Part A—Industry Program With Federal Financial Assistance

§4051. Industry flood insurance pool; requirements for participation

(a) The Administrator is authorized to encourage and otherwise assist any insurance companies and other insurers which meet the requirements prescribed under subsection (b) to form, associate, or otherwise join together in a pool—

(1) in order to provide the flood insurance coverage authorized under subchapter I; and

(2) for the purpose of assuming, including as reinsurance of coverage provided by the flood insurance program, on such terms and conditions as may be agreed upon, such financial responsibility as will enable such companies and other insurers, with the Federal financial and other assistance available under this chapter, to assume a reasonable proportion of responsibility for the adjustment and payment of claims for losses under the flood insurance program.

(b) In order to promote the effective administration of the flood insurance program under this part, and to assure that the objectives of this chapter are furthered, the Administrator is authorized to prescribe appropriate requirements for insurance companies and other insurers participating in such pool including, but not limited to, minimum requirements for capital or surplus or assets.

(Pub. L. 90–448, title XIII, §1331, Aug. 1, 1968, 82 Stat. 582; Pub. L. 98–181, title I [title IV, §451(d)(1)], Nov. 30, 1983, 97 Stat. 1229; Pub. L. 112–141, div. F, title II, §§100232(d)(1), 100238(b)(1), July 6, 2012, 126 Stat. 954, 958.)

Editorial Notes

References in Text

This chapter, referred to in subsecs. (a)(2) and (b), was in the original a reference to "this title" meaning title XIII of Pub. L. 90–448, Aug. 1, 1968, 82 Stat. 572, known as the National Flood Insurance Act of 1968, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 4001 of this title and Tables.

Amendments

2012—Subsec. (a). Pub. L. 112–141, §100238(b)(1), substituted "Administrator" for "Director" in introductory provisions.

Subsec. (a)(2). Pub. L. 112–141, §100232(d)(1), inserted ", including as reinsurance of coverage provided by the flood insurance program" before ", on such terms".

Subsec. (b). Pub. L. 112–141, §100238(b)(1), substituted "Administrator" for "Director".

1983—Pub. L. 98–181 substituted "Director" for "Secretary" wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 120 days following Aug. 1, 1968, or such later date prescribed by the Secretary but in no event more than 180 days following Aug. 1, 1968, see section 1377 of Pub. L. 90–448, set out as a note under section 4001 of this title.

Transfer of Functions

For transfer of all functions, personnel, assets, components, authorities, grant programs, and liabilities of the Federal Emergency Management Agency, including the functions of the Under Secretary for Federal Emergency Management relating thereto, to the Federal Emergency Management Agency, see section 315(a)(1) of Title 6, Domestic Security.

For transfer of functions, personnel, assets, and liabilities of the Federal Emergency Management Agency, including the functions of the Director of the Federal Emergency Management Agency relating thereto, to the Secretary of Homeland Security, and for treatment of related references, see former section 313(1) and sections 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.

§4052. Agreements with flood insurance pool

(a) Authorization

The Administrator is authorized to enter into such agreements with the pool formed or otherwise created under this part as he deems necessary to carry out the purposes of this chapter.

(b) Terms and conditions

Such agreements shall specify—

(1) the terms and conditions under which risk capital will be available for the adjustment and payment of claims,

(2) the terms and conditions under which the pool (and the companies and other insurers participating therein) shall participate in premiums received and profits or losses realized or sustained,

(3) the maximum amount of profit, established by the Administrator and set forth in the schedules prescribed under section 4018 of this title, which may be realized by such pool (and the companies and other insurers participating therein),

(4) the terms and conditions under which operating costs and allowances set forth in the schedules prescribed under section 4018 of this title may be paid, and

(5) the terms and conditions under which premium equalization payments under section 4054 of this title will be made and reinsurance claims under section 4055 of this title will be paid.

(c) Additional provisions

In addition, such agreements shall contain such provisions as the Administrator finds necessary to assure that—

(1) no insurance company or other insurer which meets the requirements prescribed under section 4051(b) of this title, and which has indicated an intention to participate in the flood insurance program on a risk-sharing basis, will be excluded from participating in the pool,

(2) the insurance companies and other insurers participating in the pool will take whatever action may be necessary to provide continuity of flood insurance coverage or reinsurance by the pool, and

(3) any insurance companies and other insurers, insurance agents and brokers, and insurance adjustment organizations will be permitted to cooperate with the pool as fiscal agents or otherwise, on other than a risk-sharing basis, to the maximum extent practicable.

