Federal Emergency Management Agency’s

National Flood Insurance Program

Call for Issues

Status Report

Federal Emergency Management Agency’s

National Flood Insurance Program

June 2000
Table of Contents

FEMA’s NFIP Call for Issues Status Report, June 2000 i

Acronyms and Abbreviations ...................................................................................................................................................................................xxiii

Introduction................................................................................................................................................................................................................xxiv

Overview of the National Flood Insurance Program (NFIP).......................................................................................................................................xxiv

Program Responsibilities..............................................................................................................................................................................................xxiv

Effectiveness of the Program.......................................................................................................................................................................................xxiv

Call for Issues................................................................................................................................................................................................................xxv

Overview of the Process..........................................................................................................................................................................................xxv

Summary of Responses..........................................................................................................................................................................................xxvi

Table 1. Percentage of Respondents per Group ....................................................................................................................................................xxvi

Report Structure and Content.................................................................................................................................................................................xxvi

Issues.....................................................................................................................................................................................................................xxvii

Table 2. Federal Insurance Administration Issue Summary...............................................................................................................................xxviii

Table 3. Mitigation Directorate Issue Summary.................................................................................................................................................xxviii

Availability of This Report..........................................................................................................................................................................................xxix

Planned Updates...........................................................................................................................................................................................................xxix

Acknowledgments........................................................................................................................................................................................................xxix

Part I. Federal Insurance Administration Issues

1. Claims......................................................................................................................................................................................................................I-1

Uniform reinspection procedures for Direct and WYO companies.....................................................................................................................I-1-1

Adjuster assignment procedures...........................................................................................................................................................................I-1-2

Revisions to flood contract language concerning proof of loss...........................................................................................................................I-1-3

Overpayment of flood insurance claims...............................................................................................................................................................I-1-3

Designation of NFIP liaison to DFO for post-disaster recovery efforts..............................................................................................................I-1-4

WYO control of single adjuster program assignments........................................................................................................................................I-1-4
Table of Contents

FEMA’s NFIP Call for Issues Status Report, June 2000 ii

1. Claims, continued

WYO company identification of adjusters...........................................................................................................................................................I-1-5

Claims inspection process for WYO companies..................................................................................................................................................I-1-5

Guidelines for determining replacement cost for claims.....................................................................................................................................I-1-6

Pre-storm coordination of general adjusters and local adjusters..........................................................................................................................I-1-6

Elimination of public adjusters as legal representatives......................................................................................................................................I-1-6

Revision to the flood policy regarding receipts and bills for previous floods.....................................................................................................I-1-7

Guidelines for Flood Final Report.......................................................................................................................................................................I-1-7

Guidelines for building and contents assessments by adjusters...........................................................................................................................I-1-7

Adjustment requirements regarding openings......................................................................................................................................................I-1-8

Reprocessing of denied Group Flood Insurance Policy (GFIP) claims...............................................................................................................I-1-8

Mechanism for reporting problems with claims adjusters...................................................................................................................................I-1-9

2. Coastal Barrier Resources Act (COBRA)............................................................................................................................................................I-2

COBRA certification by community....................................................................................................................................................................I-2-1

Creation of new COBRA zone, with buffer for close calls..................................................................................................................................I-2-2

Revisions to COBRA mapping and determination process.................................................................................................................................I-2-3

Certification of awareness by property owner .....................................................................................................................................................I-2-4

3. Communication/Public Information....................................................................................................................................................................I-3

Notification of residents in areas where zone changes occur (general mailing)..................................................................................................I-3-1

Shift of enforcement to State level.......................................................................................................................................................................I-3-2

Evaluation and revision of marketing plan..........................................................................................................................................................I-3-2

Community access to policy and claims data.......................................................................................................................................................I-3-2

Lead time for making changes.............................................................................................................................................................................I-3-3

Annual updates to Flood Insurance Manual........................................................................................................................................................I-3-3
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FEMA’s NFIP Call for Issues Status Report, June 2000 iii

3. Communication/Public Information, continued

Performance of edits.............................................................................................................................................................................................I-3-3

State and community access to claims and repetitive loss data ...........................................................................................................................I-3-4

Community access to claims data ........................................................................................................................................................................I-3-4

Conflicts between NFIP regulations and Flood Insurance Manual.....................................................................................................................I-3-4

Media and public agency involvement in notification of public about availability of flood insurance...............................................................I-3-6

Database listing of flood insurance risk zones for all structures/addresses.........................................................................................................I-3-6

Repetitive loss database for access by local floodplain administrators...............................................................................................................I-3-7

Increased activities of ISO/CRS specialists.........................................................................................................................................................I-3-7

Brochure to inform borrowers about LOMA, LOMR, and LODR processes and PRP.......................................................................................I-3-8

Development of “public friendly” and easily understood flood zone terminology.............................................................................................I-3-9

Improved homeowner access to Elevation Certificate information.....................................................................................................................I-3-9

Marketing campaign to improve lender and WYO company partnering.............................................................................................................I-3-9

Creation of a formal notification system to ensure insurance companies have accurate zone information......................................................I-3-11

Implementation of campaign to educate renters about flood risks and availability of flood insurance.............................................................I-3-11

More timely NFIP notification of monthly statistical results.............................................................................................................................I-3-11

Public outreach campaign to explain benefits of flood insurance for condominium owners............................................................................I-3-12

Reinstitution of Flood Insurance Interagency Task Force .................................................................................................................................I-3-12

Community access to insurance policy and flood loss data...............................................................................................................................I-3-13

Development of policy to warn consumers of history of flooding prior to purchase ........................................................................................I-3-13

Exclusions in each section of SFIP....................................................................................................................................................................I-3-13

Simplification of Flood Insurance Manual........................................................................................................................................................I-3-14

Community list of surveyors for consumers......................................................................................................................................................I-3-14

Revised NFIP insurance brochures to include information on substantial damage ...........................................................................................I-3-15

Revision to forms used to inform borrowers about SFHA designations and flood insurance purchase requirements......................................I-3-15

More policy/claim issue bulletins......................................................................................................................................................................I-3-16
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FEMA’s NFIP Call for Issues Status Report, June 2000 iv

3. Communication/Public Information, continued

Rewriting of Manual for the WYO side.............................................................................................................................................................I-3-16

Revised WYO Accounting Procedures Manual.................................................................................................................................................I-3-17

Reduced use of terms “100-year” and “500-year” floods..................................................................................................................................I-3-17

Clarification to lending and FZD industry about use of effective FIRMs.........................................................................................................I-3-18

