Cover Page - NFIP Write Your Own Accounting Procedures Manual October 2005
NATIONAL FLOOD INSURANCE PROGRAM
WRITE YOUR OWN (WYO)
ACCOUNTING PROCEDURES MANUAL

Ninth Printing 

October 1, 2005 


WYO ACCOUNTING PROCEDURES MANUAL 

TABLE OF CONTENTS 

PART A MONTHLY FINANCIAL STATEMENT PACKAGE 
REPORTING REQUIREMENTS.................................................................. A-1 

PART B FINANCIAL STATEMENTS - DEFINITION OF TERMS 
AND COMPLETION INSTRUCTIONS......................................................... B-1 

PART C CASH MANAGEMENT PROCEDURES...................................................... C-1 

I. Deposit of NFIP Funds .......................................................................... C-1 
II. Transfer of Excess Funds...................................................................... C-2 
III. WYO Company Expense Reimbursement ............................................ C-2 
IV. Premium and Claim Checks Outstanding 6 Months and Older............. C-3 
PART D LETTER OF CREDIT (LOC)/SMARTLINK II - HEALTH AND HUMAN 
SERVICES (HHS) PAYMENT MANAGEMENT SYSTEM........................... D-1 

I. Overview of SMARTLINK II - HHS Payment Management System...... D-1 
II. Application for Access to SMARTLINK.................................................. D-1 
III. Operation of SMARTLINK ..................................................................... D-2 
IV. SMARTLINK Payment Management System Reporting ....................... D-3 
PART E AUTOMATED CLEARINGHOUSE (ACH) PROCEDURES......................... E-1 

PART F SPECIAL ALLOCATED LOSS ADJUSTMENT EXPENSES (SALAE), 
SALVAGE/SUBROGATION PROCEDURES, AND SUPPLEMENTAL 
CLAIM PAYMENT PROCEDURES ............................................................. F-1 

I. Special Allocated Loss Adjustment Expenses....................................... F-1 
II. Salvage/Subrogation Procedures.......................................................... F-1 
III. Supplemental Claim Payment Procedures............................................ F-2 
PART G USE OF PREFORMATTED EXCEL FINANCIAL STATEMENT 
SPREADSHEET FOR MONTHLY FINANCIAL STATEMENT 
REPORTING.............................................................................. G-1 
Financial Spreadsheet Control Form ........................................................... G-3 

PART H CREDIT CARD PROCESSING ................................................................... H-1 

I. Credit Card Principles............................................................................ H-1 
II. Processing Procedures ......................................................................... H-2 
III. Financial and Statistical Reporting Requirements................................. H-3 
PART I LISTING OF PERTINENT WYO 
ACCOUNTING/FINANCIAL DOCUMENTS................................................. I-1 

Table of Contents 

Effective: 10/1/05 


WYO ACCOUNTING PROCEDURES MANUAL 
LIST OF EXHIBITS 

PART A 

EXHIBIT I INCOME STATEMENT................................................................... A-2 

EXHIBIT II RECONCILIATION OF 
PAYABLE/RECEIVABLE BALANCE .............................................. A-3 

EXHIBIT III BALANCE SHEET ITEMS .............................................................. A-4 

EXHIBIT IV EXPENSE ALLOWANCE CALCULATION ..................................... A-5 

EXHIBIT V-A FEE SCHEDULE  ALLOCATED LAE ........................................... A-6 

EXHIBIT V-B FEE SCHEDULE  ALLOCATED LAE ........................................... A-7 

EXHIBIT V-C FEE SCHEDULE  ALLOCATED LAE ........................................... A-8 

EXHIBIT V-D FEE SCHEDULE  ALLOCATED LAE ........................................... A-9 

EXHIBIT V-E ICC FEE SCHEDULE  ALLOCATED LAE .................................... A-10 

EXHIBIT V-F FEE SCHEDULE  ALLOCATED LAE ........................................... A-11 

EXHIBIT V-G ICC FEE SCHEDULE  ALLOCATED LAE .................................... A-12 

EXHBIT VI OTHER LOSS AND LAE CALCULATION ...................................... A-13 

EXHIBIT VII INTEREST INCOME....................................................................... A-14 

EXHIBIT VIII-A LETTER OF CREDIT DRAWDOWNS ............................................ A-15 

EXHIBIT VIII-B CASH PAYMENTS TO THE NFIP.................................................. A-16 

EXHIBIT VIII-C CREDIT CARD PAYMENTS TO THE NFIP ................................... A-17 

EXHIBIT VIII-D INTERNET PAYMENTS TO THE NFIP.......................................... A-18 

EXHIBIT VIII-E WIRE TRANSFER PAYMENTS TO THE NFIP .............................. A-19 

EXHIBIT IX RESTRICTED ACCOUNT DEPOSITS SUMMARY........................ A-20 

List of Exhibits 

Effective: 10/1/05 


WYO ACCOUNTING PROCEDURES MANUAL 
LIST OF EXHIBITS (contd) 

PART B 

EXHIBIT I INCOME STATEMENT................................................................... B-1 
EXHIBIT II RECONCILIATION OF PAYABLE/RECEIVABLE BALANCE......... B-4 
EXHIBIT III BALANCE SHEET ITEMS .............................................................. B-5 
EXHIBIT IV EXPENSE ALLOWANCE CALCULATION ..................................... B-7 
EXHIBIT V-A FEE SCHEDULE  ALLOCATED LAE ........................................... B-14 
EXHIBIT V-B FEE SCHEDULE  ALLOCATED LAE ........................................... B-15 
EXHIBIT V-C FEE SCHEDULE  ALLOCATED LAE ........................................... B-17 
EXHIBIT V-D FEE SCHEDULE  ALLOCATED LAE ........................................... B-18 
EXHIBIT V-E ICC FEE SCHEDULE  ALLOCATED LAE .................................... B-19 
EXHIBIT V-F FEE SCHEDULE  ALLOCATED LAE ........................................... B-20 
EXHIBIT V-G ICC FEE SCHEDULE  ALLOCATED LAE .................................... B-21 
EXHIBIT VI OTHER LOSS AND LAE CALCULATION ...................................... B-23 
EXHIBIT VII INTEREST INCOME....................................................................... B-25 
EXHIBIT VIII-A LETTER OF CREDIT DRAWDOWNS ............................................ B-26 
EXHIBIT VIII-B CASH PAYMENTS TO THE NFIP.................................................. B-26 
EXHIBIT VIII-C CREDIT CARD PAYMENTS TO THE NFIP ................................... B-26 
EXHIBIT VIII-D INTERNET PAYMENTS TO THE NFIP.......................................... B-27 
EXHIBIT VIII-E WIRE TRANSFER PAYMENTS TO THE NFIP .............................. B-27 
EXHIBIT IX RESTRICTED ACCOUNT DEPOSITS SUMMARY........................ B-28 

List of Exhibits 

Effective: 10/1/05 


PART A 

MONTHLY FINANCIAL STATEMENT PACKAGE REPORTING REQUIREMENTS 

The Write Your Own (WYO) Financial Control Plan requires WYO Companies to submit 
a monthly financial statement reporting package to the National Flood Insurance 
Program (NFIP) Bureau and Statistical Agent. The components of the reporting 
package are financial statements, reconciliation statements, certification statements, 
and statistical transactions. 

To ensure accurate monthly financial statements for the WYO Program, each WYO 
Company is required to submit financial data using the attached statements (Exhibits I-
IX). These statements must be received no later than the 21st day of the calendar 
month following each month's closing. Any WYO Company whose statements are not 
received each month by the above deadline will not be included in the report to the 
Federal Emergency Management Agency (FEMA) for that period. A list will also be 
submitted to FEMA each month with the names of WYO Companies whose statements 
were not included. 

If there is no activity in any single month, the WYO Company should still submit a 
financial report indicating that month's earned premium and net income. 

The statements should be sent to the following address: 

National Flood Insurance Program 
Bureau & Statistical Agent 
ATTN: Finance and Statistical Control Department 
7700 Hubble Drive 
Lanham, MD 20706-1833 

E-Mail: financials@nfipstat.com 

Monthly financial statements are to be transmitted electronically via e-mail. For further 
instructions, please refer to the WYO Accounting Procedures Manual, Part G, Use of 
Preformatted Excel Financial Statement Spreadsheet for Monthly Financial Statement 
Reporting. 

In addition, the Financial Control Plan requires each WYO Company to perform monthly 
reconciliations. The completed reconciliation forms are to be submitted with the 
transaction detail. Please refer to the Financial Control Plan for these reporting 
requirements. 

The NFIP Bureau and Statistical Agent's Finance Group will review each WYO 
Company's financial reports for completion and reasonableness. If any questions arise 
concerning the financial reports, the appropriate WYO Company's representative will be 
contacted by the NFIP Bureau's accounting representative. 


EXHIBIT I 
INCOME STATEMENT 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

CURRENT FISCAL-
MONTH YEAR-TO-DATE 
REVENUE 

100. Net Written Premiums 

105. Change in Unearned Premium 

110. Earned Premium 

EXPENSES 

115. Net Paid Losses 
120. Allocated LAE (Line 500) 
125. Other Loss and LAE Items (Line 660) 
130. Change in Loss and LAE Reserves

(Lines 325 through 340, Col. C) 

135. Net Loss and LAE Incurred 
140. Expense Allowance (Line 430) 
150. Miscellaneous Expense 
155. Total Expense 
160. Operating Income (Loss) 
165. Interest Income (Line 710) 
170. Net Federal Policy Fees 

175. Net Income (Loss) 
PREPARER'S NAME 
PHONE NUMBER 


EXHIBIT II 
RECONCILIATION OF PAYABLE/RECEIVABLE BALANCE

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

CURRENT FISCAL-
MONTH YEAR-TO-DATE 

200. Beginning Payable/ 
Receivable Balance 
(Line 315, Col. B) 

205. Net Income (Loss) 
(Line 175) 

210. LOC Funds Received 
(Line 800) 

215. Disbursements to NFIP 
(Line 805) 

220. Ending Payable/ 
Receivable Balance 
(Line 315, Col. A) 


EXHIBIT III 
BALANCE SHEET ITEMS 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

300. Cash 

305. Cash - Not 
Transferred To 
Restricted Account* 

310. Cash - Not 
Transferred From 
Restricted Account* 

315. Payable To 
(Receivable From) 
NFIP 

320. Unearned Premium 
Reserves 

325. Loss Reserves 
(Case) 

330. Loss Reserves 
(IBNR) 

335. LAE Reserves - Case 
(Allocated) 

336. LAE Reserves - IBNR 
(Allocated) 

340. LAE Reserves 
(Unallocated) 

345. Premium Suspense 
(Under 60 Days Old) 

346. Premium Suspense 
(60 Days and Older)* 

TOTAL 

A B C D 

INCREASE/ BEGINNING 
CURRENT PRIOR (DECREASE) OF FISCAL 
MONTH MONTH (Col. A-B) YEAR 

-0--0--0--0-

Please show debits as positive numbers and bracket all credits. The columns must add to -0-. 

