STATE OF OKLAHOMA

1st Session of the 54th Legislature (2013)

HOUSE BILL 2208	By:	Stiles

AS INTRODUCED

An Act relating to insurance claims; allowing insured to assign benefits of policy to residential contractor when certain conditions are met; limiting amount of benefits assignable; defining term; requiring a lender to release certain insurance proceeds when certain conditions are met; amending 21 O.S. 2011, Section 1662, as amended by Section 3, Chapter 235, O.S.L. 2012 (21 O.S. Supp. 2012, Section 1662), which relates to false and fraudulent insurance claims; providing that certain actions by residential contractor shall constitute a false or fraudulent claim; requiring the insured homeowner to report certain actions; defining terms; providing for codification; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 4810 of Title 36, unless there is created a duplication in numbering, reads as follows:
A.  Benefits available under a homeowner’s policy, at the option of the insured, shall be assignable to a residential contractor who has provided services and procedures which are covered under the policy.  A residential contractor shall be compensated directly by an insurer for services and procedures which have been provided when the following conditions are met:
1.  Benefits available under a policy have been assigned in writing by an insured to the residential contractor; and
2.  A copy of the assignment has been provided by the residential contractor to the insurer.
B.  Benefits assigned by the insured to the residential contractor pursuant to this section shall be limited to the amount of insurable interest, as defined in Section 3605 of Title 36 of the Oklahoma Statutes, the insured has in the property.
C.  As used in this section, “residential contractor” means a person or entity in the business of contracting or offering to contract with an owner or possessor of residential real estate to repair or replace roof systems or perform any other exterior repair, replacement, construction, or reconstruction work on residential real estate.
SECTION 2.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 4811 of Title 36, unless there is created a duplication in numbering, reads as follows:
If a claim under an insurance policy for damage to residential real property of Twenty Thousand Dollars ($20,000.00) is paid to the insured and a lender, and the lender holds all or part of the proceeds from the insurance claim payment pending completion of all or part of the repairs to the property, the lender shall either:
1.  If the lender is current on mortgage payments and the lender has received sufficient evidence that the repairs required pursuant to the claim have been completed, release the proceeds to the insured or its assignee not later than three (3) days after the lender receives payment of the insurance proceeds; or
2.  If the lender is not current on mortgage payments and the lender has received sufficient evidence that the repairs required pursuant to the claim have been completed, release the proceeds to the insured or its assignee not later than (3) days after the lender becomes current on the mortgage payments.
SECTION 3.     AMENDATORY     21 O.S. 2011, Section 1662, as amended by Section 3, Chapter 235, O.S.L. 2012 (21 O.S. Supp. 2012, Section 1662), is amended to read as follows:
Section 1662.  A.  Any person who presents or causes to be presented any false or fraudulent claim, or any proof in support of any such claim, upon any contract of insurance, for the payment of any loss, or who prepares, makes or subscribes any account, certificate, survey affidavit, proof of loss, or other book, paper or writing, with intent to present or use the same, or to allow it to be presented or used in support of any such claim, shall be guilty of a felony punishable by imprisonment in the State Penitentiary custody of the Department of Corrections not exceeding three (3) years, or by a fine not exceeding twice the amount of the aggregated loss sum, or both.
B.  A false or fraudulent claim shall include a residential contractor advertising or promising to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services, or a residential contractor decreasing the value of repairs that were quoted to the insurance company and offering the remaining portion of the insurance claim proceeds to the insured.
C.  Any insured homeowner who has retained the services of a residential contractor and has reason to believe that a contractor has made an offer or promise to the insured homeowner shall report the matter promptly to the Anti-Fraud Unit of the Insurance Department of the State of Oklahoma.
D.  As used in this section:
1.  “Promising to pay or rebate” means granting any allowance or offering any discount against the fees to be charged or paying the insured or any person directly or indirectly associated with the property any form of compensation, gift, prize, bonus, coupon, credit, referral fee, or other item of monetary value for any reason; and
2.  “Residential contractor” means a person or entity in the business of contracting or offering to contract with an owner or possessor of residential real estate to repair or replace roof systems or perform any other exterior repair, replacement, construction, or reconstruction work on residential real estate.
SECTION 4.  This act shall become effective November 1, 2013.

54-1-6588	AMM	01/16/13