Development of NFIP database for policy and claims information for access by Regional Offices, State Coordinators, and SHMOs...........I-3-18

Revisions to Flood Insurance Manual to clarify policies for scheduled buildings...........................................................................................I-3-19

Development of system to allow insurance companies to test submitted transactions......................................................................................I-3-19

Notification to WYO companies concerning problems with Bulletin Board Service .......................................................................................I-3-20

Improved response time to inquiries from WYO companies.............................................................................................................................I-3-20

Revision to NFIP Edit Dictionary in Flood Insurance Manual.........................................................................................................................I-3-21

Improved process for notifying WYO carriers of program changes..................................................................................................................I-3-21

Issuance of monthly reports to WYO companies...............................................................................................................................................I-3-22

Improved access of WYO companies to NFIP/FIA technical people................................................................................................................I-3-22

Clarification of policy regarding debris removal and appliance coverage.........................................................................................................I-3-22

Clearer wording in bulletins...............................................................................................................................................................................I-3-23

Centralized call center to handle all NFIP-related telephone calls....................................................................................................................I-3-23

Training for TRC staff regarding disaster assistance.........................................................................................................................................I-3-23

Availability of post-flood disaster data ..............................................................................................................................................................I-3-24

Improved communication with condominium associations...............................................................................................................................I-3-24

Use of direct mail and/or media to improve familiarity of agents and communities with flood insurance requirements.................................I-3-25

Better information for policyholders regarding requirements for maintaining receipts of insurance settlements.............................................I-3-25

Mechanism for verifying accuracy of repetitive loss lists used by State administrators of NFIP, HMGP, and FMA ......................................I-3-26

State supply of National Flood Policy Consumer Guides for distribution to consumers..................................................................................I-3-26

Replacement of “100-year Flood” and “500-year Flood” with other terminology............................................................................................I-3-26

Earlier release of rate and/or policy changes to insurance companies...............................................................................................................I-3-27
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FEMA’s NFIP Call for Issues Status Report, June 2000 v

3. Communication/Public Information, continued

Regular updates to CD-ROM version of Flood Insurance Manual...................................................................................................................I-3-27

Development of a booklet on applicability of flood insurance to various community associations..................................................................I-3-27

Revised approach to following up on print responses to flood insurance advertisements.................................................................................I-3-28

Easy-to-read flood insurance information for consumers..................................................................................................................................I-3-29

Improved coordination with State NFIP Coordinators on all NFIP-related matters..........................................................................................I-3-30

Improved communication between adjusters and agents...................................................................................................................................I-3-30

Lender inclusion of FZD information when enforcing mandatory flood insurance purchase requirement.......................................................I-3-31

Development of public information campaign to increase condominium association purchases of RCBAP ...................................................I-3-31

4. Community Rating System (CRS) ......................................................................................................................................................................I-4

Percent of policies in Special Flood Hazard Areas (SFHAs) as CRS rating criteria...........................................................................................I-4-1

CRS credits for improvements.............................................................................................................................................................................I-4-1

Provide CRS discount for those properties outside the floodplain......................................................................................................................I-4-2

Evaluate and restructure CRS ..............................................................................................................................................................................I-4-3

CRS discount ratings of structures/addresses.......................................................................................................................................................I-4-3

Increased CRS points for nonstructural floodplain management.........................................................................................................................I-4-4

Expansion of the CRS program to include all communities................................................................................................................................I-4-6

Correct the Elevation Certificate to CRS class code and compliance..................................................................................................................I-4-7

Tightening of CRS flood prevention activities....................................................................................................................................................I-4-7

Development of “Negative CRS” structure .........................................................................................................................................................I-4-8

CRS points for floodplain management issues addressed by local and State hazard mitigation plans...............................................................I-4-8

Adjustment of CRS point system based on community size ...............................................................................................................................I-4-9

CRS points for public information activities to the public and voluntary purchase funding.............................................................................I-4-10

Increased CRS credit for regulations to protect flood fringe and open space....................................................................................................I-4-10

Prorated CRS points for dam safety programs...................................................................................................................................................I-4-11
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FEMA’s NFIP Call for Issues Status Report, June 2000 vi

4. Community Rating System (CRS), continued

Increased CRS points for local and regional structural flood control projects..................................................................................................I-4-11

Reduced CRS paperwork...................................................................................................................................................................................I-4-12

Independent evaluation of CRS..........................................................................................................................................................................I-4-13

Basis of CRS credit for stormwater facilities.....................................................................................................................................................I-4-14

5. Coverage ................................................................................................................................................................................................................I-5

Changes in contents coverage ..............................................................................................................................................................................I-5-1

Creation of farmowners policy.............................................................................................................................................................................I-5-1

Improved coordination of coverage limits for condominiums and other residential and non-residential buildings...........................................I-5-2

Provision of disaster relief assistance...................................................................................................................................................................I-5-2

State modification to homeowner’s policies to include flood insurance .............................................................................................................I-5-3

Changes to RCBAP..............................................................................................................................................................................................I-5-3

Revisions to SFIP to include mudslide coverage .................................................................................................................................................I-5-4

Revisions to common-wall rule............................................................................................................................................................................I-5-5

Elimination of PRP ..............................................................................................................................................................................................I-5-6

Revision to Reformation of Coverage provision in policy..................................................................................................................................I-5-6

Upgrade of contents coverage to enhance value ..................................................................................................................................................I-5-7

Expansion of waiver for waiting period...............................................................................................................................................................I-5-8

Addition of landslide buy-back endorsement to SFIP .........................................................................................................................................I-5-8

Elimination of enclosure coverage for pre-FIRM structures...............................................................................................................................I-5-9

Increased residential coverage limits...................................................................................................................................................................I-5-9

Inclusion of decks in property covered..............................................................................................................................................................I-5-10

Provision of buy-back endorsement for swimming pools..................................................................................................................................I-5-10

Evaluation of benefits of restriction versus confusion and difficulty in implementation..................................................................................I-5-11

Provide buy-back endorsement for full replacement cost on contents...............................................................................................................I-5-11
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FEMA’s NFIP Call for Issues Status Report, June 2000 vii

5. Coverage, continued

Expanded application of replacement cost coverage for single-family dwellings.............................................................................................I-5-11

Expansion of ICC coverage to structures in non-floodway SFHAs damaged by flooding................................................................................I-5-13

Development of exclusive residential co-operative policy similar to RCBAP..................................................................................................I-5-14

Lowering of minimum deductibles and/or premiums for structures of little value ...........................................................................................I-5-15

Development of “bridge” insurance coverage ...................................................................................................................................................I-5-16