*Upon Treasury Departments request, WYO Company must provide supporting aged detail for 
the reported balance. Companies will be notified when such a request is made. 


EXHIBIT IV
EXPENSE ALLOWANCE CALCULATION 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

CURRENT FISCAL-
MONTH YEAR-TO-DATE 

EXPENSE ALLOWANCE 

400. Net Written Premiums (Line 100) 
405. Expense Allowance % % % 
410. Expense Allowance for 
Written Premium 
411. For Future Reference 
412. For Future Reference 
413. For Future Reference 
414. Subtotal Expense Allowance 
415. Cancellation Premium 
Refund Adjustment Base 
420. Commission Allowance % 15% 15% 
425. Cancellation Commission 
Retention 
426. Expense Allowance Adjustment 
for Bonus Commission 
427. Rating Organization Expense 
428. State Sales Tax on Insurance Services 
429. Prior Term Refund Expense Allowance 
Due to the NFIP 
430. Total Expense Allowance 


EXHIBIT V-A 
FEE SCHEDULE - ALLOCATED LAE 
(USE FOR CLAIMS WITH LOSS DATE OF 9/30/90 AND PRIOR) 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

A B C D 

NUMBER FEES PAID 
ENTRY VALUE RANGE CLOSED FEE (COLS. B X C) 
Erroneous AssignmentClosed Without Payment$ .01 -$ 200.00 

200.01 -400.00 

400.01 -600.00 

600.01 -800.00 

800.01 -1,000.00

1,000.01 -1,500.00

1,500.01 -2,000.00

2,000.01 -2,500.00

2,500.01 -3,000.00

3,000.01 -3,500.00

3,500.01 -4,000.00

4,000.01 -4,500.00

4,500.01 -5,000.00

5,000.01 -6,000.00

6,000.01 -7,000.00

7,000.01 -8,000.00

8,000.01 -9,000.00

9,000.01 -10,000.00

10,000.01 -15,000.00

15,000.01 -20,000.00

20,000.01 -25,000.00

25,000.01 -30,000.00

30,000.01 -35,000.00

35,000.01 -40,000.00

40,000.01 -45,000.00

45,000.01 -50,000.00

50,000.01 -75,000.00

75,000.01 -100,000.00
100,000.01 -125,000.00
125,000.01 -150,000.00
150,000.01 -175,000.00
175,000.01 -200,000.00
200,000.01 to Limits 

$ 40.00 

70.00 

70.00 

90.00 

110.00 

130.00 

150.00 

180.00 

200.00 

220.00 

240.00 

260.00 

280.00 

300.00 

320.00 

350.00 

370.00 

380.00 

400.00 

420.00 

460.00 

490.00 

520.00 

550.00 

580.00 

610.00 

640.00 

670.00 

800.00 

950.00 
1,100.00
1,250.00
1,400.00
1,550.00
1,700.00 

500-A. Total Allocated LAE Fees Paid - Exhibit V-A* 
*Upon FEMA request, a WYO Company must provide detail supporting the reported expense. 


EXHIBIT V-B 
FEE SCHEDULE - ALLOCATED LAE 
(USE FOR CLAIMS WITH LOSS DATE OF 10/1/90 TO 10/31/96)

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

A B C D 

NUMBER FEES PAID 
ENTRY VALUE RANGE CLOSED FEE (COLS. B X C) 

ERRONEOUS ASSIGNMENT 
CLOSED WITHOUT PAYMENT 
MINIMUM FOR UPTON-JONES 

$ .01 -$600.00 
600.01 -1,000.00 
1,000.01 -2,000.00 
2,000.01 -3,500.00 
3,500.01 -5,000.00 
5,000.01 -7,000.00 
7,000.01 -10,000.00 
10,000.01 -15,000.00 
15,000.01 -25,000.00 
25,000.01 -35,000.00 
35,000.01 -50,000.00 
50,000.01 -100,000.00 
100,000.01 -150,000.00 
150,000.01 -200,000.00 

$ 40.00 
125.00 
800.00 
150.00 
175.00 
225.00 
275.00 
350.00 
425.00 
500.00 
550.00 
600.00 
675.00 
750.00 

1,000.00 

1,300.00 

1,600.00 

2,000.00

200,000.01 to Limits 
EXCESS MILEAGE 
500-B. Total Allocated LAE Fees Paid - Exhibit V-B* 

*Upon FEMA request, a WYO Company must provide supporting detail for the reported 
expense. 


EXHIBIT V-C 

FEE SCHEDULE - ALLOCATED LAE 
(USE FOR CLAIMS WITH LOSS DATE OF 11/1/96 TO 4/30/97) 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

A B 

NUMBER 
ENTRY VALUE RANGE CLOSED 

ERRONEOUS ASSIGNMENT 
CLOSED WITHOUT PAYMENT 
MINIMUM FOR UPTON-JONES 

$ .01 -$600.00 
600.01 -1,000.00 
1,000.01 -2,000.00 
2,000.01 -3,500.00 
3,500.01 -5,000.00 
5,000.01 -7,000.00 
7,000.01 -10,000.00 
10,000.01 -15,000.00 
15,000.01 -25,000.00 
25,000.01 -35,000.00 
35,000.01 -50,000.00 
50,000.01 -100,000.00 
100,000.01 -250,000.00 

250,000.01 and up 
500-C. Total Allocated LAE Fees Paid - Exhibit V-C* 

C D 

FEES PAID 
FEE (COLS. B X C) 

$40.00 
125.00 
800.00 
150.00 
175.00 
225.00 
275.00 

350.00 

425.00 
500.00 
550.00 
600.00 
675.00 
750.00 
3.0% 

2.3%, BUT NOT 
LESS THAN $3,000 

2.1%, BUT NOT 
LESS THAN $5,750 

*Upon FEMA request, a WYO Company must provide supporting detail for the reported 
expense. 


EXHIBIT V-D 

FEE SCHEDULE - ALLOCATED LAE 
(USE FOR CLAIMS WITH LOSS DATE OF 5/1/97 TO 8/31/04) 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

A B 

NUMBER 
ENTRY VALUE RANGE CLOSED 

ERRONEOUS ASSIGNMENT 

CLOSED WITHOUT PAYMENT 

$ .01 -$ 600.00 
600.01 -1,000.00 
1,000.01 -2,000.00 
2,000.01 -3,500.00 
3,500.01 -5,000.00 
5,000.01 -7,000.00 
7,000.01 -10,000.00 
10,000.01 -15,000.00 
15,000.01 -25,000.00 
25,000.01 -35,000.00 
35,000.01 -50,000.00 
50,000.01 -100,000.00 
100,000.01 -250,000.00 

250,000.01 and up 
500-D. Total Allocated LAE Fees Paid - Exhibit V-D* 

C D 

FEES PAID 
FEE (COLS. B X C) 

$ 40.00 
125.00 
150.00 
175.00 
225.00 
275.00 
350.00 
425.00 
500.00 
600.00 
750.00 
900.00 
1200.00 

3.0% 

2.3%, BUT NOT 
LESS THAN $3,000 

2.1%, BUT NOT 
LESS THAN $5,750 

*Upon FEMA request, WYO Company must provide supporting detail for the reported 
expense. 


EXHIBIT V-E 

INCREASED COST OF COMPLIANCE (ICC) FEE SCHEDULE - ALLOCATED LAE 
(USE FOR ICC CLAIMS WITH LOSS DATE OF 6/1/97 TO 8/31/04) 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

A B C D 

NUMBER FEES PAID 
ENTRY VALUE RANGE CLOSED FEE (COLS. B X C) 

ERRONEOUS ASSIGNMENT 
CLOSED WITHOUT PAYMENT 
$ .01 -$600.00 

600.01 -1,000.00 

1,000.01 -2,000.00 

2,000.01 -3,500.00 

3,500.01 -5,000.00 

5,000.01 -7,000.00 

7,000.01 -10,000.00 

10,000.01 -15,000.00 

$ 40.00 
125.00 
150.00 
175.00 
225.00 
275.00 
350.00 
425.00 
500.00 
600.00 

(Use the following entry value only for ICC total claims payments greater than $15,000 
but not more than $20,000, and with a loss date of 5/1/00 to 4/30/03.) 

15,000.01 -20,000.00 750.00 

(Use the following entry range only for ICC total claims payments greater than $15,000 
but not more than $30,000, and with a loss date of 5/1/03 to 8/31/04.) 

15,000.01 -20,000.00 750.00 
20,000.01 -30,000.00 900.00 

500-E. Total Allocated LAE Fees Paid for ICC* 

*Upon FEMA request, WYO Company must provide supporting detail for the reported 
expense. 


EXHIBIT V-F 

FEE SCHEDULE - ALLOCATED LAE 
(USE FOR CLAIMS WITH LOSS DATE OF 9/1/04 AND LATER) 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

A B 

NUMBER 
ENTRY VALUE RANGE CLOSED 

ERRONEOUS ASSIGNMENT 
CLOSED WITHOUT PAYMENT 
$ .01 -$1,000.00 

1,000.01 -2,500.00 

2,500.01 -5,000.00 

5,000.01 -7,500.00 

7,500.01 -10,000.00 

10,000.01 -15,000.00 

15,000.01 -25,000.00 

25,000.01 -35,000.00 

35,000.01 -50,000.00 

50,000.01 -100,000.00 

100,000.01 -250,000.00 

250,000.01 and up 

500-F. Total Allocated LAE Fees Paid-Exhibit V-F* 

C D 

FEES PAID 
FEE (COLS. B X C) 

$ 60.00 
225.00 
300.00 
425.00 
500.00 
575.00 
650.00 
750.00 
850.00 

1,000.00 
1,250.00 
3.0% 

2.3% BUT NOT LESS 
THAN $3,000.00 

2.1% BUT NOT LESS 
THAN $5,750.00 

*Upon FEMA request, WYO Company must provide supporting detail for the reported 
expense. 


EXHIBIT V-G 

INCREASED COST OF COMPLIANCE (ICC) FEE SCHEDULE - ALLOCATED LAE 
(USE FOR ICC CLAIMS WITH LOSS DATE OF 9/1/04 AND LATER) 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

A B C 

NUMBER 
ENTRY VALUE RANGE CLOSED FEE 

ERRONEOUS ASSIGNMENT 
CLOSED WITHOUT PAYMENT 
$ .01 -$1,000.00 

1,000.01 -2,500.00 

2,500.01 -5,000.00 

5,000.01 -7,500.00 

7,500.01 -10,000.00 

10,000.01 -15,000.00 

15,000.01 -25,000.00 

25,000.01 -35,000.00 

$ 60.00 
225.00 
300.00 
425.00 
500.00 
575.00 
650.00 
750.00 
850.00 

1,000.00 

D 

FEES PAID 
(COLS. B X C) 

__________ 
__________ 
__________ 
__________ 
__________ 
__________ 
__________ 
__________ 
500  G.Total Allocated LAE Fees Paid  Exhibit V-G 
500  F.Total Allocated LAE Fees Paid  Exhibit V-F 
500  E.Total Allocated LAE Fees Paid  Exhibit V-E 
500  D.Total Allocated LAE Fees Paid  Exhibit V-D 
500  C.Total Allocated LAE Fees Paid  Exhibit V-C 
500  B.Total Allocated LAE Fees Paid  Exhibit V-B 
500  A.Total Allocated LAE Fees Paid  Exhibit V-A 
500. Total Allocated LAE Fees Paid* 

*Upon FEMA request, WYO Company must provide supporting detail for the reported 
expense. 