(Pub. L. 90–448, title XIII, §1332, Aug. 1, 1968, 82 Stat. 582; Pub. L. 98–181, title I [title IV, §451(d)(1)], Nov. 30, 1983, 97 Stat. 1229; Pub. L. 112–141, div. F, title II, §§100232(d)(2), 100238(b)(1), July 6, 2012, 126 Stat. 954, 958.)

Editorial Notes

References in Text

This chapter, referred to in subsec. (a), was in the original a reference to "this title" meaning title XIII of Pub. L. 90–448, Aug. 1, 1968, 82 Stat. 572, known as the National Flood Insurance Act of 1968, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 4001 of this title and Tables.

Amendments

2012—Subsecs. (a), (b)(3), (c). Pub. L. 112–141, §100238(b)(1), substituted "Administrator" for "Director".

Subsec. (c)(2). Pub. L. 112–141, §100232(d)(2), inserted "or reinsurance" after "flood insurance coverage".

1983—Subsecs. (a), (b)(3), (c). Pub. L. 98–181 substituted "Director" for "Secretary".

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 120 days following Aug. 1, 1968, or such later date prescribed by the Secretary but in no event more than 180 days following Aug. 1, 1968, see section 1377 of Pub. L. 90–448, set out as a note under section 4001 of this title.

Transfer of Functions

For transfer of all functions, personnel, assets, components, authorities, grant programs, and liabilities of the Federal Emergency Management Agency, including the functions of the Under Secretary for Federal Emergency Management relating thereto, to the Federal Emergency Management Agency, see section 315(a)(1) of Title 6, Domestic Security.

For transfer of functions, personnel, assets, and liabilities of the Federal Emergency Management Agency, including the functions of the Director of the Federal Emergency Management Agency relating thereto, to the Secretary of Homeland Security, and for treatment of related references, see former section 313(1) and sections 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.

§4053. Adjustment and payment of claims; judicial review; limitations; jurisdiction

The insurance companies and other insurers which form, associate, or otherwise join together in the pool under this part may adjust and pay all claims for proved and approved losses covered by flood insurance in accordance with the provisions of this chapter and, upon the disallowance by any such company or other insurer of any such claim, or upon the refusal of the claimant to accept the amount allowed upon any such claim, the claimant, within one year after the date of mailing of notice of disallowance or partial disallowance of the claim, may institute an action on such claim against such company or other insurer in the United States district court for the district in which the insured property or the major part thereof shall have been situated, and original exclusive jurisdiction is hereby conferred upon such court to hear and determine such action without regard to the amount in controversy.

(Pub. L. 90–448, title XIII, §1333, Aug. 1, 1968, 82 Stat. 583; Pub. L. 98–181, title I [title IV, §451(d)(3)], Nov. 30, 1983, 97 Stat. 1229.)

Editorial Notes

References in Text

This chapter, referred to in text, was in the original a reference to "this title" meaning title XIII of Pub. L. 90–448, Aug. 1, 1968, 82 Stat. 572, known as the National Flood Insurance Act of 1968, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 4001 of this title and Tables.

Amendments

1983—Pub. L. 98–181 inserted "original exclusive" before "jurisdiction".

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 120 days following Aug. 1, 1968, or such later date prescribed by the Secretary but in no event more than 180 days following Aug. 1, 1968, see section 1377 of Pub. L. 90–448, set out as a note under section 4001 of this title.

§4054. Premium equalization payments; basis; aggregate amount; establishment of designated periods

(a) The Administrator, on such terms and conditions as he may from time to time prescribe, shall make periodic payments to the pool formed or otherwise created under section 4051 of this title, in recognition of such reductions in chargeable premium rates under section 4015 of this title below estimated premium rates under section 4014(a)(1) of this title as are required in order to make flood insurance available on reasonable terms and conditions.

(b) Designated periods under this section and the methods for determining the sum of premiums paid or payable during such periods shall be established by the Administrator.

(Pub. L. 90–448, title XIII, §1334, Aug. 1, 1968, 82 Stat. 583; Pub. L. 93–234, title I, §111, Dec. 31, 1973, 87 Stat. 981; Pub. L. 98–181, title I [title IV, §451(d)(1)], Nov. 30, 1983, 97 Stat. 1229; Pub. L. 112–141, div. F, title II, §100238(b)(1), July 6, 2012, 126 Stat. 958.)

Editorial Notes

Amendments

2012—Pub. L. 112–141 substituted "Administrator" for "Director" in subsecs. (a) and (b).

1983—Pub. L. 98–181 substituted "Director" for "Secretary" in subsecs. (a) and (b).