Changes to ICC claims process to remove the local administrator’s involvement............................................................................................I-5-16

Lowering of ICC policy rider fee for pre-FIRM structures...............................................................................................................................I-5-18

Elimination of ICC coverage for historic buildings...........................................................................................................................................I-5-19

Denial of flood insurance coverage for new development in SFHAs where base flood depths are 5 feet or more...........................................I-5-19

Removal of mandatory flood insurance purchase requirement for existing structures when levees are discredited.........................................I-5-20

Replacement of PRP using credits and surcharges within SFIP........................................................................................................................I-5-20

Increased coverage limits to reflect increasing house values.............................................................................................................................I-5-21

Clarification of insurance coverage for residential condominiums...................................................................................................................I-5-22

Reconsideration of coverage for finished basements.........................................................................................................................................I-5-22

Improvement to flood insurance product by adding new coverage, either as a core element or option............................................................I-5-23

Addition of coverage for commercial and municipal infrastructures and lost income protection.....................................................................I-5-23

Increased policy limits to match property values, construction costs, and replacement cost valuations...........................................................I-5-24

Investigation of disadvantages of adding “flood peril” to homeowners insurance policies..............................................................................I-5-24

Elimination of the 3-year policy.........................................................................................................................................................................I-5-25

Coverage for replacement plywood sheathing of the foundation walls below BFE..........................................................................................I-5-25

Changes in coverage effective date....................................................................................................................................................................I-5-26

Self-certification from policyholders to ensure below-BFE enclosures are not converted to other uses..........................................................I-5-27

Quarterly or semi-annual policies......................................................................................................................................................................I-5-27

Requirement of PRP for structures removed from SFHA by LOMA................................................................................................................I-5-28

Allowing multiple policies to eliminate “shortfalls” in coverage ......................................................................................................................I-5-28
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FEMA’s NFIP Call for Issues Status Report, June 2000 viii

5. Coverage, continued

Allowance of condominium associations’ umbrella policy to cover units located outside SFHAs..................................................................I-5-29

Changes in the requirement for minimum flood insurance coverage ................................................................................................................I-5-30

Addition of flood insurance premiums to property tax bills..............................................................................................................................I-5-31

Extension of ICC coverage ................................................................................................................................................................................I-5-31

Allowing lenders to require borrowers to carry replacement cost rather than loan balance level.....................................................................I-5-32

Development of PRP for commercial properties...............................................................................................................................................I-5-33

Reduction or elimination of coinsurance requirement for RCBAP ...................................................................................................................I-5-33

Changes in process for cancellation of condominium association policies.......................................................................................................I-5-34

Provide higher deductibles and lower premiums for condominium associations..............................................................................................I-5-35

Implementation of effective strategy to address repetitive losses......................................................................................................................I-5-35

Clarification of coverage concerning non-owned debris ...................................................................................................................................I-5-37

Elimination of “common wall” from flood insurance policies..........................................................................................................................I-5-37

Use of 80 percent insurance to value requirement as basis for replacement cost coverage...............................................................................I-5-38

Coverage for business contents for in-the-home businesses..............................................................................................................................I-5-39

Additions and alterations coverage in policies for non-residential condominiums...........................................................................................I-5-39

Reduction in waiting period for flood insurance policies..................................................................................................................................I-5-39

Waiver of waiting period for RCBAP................................................................................................................................................................I-5-40

Changes in mandatory purchase requirements to replacement cost or maximum amount of insurance available............................................I-5-41

6. Lender Compliance ..............................................................................................................................................................................................I-6

Flood insurance coverage for all federally backed mortgages.............................................................................................................................I-6-1

Lender submittal of annual certification..............................................................................................................................................................I-6-2

Extension of borrower response time to lender determination............................................................................................................................I-6-3

Placement of burden of proof for determination on FEMA and FZD Company.................................................................................................I-6-3

Exemption for federally defined “Abundance of Caution” loans from flood insurance coverage ......................................................................I-6-4
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FEMA’s NFIP Call for Issues Status Report, June 2000 ix

6. Lender Compliance, continued

Changes in lender requirements for lenders to check flood status.......................................................................................................................I-6-4

Changes in Federal lending regulations regarding checks of flood status...........................................................................................................I-6-5

Clarification of guidelines for making “pattern or practice” determination to assess CMPs..............................................................................I-6-5

Escrow of premium payment into monthly payments and notification of mortgagees when policy is close to expiration................................I-6-6

Improved enforcement of lender compliance policies.........................................................................................................................................I-6-7

NFIP responsibility for FZD process...................................................................................................................................................................I-6-7

Improvement of FZD process for contracted firms..............................................................................................................................................I-6-8

Handling of expired policies................................................................................................................................................................................I-6-8

Improved cooperation between insurance companies/agents and lenders...........................................................................................................I-6-8

Changes in LODR processing..............................................................................................................................................................................I-6-9

Replacement cost coverage guidelines.................................................................................................................................................................I-6-9

Lender provision of FZD information to consumers/agents................................................................................................................................I-6-9

Insurance and disaster assistance in non-participating communities.................................................................................................................I-6-10

Impact of NFIP procedures on lending industry expenditures...........................................................................................................................I-6-10

Examination criteria for lenders.........................................................................................................................................................................I-6-11

Increased flexibility of MPPP............................................................................................................................................................................I-6-11

Clarification of “affected area” for which lenders may charge for FZD...........................................................................................................I-6-12

Uninsured flood damage resulting from lender non-compliance.......................................................................................................................I-6-12

Federal and non-Federal audits of mortgage lenders.........................................................................................................................................I-6-13

Calculation of minimum insurance required......................................................................................................................................................I-6-13

Payment of loss payees......................................................................................................................................................................................I-6-14

Lender notification requiring LOMAs or LOMRs.............................................................................................................................................I-6-14

Use of technical evidence from local officials in FZD process.........................................................................................................................I-6-15

Addition of flood insurance premiums to property tax bills..............................................................................................................................I-6-15

Extension of property owner’s timeframe to contest lender determinations .....................................................................................................I-6-16
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FEMA’s NFIP Call for Issues Status Report, June 2000 x

6. Lender Compliance, continued

FEMA-approved FZD........................................................................................................................................................................................I-6-16

Clarification of loan transactions as “the making of a new loan” ......................................................................................................................I-6-17

“Out as shown” letters........................................................................................................................................................................................I-6-17

County official involvement in property transfer...............................................................................................................................................I-6-18

Local government entity authority over flood insurance purchases..................................................................................................................I-6-18

7. Rates ......................................................................................................................................................................................................................I-7