EXHIBIT VI 
OTHER LOSS AND LAE CALCULATION 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

CURRENT FISCAL-
MONTH YEAR-TO-DATE 

UNALLOCATED LAE PAID 

600. Net Paid Losses (Line 115) 

605. Change In Case Reserves 
(Line 325, Col. C) 

610. Case Incurred Losses 
615. Unallocated Expense 
Allowance % x3.3% x3.3% 
620. Unallocated LAE 

SALVAGE, SUBROGATION, AND RECOVERY 
625. Net Salvage Received 
630. Salvage Allowance % 
635. Salvage Credit 

640. Net Subrogation Received 
645. Subrogation Allowance % 
650. Subrogation Credit 

652. Recovery of Losses Paid 

SPECIAL ALLOCATED LAE 

655. Special Allocated Loss 
Adjustment Expenses 

660. Total Other Loss & LAE 
Items (Sum of Lines 620, 
635, 650, and 655) 

x10% x10% 

x25% x25% 


 EXHIBIT VII 
INTEREST INCOME 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

CURRENT FISCAL-
MONTH YEAR-TO-DATE 

700. Total Interest Received 
705. Restricted Account Charges 
710. Total Interest Income 


 EXHIBIT VIII-A 
LETTER OF CREDIT DRAWDOWNS 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

DATE AMOUNT

800. Total 


 EXHIBIT VIII-B
CASH PAYMENTS TO THE NFIP

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

DATE AMOUNT 

805-B. Total Cash Payments 
805-C. Total Credit Card Payments 
805-D. Total Internet Payment 
805-E. Total Wire Transfer Payments 
805. Total Payments to NFIP 


EXHIBIT VIII-C 

CREDIT CARD PAYMENTS TO THE NFIP 
COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

DATE AMOUNT 

805-C. Total Credit Card Payments 


EXHIBIT VIII-D 
INTERNET PAYMENTS TO THE NFIP 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

DATE AMOUNT 

805-D. Total Internet Payments 


EXHIBIT VIII-E 
WIRE TRANSFER PAYMENTS TO THE NFIP (Greater than $100,000) 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

DATE AMOUNT 

805-E. Total Wire Transfer Payments 


EXHIBIT IX 
RESTRICTED ACCOUNT DEPOSITS SUMMARY 

COMPANY (NAME) 
COMPANY (NUMBER) 
PERIOD ENDING 

RESTRICTED ACCOUNT DEPOSITS 
DATE AMOUNT 

900. Total Deposits for the Month 


PART B 

FINANCIAL STATEMENTS - DEFINITION OF TERMS AND COMPLETION 
INSTRUCTIONS 

EXHIBIT I -INCOME STATEMENT 

100. NET WRITTEN PREMIUMS: 

Represents the total premiums written (calculated values) less the 
premium refunds and voids. 

Consists of the premiums processed to the Policy Master File for the 
following Transaction Record Reporting and Processing (TRRP) Plan 
transactions: 

 New business (TRRP Plan, transaction #11) 
 Reinstatement with policy changes (TRRP Plan, transaction #15) 
 Renewals (TRRP Plan, transaction #17) 
 Endorsements (TRRP Plan, transaction #20) 
 Policy correction (TRRP Plan, transaction #23) 
 Policy cancellation (TRRP Plan, transaction #26) 
 Cancellation correction (TRRP Plan, transaction #29) 
NOTE: Written premium does not include the Federal Policy Fee. 
105. CHANGE IN UNEARNED PREMIUM: 

(From Exhibit III, Line 320, Column C) 

Reflects the increase or decrease in the account balances of unearned 
premiums from the ending balance of the prior month to the ending 
balance of the current month. 

110. EARNED PREMIUM: 

Line 100 + or - Line 105. 

Represents net written premium, plus or minus the change in unearned 
premium. 


115. NET PAID LOSSES: 

Represents actual claim payments for flood losses. This amount is net 
of salvage, subrogation, recoveries, and applicable deductibles. 

Losses Paid consists of the following TRRP Plan transactions: 

 Open claim reserve (TRRP Plan, transaction #31) 
 Reopen claim (TRRP Plan, transaction #34) 
 Change Reserve (TRRP Plan, transaction #37) 
 Partial payments (TRRP Plan, transaction #40) 
 Close claim payments (TRRP Plan, transaction #43) 
 Close claim w/o payment (TRRP Plan, transaction #46) 
 General claim correction (TRRP Plan, transaction #61) 
 Addition to final payments (TRRP Plan, transaction #49) 
 Claim payment correction (TRRP Plan, transaction #64) 
 Change date of loss (TRRP Plan, transaction #84) 
 Change claim payment date (TRRP Plan transaction #87) 
 Recovery after final payment (TRRP Plan, transaction #52) 
 Recovery correction (TRRP Plan, transaction #67) 
NOTE: For paid losses, count the claim payment only, not the open 
reserve amount. 

120. ALLOCATED LAE: 

From Exhibit V-G, Line 500 

Represents fee expense for services provided in processing flood claims 
per the Fee Schedules. 

125. OTHER LOSS AND LAE ITEMS: 

From Exhibit VI, Line 660 

130. CHANGE IN LOSS AND LAE RESERVES: 

Reflects the increase or decrease in the following ending balances from 
prior period to the current: 

 Loss Reserves - Case (Exhibit III, Line 325, Column C). 
 Loss Reserves - IBNR (Exhibit III, Line 330, Column C). 
 LAE Reserves - Case (Allocated) (Exhibit III, Line 335, Column C). 
 LAE Reserves - IBNR (Allocated) (Exhibit III, Line 336, Column C). 
 LAE Reserves - Unallocated (Exhibit III, Line 340, Column C). 

135. NET LOSS AND LAE INCURRED: 

Sum of Lines 115, 120, 125, and 130. 

140. EXPENSE ALLOWANCE: 

From Exhibit IV, Line 430 

Represents the amount given to the WYO Companies for operating, 
administrative, and commission expenses. For further details, see WYO 
Accounting Procedures Manual, Part B, Exhibit IV, Expense Allowance 
Calculation. 

150. MISCELLANEOUS EXPENSE: 

Represents net underpayment or overpayment for premiums submitted 
within $6.00 of the system calculated amount (Breakage). This can 
occur on new business applications, endorsements, or renewal 
applications. The WYO Company should send supporting detail to 
reconcile to the total amount reported for miscellaneous expense. 

155. TOTAL EXPENSE: 

Sum of Lines 135, 140, and 150. 

160. OPERATING INCOME (LOSS): 

Line 110 less Line 155. 

165. INTEREST INCOME: 

From Exhibit VII, Line 710 

Line 700 less Line 705. 

170 NET FEDERAL POLICY FEES 

Represents the amount charged for Federal Policy Fees, less the 
amount refunded for these fees. 

Federal Policy Fees consist of the following TRRP Plan transactions: 

 New business (TRRP Plan, transaction #11) 
 Reinstatement (TRRP Plan, transaction #15) 
 Renewals (TRRP Plan, transaction #17) 
 Endorsements (TRRP Plan, transaction #20) 
 Policy correction (TRRP Plan, transaction #23) 
 Policy cancellation (TRRP Plan, transaction #26) 
 Cancellation correction (TRRP Plan, transaction #29) 
175. NET INCOME (LOSS): 

Sum of Lines 160, 165, and 170. 


EXHIBIT II -RECONCILIATION OF PAYABLE/RECEIVABLE BALANCE 

200. BEGINNING PAYABLE/RECEIVABLE BALANCE: 

From Exhibit III, Line 315, Column B 
Represents the prior period ending balance. 

205. NET INCOME (LOSS): 

From Exhibit I, Line 175 

210. LOC FUNDS RECEIVED: 

From Exhibit VIII-A, Line 800 
Represents the amount of money drawn from the Letter of Credit. 

215. DISBURSEMENTS TO NFIP: 

From Exhibit VIII-B, Line 805 

Represents funds inclusive of cash, wire, Internet, and credit card 
payments remitted to the NFIP by the WYO Company during the reporting 
period. 

220. ENDING PAYABLE/RECEIVABLE BALANCE: 

Sum of Lines 200, 205, 210, and 215. 


EXHIBIT III -BALANCE SHEET ITEMS 

300. CASH: 

Represents the General Ledger ending cash balance for the Flood 
Insurance Restricted Account. 

305. CASH - NOT TRANSFERRED TO RESTRICTED ACCOUNT: 

Represents the total amount of cash due the restricted account but not 
transferred by the end of the reporting month. Consider this balance as 
FEMAs Accounts Receivable. Upon FEMA's request, the WYO 
Company must provide supporting detail concerning the reported 
balance. The detail should include policy number or payer name and 
amount. This detail should also age balances under the following time 
frames: 60-180 days, 181-360 days, and over 360 days. The WYO 
Company will be notified when the data is required. 

310. CASH - NOT TRANSFERRED FROM RESTRICTED ACCOUNT: 

Represents the total amount of cash due from the restricted account but 
not withdrawn by the end of the reporting period. Consider this balance 
as FEMAs Accounts Payable. Upon FEMA's request, the WYO 
Company must provide supporting detail concerning the reported 
balance. This detail should include payee name or policy number and 
amount payable. This detail should also age balances under the 
following time frames: 60-180 days, 181-360 days, and over 360 days. 
The WYO Company will be notified when the data is needed. 

315. PAYABLE TO (RECEIVABLE FROM) NFIP: 

Assets minus liabilities. 

320. UNEARNED PREMIUM RESERVES: 

Represents the income received for the written premiums but not yet 
earned. Companies shall use a pro-rata earnings method over the life of 
the policy. 

325. LOSS RESERVES (CASE): 

Represents the estimated loss (building and/or contents) for all the 
open claim cases. The balance of this account is affected by the 
following TRRP Plan transactions: 

 Open claim reserve (TRRP Plan, transaction #31) 
 Reopen claim (TRRP Plan, transaction #34) 
 Change reserve (TRRP Plan, transaction #37) 

 Partial payment (TRRP Plan, transaction #40) 
 Close claim with payment (TRRP Plan, transaction #43) 
 Close claim without payment (TRRP Plan, transaction #46) 
 General claim correction (TRRP Plan, transaction #61) 
 Claim payment correction (TRRP Plan, transaction #64) 
330. LOSS RESERVES (IBNR): 
Represents the estimated outstanding losses for building and/or 
contents that are incurred but not yet reported. 

335. LAE RESERVES - CASE (ALLOCATED): 

Represents an estimate of allocated LAE reserves for open reported 
claims only. 