1973—Subsecs. (b), (c). Pub. L. 93–234 redesignated subsec. (c) as (b) and struck out former subsec. (b) prescribing formula for sharing losses between Government and industry and permit necessary flexibility in loss sharing to take into account longer-term loss experience trends and to compensate for lack of precision in actuarial computations.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 120 days following Aug. 1, 1968, or such later date prescribed by the Secretary but in no event more than 180 days following Aug. 1, 1968, see section 1377 of Pub. L. 90–448, set out as a note under section 4001 of this title.

Transfer of Functions

For transfer of all functions, personnel, assets, components, authorities, grant programs, and liabilities of the Federal Emergency Management Agency, including the functions of the Under Secretary for Federal Emergency Management relating thereto, to the Federal Emergency Management Agency, see section 315(a)(1) of Title 6, Domestic Security.

For transfer of functions, personnel, assets, and liabilities of the Federal Emergency Management Agency, including the functions of the Director of the Federal Emergency Management Agency relating thereto, to the Secretary of Homeland Security, and for treatment of related references, see former section 313(1) and sections 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.

§4055. Reinsurance coverage

(a) Availability for excess losses

(1) In general

The Administrator is authorized to take such action as may be necessary in order to make available, to the pool formed or otherwise created under section 4051 of this title, reinsurance for losses (due to claims for proved and approved losses covered by flood insurance) which are in excess of losses assumed by such pool in accordance with the excess loss agreement entered into under subsection (c).

(2) Private reinsurance

The Administrator is authorized to secure reinsurance of coverage provided by the flood insurance program from the private market at rates and on terms determined by the Administrator to be reasonable and appropriate, in an amount sufficient to maintain the ability of the program to pay claims.

(b) Availability pursuant to contract, agreement, or other arrangement; payment of premium, fee, or other charge

Such reinsurance shall be made available pursuant to contract, agreement, or any other arrangement, in consideration of such payment of a premium, fee, or other charge as the Administrator finds necessary to cover anticipated losses and other costs of providing such reinsurance.

(c) Excess loss agreement; negotiation

The Administrator is authorized to negotiate an excess loss agreement, from time to time, under which the amount of flood insurance retained by the pool, after ceding reinsurance, shall be adequate to further the purposes of this chapter, consistent with the objective of maintaining appropriate financial participation and risk sharing to the maximum extent practicable on the part of participating insurance companies and other insurers.

(d) Submission of excess losses on portfolio basis

All reinsurance claims for losses in excess of losses assumed by the pool shall be submitted on a portfolio basis by such pool in accordance with terms and conditions established by the Administrator.

(Pub. L. 90–448, title XIII, §1335, Aug. 1, 1968, 82 Stat. 583; Pub. L. 98–181, title I [title IV, §451(d)(1)], Nov. 30, 1983, 97 Stat. 1229; Pub. L. 112–141, div. F, title II, §§100232(d)(3), 100238(b)(1), July 6, 2012, 126 Stat. 954, 958.)

Editorial Notes

References in Text

This chapter, referred to in subsec. (c), was in the original a reference to "this title" meaning title XIII of Pub. L. 90–448, Aug. 1, 1968, 82 Stat. 572, known as the National Flood Insurance Act of 1968, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 4001 of this title and Tables.

Amendments

2012—Subsec. (a). Pub. L. 112–141, §100232(d)(3), designated existing provisions as par. (1), inserted heading, substituted "The Administrator" for "The Director" and added par. (2).

Subsecs. (b) to (d). Pub. L. 112–141, §100238(b)(1), substituted "Administrator" for "Director".

1983—Pub. L. 98–181 substituted "Director" for "Secretary" wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 120 days following Aug. 1, 1968, or such later date prescribed by the Secretary but in no event more than 180 days following Aug. 1, 1968, see section 1377 of Pub. L. 90–448, set out as a note under section 4001 of this title.

Transfer of Functions

For transfer of all functions, personnel, assets, components, authorities, grant programs, and liabilities of the Federal Emergency Management Agency, including the functions of the Under Secretary for Federal Emergency Management relating thereto, to the Federal Emergency Management Agency, see section 315(a)(1) of Title 6, Domestic Security.

For transfer of functions, personnel, assets, and liabilities of the Federal Emergency Management Agency, including the functions of the Director of the Federal Emergency Management Agency relating thereto, to the Secretary of Homeland Security, and for treatment of related references, see former section 313(1) and sections 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.