Change/eliminate grandfathering of rates............................................................................................................................................................I-7-1

Quality control program to monitor accuracy of flood zone ratings....................................................................................................................I-7-1

Common building/contents deductible on policies..............................................................................................................................................I-7-2

Consideration of risk-based rating system...........................................................................................................................................................I-7-2

Collection of Elevation Certificate at closing......................................................................................................................................................I-7-3

Preemption of rebating and surcharges................................................................................................................................................................I-7-4

Simplify rates structure to only with/without enclosure (no reference to equipment).........................................................................................I-7-4

Phase out subsidy for flood policy after two or more losses................................................................................................................................I-7-5

Standards for nonsupporting breakaway walls.....................................................................................................................................................I-7-5

Resolution of inconsistencies between insurance and floodplain standards........................................................................................................I-7-6

Use of Diagram #8 on Elevation Certificates for structures with crawl spaces in winter climate areas..............................................................I-7-6

Insurance premiums for policies purchased before map becomes effective........................................................................................................I-7-7

Premium rate structure based on true risk and loss history factors......................................................................................................................I-7-7

Insurance policy rates for pre-FIRM structures...................................................................................................................................................I-7-8

Mandatory purchase requirement for new structures in riverine erosion hazard zones.......................................................................................I-7-8

Flood insurance rating based on depth of flooding and flood history of building...............................................................................................I-7-8

Renewal of provisionally rated policies...............................................................................................................................................................I-7-9

Schedule for program changes...........................................................................................................................................................................I-7-10
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FEMA’s NFIP Call for Issues Status Report, June 2000 xi

7. Rates, continued

Elimination of 3-year policies............................................................................................................................................................................I-7-10

Individual building insurance rating system......................................................................................................................................................I-7-10

Reduction in cost of condominium insurance....................................................................................................................................................I-7-11

Changes in rates to discourage repetitive claims and encourage mitigation......................................................................................................I-7-11

Introduction of payment plans............................................................................................................................................................................I-7-11

Premiums included in monthly mortgage payments..........................................................................................................................................I-7-12

Rating of pre-FIRM homes................................................................................................................................................................................I-7-12

Adjustment of condominium rating structure ....................................................................................................................................................I-7-12

Rates for “disaster-proofing” a structure............................................................................................................................................................I-7-13

Incremental removal of subsidies.......................................................................................................................................................................I-7-13

Formalized procedure for re-rating noncompliant structures.............................................................................................................................I-7-14

Dry floodproofing for floodplain management in flood insurance rating..........................................................................................................I-7-14

Rating of post-FIRM properties when no Elevation Certificate is available .....................................................................................................I-7-15

Attachment to Elevation Certificate...................................................................................................................................................................I-7-15

State or regional adjustments to rate structure ...................................................................................................................................................I-7-16

Adjustments to premiums in areas behind levees with insufficient freeboard...................................................................................................I-7-16

Rating of policies for repetitive loss structures..................................................................................................................................................I-7-17

Premiums for pre-FIRM buildings with enclosures below the lowest floor......................................................................................................I-7-17

Inequities in rating coverages for post-FIRM structures....................................................................................................................................I-7-18

Simplification of the rating system....................................................................................................................................................................I-7-18

Development of a “claim history factor” for rating tables.................................................................................................................................I-7-19

Additions to post-FIRM structures.....................................................................................................................................................................I-7-19

Reduction/elimination of need for Elevation Certificates..................................................................................................................................I-7-20

Enactment of an automatic inflation guard increase at renewal time ................................................................................................................I-7-20

Software package to simplify rating process......................................................................................................................................................I-7-21
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FEMA’s NFIP Call for Issues Status Report, June 2000 xii

7. Rates, continued

Prohibition of rebates of Federal flood insurance premiums.............................................................................................................................I-7-21

Connection of Elevation Certificate to CRS class code.....................................................................................................................................I-7-22

Reduction in cost of RCBAP .............................................................................................................................................................................I-7-22

8. Training/Education ..............................................................................................................................................................................................I-8

Improved training for lenders and insurance agents............................................................................................................................................I-8-1

Improved lender training on procedures for dual zones.......................................................................................................................................I-8-1

Inclusion of a separate Elevated Building section, diagrams, and ratings examples in the Flood Insurance Manual........................................I-8-2

Instruct agents, lenders, and map determination companies to use current FIRM in Mandatory Purchase Guidelines, Watermark .................I-8-2

Minimum training/certificate for insurance agents..............................................................................................................................................I-8-3

Improve insurance industry education of agents and employees about CRS discount........................................................................................I-8-3

Educational program for insurance agents...........................................................................................................................................................I-8-4

System for standards, training, compliance, and enforcement to reduce misrated policies by insurance companies.........................................I-8-4

Timely updates to Flood Insurance Manual........................................................................................................................................................I-8-5

Revised language in Flood Insurance Manual concerning map revisions ..........................................................................................................I-8-6

Wind and flood adjuster certification...................................................................................................................................................................I-8-6

Revisions to adjuster certification training document to make it a modular format, allowing topics to be inserted or removed more easily....I-8-6

Improved agent knowledge about flood insurance ..............................................................................................................................................I-8-7

Incentives to State Insurance Commissions for flood insurance questions on State licensing exams.................................................................I-8-7

System resources for WYO companies with overtolerance errors......................................................................................................................I-8-8

NFIP Policy Issuance Bulletin and Flood Insurance Manual update on use of electronic transactions .............................................................I-8-8

Certification of community officials for teaching flood insurance locally..........................................................................................................I-8-9

FZD training for insurance agents/companies and lending institutions...............................................................................................................I-8-9

Training liaison for State insurance commissioners..........................................................................................................................................I-8-10

Improved adjuster training on NFIP ..................................................................................................................................................................I-8-10
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FEMA’s NFIP Call for Issues Status Report, June 2000 xiii

8. Training/Education, continued

Advise lenders that homeowners of non-SFHA properties do not need to purchase insurance ........................................................................I-8-11

Education for insurance industry on NFIP.........................................................................................................................................................I-8-11

Replace post-flood claims workshops for adjusters with pre-flood workshops.................................................................................................I-8-11

Technical training program for adjusters separate from policy and rules training.............................................................................................I-8-12

Certification program for independent processing vendors...............................................................................................................................I-8-12

Certification process for NFIP representatives assigned to WYO carriers........................................................................................................I-8-12

Training for local insurance carriers, mortgage companies, and environmental firms on flood map maintenance and reading.......................I-8-13