336. LAE RESERVES - IBNR (ALLOCATED): 

Represents an estimate of allocated LAE reserves for incurred but not 
reported claims only. 

340. LAE RESERVES (UNALLOCATED): 

Represents the LAE reserves for the unallocated loss adjustment 
expenses on the reported IBNR (Line 330, Column A x 3.3%). 

345. PREMIUM SUSPENSE (UNDER 60 DAYS OLD): 

Represents the total premiums aged under 60 days for policies that 
have not been processed. 

346. PREMIUM SUSPENSE (60 DAYS AND OLDER): 

Represents the total premiums aged 60 days or more for policies that 
have not been processed. 

Upon FEMA's request, the WYO Company must provide supporting 
detail concerning the reported balance. The detail should contain policy 
number, policy effective date, amount, and number of days outstanding. 


EXHIBIT IV -EXPENSE ALLOWANCE CALCULATION 
400. NET WRITTEN PREMIUM: 

From Line 100. 

405. EXPENSE ALLOWANCE %: 

The WYO Company expense allowance percentage for operating, 
administrative, and commission expenses for a specific fiscal year. 

410. EXPENSE ALLOWANCE FOR WRITTEN PREMIUM: 

Line 400 multiplied by Line 405. 

411. THIS LINE ITEM IS RESERVED FOR FUTURE REFERENCE USE. 
412. THIS LINE ITEM IS RESERVED FOR FUTURE REFERENCE USE. 
413. THIS LINE ITEM IS RESERVED FOR FUTURE REFERENCE USE. 
414. SUBTOTAL EXPENSE ALLOWANCE 

Total of Line 410. 

415. CANCELLATION PREMIUM REFUND ADJUSTMENT BASE: 

The WYO Company may retain 15 percent of the premium refunded 
(exclusive of the Federal Policy Fee) on policies canceled for the 
cancellation reasons 9 and 20. For more information, please reference 
the NFIP Transaction Record Reporting and Processing (TRRP) Plan, 
Revision 4, Change 5, October 1, 2003, Page 4-39, Case V. 

Line 415 represents the total amount of the premium refunds for the 
allowable cancellation reasons 9 and 20. 


420. COMMISSION ALLOWANCE %: 

Represents the percentage of the premium refund that can be retained 
as commission (15 percent). 

425. CANCELLATION COMMISSION RETENTION: 

Line 415 multiplied by Line 420. 

426. EXPENSE ALLOWANCE ADJUSTMENT FOR BONUS COMMISSION: 

Line 426 is used to record the annual adjustment to a WYO Company's 
expense allowance based upon its performance to achieve policy- or 
contract-in-force goals. The adjustment can result in a WYO Company 
earning additional expense allowance. 

The calculation of the expense allowance adjustment will be performed 
by the NFIP Bureau and Statistical Agent. A WYO Company will be 
notified by the NFIP Bureau of the additional expense allowance amount 
earned. 

If a WYO Company receives notice that it is entitled to additional 
expense allowance funds, the funds should be taken from the restricted 
flood account and the transaction recorded as a debit on Line 426. 

Line 426 is also used as necessary to record the Expense Allowance 
Adjustment from Cancellation Reason Code 24. Cancellation Reason 
Code 24 was established to cancel/rewrite when converting a standard 
rated policy to a Preferred Risk Policy (PRP) as a result of a map 
revision, Letter of Map Amendment (LOMA), or Letter of Map Revision 
(LOMR). The expense allowance is retained by the WYO Company on 
both the standard policy being canceled and the PRP being written. 

427. RATING ORGANIZATION EXPENSE: 

Several WYO Companies have agreed to use the services of a rating 
organization in assisting FEMA in performing studies and investigations 
on a community or individual risk basis to determine more equitable and 
accurate estimates of flood insurance risk premium rates. With the prior 
approval of FEMA, these Companies will be reimbursed for fees charged 
in conjunction with this project. 

To report such expenses, the WYO Company should indicate the fee 
paid to the rating organization on its monthly financial statement, Exhibit 
IV, Line 427. The WYO Company may disburse funds directly from the 
WYO restricted account, or be reimbursed from the restricted account. 
A copy of the paid bill must be attached to the monthly financial 
statements. 


428. STATE SALES TAX ON INSURANCE SERVICES: 

Background 

The Texas tax authorities have determined that Texas sales tax on 
insurance services is applicable to all fees paid by WYO Companies to 
claim adjusters, and/or adjusting firms, for handling NFIP claims for 
Texas. Because of this determination, the NFIP allotted the cost of the 
Texas adjuster services sales tax to Texas flood insurance 
policyholders. This was done by assessing an additional $5 charge to 
new business policies (effective 1/1/93) and renewal policies (effective 
3/1/93). 

In addition, FEMA has determined it will reimburse, dollar-for-dollar, the 
expense incurred by a WYO Company that pays the Texas sales tax for 
adjuster services provided to Texas policyholders. A WYO Company 
may take the reimbursement for the tax expense after the tax has been 
paid to the adjuster and/or adjusting firm. 

Procedure 

In order to be reimbursed for the Texas sales tax, a WYO Company 
must make the payment to the adjuster and then submit supporting 
documentation. Reimbursement procedure guidelines are as follows: 

1. Indicate the total amount of Texas sales charges paid for the 
reporting month on financial statement Exhibit IV (Expense 
Allowance Calculation), Line 428. Please note that this entry 
should not include your WYO Company's allocated loss 
adjustment fee for the adjustment of claims cases. This expense 
must be indicated on the appropriate Fee Schedule. 
2. Include, with your financial statement package, a listing that details 
the Texas sales tax paid for adjuster services on each payment 
made. The total of the individual tax payments on this listing 
should agree with the total amount recorded on Exhibit IV, Line 
428. The listing should contain the following information: the 
policy number (not claim number) associated with the paid adjuster 
expense; date of loss; name of adjuster and/or adjusting firm paid; 
date of the adjuster payment; total amount of payment to the 
adjuster (including sales tax); and amount of Texas sales tax paid. 
3. Maintain in your WYO Company's records all supporting 
documentation concerning the payment of the Texas sales tax. 

429. PRIOR TERM REFUND EXPENSE ALLOWANCE DUE TO THE NFIP: 

Line 429 is used to record the return of the expense allowance from the 
WYO Company to the NFIP based on the refund amount and the 
expense allowance in effect when the refund is processed. 

Effective October 1, 2003, changes were made regarding the NFIP's 
current refund and cancellation rules, in response to the WYO 
Companies' requests. These changes indicate that eligible prior term 
refunds older than 2 years will be processed by the NFIP Bureau and 
Statistical Agent. 

To adhere to this procedure, please continue to follow the existing NFIP 
Underwriting Procedures in the Flood Insurance Manuals Cancellation 
and Endorsement sections when submitting your request for prior term 
refunds. FEMA bills and notifies the WYO Company via the Prior Term 
Refund Expense Report (see next page). This expense report is 
provided to the WYO Company on a monthly basis subsequent to the 
issuance of the prior term refund check to the insured. 

Upon receipt of the prior term refund billing information, the WYO 
Company should reflect the return of the expense allowance to the NFIP 
Bureau by showing the amount as a credit on Exhibit IV, Line 429, and a 
debit on Exhibit VIII-B. The expense allowance adjustment should be 
made within 30 days of receipt of the prior term refund billing 
information. When making the expense allowance adjustment, please 
send a copy of the prior term refund billing information with your monthly 
financial statement package for proper tracking. 


PRIOR TERM REFUND EXPENSE REPORT 
WYO COMPANY 
POLICY NUMBER 
INSURED NAME 
Policy 
Term 
Original 
Premium 
New 
Premium 
Refund Amount 
Due Insured 
Expense 
Allowance Rate 
Applied 
Expense 
Allowance 
Adjustment Due 
NFIP 

430. TOTAL EXPENSE ALLOWANCE: 

Sum of Lines 414, 425, 426, 427, 428, and 429. 


EXHIBITS V-A, V-B, V-C, V-D, V-E, V-F, and V-G 

FEE SCHEDULES - ALLOCATED LAE 

Please be aware that there are seven financial statement fee schedules for 
allocated Loss Adjustment Expense (LAE). The key to the use of the proper fee 
schedule is the claim loss date. Once the claim loss date is known, simply apply 
the following guide to determine which financial statement fee schedule you 
should use to report the allocated LAE on your financial statement: 

DATE OF LOSS 

9/30/90 and prior 
10/1/90 through 10/31/96 
11/1/96 through 4/30/97 
5/1/97 through 8/31/04 
6/1/97 through 8/31/04 

9/1/04 and later 
9/1/04 and later 

FEE SCHEDULE 

Exhibit V-A 

Exhibit V-B 

Exhibit V-C 

Exhibit V-D 

Exhibit V-E 
Used only for
Increased Cost of 
Compliance (ICC)
claim expenses 

Exhibit V-F 

Exhibit V-G 
Used only for
Increased Cost of 
Compliance (ICC)
claim expenses 

FEE SCHEDULE PRINCIPLES 

 The allocated LAE fee can be taken at the time either a partial claim payment or afinal claim payment is made. 
 Fees are not paid separately for building and content losses. Rather, the sum of 
the building and contents covered or gross losses is the basis for the fee. 
 The major task in using the various fee schedules is to determine the entry value foreach claim. The entry value may be based on either the covered loss or the grossloss. In addition, the entry value will not always equal the claim payment. 
 For fee schedule entry value calculations based on covered loss, the standarddeductible is subtracted from the covered loss amount, rather than the actual 
deductible amount shown on the policy. Covered loss is limited to the amount of 
insurance purchased. 
 Fee schedule entry value calculations based on gross loss pertain to all claims witha date of loss from 5/15/96 to 7/10/96 and all claims with a date of loss from 5/1/97and later. 

 Exhibit V-E is to be used to record and to report only LAE related to ICC claims witha loss date before 9/1/04. 
 Exhibit V-F is to be used to record and to report LAE related to claims with a lossdate of 9/1/04 and later. 
 Exhibit V-G is to be used to record and to report only LAE related to ICC claims witha loss date of 9/1/04 and later. 

EXHIBIT V-A - FEE SCHEDULE - ALLOCATED LAE 
(USE FOR CLAIMS WITH LOSS DATE OF 9/30/90 AND PRIOR) 

500-A. TOTAL ALLOCATED LAE FEES PAID: 

Allocated loss adjustment expenses for loss dates of 9/30/90 and prior 
are reported and reimbursed on the basis of the Exhibit V-A Fee 
Schedule. The following factors determine the fee to which the WYO 
Company is entitled: 

 All fee schedule entry values should be based on covered loss, 
less standard deductible for building ($500) and contents ($500), if 
applicable. 
 Fees are not paid separately for building and contents losses. 
 The Fee Schedule is predicated on the application of the $500 
standard deductible to the covered losses, subject to the amounts 
of insurance purchased. 
 Bring forward total on Exhibit V-A, Line 500-A, to Exhibit V-G, 
Line 500-A. 
Refer to the WYO Accounting Training Manual for additional 
information and instructions on how to complete Exhibit V-A. 