§4056. Emergency implementation of flood insurance program; applicability of other provisions of law

(a) Notwithstanding any other provisions of this chapter, for the purpose of providing flood insurance coverage at the earliest possible time, the Administrator shall carry out the flood insurance program authorized under subchapter I during the period ending on the date specified in section 4026 of this title, in accordance with the provisions of this part and the other provisions of this chapter insofar as they relate to this part but subject to the modifications made by or under subsection (b).

(b) In carrying out the flood insurance program pursuant to subsection (a), the Administrator—

(1) shall provide insurance coverage without regard to any estimated risk premium rates which would otherwise be determined under section 4014 of this title; and

(2) shall utilize the provisions and procedures contained in or prescribed by this part (other than section 4054 of this title) and sections 4081 and 4082 of this title to such extent and in such manner as he may consider necessary or appropriate to carry out the purpose of this section.

(Pub. L. 90–448, title XIII, §1336, as added Pub. L. 91–152, title IV, §408, Dec. 24, 1969, 83 Stat. 396; amended Pub. L. 92–213, §2(a), Dec. 22, 1971, 85 Stat. 775; Pub. L. 93–234, title I, §106, Dec. 31, 1973, 87 Stat. 979; Pub. L. 94–173, §5, Dec. 23, 1975, 89 Stat. 1028; Pub. L. 94–375, §14(b), Aug. 3, 1976, 90 Stat. 1075; Pub. L. 95–128, title VII, §701(b), Oct. 12, 1977, 91 Stat. 1144; Pub. L. 95–406, §6(b), Sept. 30, 1978, 92 Stat. 880; Pub. L. 95–557, title III, §308(b), Oct. 31, 1978, 92 Stat. 2098; Pub. L. 96–153, title VI, §602(b), Dec. 21, 1979, 93 Stat. 1137; Pub. L. 97–35, title III, §341(b)(2), Aug. 13, 1981, 95 Stat. 419; Pub. L. 97–289, §4(b), Oct. 6, 1982, 96 Stat. 1231; Pub. L. 98–35, §4(b), May 26, 1983, 97 Stat. 198; Pub. L. 98–109, §5(b), Oct. 1, 1983, 97 Stat. 746; Pub. L. 98–181, title I [title IV, §451(b), (d)(1)], Nov. 30, 1983, 97 Stat. 1229; Pub. L. 99–120, §4(a)(2), Oct. 8, 1985, 99 Stat. 503; Pub. L. 99–156, §4(a)(2), Nov. 15, 1985, 99 Stat. 816; Pub. L. 99–219, §4(a)(2), Dec. 26, 1985, 99 Stat. 1731; Pub. L. 99–267, §4(a)(2), Mar. 27, 1986, 100 Stat. 74; Pub. L. 99–272, title III, §3010(a)(2), Apr. 7, 1986, 100 Stat. 106; Pub. L. 99–289, §1(b), May 2, 1986, 100 Stat. 412; Pub. L. 99–345, §1, June 24, 1986, 100 Stat. 673; Pub. L. 99–430, Sept. 30, 1986, 100 Stat. 986; Pub. L. 100–122, §1, Sept. 30, 1987, 101 Stat. 793; Pub. L. 100–154, Nov. 5, 1987, 101 Stat. 890; Pub. L. 100–170, Nov. 17, 1987, 101 Stat. 914; Pub. L. 100–179, Dec. 3, 1987, 101 Stat. 1018; Pub. L. 100–200, Dec. 21, 1987, 101 Stat. 1327; Pub. L. 100–242, title V, §541(b), Feb. 5, 1988, 101 Stat. 1939; Pub. L. 101–137, §1(b), Nov. 3, 1989, 103 Stat. 824; Pub. L. 101–508, title II, §2302(b), Nov. 5, 1990, 104 Stat. 1388–23; Pub. L. 103–325, title V, §571(b), Sept. 23, 1994, 108 Stat. 2277; Pub. L. 105–46, §118, Sept. 30, 1997, 111 Stat. 1157; Pub. L. 105–65, title III, Oct. 27, 1997, 111 Stat. 1377; Pub. L. 105–276, title III, title V, §599D(b), Oct. 21, 1998, 112 Stat. 2502, 2663; Pub. L. 107–73, title III, Nov. 26, 2001, 115 Stat. 689; Pub. L. 108–3, §2(a)(3), Jan. 13, 2003, 117 Stat. 7; Pub. L. 108–171, §2(a)(3), Dec. 6, 2003, 117 Stat. 2064; Pub. L. 108–199, div. H, §136(a)(3), Jan. 23, 2004, 118 Stat. 442; Pub. L. 108–264, title I, §101(c), June 30, 2004, 118 Stat. 714; Pub. L. 112–141, div. F, title II, §100238(b)(1), July 6, 2012, 126 Stat. 958.)