Annual training for States regarding flood policies, coverages, and deductibles..............................................................................................I-8-13

Establish a formal training program for flood map determination companies..................................................................................................I-8-14

Rating systems and procedures training for agents and WYO companies........................................................................................................I-8-14

Improve agent knowledge of flood insurance through targeted mass mailing...................................................................................................I-8-15

Improved marketing of flood insurance.............................................................................................................................................................I-8-16

9. Underwriting .........................................................................................................................................................................................................I-9

Underwriting requirement for RCBAP ................................................................................................................................................................I-9-1

Policyholder self-certification for improvements and alterations........................................................................................................................I-9-1

Flood zone validation system for PRP renewal records.......................................................................................................................................I-9-1

Assignment of account executives to assist WYO companies.............................................................................................................................I-9-2

WYO expense allowance .....................................................................................................................................................................................I-9-3

Procedures for correcting flood zones on policies...............................................................................................................................................I-9-4

Accuracy of rates used by WYO companies........................................................................................................................................................I-9-4

FIA monitoring of WYO compliance ..................................................................................................................................................................I-9-5

FIA auditing of WYO vendors.............................................................................................................................................................................I-9-5

Simplification of policy writing process..............................................................................................................................................................I-9-6

Cancellation of flood policies for paid-off loan...................................................................................................................................................I-9-7
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FEMA’s NFIP Call for Issues Status Report, June 2000 xiv

9. Underwriting, continued

Change arrangement with WYO carriers.............................................................................................................................................................I-9-7

Legal action against insurance agents..................................................................................................................................................................I-9-8

Vice President Gore’s Plain Language Initiative .................................................................................................................................................I-9-8

Electronic signatures on insurance forms.............................................................................................................................................................I-9-9

ACORD standards................................................................................................................................................................................................I-9-9

Software for automated flood zone lookups......................................................................................................................................................I-9-10

Conformance of flood insurance policies to resemble fire and homeowners policies.......................................................................................I-9-11

10. Other Insurance Issues .......................................................................................................................................................................................I-10

Cutoff date for insurance eligibility...................................................................................................................................................................I-10-1

Tax assessor notification of property owners.....................................................................................................................................................I-10-1

Elimination of expense constant ........................................................................................................................................................................I-10-2

Elimination of 3-year policies............................................................................................................................................................................I-10-3

State flood insurance funds................................................................................................................................................................................I-10-3

Establishment of policy to pay NFIP policyholders back premiums on buyouts..............................................................................................I-10-4

WYO reimbursement formula............................................................................................................................................................................I-10-4

Payment of State/local premium taxes on policies.............................................................................................................................................I-10-5

NFIP independence from FEMA .......................................................................................................................................................................I-10-6

Comprehensive evaluation of NFIP effectiveness.............................................................................................................................................I-10-7

Increased flexibility of MPPP............................................................................................................................................................................I-10-7

Financial goals and incentives for WYO companies.........................................................................................................................................I-10-8

FIA act as final authority rather than State courts..............................................................................................................................................I-10-8

Lowered PIF percentage growth goals for large companies..............................................................................................................................I-10-9

Reconfiguration of base expense percent and growth bonus.............................................................................................................................I-10-9

Devolution to private companies, including underwriting (French model).....................................................................................................I-10-10
Table of Contents

FEMA’s NFIP Call for Issues Status Report, June 2000 xv

10. Other Insurance Issues, continued

Increased emphasis on certain repetitive loss structures..................................................................................................................................I-10-12

Requirement for developing permit and Elevation Certificate with flood insurance policy applications.......................................................I-10-13

Designation of regional NFIP data processing technicians..............................................................................................................................I-10-13

Flood insurance for all structures in mapped non-participating communities.................................................................................................I-10-14

Requirement for condominium associations to maintain adequate flood insurance coverage ........................................................................I-10-14

Broadened definition of SFHA for insurance purposes...................................................................................................................................I-10-15

Marketing plan changes...................................................................................................................................................................................I-10-16

Improved State and local access to flood insurance activity, claims, and enforcement data...........................................................................I-10-16

Removal of mandatory purchase requirement in Zone AR..............................................................................................................................I-10-17

Elimination of the NFIP Direct Program.........................................................................................................................................................I-10-17

Extension of Financial Arrangement with WYO Companies to 2 years.........................................................................................................I-10-18

Use of Zone AR policy funds for restoring disaccredited levees.....................................................................................................................I-10-19

Expanded incentives and disincentives for flood insurance purchase and flood mitigation practices............................................................I-10-19

Federal preemption on local premium taxes and other assessments................................................................................................................I-10-19

Changes in restricted accounts.........................................................................................................................................................................I-10-20

Exclusion of flood peril from residential insurance policies............................................................................................................................I-10-20

Privatization of flood insurance .......................................................................................................................................................................I-10-20

Increased actuarial soundness of NFIP............................................................................................................................................................I-10-21

Increased local management of flood insurance programs to minimize unprotected buildings......................................................................I-10-21

Disaster assistance waiver for property owners without flood insurance ........................................................................................................I-10-22

Add the provisions found in 44 CFR 62.3 to settle preemption question........................................................................................................I-10-22

Federal Court jurisdiction for cases against WYO carriers..............................................................................................................................I-10-23

Regulatory change regarding WYO carrier risk of no reimbursement ............................................................................................................I-10-24

Clarification of FEMA requirements regarding WYO carriers requirement to keep FEMA fully apprised of pending litigation..................I-10-25

Clarification of WYO companies’ status as agents of Federal Government ...................................................................................................I-10-25
Table of Contents

FEMA’s NFIP Call for Issues Status Report, June 2000 xvi

10. Other Insurance Issues, continued

Consistent statute of limitations to all parts of flood program.........................................................................................................................I-10-26

Removal of WYO carriers from Standards Committee ...................................................................................................................................I-10-26

Unification of insurance and floodplain management risk identification components of the NFIP under FIA ..............................................I-10-27

Set up centralized location to provide settlement information for IFG claims following disaster ..................................................................I-10-27

Investigation of Lloyds’ programs...................................................................................................................................................................I-10-27

Assessment of the complete set of effects on resource use and vulnerability of the NFIP..............................................................................I-10-28

Balanced disaster and flood insurance approach to flood loss reduction.........................................................................................................I-10-29

Interest-bearing accounts for benefit of NFIP..................................................................................................................................................I-10-30

Repairs handled by insureds.............................................................................................................................................................................I-10-30

Form 81-93 as attachment to flood insurance policy applications...................................................................................................................I-10-31

Tougher restrictions to address repetitive loss problem...................................................................................................................................I-10-31

