HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.
![handle is hein.crs/govyfz0001 and id is 1 raw text is:
Congressional
Private Flood Insurance and the National
Flood Insurance Program (NFIP)
Updated February 28, 2019
The National Flood Insurance Program
The NFIP was first authorized by the National Flood Insurance Act of 1968 (42 U.S.C. §4001 et seq.), and
was reauthorized until the end of FY2017 by the Biggert-Waters Flood Insurance Reform Act of 2012
(BW-12, Title II of P.L. 112-141). After a series of short-term reauthorizations, S. 3628 in the 115th
Congress reauthorized the NFIP until May 31, 2019. In statute, Congress has found that
(1) many factors have made it uneconomic for the private insurance industry alone to make flood
insurance available to those in need of such protection on reasonable terms and conditions; but
(2) a program of flood insurance with large-scale participation of the Federal Government and
carried out to the maximum extent practicable by the private insurance industry is feasible and can
be initiated. (42 U.S.C. §4001(b)).
By law or regulation, federal agencies, federally regulated lending institutions, and government-sponsored
enterprises (GSEs) must require certain property owners to purchase flood insurance as a condition of any
mortgage that these entities make, guarantee, or purchase. Property owners are required to purchase flood
insurance if their property is identified as being in a Special Flood Hazard Area (SFHA, which is
equivalent to having a 10% or greater risk of flooding every year) and is in a community that participates
in the NFIP. Historically, this has generally meant that such property owners were required to purchase a
Standard Flood Insurance Policy (SFIP) from the NFIP. In BW-12, Congress explicitly provided for
private flood insurance to fulfill this mortgage requirement instead of the SFIP, ifthe private flood
insurance met the conditions defined further in statute at 42 U.S.C. §4012a(b)(7).
Rulemaking on Accepting Private Flood Insurance
To fulfill the mortgage requirement, a private insurance policy must provide, among other conditions,
flood insurance coverage which is at least as broad as the coverage provided under a [SFIP] ... including
when considering deductibles, exclusions, and conditions offered by the insurer. The implementation of
this requirement has proved challenging, with the responsible federal regulators (the Federal Reserve,
Farm Credit Administration, Federal Deposit Insurance Corporation, National Credit Union
Administration, and Comptroller of the Currency) issuing two separate Notices of Proposed Rulemaking
(NPRM) addressing the issue in October 2013 and November 2016. The crux of the implementation issue
can be seen as answering the question of who would judge whether specific policies met the at least as
broad as standard and what criteria would be used in making this judgment? The uncertainty as to
Con res ~c~n IRe ar hS rvc 00 www. ~go](ViewImageLocal?handle=hein.crs/govyfz0001&div=1&collection=&method=preview&ext=.png&size=3)