Editorial Notes

References in Text

This chapter, referred to in subsec. (a), was in the original a reference to "this title" meaning title XIII of Pub. L. 90–448, Aug. 1, 1968, 82 Stat. 572, known as the National Flood Insurance Act of 1968, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 4001 of this title and Tables.

Amendments

2012—Pub. L. 112–141 substituted "Administrator" for "Director" in subsecs. (a) and (b).

2004—Subsec. (a). Pub. L. 108–264 substituted "during the period ending on the date specified in section 4026 of this title, in accordance" for identical language.

Pub. L. 108–199 made amendment identical to that made by Pub. L. 108–171. See 2003 Amendment note below.

2003—Subsec. (a). Pub. L. 108–171 substituted "on the date specified in section 4026 of this title" for "December 31, 2003".

Pub. L. 108–3 substituted "ending December 31, 2003, in" for "ending December 31, 2002, in".

2001—Subsec. (a). Pub. L. 107–73 substituted "December 31, 2002" for "September 30, 2001".

1998—Subsec. (a). Pub. L. 105–276, §599D(b), which directed the substitution of "2001" for "1998", was executed by substituting "2001" for "1999" to reflect the probable intent of Congress and the amendment by Pub. L. 105–276, title III, see below.

Pub. L. 105–276, title III, substituted "1999" for "1998".

1997—Subsec. (a). Pub. L. 105–65 substituted "September 30, 1998" for "October 23, 1997".

Pub. L. 105–46 substituted "October 23, 1997" for "September 30, 1996".

1994—Subsec. (a). Pub. L. 103–325 substituted "September 30, 1996" for "September 30, 1995".

1990—Subsec. (a). Pub. L. 101–508 substituted "September 30, 1995" for "September 30, 1991".

1989—Subsec. (a). Pub. L. 101–137 substituted "September 30, 1991" for "September 30, 1989".

1988—Subsec. (a). Pub. L. 100–242 substituted "September 30, 1989" for "March 15, 1988".

1987—Subsec. (a). Pub. L. 100–200 substituted "March 15, 1988" for "December 16, 1987".

Pub. L. 100–179 substituted "December 16, 1987" for "December 2, 1987".

Pub. L. 100–170 substituted "December 2, 1987" for "November 15, 1987".

Pub. L. 100–154 substituted "November 15, 1987" for "October 31, 1987".

Pub. L. 100–122 substituted "October 31, 1987" for "September 30, 1987".

1986—Subsec. (a). Pub. L. 99–430 substituted "September 30, 1987" for "September 30, 1986".

Pub. L. 99–345 substituted "September 30, 1986" for "June 6, 1986".

Pub. L. 99–289 substituted "June 6, 1986" for "April 30, 1986".

Pub. L. 99–272 directed amendment identical to Pub. L. 99–219 substituting "March 17, 1986" for "December 15, 1985".

Pub. L. 99–267 substituted "April 30, 1986" for "March 17, 1986".

1985—Subsec. (a). Pub. L. 99–219 substituted "March 17, 1986" for "December 15, 1985".

Pub. L. 99–156 substituted "December 15, 1985" for "November 14, 1985".

Pub. L. 99–120 substituted "November 14, 1985" for "September 30, 1985".

1983—Subsec. (a). Pub. L. 98–181, §451(d)(1), substituted "Director" for "Secretary".

Pub. L. 98–181, §451(b), substituted "September 30, 1985" for "November 30, 1983".

Pub. L. 98–109 substituted "November 30, 1983" for "September 30, 1983".

Pub. L. 98–35 substituted "September 30, 1983" for "May 20, 1983".

Subsec. (b). Pub. L. 98–181, §451(d)(1), substituted "Director" for "Secretary".

1982—Subsec. (a). Pub. L. 97–289 substituted "May 20, 1983" for "September 30, 1982".

1981—Subsec. (a). Pub. L. 97–35 substituted "1982" for "1981".

1979—Subsec. (a). Pub. L. 96–153 substituted "1981" for "1980".

1978—Subsec. (a). Pub. L. 95–557 substituted "September 30, 1980" for "October 31, 1978".

Pub. L. 95–406 substituted "October 31, 1978" for "September 30, 1978".

1977—Subsec. (a). Pub. L. 95–128 substituted "1978" for "1977".

1976—Subsec. (a). Pub. L. 94–375 substituted "September 30, 1977" for "December 31, 1976".