Continuation of the Flood Insurance Interagency Task Force .........................................................................................................................I-10-32

Part II. Mitigation Floodplain Management Issues

1. Floodplain Management – Community Eligibility and Compliance ...............................................................................................................II-1

Make legislation/regulations for addressing non-compliance structures more flexible......................................................................................II-1-1

Establish team to develop compliance benchmarks and performance standards in each region and throughout the U.S..................................II-1-2

Implement a more aggressive NFIP compliance program, exercise authorities for probation and suspension, and limit disaster assistance ...II-1-3

Develop new tools to improve community compliance......................................................................................................................................II-1-6

Establish and implement a fee structure for recovering FEMA staff time funds expended working with communities

to correct deficiencies and violations..................................................................................................................................................................II-1-8

Change Biennial Reports to Annual Reports and make them part of the CAP process......................................................................................II-1-8
Table of Contents

FEMA’s NFIP Call for Issues Status Report, June 2000 xvii

2. Floodplain Management – General Construction Requirements ...................................................................................................................II-2

Use model building codes as an alternate means to meet the building construction requirements of the NFIP ................................................II-2-1

Shallow flooding in A-Zones in coastal areas can present significantly different hazards than flooding in A-Zones affected

by riverine flooding.............................................................................................................................................................................................II-2-1

Residential basements in Special Flood Hazard Areas (SFHAs)........................................................................................................................II-2-2

Change regulations to allow one toilet/sink below the BFE...............................................................................................................................II-2-4

Allow for floating houses when properly engineered.........................................................................................................................................II-2-5

Require specific certification of breakaway walls by a design professional.......................................................................................................II-2-6

3. Floodplain Management – Policy Review .........................................................................................................................................................II-3

NFIP policy guidance..........................................................................................................................................................................................II-3-1

Manufactured home permanent foundation........................................................................................................................................................II-3-1

Building utilities..................................................................................................................................................................................................II-3-2

Critical facilities..................................................................................................................................................................................................II-3-3

Freeboard.............................................................................................................................................................................................................II-3-4

Zero-rise floodway..............................................................................................................................................................................................II-3-6

Grandfathering of existing manufactured home parks and subdivisions............................................................................................................II-3-7

Floodway analysis for subdivisions and other development in Zone A.............................................................................................................II-3-8

Repetitive loss.....................................................................................................................................................................................................II-3-9

Enclosures below the lowest floor of elevated buildings....................................................................................................................................II-3-9

Define crawl space ............................................................................................................................................................................................II-3-11

Substantial improvement/substantial damage ...................................................................................................................................................II-3-13

Stricter State law ...............................................................................................................................................................................................II-3-17

Elevation Certificate..........................................................................................................................................................................................II-3-17

Structures in/out floodplain...............................................................................................................................................................................II-3-18

Floodplain management ordinance ...................................................................................................................................................................II-3-19
Table of Contents

FEMA’s NFIP Call for Issues Status Report, June 2000 xviii

3. Floodplain Management – Policy Review, continued

Disincentives for coastal areas and incentives for limiting development .........................................................................................................II-3-21

Elevation requirements in unnumbered A Zones..............................................................................................................................................II-3-22

Exceptions to NFIP criteria...............................................................................................................................................................................II-3-23

Allow communities to not designate a regulatory floodway under certain circumstances...............................................................................II-3-24

Develop a plan for addressing endangered species under the NFIP.................................................................................................................II-3-24

Limiting increase in flood stage in unnumbered A Zones................................................................................................................................II-3-25

E.O. 11988 Floodplain Management ................................................................................................................................................................II-3-26

Excluding property from floodplain..................................................................................................................................................................II-3-28

NFIP definitions................................................................................................................................................................................................II-3-28

Maintenance of the flood carrying capacity of channels (44 CFR 60.3 (B)(7)) ...............................................................................................II-3-29

Revise and reorganize the NFIP floodplain management requirements in a floodplain management ordinance format.................................II-3-30

Definition of recreational vehicle......................................................................................................................................................................II-3-31

4. Floodplain Management – Technical Assistance, Training, Communications, and Publications ...............................................................II-4

NFIP repetitive loss data .....................................................................................................................................................................................II-4-1

Foster training and develop certification program of floodplain managers........................................................................................................II-4-2

Strengthen the FEMA/State partnership to better clarify for the community what floodplain and watershed planning can do........................II-4-3

Community education regarding maps and ICC claims processes.....................................................................................................................II-4-4

Requirement for surveyors to be educated in flood zone determinations...........................................................................................................II-4-5

A training video on the new FEMA Elevation Certificate..................................................................................................................................II-4-6

Establishment of required outreach and education programs to reinforce the skills of local floodplain management officials ........................II-4-6

Training for surveyors, engineers, local officials, insurance agents, and lenders...............................................................................................II-4-8

Public education and awareness that the base flood elevation is a minimum criterion and higher standards are more effective

at reducing loss....................................................................................................................................................................................................II-4-9
Table of Contents

FEMA’s NFIP Call for Issues Status Report, June 2000 xix

4. Floodplain Management – Technical Assistance, Training, Communications, and Publications, continued

Spearhead a program in unison with State and local floodplain management associations and government officials for floodplain

management cross-training and make information available............................................................................................................................II-4-10

Provide Incentives to local floodplain administrators to attend floodplain management training developed by FEMA or a State

agency at least once in a three-year period .......................................................................................................................................................II-4-11

Distribution of information on local floodplain management accomplishments to all participating communities..........................................II-4-12

Manufactured home installation training...........................................................................................................................................................II-4-12

Privatize (partially) disaster operations; management efficiencies at the territory level; seek additional staff positions ................................II-4-13

Provide better training, fund FPM program implementation, and foster open communication during a CAV................................................II-4-14

Conduct CAVs for communities before nomination for Project Impact to identify and resolve violations or programmatic deficiencies....II-4-16

5. Floodplain Management – Other FEMA Programs .........................................................................................................................................II-5

Hazard Mitigation Grant Program – simplify the acquisition process................................................................................................................II-5-1

Increase funding to Hazard Mitigation Grant Program and Flood Mitigation Assistance..................................................................................II-5-2

Hazard Mitigation Grant Program – allow USACE or State-certified flood control projects to be built on land acquired using

HMGP funds.......................................................................................................................................................................................................II-5-3

Hazard Mitigation Grant Program – offer HMGP funds for buyout to homeowners immediately after a disaster............................................II-5-4

Hazard Mitigation Grant Program – reduce buyout payments for uninsured structures....................................................................................II-5-5