EXHIBIT V-B  FEE SCHEDULE - ALLOCATED LAE 
(USE FOR CLAIMS WITH LOSS DATE OF 10/1/90 TO 10/31/96) 

500-B. TOTAL ALLOCATED LAE FEES PAID - EXHIBIT V-B: 

Allocated loss adjustment expenses for loss dates of 10/1/90 to 10/31/96 
are reported on the Exhibit V-B Fee Schedule. The following procedures 
outline the calculation of the LAE and its reporting requirements. 

LOSS DATES BETWEEN 10/1/90 AND 5/14/96 AND 
BETWEEN 7/11/96 AND 10/31/96 

 Allocated loss adjustment expenses for loss dates of 10/1/90 to 
5/14/96 and loss dates of 7/11/96 to 10/31/96 are reimbursed 
based on the Exhibit V-B Fee Schedule. 
 All fee schedule entry value calculations should be based on 
covered loss (not gross loss) less standard deductibles for 
building ($500) and contents ($500), if applicable. Covered loss is 
limited to the amount of insurance purchased. 
 Fees are not paid separately for building and contents losses. 
 Bring forward total on Exhibit V-B, Line 500-B, to Exhibit V-G, Line 
500-B. 
Refer to the WYO Accounting Training Manual for additional 
information and instructions on how to complete Exhibit V-B. 


LOSS DATE BETWEEN 5/15/96 AND 7/10/96 

 For claims with a loss date between 5/15/96 and 7/10/96, calculate 
the fee amount based on the Exhibit V-C Fee Schedule. All entry 
value calculations should be based on the gross loss. 
 For all claims with a fee range value of $50,000.01 and above, 
calculate the fee amount based on the Exhibit V-C Fee Schedule. 
The amount of fee in excess of the Exhibit V-B Fee Schedule is to 
be processed as a Special Allocated Loss Adjustment Expense 
(SALAE) - Type 2. No prior FEMA approval (authorization letter) is 
necessary. 
 The excess fee should be reported on the current financial 
statement Exhibit VI, Line 655. For the SALAE, follow the 
procedures as outlined in Accounting Training Assistance Bulletin 
(ATAB) 1-92, which requires a listing that details the SALAE by 
policy number, date of loss, amount, and type code. To establish 
an audit trail, please include the gross loss amount on your SALAE 
listing. 
 The basic fee (amount per Exhibit V-B Fee Schedule) is to be 
reported on Exhibit V-B, Fee Schedule - Allocated LAE. 
 For all claims with a fee range value of $50,000 and below, 
calculate the fee based on the Exhibit V-C Fee Schedule and use 
the financial statement Exhibit V-B Fee Schedule to report the 
LAE. 
Refer to the WYO Accounting Training Manual for additional 
information and examples. 


EXHIBIT V-C -FEE SCHEDULE - ALLOCATED LAE 
(USE FOR CLAIMS WITH LOSS DATE OF 11/1/96 TO 4/30/97) 

500-C. TOTAL ALLOCATED LAE FEES PAID - EXHIBIT V-C: 

Allocated loss adjustment expenses for loss dates between 11/1/96 and 
4/30/97 are reimbursed on the basis of the Exhibit V-C Fee Schedule. 

The following factors determine the fee to which the WYO Company is 
entitled: 

 All fee schedule entry values should be based on covered loss, 
less standard deductible for building ($500) and contents ($500), if 
applicable. 
 Fees are not paid separately for building and contents losses. 
The Exhibit V-C Fee Schedule incorporates the revised fee amounts for 
the entry value ranges of $50,000.01 and above, and its use will 
eliminate the need for WYO Companies to process the excess fee 
above the basic fee schedule as a SALAE. 

The Exhibit V-C Fee Schedule should be used only to report adjuster 
fees for claims with a loss date between 11/1/96 and 4/30/97. All fees 
for loss dates prior to 11/1/96 should be reported on financial statement 
Exhibit V-A or V-B. 

 Bring forward total on Exhibit V-C, Line 500-C, to Exhibit V-G, Line 
500-C. 
Refer to the WYO Accounting Training Manual for additional 
information and instructions on how to complete Exhibit V-C. 


EXHIBIT V-D - FEE SCHEDULE - ALLOCATED LAE 
(USE FOR CLAIMS WITH LOSS DATE OF 5/1/97 TO 8/31/04) 

500-D. TOTAL ALLOCATED LAE FEES PAID - EXHIBIT V-D: 

Allocated loss adjustment expenses for loss dates of 5/1/97 to 8/31/04 
are reimbursed on the basis of the Exhibit V-D Fee Schedule. All 
fee schedule entry values should be based on gross loss. 

Gross loss is defined as follows: 

(1) Gross loss shall mean the agreed cost to repair or replace before 
application of depreciation, deductibles, or other limiting clauses 
or conditions. 

(2) For the purpose of this schedule, should the loss exceed the 
available coverage, gross loss shall mean the amount of coverage. 

(3) If the claim involves a salvage "buy-back," gross loss shall mean 
the amount of the claim before the salvage value is deducted. 

(4) If the insured qualifies for replacement cost coverage, gross loss is 
determined on the basis of the entire replacement cost claim 
(including depreciation holdback). 

The Exhibit V-D Fee Schedule should be used only to report adjuster 
fees for claims with a loss date of 5/1/97 to 8/31/04. All fees for loss 
dates prior to 5/1/97 should be reported on financial statement Exhibit V-
A, V-B, or V-C. 


EXHIBIT V-E -INCREASED COST OF COMPLIANCE (ICC) FEE SCHEDULE -
ALLOCATED LAE 
(USE FOR CLAIMS WITH LOSS DATE OF 6/1/97 TO 8/31/04) 

500-E. TOTAL ALLOCATED LAE FEES PAID FOR ICC: 

This Exhibit is to be used only to report allocated loss adjustment 
expenses associated with ICC coverage payments. 

ICC allocated loss adjustment expenses for loss dates of 6/1/97 to 
8/31/04 are reported and reimbursed on the basis of the Exhibit V-E Fee 
Schedule. The following factors determine the fee to which the 
Company is entitled: 

 All fee schedule entry values should be based on the loss amount. 
 The maximum loss limit is $15,000 up to loss date of 4/30/00. 
 The maximum loss limit was increased to $20,000 with loss date of 
5/1/00 to 4/30/03. 
 The maximum loss limit was increased to $30,000 with loss date of 
5/1/03 to 8/31/04. 
 ICC coverage is effective for new and renewal policies dated 
June 1, 1997, and later. 
 Bring forward total on Exhibit V-E, Line 500-E, to Exhibit X Line 
500-E. 
Refer to the WYO Accounting Training Manual for additional 
information and instructions on how to complete Exhibit V-E. 


EXHIBIT V-F -FEE SCHEDULE - ALLOCATED LAE 
(USE FOR CLAIMS WITH LOSS DATE OF 9/1/04 AND LATER) 

500-F. TOTAL ALLOCATED LAE FEES PAID: 

Allocated loss adjustment expenses for loss dates of 9/1/04 and later are 
reimbursed on the basis of the Exhibit V-F Fee Schedule. All fee 
schedule entry values should be based on gross loss. 

Gross loss is defined as follows: 

1. Gross loss shall mean the agreed cost to repair or replace before 
application of depreciation, deductibles, or other limiting clauses 
or conditions. 
2. For the purpose of this schedule, should the loss exceed the 
available coverage, gross loss shall mean the amount of coverage. 
3. If the claim involves a salvage "buy-back," gross loss shall mean 
the amount of the claim before the salvage value is deducted. 
4. If the insured qualifies for replacement cost coverage, gross loss is 
determined on the basis of the entire replacement cost claim 
(including depreciation holdback). 
The Exhibit V-F Fee Schedule should be used only to report 
adjuster fees for claims with a loss date of 9/1/04 and later. All 
fees for loss dates prior to 9/1/04 should be reported on financial 
statement Exhibit V-A, V-B, or V-C. 

Refer to the WYO Accounting Training Manual for additional 
information and instructions on how to complete Exhibit V-F. 


EXHIBIT V-G -INCREASED COST OF COMPLIANCE (ICC) FEE SCHEDULE -
ALLOCATED LAE 
(USE FOR ICC CLAIMS WITH LOSS DATE OF 9/1/04 AND LATER) 

500-G. TOTAL ALLOCATED LAE FEES PAID FOR ICC: 

This Exhibit is to be used only to report increased cost of compliance 
associated with ICC coverage payments. 

ICC allocated loss adjustment expenses for loss dates of 9/1/94 and 
later are reported and reimbursed on the basis of the Exhibit V-G Fee 
Schedule. The following factors determine the fee to which the WYO 
Company is entitled: 

 All fee schedule entry values should be based on the loss amount. 
 The maximum loss limit is $30,000. 
 ICC coverage is effective for new and renewal policies dated 
September 1, 1994, and later. 
 Bring forward total on Exhibit V-E, Line 500-G, to Exhibit V-G, Line 
500-G. 
Refer to the WYO Accounting Training Manual for additional 
information and instructions on how to complete Exhibit V-G.. 

500-G. TOTAL ALLOCATED LAE FEES PAID-EXHIBIT V-G. 

Total brought forward from Exhibit V-G, Line 500-G. 

500-F. TOTAL ALLOCATED LAE FEES PAID-EXHIBIT V-F. 

Total brought forward from Exhibit V-F, Line 500-F. 

500-E. TOTAL ALLOCATED LAE FEES PAID-EXHIBIT V-E. 

Total brought forward from Exhibit V-E, Line 500-E. 

500-D. TOTAL ALLOCATED LAE FEES PAID - EXHIBIT V-D: 

Total brought forward from Exhibit V-D, Line 500-D. 


500-C. TOTAL ALLOCATED LAE FEES PAID - EXHIBIT V-C: 

Total brought forward from Exhibit V-C, Line 500-C. 

500-B. TOTAL ALLOCATED LAE FEES PAID - EXHIBIT V-B: 

Total brought forward from Exhibit V-B, Line 500-B. 

500-A. TOTAL ALLOCATED LAE FEES PAID - EXHIBIT V-A: 

Total brought forward from Exhibit V-A, Line 500-A. 

500. TOTAL ALLOCATED LAE FEES PAID: 

Sum of Lines 500-A, 500-B, 500-C, 500-D, and 500-E. 

NOTE: Upon FEMA's request, a WYO Company must provide 
supporting details for its fiscal year-to-date allocated loss 
adjustment expenses. The detail should include the policy 
number associated with the claim, date of loss, total claim 
payments, and the total allocated loss adjustment expense. 

Refer to the WYO Accounting Training Manual for additional 
information and instructions on how to complete Exhibit V-G. 


EXHIBIT VI - OTHER LOSS AND LAE CALCULATION 

600. NET PAID LOSSES: 

From Line 115. 

605. CHANGE IN CASE RESERVES: 

From Exhibit III, Line 325, Column C. 

610. CASE INCURRED LOSSES: 

Sum of Lines 600 and 605. 