1975—Subsec. (a). Pub. L. 94–173 substituted "1976" for "1975".

1973—Subsec. (a). Pub. L. 93–234 substituted "1975" for "1973".

1971—Subsec. (a). Pub. L. 92–213 substituted "1973" for "1971".

Statutory Notes and Related Subsidiaries

Effective Date of 2004 Amendment

Amendment by Pub. L. 108–199 considered to have taken effect on Dec. 31, 2003, see section 136(b) of div. H of Pub. L. 108–199, set out as a note under section 4016 of this title.

Effective Date of 2003 Amendments

Amendment by Pub. L. 108–171 effective Dec. 31, 2003, see section 2(b) of Pub. L. 108–171, set out as a note under section 4016 of this title.

Amendment by Pub. L. 108–3 effective Dec. 31, 2002, see section 2(b) of Pub. L. 108–3, set out as a note under section 4016 of this title.

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–35 effective Oct. 1, 1981, see section 371 of Pub. L. 97–35, set out as an Effective Date note under section 3701 of Title 12, Banks and Banking.

Transfer of Functions

For transfer of all functions, personnel, assets, components, authorities, grant programs, and liabilities of the Federal Emergency Management Agency, including the functions of the Under Secretary for Federal Emergency Management relating thereto, to the Federal Emergency Management Agency, see section 315(a)(1) of Title 6, Domestic Security.

For transfer of functions, personnel, assets, and liabilities of the Federal Emergency Management Agency, including the functions of the Director of the Federal Emergency Management Agency relating thereto, to the Secretary of Homeland Security, and for treatment of related references, see former section 313(1) and sections 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.

Continuing Appropriations for Fiscal Year 1998

The expiration date of Oct. 23, 1997 (see 1997 Amendment note above) was temporarily extended to Nov. 7, 1997, by Pub. L. 105–64, Oct. 23, 1997, 111 Stat. 1343.

§4057. Alternative loss allocation system for indeterminate claims

(a) Definitions

In this section:

(1) Administrator

The term "Administrator" means the Administrator of the Federal Emergency Management Agency.

(2) COASTAL Formula

The term "COASTAL Formula" means the formula established under subsection (b).

(3) Coastal State

The term "coastal State" has the meaning given the term "coastal state" in section 1453 of title 16, except that the term shall not apply with respect to a State or territory that has an operational wind and flood loss allocation system.

(4) Indeterminate loss

(A) In general

The term "indeterminate loss" means, as determined by an insurance claims adjuster certified under the national flood insurance program and in consultation with an engineer as appropriate, a loss resulting from physical damage to, or loss of, property located in any coastal State arising from the combined perils of flood and wind associated with a named storm.

(B) Requirements

An insurance claims adjuster certified under the national flood insurance program shall only determine that a loss is an indeterminate loss if the claims adjuster determines that—

(i) no material remnant of physical buildings or man-made structures remain except building foundations for the specific property for which the claim is made; and

(ii) there is insufficient or no tangible evidence created, yielded, or otherwise left behind of the specific property for which the claim is made as a result of the named storm.

(5) Named storm

The term "named storm" means any organized weather system with a defined surface circulation and maximum sustained winds of not less than 39 miles per hour which the National Hurricane Center of the United States National Weather Service names as a tropical storm or a hurricane.

(6) Post-storm assessment

The term "post-storm assessment" means the post-storm assessment developed under section 3611(b) of title 33.

(7) State

The term "State" means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any other territory or possession of the United States.

(8) Secretary

The term "Secretary" means the Secretary of Homeland Security.

(9) Standard insurance policy

The term "standard insurance policy" means any insurance policy issued under the national flood insurance program that covers loss or damage to property resulting from water peril.

(10) Property

The term "property" means real or personal property that is insured under a standard insurance policy for loss or damage to structure or contents.

(11) Under Secretary

The term "Under Secretary" means the Under Secretary of Commerce for Oceans and Atmosphere, in the Under Secretary's capacity as Administrator of the National Oceanic and Atmospheric Administration.

(b) Establishment of flood loss allocation formula for indeterminate claims

(1) In general

Not later than 180 days after the date on which the protocol is established under section 3611(c)(1) of title 33, the Secretary, acting through the Administrator and in consultation with the Under Secretary, shall publish for comment in the Federal Register a standard formula to determine and allocate wind losses and flood losses for claims involving indeterminate losses.