Y2K impacts........................................................................................................................................................................................................II-5-6

Stafford Act on the Internet.................................................................................................................................................................................II-5-7

Disaster assistance for infrastructure...................................................................................................................................................................II-5-7

Flood Mitigation Assistance................................................................................................................................................................................II-5-8

Flood Mitigation Assistance................................................................................................................................................................................II-5-8

Flood Mitigation Assistance................................................................................................................................................................................II-5-9

CAP-SSSE..........................................................................................................................................................................................................II-5-9

Post disaster teleregistration..............................................................................................................................................................................II-5-10
Table of Contents

FEMA’s NFIP Call for Issues Status Report, June 2000 xx

5. Floodplain Management – Other FEMA Programs, continued

NFIP assessment ...............................................................................................................................................................................................II-5-10

Community Information System.......................................................................................................................................................................II-5-10

Number of flood-prone structures.....................................................................................................................................................................II-5-11

Internal FEMA policy.......................................................................................................................................................................................II-5-12

Planning.............................................................................................................................................................................................................II-5-12

Planning.............................................................................................................................................................................................................II-5-13

Flood data to improve disaster response ...........................................................................................................................................................II-5-13

Part III. Mitigation Hazard Identification/Mapping Issues

Cooperating Technical Communities – delegation of authority to issue LOCMs ...........................................................................................III-1-1

Cooperating Technical Communities – flood mapping partnerships/transfers of responsibilities....................................................................III-1-2

Cooperating Technical Communities – policy changes.....................................................................................................................................III-1-3

Cooperating Technical Communities – funding................................................................................................................................................III-1-4

Cooperating Technical Communities – outreach...............................................................................................................................................III-1-4

Dam-break inundation mapping.........................................................................................................................................................................III-1-5

Flood hazard zones for levee-protected areas....................................................................................................................................................III-1-8

Data integrity....................................................................................................................................................................................................III-1-11

Vertical datum usage ........................................................................................................................................................................................III-1-12

DFIRMs – coordination with States and local governments............................................................................................................................III-1-15

DFIRMs – improved base maps.......................................................................................................................................................................III-1-16

DFIRMs – Q3 updates......................................................................................................................................................................................III-1-18

DFIRMs – digital conversion and data distribution.........................................................................................................................................III-1-18

DFIRMs – suggested mapping enhancements.................................................................................................................................................III-1-19

Product and service fees...................................................................................................................................................................................III-1-22
Table of Contents

FEMA’s NFIP Call for Issues Status Report, June 2000 xxi

Part III. Mitigation Hazard Identification/Mapping Issues, continued

Fees for mitigation products and services........................................................................................................................................................III-1-24

Mapping Needs Assessment Process – approximate A Zones and unmapped flood-prone areas...................................................................III-1-27

Mapping Needs Assessment Process – mapping other hazard areas...............................................................................................................III-1-28

Mapping Needs Assessment Process – frequency of map updates..................................................................................................................III-1-30

Mapping Needs Assessment Process – process for prioritizing restudies.......................................................................................................III-1-30

Mapping Needs Assessment Process – specific map update requests.............................................................................................................III-1-31

Mapping Needs Assessment Process – funding issues....................................................................................................................................III-1-32

Mapping Needs Assessment Process – acceptance of flood data submitted by communities.........................................................................III-1-32

Mapping Needs Assessment Process – mapping techniques and standards....................................................................................................III-1-33

Mapping Needs Assessment Process – requirements for developers..............................................................................................................III-1-34

Future development hydrology and hydraulics................................................................................................................................................III-1-35

Handling of phased improvement projects.......................................................................................................................................................III-1-38

LOMA and LOMR – other hazard identification/mapping issues...................................................................................................................III-1-41

LOMA and LOMR – outreach, communication, education, and publications................................................................................................III-1-42

LOMA and LOMR – map production..............................................................................................................................................................III-1-44

LOMA and LOMR – map accuracy and completeness...................................................................................................................................III-1-50

LOMA and LOMR – other regulatory requirements.......................................................................................................................................III-1-52

LOMA and LOMR – other floodplain management issues.............................................................................................................................III-1-53

Models and Modeling – coastal modeling technology and funding................................................................................................................III-1-54

Models and Modeling – archived hydraulic models........................................................................................................................................III-1-55

Models and Modeling – standards for water surface elevation reporting........................................................................................................III-1-56

Models and Modeling – base flood elevations in potholes..............................................................................................................................III-1-56

Models and Modeling – model selection when analyzing levees....................................................................................................................III-1-57

Models and Modeling – combined rainfall/snowmelt analysis and modeling.................................................................................................III-1-57

Models and Modeling – hydrologic review for map revision requests............................................................................................................III-1-58
Table of Contents

FEMA’s NFIP Call for Issues Status Report, June 2000 xxii

Part III. Mitigation Hazard Identification/Mapping Issues, continued

Models and Modeling – debris blockage at hydraulic structures.....................................................................................................................III-1-59

Models and Modeling – starting water surface elevations in hydraulic models..............................................................................................III-1-59

Models and Modeling – acceptance of HEC-RAS model................................................................................................................................III-1-60

Models and Modeling – alluvial fan flooding and the NRC recommendations...............................................................................................III-1-61

Models and Modeling – NAS methodologies for coastal zone designations...................................................................................................III-1-62

Models and Modeling – wave runup determinations.......................................................................................................................................III-1-62

Models and Modeling – floodway conveyance concept..................................................................................................................................III-1-63

Models and Modeling – simple floodway encroachment ................................................................................................................................III-1-64

Models and Modeling – standards for designing and approving USACE structural projects.........................................................................III-1-64

Mudslide hazard mapping................................................................................................................................................................................III-1-65

Structure Identification – incorporating new technologies to increase map utility..........................................................................................III-1-69

Structure Identification – database of insurable and at-risk structures and infrastructure...............................................................................III-1-70

Study Process – improve coordination between FEMA and communities for flood studies...........................................................................III-1-71

Study Process – community outreach..............................................................................................................................................................III-1-72

Study Process – zone designation and use .......................................................................................................................................................III-1-73

Study Process – improve quality control and quality assurance of study data ................................................................................................III-1-73

Study Process – regionalize mapping coordination contractor activities.........................................................................................................III-1-74

Study Process – using students at universities in the study process................................................................................................................III-1-74

Terminology.....................................................................................................................................................................................................III-1-75
Acronyms and Abbreviations

FEMA’s NFIP Call for Issues Status Report, June 2000 xxiii

ASFPM............... Association of State Floodplain Managers

BFE.....................Base Flood Elevation

CAV....................Community Assistance Visit

COBRA...............Coastal Barrier Resources Act (of 1982)