Represents the amount to which the unallocated LAE percentage 
allowance is applied. 

615. UNALLOCATED EXPENSE ALLOWANCE %: 

Represents the unallocated expense allowance percentage. 

620. UNALLOCATED LAE: 

Line 610 multiplied by Line 615. 

Represents the amount allowed the WYO Companies for unallocated 
LAE. 

625. NET SALVAGE RECEIVED: 

Represents the recoveries made on salvaged items, net of the recovery 
expenses (transactions #52 and #67), plus any additional recovery that 
is not attributable to any single claim. 

630. SALVAGE ALLOWANCE %: 

Represents allowance percentage for salvage collected (currently 10 
percent). 

635. SALVAGE CREDIT: 

Line 625 multiplied by Line 630. 

Represents the amount to be retained by the WYO Company as its 
share of collections. 


640. NET SUBROGATION RECEIVED: 

Represents the recoveries made on subrogation cases. This amount 
should be net of expenses incurred for the subrogation collections 
(transactions #52 and #67). 

645. SUBROGATION ALLOWANCE %: 

Represents allowance percent for subrogation collected (currently 25 
percent). 

650. SUBROGATION CREDIT: 

Line 640 multiplied by Line 645. 

Represents the amount retained by WYO Companies for their collection 
efforts. 

652. RECOVERY OF LOSSES PAID 

Represents the amount of recoveries (transactions #52 and #67) for 
the erroneous payment of claim losses. 

655. SPECIAL ALLOCATED LOSS ADJUSTMENT EXPENSES: 

These are SALAE (transactions #71 and #74) authorized by FEMA for 
reimbursement exclusive of expenses based on the Fee Schedule. The 
types of SALAE are as follows: 

 Expense Type 1 - Engineering Expense - WYO Company 
authorized to approve up to $2,500 per claim without FEMA's 
approval. 
 Expense Type 2 - Adjuster Expense (in excess of the applicable 
Fee Schedule) - WYO Company authorized to approve up to $500 
per claim without FEMA's approval. 
 Expense Type 3 - Litigation Expenses - WYO Company 
authorized to approve up to $5,000 per claim without FEMA's 
approval. 
 Expense Type 4 - Cost of Appraisal (implementation of the 
Standard Flood Insurance Appraisal Clause) - WYO Company 
authorized to approve up to $2,500 per claim without FEMA's 
approval. 
For detailed information concerning the procedures for reporting SALAE 
on your monthly financial statement, refer to Part F of this Manual. 

660. TOTAL OTHER LOSS & LAE ITEMS: 

Sum of Lines 620, 635, 650, and 655. This sum is posted to Exhibit I, 
Line 125. 


EXHIBIT VII - INTEREST INCOME 

700. TOTAL INTEREST RECEIVED: 

Represents the interest, if any, that has been earned from NFIP funds 
deposited into the restricted flood account or any other account(s). Any 
interest earned on NFIP processing accounts, restricted accounts, 
satellite accounts, lockboxes, or other accounts must be paid to the 
NFIP. These funds and their associated interest are flood insurance-
related money. 

705. RESTRICTED ACCOUNT CHARGES: 

Represents the charges, if any, for the utilization of ACH, wire transfers, 
credit card, internet charges, or other charges related to the restricted 
flood account, that are levied by the banking institution. 

Funds exceeding $100,000 must be remitted by wire transfer. This 

method may require WYO Companies to transfer excess funds more 

frequently than once a week. It is FEMAs understanding that wire 

transfers may be assessed an additional cost by your banking institution. 
Please negotiate with your banking institution to obtain the best possible 
per-transaction cost. 

For credit card processing, FEMA will absorb all bank service charges 
when using FEMAs provider. The WYO Company will not be 
reimbursed by FEMA when using alternative credit card services other 
than FEMAs provider. All other charges for hardware and software will 
be borne by the WYO Company. See Part H, Credit Card Processing, 
for additional information. 

These reported charges must be offset by any account earning credits. 

On a monthly basis, the WYO Company should send supporting detail to 
reconcile to the total amount reported for restricted account charges. 

710. TOTAL INTEREST INCOME: 

Line 700 minus Line 705. This total is posted to Exhibit I, Line 165. 

Represents the total interest income for the month. 


EXHIBIT VIII-A - LETTER OF CREDIT DRAWDOWNS 

800. TOTAL LETTER OF CREDIT (LOC) DRAWDOWNS: 

Represents the total amount of LOC funds deposited in the restricted 
account for the reporting month. As indicated, the Exhibit requires the 
date and amount of the individual drawdown. 

This total is then posted to Exhibit II, Line 210. 

EXHIBIT VIII-B - CASH PAYMENTS TO THE NFIP 
805-B. TOTAL CASH PAYMENTS 

Represents the excess funds, exclusive of credit card payments, 
remitted to the U.S. Treasury. 

805-C. CREDIT CARD PAYMENTS 

Represents funds remitted to the U.S Treasury. 

805-D. INTERNET PAYMENTS 

Represents funds collected through the Internet system. 

805-E. WIRE TRANSFER PAYMENTS 

Represents funds remitted to the U.S. Treasury through the use of wire 
transfers. 

805. TOTAL PAYMENTS TO NFIP: 

The sum of Lines 805-B, 805-C, 805-D and 805-E. This total is then 
brought forward to Exhibit II, Line 215. 

EXHIBIT VIII-C - CREDIT CARD PAYMENTS TO THE NFIP 
805-C. TOTAL CREDIT CARD PAYMENTS 

This Exhibit is to be completed by only those WYO Companies 
accepting credit card payments. Line 805-C represents the funds 
remitted to the U.S. Treasury through the use of the credit card payment 
mechanism. This total is then brought forward to Exhibit VIII-B, Line 805-

C. 

EXHIBIT VIII-D - INTERNET PAYMENTS TO THE NFIP 

805-D. INTERNET PAYMENTS 

The Internet transactions must be reported on Exhibit VIII-D, Internet 
Payments to NFIP. Line 805-D represents the funds collected through 
the Internet system. The total is then brought forward to Exhibit VIII-B, 
Line 805-D. Each Internet transfer must be reported on the day that it is 
made. 

EXHIBIT VIII-E  WIRE TRANSFER PAYMENTS TO THE NFIP 

805-E. WIRE TRANSFER PAYMENTS 

The wire transfer payment must be reported on Exhibit VIII-E, Wire 
Transfer to NFIP. Line 805-E represents the funds remitted to the U.S. 
Treasury that is greater than $100,000, through the use of the wire 
transfer mechanism. The total is then brought forward to Exhibit VIII-B, 
Line 805-E. Each wire transfer must be reported on the day that it is 
made. 


EXHIBIT IX - RESTRICTED ACCOUNT DEPOSITS SUMMARY 
900. TOTAL DEPOSITS FOR THE MONTH: 

Represents the total amount of funds deposited in the restricted account 
for the reporting month. As indicated, the Exhibit also requires the date 
and amount of the individual deposits. 


PART C 
CASH MANAGEMENT PROCEDURES 

I. DEPOSIT OF NFIP FUNDS 

All premiums (net of expense allowances), Federal Policy Fees, and interest income 
relating to the WYO flood insurance program shall be deposited in a special account in 
an FDIC-regulated bank separate from all other WYO Company business. For 
purposes of clarification, premiums collected will also include all "suspense" items, not 
only posted policies. In addition, all premiums and Federal Policy Fees collected for 
policies with a future effective date must be deposited into the WYO Company's 
restricted account as soon as processing allows. A WYO Company may not use flood 
funds to earn interest for its company. Any interest earned on NFIP processing 
accounts, restricted accounts, satellite accounts, lockboxes, or other accounts must be 
paid to the NFIP. 

Using existing cash flow systems of each WYO Company, the flood insurance cash 
activity should be monitored on the same basis as all other company funds. To supple-
ment this cash monitoring process, particularly the timely deposit of funds, WYO 
Companies are required to report all monthly restricted account deposits on Exhibit IX of 
the financial statements. The WYO Company must deposit flood insurance funds in the 
restricted account as soon as possible following collection of the premium. Each WYO 
Company must exert a good faith effort to comply with this intent. Each WYO Company 
must be prepared to document and explain how its individual procedures satisfy the 
intent. 

In order to facilitate timely deposit of WYO funds, a WYO Company may, at its 
discretion, operate more than one restricted account. The company will continue to 
supply FEMA with one (1) financial report encompassing all such accounts. In addition, 
the company will be allowed only one (1) SMARTLINK (Letter of Credit) account. 

To ensure that the intent of overall proper cash management is achieved, each WYO 
Company shall outline its proposed cash management procedures for review by FEMA. 
These procedures shall be transmitted to the company's WYO Program Coordinator at 
the NFIP Bureau and Statistical Agent prior to the start of the companys WYO 
operations. In addition, FEMA may request companies currently writing to update their 
cash management procedures or clarify a specific one. 

To ensure the proper control and maintenance of the flood insurance account, WYO 
Companies must establish a general ledger to record transactions and provide 
supporting detail for the cash balances. In addition, monthly reconciliations between 
bank statements and the general ledger cash balances must be performed. 


II. TRANSFER OF EXCESS FUNDS 

Transfer of excess funds from the Restricted Flood Insurance Account to the U.S. 
Treasury is mandatory and should be performed at least once a week. Excess funds are 
defined as those funds in the restricted account less $5,000 and established payables 
(Exhibit III, Line 310). Funds in the premium suspense account are to be included in the 
excess funds calculation. In addition, premiums and Federal Policy Fees collected for 
policies with future effective dates should be included in the excess funds calculation. 
Established reserves for claim payments and claim loss adjustment expenses are not 
included when calculating the excess funds amount. 

The WYO Company or vendor must transmit excess funds to FEMA on at least a 
weekly basis. If weekly transfers are not made, a WYO Company must be prepared to 
document the reasons for FEMA. The Cash Management Procedure requires WYO 
Companies to remit funds as follows: 

 Through the use of the Automated Clearinghouse (ACH) established by FEMA 
for excess funds of $100,000 or less. 
 Funds exceeding $100,000 must be remitted by wire transfer. This method may 
require WYO Companies to transfer excess funds more frequently than once a 
week. It is FEMAs understanding that wire transfers may be assessed an 
additional cost by your banking institution. Please negotiate with your banking 
institution to obtain the best possible per-transaction cost. FEMAs agency 
location code for NFIP funds is 70-07-0005 and the Treasury appropriations code 
is 70X4236. 
 Funds may be transferred through the Internet. This process is part of an 
e-business initiative that allows customers to make flood insurance premium 
payments with paperless check transactions using the Internet. 
The WYO Program Coordinator assigned to each company should be contacted to 
coordinate the companys access to the ACH. In rare situations and with FEMAs 
permission, excess funds checks may be sent directly to the NFIP Bureau and 
Statistical Agent. For more details on the ACH, please refer to Part E of this Manual. 