(2) Contents

The standard formula established under paragraph (1) shall—

(A) incorporate data available from the Coastal Wind and Water Event Database established under section 3611(f) of title 33;

(B) use relevant data provided on the National Flood Insurance Program Elevation Certificate, or other data or information used to determine a property's current risk of flood, as determined by the Administrator, for each indeterminate loss for which the formula is used;

(C) consider any sufficient and credible evidence, approved by the Administrator, of the pre-event condition of a specific property, including the findings of any policyholder or insurance claims adjuster in connection with the indeterminate loss to that specific property;

(D) include other measures, as the Administrator considers appropriate, required to determine and allocate by mathematical formula the property damage caused by flood or storm surge associated with a named storm; and

(E) subject to paragraph (3), for each indeterminate loss, use the post-storm assessment to allocate water damage (flood or storm surge) associated with a named storm.

(3) Degree of accuracy required

The standard formula established under paragraph (1) shall specify that the Administrator may only use the post-storm assessment for purposes of the formula if the Under Secretary certifies that the post-storm assessment has a degree of accuracy of not less than 90 percent in connection with the specific indeterminate loss for which the assessment and formula are used.

(c) Authorized use of post-storm assessment and COASTAL Formula

(1) In general

Subject to paragraph (3), the Administrator may use the post-storm assessment and the COASTAL Formula to—

(A) review flood loss payments for indeterminate losses, including as part of the quality assurance reinspection program of the Federal Emergency Management Agency for claims under the national flood insurance program and any other process approved by the Administrator to review and validate payments under the national flood insurance program for indeterminate losses following a named storm; and

(B) assist the national flood insurance program to—

(i) properly cover qualified flood loss for claims for indeterminate losses; and

(ii) avoid paying for any loss or damage to property caused by any peril (including wind), other than flood or storm surge, that is not covered under a standard policy under the national flood insurance program.

(2) Federal disaster declaration

Subject to paragraph (3), in order to expedite claims and reduce costs to the national flood insurance program, following any major disaster declared by the President under section 5170 of this title relating to a named storm in a coastal State, the Administrator may use the COASTAL Formula to determine and pay for any flood loss covered under a standard insurance policy under the national flood insurance program, if the loss is an indeterminate loss.

(3) National Academy of Sciences evaluation

(A) Evaluation required

(i) Evaluation

Upon publication of the COASTAL Formula in the Federal Register as required by subsection (b)(1), and each time the Administrator modifies the COASTAL Formula, the National Academy of Sciences shall—

(I) evaluate the expected financial impact on the national flood insurance program of the use of the COASTAL Formula as so established or modified; and

(II) evaluate the validity of the scientific assumptions upon which the formula is based and determine whether the COASTAL formula ¹ can achieve a degree of accuracy of not less than 90 percent in allocating flood losses for indeterminate losses.

(ii) Report

The National Academy of Sciences shall submit a report containing the results of each evaluation under clause (i) to the Administrator, the Committee on Banking, Housing, and Urban Affairs and the Committee on Commerce, Science, and Transportation of the Senate, and the Committee on Financial Services and the Committee on Science, Space, and Technology of the House of Representatives.

(B) Effective date and applicability

(i) Effective date

Paragraphs (1) and (2) of this subsection shall not take effect unless the report under subparagraph (A) relating to the establishment of the COASTAL Formula concludes that the use of the COASTAL Formula for purposes of paragraph ² (1) and (2) would not have an adverse financial impact on the national flood insurance program and that the COASTAL Formula is based on valid scientific assumptions that would allow a degree of accuracy of not less than 90 percent to be achieved in allocating flood losses for indeterminate losses.

(ii) Effect of modifications

Unless the report under subparagraph (A) relating to a modification of the COASTAL Formula concludes that the use of the COASTAL Formula, as so modified, for purposes of paragraphs (1) and (2) would not have an adverse financial impact on the national flood insurance program and that the COASTAL Formula is based on valid scientific assumptions that would allow a degree of accuracy of not less than 90 percent to be achieved in allocating flood losses for indeterminate losses the Administrator may not use the COASTAL Formula, as so modified, for purposes of paragraphs (1) and (2).

(C) Funding

Notwithstanding section 4017 of this title, there shall be available to the Administrator from the National Flood Insurance Fund, of amounts not otherwise obligated, not more than $750,000 to carry out this paragraph.

(d) Disclosure of COASTAL Formula

Not later than 30 days after the date on which a post-storm assessment is submitted to the Secretary under section 3611(b)(2)(E) of title 33, for each indeterminate loss for which the COASTAL Formula is used pursuant to subsection (c)(2), the Administrator shall disclose to the policyholder that makes a claim relating to the indeterminate loss—

(1) that the Administrator used the COASTAL Formula with respect to the indeterminate loss; and

(2) a summary of the results of the use of the COASTAL Formula.

