Long-term policy pilot program

(a) In general The Secretary shall, in consultation with States and the National Association of Insurance Commissioners, establish a pilot program for all-perils property insurance policies, as perils are phased in under section 3(d), with a policy term of at least 5 years (in this section referred to as a multi-year policy). (b) Premium and policy conditions An insurer who participates in the pilot program established under this section may— (1) increase premiums based on— (A) price indexes of construction costs; (B) changes in home value; and (C) optional coverages selected by the policyholder; (2) not increase premiums based on a change in the assessment by the insurer of the catastrophe peril risks associated with the insured property; (3) require property maintenance consistent with the condition of the property at time of initial policy issuance; and (4) require loss mitigation investment partnerships as a condition for the multi-year policy. (c) Actions by the policyholder (1) Policy continuation With the agreement of the insurer, a consumer purchasing the property during the term of the multi-year policy may continue the policy for the remainder of the term. (2) Election to new insurer If the policyholder elects to move to a new insurer during the term of the multi-year policy, the new insurer may take into account loss mitigation investment partnerships with the prior insurers in rate setting. (3) Cancellation by policyholder If the policyholder is the recipient of any funds for loss prevention property improvements from the insurer, Federal, State, local government, or other source and the policyholder cancels the policy before the end of the multi-year policy term, the policyholder shall return a pro-rata share of such improvement to the source of the funds.