III. WYO COMPANY EXPENSE REIMBURSEMENT 

 The appropriate expense allowance for the WYO Company may be taken at the 
time the policy is processed and reported on the financial statement. 
 Allocated loss adjustment expenses based on the Fee Schedules can be taken at 
the time the claim payment is made. 
 Unallocated loss adjustment expenses may be taken at the time the reserve is 
established (with any necessary adjustments made as the incurred claim 
develops) or at the time the claim case is closed. 
 Special allocated loss adjustment expense reimbursement procedures are detailed 
in Part F of the WYO Accounting Procedures Manual. 

IV. 
PREMIUM AND CLAIM CHECKS OUTSTANDING 6 MONTHS AND OLDER 

The following procedures should be used in processing premium and claim 
checks that are outstanding (not cashed) for 6 months and later. 

A. Premium Checks 

1. Void check(s). 
2. Increase your net written premium (Exhibit I, Line 100) for the reporting 
month by the amount of the check(s). 
3. Increase your cash account (Exhibit III, Line 300, Column A) by the 
amount of the voided check(s). 
4. Your expense allowance for written premium (Exhibit IV, Line 410, Current 
Month Column) will be increased because of the increase in net written 
premium. 
5. On your "Net Written Premiums" monthly reconciliation statement, show in 
the "Other-Explain" line the amount of the voided check(s), and then 
subtract this figure from your net written premium total. Identify this entry 
on the reconciliation statement with "Stale-Dated Check(s)." This 
adjustment is required since no statistical transaction will be generated for 
the voided check(s). 
6. Maintain for 3 years the details supporting the voided check(s). 
B. Claim Checks 

1. Void check(s). 
2. Decrease your net paid losses (Exhibit I, Line 115) for the reporting month 
by the amount of the check(s). 
3. Increase your cash account (Exhibit III, Line 300, Column A) by the 
amount of the voided check(s). 
4. The "Losses" monthly reconciliation statement must show, on the "Other-
Explain" line, the amount of the voided check(s). Add this figure to your 
reported net paid losses total. Identify this entry on the reconciliation 
statement with "Stale-Dated Check(s)." This adjustment is required since 
no statistical transaction will be generated for the voided check(s). 
5. Maintain details supporting the voided check(s) for 3 years. 

PART D 

LETTER OF CREDIT (LOC)/SMARTLINK II - HEALTH AND HUMAN SERVICES(HHS) PAYMENT MANAGEMENT SYSTEM 

I. OVERVIEW OF SMARTLINK II - HHS PAYMENT MANAGEMENT SYSTEM 

The U.S. Department of Health and Human Services Payment Management System 
(DHHS PMS) is the system currently used by FEMA to enable WYO Companies to draw 
funds as needed from the U.S. Treasury. The DHHS PMS allows each recipient to 
request transfer of funds via computer through a program called SMARTLINK. After 
receipt of the request, transfer of the funds is made to the recipient's bank on a next 
business day basis. 

FEMA will delay approval of SMARTLINK requests only in extraordinary circumstances. 
A company's requests may be delayed if they seem excessive relative to its financial 
statement entries. In such cases, the company will be contacted immediately and the 
funds approved upon satisfactory resolution of the issue. 

II. APPLICATION FOR ACCESS TO SMARTLINK 

A. In order to participate in the WYO Program, a company must have a 
signed Financial Assistance/Subsidy Arrangement with FEMA. Once the 
Arrangement has been executed, a WYO Program Coordinator will be 
assigned by the NFIP Bureau and Statistical Agent to assist the company 
in establishing access to SMARTLINK for the purpose of paying claims 
and adjustment expenses arising from the issuance of flood insurance 
policies. 

B. The WYO Company should provide a complete Direct Deposit Form 
(Form 1199A), available at the financial institution where the Company 
has established its NFIP restricted account. Forms can also be accessed 
via the Internet (www.dpm.psc.gov). Instructions for completing the Direct 
Deposit Form are as follows: 

1. Section 1 (to be completed by the recipient) - Fill out all paragraphs 
except paragraphs B and G. Be certain to enter your Company Tax 
ID number in paragraph C. This Employer Identification Number 
(EIN) is absolutely necessary for access to the SMARTLINK II 
Payment Management System. Provide the signature(s) of the 
person or persons granted authority to oversee the account to 
which funds are to be deposited, and date the form. 

2. Section 2 (to be completed by the recipient) - The following agency 
address should be included: Federal Emergency Management 
Agency, FM-CFO, Room 716, 500 C Street, SW, Washington, DC 
20472. 
3. Section 3 (to be completed by the financial institution) -The 
financial institution's representative must sign the form and provide 
a telephone number for contact purposes. 
C. After the form is completed, provide all parts of the original form to your 
WYO Program Coordinator. 
NOTE: At the same time you transmit these forms to your WYO Program 
Coordinator, please provide the name, telephone number, and 
mailing address of your contact representative. Your contact will be 
given the access password for SMARTLINK to request funds for 
payment of flood claims. 

D. Once your WYO Company has been registered on SMARTLINK, DHHS 
will provide KERMIT communications software access, which will enable 
your representative to process online with SMARTLINK. DHHS will also 
provide the appropriate password, Technical Manual, and User's Manual. 
FEMA will provide the necessary additional information to request funds. 

III. OPERATION OF SMARTLINK 

A. As funds are needed, the recipient must follow the instructions in the 
SMARTLINK User's Manual to request funds via computer. The DHHS 
office hours are Monday through Friday from 8:00 a.m. to 7:30 p.m. EST. 

B. Upon receipt, the request is approved for payment through the Federal 
Reserve Bank of Richmond. Payment will be made on the business day 
after the request is received for funds via SMARTLINK. 

C. However, each WYO Company must keep track of its Letter of Credit 
balance. 
D. If for any reason the payment request is rejected, the recipient will be 
notified immediately. The recipient will, in most cases, be notified by 
DHHS via phone and given the reason(s) for the rejection. If the problem 
cannot be resolved, the individual should contact the assigned WYO 
Program Coordinator or a FEMA representative. 


E. Letter of Credit (LOC) balances for WYO Companies are normally kept at 
a "zero balance." If a Company wants an increase to pay for claims or 
premium refunds, it must send a written request to its Program 
Coordinator and include the following documentation: 

1. The actual amount needed to pay claims or premium refunds. 
2. The current balance in the company's LOC account. 
3. The number and dollar amount of current company reserves as 
adjusted by previous payments. 
4. Any other documentation that will support the request for additional 
funds. 
F. All LOC increases are forwarded by the WYO Program Coordinator to 
FEMA for processing. 

IV. SMARTLINK PAYMENT MANAGEMENT SYSTEM REPORTING 

The current financial statement entitled "Letter of Credit Drawdowns" (Exhibit 
VIII-A) must be completed and reported by the WYO Companies using the 
DHHS SMARTLINK Payment Management System. This financial statement 
must be submitted monthly as part of the financial statement package. 

If any other report is required by the DHHS on the SMARTLINK PMS, the WYO 
Company will be advised by memorandum. 


PART E
AUTOMATED CLEARINGHOUSE (ACH) PROCEDURES 

Excess flood insurance funds of $100,000 or less must be transferred to the NFIP 
through the use of the Automated Clearinghouse (ACH) mechanism. (See other excess 
funds transfer methods in Part C of this manual). Bank of America is part of the U.S. 
Treasury electronic lockbox network and has been selected to serve as the ACH for 
WYO Company transfers to the NFIP. These transfers can be handled through the 
ACH as automatic debits from WYO Company bank accounts, using either a modem-
equipped personal computer or a touch-tone telephone. 

To implement this procedure, the WYO Company sends a Direct Deposit Form or 
voided check to the WYO Program Coordinator, who submits it to FEMA to obtain the 
location code and password from Bank of America. When the WYO Company receives 
the required location code and password, excess funds transfers are completed as 
follows: 

For Telephone Transfers: 

Daily deposits must be reported by 1:50 p.m., EST., using the following instructions: 

1. Calculate the check digit prior to the call, by adding the number of digits (including 
cents) to the value of all the digits. For example, if the amount to be deposited is 
$100,000.00: 
a. Total all the digits in the deposit amount: 
1+0+0+0+0+0+0+0 = 1 
b. Count the number of digits in the deposit: 
1,0,0,0,0,0,0,0 = 8 
c. Add a + b: 
1 + 8 = 9 
The check digit is 9. 
2. Call 1-800-669-3110. 

3. After the operator's identification, state your company's name. 
4. When prompted for deposit amount, say: "Field 1 is $100,000.00." 
5. When you have completed your reporting, the operator will repeat the amount. The 
operator will then give you a check digit (compare this with the one you have 
previously calculated and advise the operator of any discrepancy) and a trace 
number for possible future reference. 
6. Your reporting is completed. 
For On-Line Transfers: 

1. Turn the terminal's power switch "on." 
2. Dial 1-800-827-3001 (if the baud rate is 1200). Dial 1-800-827-8001 (if the baud 
rate is 2400). 
3. When the call is connected, listen for a continuous, high-pitched tone. When the 
tone is heard, place the phone receiver in the coupler box next to the terminal. 
4. On the area of the coupler box labeled "CARRIER," a light will turn on after a few 
seconds. When it does, press the sign-on character key for your particular terminal 
or press the carriage return key twice. The following message will generate 
automatically: 
AUTONET LINE XXXXX. 

5. The system will then ask for "COMMAND." Type in your Company's "Command" 
and press the carriage return key once. 
6. Next, the terminal will display "ADP NETWORK SERVICES," and on the next line, 
six black squares followed by "PASSWORD." Type in your Company's "Password" 
and press the carriage return key once. 
7. A message containing the log-on information will appear, and the system will ask for 
the Location Number. Type in your Company's "Location Number" and press the 
carriage return key once. 
8. The system will then ask for the Password for the Location. Type in your 
Company's "Password for the Location" and press the carriage return key once. 
9. The system will then prompt "ENTRY, CORRECTION, ADJUSTMENT, OR 
INQUIRY (E, C, A, I)." Type in the appropriate letter, and press the carriage return 
key once. 

10. Next, the system will prompt "ENTER (1) DEPOSIT AMOUNT." Enter the deposit 
amount and press the carriage return key once. 
11. The system will respond by providing a check digit and trace number. Calculate the 
check digit by adding the number of digits (including cents) to the value of all the 
digits. For example, if the amount to be deposited is $100,000.00: 
a. Total all the digits in the deposit amount: 
1+0+0+0+0+0+0+0 = 1 
b. Count the number of digits in the deposit: 
1,0,0,0,0,0,0,0 = 8 
c. Add a + b: 
1 + 8 = 9 
12. The system will continue to prompt for location number and deposit amount. When 
all locations have been entered, respond with *** at the location number prompt, 
and press the carriage return key once. 
13. The system will then log off. 
14. This completes the use of the ACH system for excess funds deposit. 