(e) Consultation

In carrying out subsections (b) and (c), the Secretary shall consult with—

(1) the Under Secretary for Oceans and Atmosphere;

(2) the Director of the National Institute of Standards and Technology;

(3) the Chief of Engineers of the Corps of Engineers;

(4) the Director of the United States Geological Survey;

(5) the Office of the Federal Coordinator for Meteorology;

(6) State insurance regulators of coastal States; and

(7) such public, private, and academic sector entities as the Secretary considers appropriate for purposes of carrying out such subsections.

(f) Recordkeeping

Each consideration and measure the Administrator determines necessary to carry out subsection (b) may be required, with advanced approval of the Administrator, to be provided for on the National Flood Insurance Program Elevation Certificate, or maintained otherwise on record if approved by the Administrator, for any property that qualifies for the COASTAL Formula under subsection (c).

(g) Civil penalty

(1) In general

If an insurance claims adjuster knowingly and willfully makes a false or inaccurate determination relating to an indeterminate loss, the Administrator may, after notice and opportunity for hearing, impose on the insurance claims adjuster a civil penalty of not more than $1,000.

(2) Deposit

Notwithstanding section 3302 of title 31 or any other law relating to the crediting of money, the Administrator shall deposit in the National Flood Insurance Fund any amounts received under this subsection, which shall remain available until expended and be available to the Administrator for purposes authorized for the National Flood Insurance Fund without further appropriation.

(h) Rule of construction

Nothing in this subsection ³ shall be construed to require the Administrator to make any payment under the national flood insurance program, or an insurance company that issues a standard flood insurance policy under the national flood insurance program to make any payment, for an indeterminate loss based upon post-storm assessment, the COASTAL Formula, or any other loss allocation or post-storm assessment arising under the laws or ordinances of any State.

(i) Applicability

Subsection (c) shall apply with respect to an indeterminate loss associated with a named storm that occurs 60 days after publication of the COASTAL Formula in the Federal Register as required by subsection (b)(1).

(j) Rule of Construction

Nothing in this subsection ³ shall be construed to negate, set aside, or void any policy limit, including any loss limitation, set forth in a standard insurance policy.

(k) Rule of construction

Nothing in this section shall be construed to create a cause of action under this chapter.

(Pub. L. 90–448, title XIII, §1337, as added Pub. L. 112–141, div. F, title II, §100253, July 6, 2012, 126 Stat. 974; amended Pub. L. 116–271, title II, §201(b), Dec. 31, 2020, 134 Stat. 3346.)

Editorial Notes

Amendments

2020—Subsec. (a)(3). Pub. L. 116–271, §201(b)(1)(A), inserted ", except that the term shall not apply with respect to a State or territory that has an operational wind and flood loss allocation system" before period at end.

Subsec. (a)(5). Pub. L. 116–271, §201(b)(1)(B), inserted "sustained" after "maximum".

Subsec. (b)(1). Pub. L. 116–271, §201(b)(2)(A), substituted "publish for comment in the Federal Register" for "establish by rule".

Subsec. (b)(2)(B). Pub. L. 116–271, §201(b)(2)(B), inserted ", or other data or information used to determine a property's current risk of flood, as determined by the Administrator," after "Elevation Certificate".

Subsec. (c)(3)(A)(i). Pub. L. 116–271, §201(b)(3), substituted "publication of the COASTAL Formula in the Federal Register as required by subsection (b)(1)" for "the issuance of the rule establishing the COASTAL Formula".

Subsec. (d). Pub. L. 116–271, §201(b)(4), substituted "section 3611(b)(2)(E)" for "section 3611(b)(2)(C)".

Subsec. (h). Pub. L. 116–271, §201(b)(5), inserted "that issues a standard flood insurance policy under the national flood insurance program" after "company" and substituted ", the COASTAL Formula, or any other loss allocation or post-storm assessment arising under the laws or ordinances of any State" for "or the COASTAL Formula".

Subsec. (i). Pub. L. 116–271, §201(b)(6), substituted "60 days after publication of the COASTAL Formula in the Federal Register as required by subsection (b)(1)" for "after the date on which the Administrator issues the rule establishing the COASTAL Formula under subsection (b)".

Subsec. (k). Pub. L. 116–271, §201(b)(7), added subsec. (k).

¹ So in original. Probably should be capitalized.

² So in original. Probably should be "paragraphs".

³ So in original. Probably should be "this section".