c) The commissioner of insurance, in consultation with the State Uniform Construction Code Council, shall promulgate rules and regulations in accordance with the Administrative Procedure Act to implement the provisions of this Section. The rules and regulations may include but not be limited to the following:

  1. Provisions necessary to effectuate Section 4 (B) of this act.
  2. Those items reasonably necessary for an insurer to compute or otherwise determine the actuarially justified amount of any premium rate reduction, discount, credit, rate differential, reduction in deductible, or other adjustment available to an insured. The Program should be administered in a manner that facilitates consistent verification, minimizes administrative burden, and supports practical implementation by homeowners, contractors, insurers, and regulators.
  3. Provisions establishing the inspection and certification requirements for insureds who comply with the provisions of this Section.
  4. Recordkeeping requirements for insurers.

(d) For any information filed by insurers in compliance with Section 4, the Commissioner shall not:

  1. Share any information with organizations outside of the state, absent a lawful subpoena issued by a court of competent jurisdiction
  2. Set a benchmark or other minimum discount an insurer must utilize if the insurer offers a premium discount or rate reduction. Information submitted by an insurer that contains proprietary actuarial, underwriting, rating, or catastrophe modeling information shall be treated as confidential and protected from public disclosure to the extent permitted by state law.
  3. Information submitted by an insurer that contains proprietary actuarial, underwriting, rating, or catastrophe modeling information shall be treated as confidential and protected from public disclosure to the extent permitted by state law.

Section 5. Effective Date
This Act shall take effect [xxx].