PART F 

SPECIAL ALLOCATED LOSS ADJUSTMENT EXPENSES (SALAE),
SALVAGE/SUBROGATION PROCEDURES, AND SUPPLEMENTALCLAIM PAYMENT PROCEDURES 

I. SPECIAL ALLOCATED LOSS ADJUSTMENT EXPENSES 

Special Allocated Loss Adjustment Expenses are of the following types: 

 Expense Type 1 - Engineering Expense - WYO Company is authorized to 
approve up to $2,500 per claim without FEMA's approval. 
 Expense Type 2 - Adjuster Expense (in excess of the applicable Schedule 
Fee) - WYO Company is authorized to approve up to $500 per claim without 
FEMA's approval. 
 Expense Type 3 - Litigation Expenses - WYO Company is authorized to 
approve up to $5,000 per claim without FEMA's approval. 
 Expense Type 4 - Cost of Appraisal (implementation of the Standard Flood 
Insurance Policys appraisal clause) - WYO Company is authorized to 
approve up to $2,500 per claim without FEMA's approval. 
When approved, SALAE can be drawn from the Flood Insurance Restricted Account. 

When SALAE is incurred, it must be reported on the monthly financial statement, Exhibit 
VI, Line 655. In addition, the WYO Company representative must attach to its monthly 
financial statement a listing of all SALAEs taken in the reporting period. The listing 
should contain the following information: policy number, date of loss, SALAE amount, 
SALAE type code, and gross loss amount (when appropriate). 

The WYO Company representative must attach a copy of the FEMA approval letter for 
SALAEs that required approval. The SALAE statistical transaction and the appropriate 
monthly financial/statistical reconciliation form are also required from the WYO 
Company. 

II. SALVAGE/SUBROGATION PROCEDURES 

Expenses incurred in an unsuccessful subrogation situation will be reimbursed 
as an Expense Type 1 SALAE. 

The WYO Company's share of salvage and subrogation recoveries (10-percent 
salvage/25-percent subrogation) will be deducted from the net recovery proceeds prior 
to remitting the remaining proceeds to the restricted bank account. The amounts of 
salvage and subrogation recoveries reported to FEMA (via the recovery after final 
payment transaction) will be for the total recoveries, inclusive of the company's 
entitlement. 


III. SUPPLEMENTAL CLAIM PAYMENT PROCEDURES 

For claim losses that require reopening and reassignment, the additional loss 
adjustment expense (LAE) payment for the supplemental claim handling is calculated as 
the larger of the Closed Without Payment (CWOP) Fee ($225.00), or the difference 
between the allocated LAE determined by the entry value on the Fee Schedule (Exhibit 
V-A, V-B, V-C, V-D, V-E, V-F, or V-G of the monthly financial statement) when the claim 
was first closed and the entry value for the entire claim after the supplemental claim is 
concluded. With use of either criterion, the minimum LAE to be paid for the handling of a 
supplemental claim will be the CWOP Fee Schedule amount ($225.00). 

For more information and examples on supplemental claim payment cases, please refer 
to the WYO Accounting Training Manual, Part E. 


PART G 

USE OF PREFORMATTED EXCEL FINANCIAL STATEMENT SPREADSHEET 
FOR MONTHLY FINANCIAL STATEMENT REPORTING 

To expedite the processing of monthly financial statements, a preferred form of 
electronic financial reporting has been developed for WYO Companies and their 
vendors. The new procedure involves the use of a preformatted Excel spreadsheet 
containing Exhibits I-IX, the Financial Spreadsheet Control Form, and Reconciliation 
Exhibits. The WYO Company representative keys the Company's financial data onto the 
preformatted spreadsheet and e-mails this data to the NFIP Bureau and Statistical 
Agent at financials@nfipstat.com for processing. 

Use of these spreadsheets has enhanced the process, saving time for both the WYO 
Company and the NFIP Bureau and Statistical Agent. It has also significantly reduced 
paper maintenance and its associated costs. WYO Companies are encouraged to use 
this electronic reporting tool. However, the NFIP Bureau will accept hardcopy financial 
reporting as necessary. The procedure is outlined below: 

1. Send all requests for a Preformatted Financial Statement Spreadsheet to 
financials@nfipstat.com. 
2. NFIP Bureau and Statistical Agent Finance Group will send to your accounting 
representative a preformatted financial statement spreadsheet containing financial 
statement Exhibits I-IX, Financial Spreadsheet Control Form, and Reconciliation 
Exhibits. 
3. Use the preformatted financial statement spreadsheet to record your monthly 
financial statement and reconciliation information. Key information into the 
unprotected cells only. Save the keyed financial statement information by a new 
file name using the Save As operation. This will not alter the original 
preformatted spreadsheet file, which you will maintain as a template for future use 
and reference. 
4. Complete the required Financial Spreadsheet Control Form. For your 
convenience, this form is contained on the preformatted spreadsheet. E-mail the 
completed Financial Statement(s), Financial Spreadsheet Control Form, and 
Reconciliation Statement(s) file to financials@nfipstat.com. 

5. When the e-mail option is not feasible for the WYO Company, the Bureau will 
accept a physical diskette and/or hardcopy reporting. Securely package and mail 
the Financial, Reconciliation, Financial Spreadsheet Control Form (hardcopy form 
below), and Certification Statements to the following address: 
National Flood Insurance Program 
Bureau and Statistical Agent 
ATTN: Finance and Statistical Control Department 
7700 Hubble Drive 
Lanham, MD 20706-1833 

6. The NFIP Bureau and Statistical Agent Finance Group will record the receipt date 
of the financial statement package. 
7. The NFIP Bureau and Statistical Agent Finance Group will open the financial data 
in the financial system and review information. If data cannot be read clearly or if 
there are any questions, the Finance Group will contact your WYO Company's 
representative. 
8. Upon verification, the NFIP Bureau and Statistical Agent Finance Group will upload 
data to the WYO FOCUS financial system. 
9. Upon completion of the "upload," the NFIP Bureau and Statistical Agent Finance 
Group will file the WYO Company financial data in a secured area for future 
reference. 
NOTE: Please remember, the WYO Companys financial data will be retained in 
the NFIP Bureaus electronic storage and will not be returned to your 
Company. Please maintain copies for your records. 

All WYO Companies are encouraged to use this easy procedure for reporting monthly 
financial statement information. If you have any questions concerning the procedure or 
are interested in participating, please contact the NFIP Bureau and Statistical Agent 
Finance Manager. 


FINANCIAL SPREADSHEET CONTROL FORM

WYO Company Name: 
File Name: Date Sent: 
Reporting Month/Year: 
Preparer's Name: 
Telephone Number: 

Current Month FiscalYear 
toDate 

$ $ 

Net Income (Loss) for Reporting Month 
(Exhibit I, Income Statement, Line 175): 

Payable to (Receivable from) NFIP 

(Exhibit III, Balance Sheet Items, Line 315, 
Current Month Column): $ $ 


PART H 

CREDIT CARD PROCESSING 

To assist in the dual goals of simplifying "doing business with the NFIP" and "promoting 
policies/contracts growth," FEMA has approved use of credit cards to pay for flood 
insurance policies. 

To encourage your WYO Company's use of the credit card payment mechanism, the 
major expense (all bank service charges associated with credit transactions) will be paid 
by FEMA when your WYO Company is using FEMAs provider. All other expenses will 
be borne by your Company. 

I. CREDIT CARD PRINCIPLES 

 FEMA will absorb all bank service charges when using FEMAs provider. 
The WYO Company will not be reimbursed by FEMA when using 
alternative credit card services other than FEMAs provider. All other 
charges for hardware and software will be borne by the WYO Company. 
 The credit card authorization and processing bank will be Bank of 
America. All credit card processing software and hardware will be 
provided by Bank of America. 
 Assistance in equipment selection and configurations will also be provided 
by Bank of America representatives. Many options are available, from 
"point of sale" processing to "batch" processing at one central location. 
 Training in the use of credit card authorization and processing software 
will also be provided, at no charge, by a Bank of America representative. 
 The approved charge cards for use are VISA, MasterCard, American 
Express, Diners Club, and Discover. 

II. PROCESSING PROCEDURES 

 To charge the purchase of a flood insurance policy to a credit card, the 
following billing information is required: 
-Date of charge 
-Name of cardholder 
-Account number 
-Card expiration date 
-Dollar amount of charge 
-Cardholder's signature 
If a credit card charge is taken by telephone, the cardholder's signature is not 
required. The billing information should be attached to the application or 
included with the renewal update. It is the WYO Company's decision as to how 
this billing information is obtained. 

 Billing information must be retained for at least 3 years for billing dispute 
purposes and for the creation of an audit trail. 
 In addition, the following cancellation disclaimer must be placed not more 
than one quarter of an inch below the cardholder's signature line. 
"This policy is not subject to cancellation for reasons 
other than those set forth in the National Flood 
Insurance Program rules and regulations. In matters 
involving billing disputes, cancellation is not available 
other than for billing processing error or fraud." 

For credit card charges taken by telephone, the cancellation disclaimer must be 
read to the caller. 

 Funds generated through the credit card payment mechanism will be sent 
directly to the U.S. Treasury and not to the WYO Company's restricted 
account. The U.S. Treasury will receive the gross amount of the policy 
premium and the Federal Policy Fee. 
 There will be a 2-day delay before the U.S. Treasury receives Bank of 
America's payment for an approved credit card transaction. For example, 
the funds for a transaction approved on Monday will not be received by 
the U.S. Treasury until Wednesday. 
 Reports for all credit card approval and payment transactions will be 
provided on a daily basis by Bank of America. 

 New business, renewal, and endorsement premiums can be paid partially 
by credit card and by check/cash. 
 Cancellation or endorsement refunds should be made by check according 
to your standard refund processing procedures. However, if the customer 
insists, the refund should be applied to his/her credit card. 
III. FINANCIAL AND STATISTICAL REPORTING REQUIREMENTS 

 For financial statement reporting, use Exhibit VIII-C entitled "Credit Card 
Payments to NFIP" to report all credit payment transactions. This is the 
only additional financial statement reporting requirement. 
 For Transaction Record and Reporting Processing (TRRP) Plan statistical 
reporting, there are two requirements. 
- The "New/Rollover Indicator" data element has been eliminated and 
a new data element, "Premium Payment Indicator," has taken its 
place. This special indicator (C) must be used to identify only those 
flood policies that have been paid by credit card. 
- Use a special cancellation code (70) if the policy is canceled due to 
credit card processing error or fraud. 
 Since credit card payments will be sent directly to the U.S. Treasury, 
WYO Companies and vendors will have to build a mechanism to post 
credit card payments to their general ledger. 
NOTE: If your company or vendor is interested in implementing the credit 
card payment mechanism or requires further information, please 
contact your WYO Program Coordinator. 


PART I
LISTING OF PERTINENT WYO ACCOUNTING/FINANCIAL DOCUMENTS

 Financial Assistance/Subsidy Arrangement 
 Write Your Own (WYO) Accounting Procedures Manual (this document) 
 Write Your Own (WYO) Accounting Training Manual 
 Write Your Own (WYO) Program Financial Control Plan 
 Transaction Record Reporting and Processing (TRRP) Plan for the Write Your Own 
(WYO) Program 

900-022E(10/05)