South Carolina flooding - Regulatory developments

South Carolina has recently experienced widespread severe flooding. The South Carolina Department of Insurance (“SC DOI”) has issued a data call requiring insurers to provide claims data for losses related to the flooding. Lloyd’s will be providing aggregate figures at market level. The first return of data is due to Lloyd’s as soon as possible.

A communication has been issued to all Heads of Claims detailing the specific information that is required. An Emergency Order has also been issued by the SC DOI restricting cancellation and nonrenewal of policies for insureds impacted by the flooding.

Background

South Carolina Governor Nikki Haley issued a state of emergency effective from 1 October 2015 which has been extended through 30 October 2015 for 15 counties that have been adversely affected by the severe flooding. The flooding has caused evacuation of local residents and numerous road closures throughout the state.

The SC DOI has issued a data call for P&C policies for loss information relating to the flooding. This data call is directed to all licensed and surplus lines insurers writing business in South Carolina. Lloyd’s has assigned CAT code 15G to the South Carolina flooding losses.

Based on the declaration of a state of emergency, the SC DOI also issued Emergency Order 2015-EO-001 which prohibits insurers from cancelling or non-renewing policies between 8 October and 1 November 2015 for insureds residing in the counties impacted by the state of emergency. Cancellation or nonrenewal notices that were issued between 15 September and 16 October 2015 must be re-issued on or after 1 November 2015. The Emergency Order extends deadlines for the payment of insurance premiums and other required correspondence for thirty days. It also prohibits insurers from canceling or non-renewing policies solely because of claims resulting from this catastrophic event and prohibits insurers from applying hurricane or named storm deductibles.