CBRS..................Coastal Barrier Resources System

CD-ROM.............Compact Disk Read-Only Memory

CEU....................Continuing Education Unit

CFR.....................Code of Federal Regulations

CMP....................Civil Monetary Penalties

CRS.....................Community Rating System

DFO .................... Disaster Field Office

FEMA ................. Federal Emergency Management Agency

FFIEC.................. Federal Financial Institutions Examination Council

FIA...................... Federal Insurance Administration

FIPNC................. Flood Insurance Producers National Committee

FIRM................... Flood Insurance Rate Map

FMA.................... Flood Mitigation Assistance (program)

FMPCC............... Flood Map Production Coordination Contractor

FPF ..................... Federal Policy Fee

FY....................... Fiscal Year

FZD..................... Flood Zone Determination (company)

GFIP.................... Group Flood Insurance Policy

HMGP................. Hazard Mitigation Grant Program

IBHS...................Institute for Business and Home Safety

ICC .....................Increased Cost of Compliance (coverage)

IFG ......................Individual and Family Grant (Program)

LODR..................Letter of Determination Review

LOMA .................Letter of Map Amendment

LOMR .................Letter of Map Revision

LOMR-F..............Letter of Map Revision Based on Fill

MPPP ..................Mortgage Portfolio Protection Program

NAIC...................National Association of Insurance Commissioners

NEMIS.................National Emergency Management Information System

NFDA..................National Flood Determination Association

NFIP....................National Flood Insurance Program

NFIRA.................National Flood Insurance Reform Act of 1994

NLIC ...................National Lenders Insurance Council

NPSC...................National Processing Service Center

OPA.....................Otherwise Protected Area

PIA......................Professional Insurance Agents (association)

PIF.......................Policies in Force

PRP .....................Preferred Risk Policy

RCBAP................Residential Condominium Building Association Policy

SBA.....................Small Business Administration

SFHA...................Special Flood Hazard Area

SFIP.....................Standard Flood Insurance Policy

SHMO .................State Hazard Mitigation Officer

TRC.....................Telephone Response Centers

WYO...................Write Your Own (program)
Introduction

FEMA’s NFIP Call for Issues Status Report, June 2000 xxiv

Overview of the National Flood Insurance

Program (NFIP)

For decades the national response to flood disasters was generally limited to

constructing flood control works, such as dams, levees, and seawalls, and

providing disaster relief to flood victims. This approach did not reduce losses

or discourage unwise development. To compound the problem, the public

could not buy flood coverage from insurance companies, and building

techniques to reduce flood damage were often overlooked. In the face of

mounting flood losses and escalating costs to the general taxpayers for

disaster relief, the U.S. Congress created the National Flood Insurance

Program (NFIP) in 1968. The intent was to reduce future damage and provide

property owners with protection from financial losses through an insurance

mechanism that allows a premium to be paid for protection by those most in

need of this protection.

The NFIP is a Federal program that enables property owners to purchase flood

insurance and is designed to reduce the escalating costs of property damage

caused by floods. The program is based on an agreement between local

communities and the Federal Government that if a community will implement

programs to reduce future flood risks, the Federal Government will make

flood insurance available within the community as a form of financial

protection against flood losses that occur. The NFIP is administered by the

Federal Emergency Management Agency (FEMA).

Today more than 19,000 communities participate in and benefit from the

NFIP. The following are some of the benefits to participating communities

and property owners in those communities:

• Property owners in participating communities are able to insure their

property against flood losses.

• By employing wise floodplain management, a participating

community can protect its citizens against much of the devastating

financial loss resulting from flood-related disasters.

• Careful local management of development in designated floodplains

results in construction practices that can reduce flood losses and the

high costs to all levels of government associated with flood-related

disasters.

Program Responsibilities

Two directorates within FEMA are responsible for managing the NFIP. The

Federal Insurance Administration (FIA) oversees the insurance components of

the NFIP. The Mitigation Directorate oversees the floodplain management

and risk identification/mapping components of the Program. Because of the

complexity and interconnectedness of both program components, the staff

from the two directorates will work closely together in the FEMA

Headquarters office in Washington, D.C., and in ten (10) FEMA Regional

Offices across the United States.

Effectiveness of the Program

Through partnerships with participating communities, State and local

floodplain management agencies, other Federal agencies, and the insurance,

lending, and building industries, the NFIP helps reduce flood damage by an

estimated $1 billion annually. In addition, buildings constructed in

compliance with the standards set forth in the NFIP regulations and related

documents suffer on average 80 percent less damage annually than those

buildings that were not built in compliance with NFIP standards.
Introduction

FEMA’s NFIP Call for Issues Status Report, June 2000 xxv

Furthermore, every $3 paid to property owners in claims against current flood

insurance policy premiums and fees saves taxpayers $1 in disaster assistance

payments, which come directly from the U.S. Treasury.

NFIP policies for new construction are written at full actuarial rates. Policies

written for old construction that was properly elevated above the flood level

may also be charged full actuarial rates, at the election of the property owner.

In both cases, such rates involve no cost to the nation’s taxpayers. Older

buildings in general are charged less than full risk premium rates, by law, but

even this does not involve appropriations or taxpayer funds. If necessary, the

statutory authority to borrow funds may be exercised, but that represents a

loan, which is repaid to the U.S. Treasury, with interest.

Call for Issues

Overview of the Process

Through its administration of the NFIP, FEMA has been effective in reducing

the catastrophic effects, both physical and financial, of flood-related disasters

nationwide. In 1998, as part of its ongoing efforts to achieve even higher

levels of effectiveness, FEMA decided to solicit input from its NFIP partners

and customers. This solicitation was implemented through a nationwide Call

for Issues. Through the Call for Issues, FEMA requested comments on all

facets of the NFIP from partners and customers of the NFIP.

To ensure constituent groups were given equal opportunity to submit

comments and recommendations regarding issues, problems, or concerns of

particular interest to them, FEMA implemented the Call for Issues as follows:

1. A notice was published in the Federal Register on September 9,

1998.

2. An announcement was posted on the NFIP Web site:

www.fema.gov/nfip.

3. Individual letters were sent to hundreds of people representing the

various constituent groups.

To allow a reasonable time to submit comments and suggestions, FEMA

established a submittal deadline of November 9, 1998, and accepted late

submissions for a reasonable time thereafter. To ensure a complete

understanding of each issue and recommended action, FEMA established

some basic guidelines for submissions. Respondents were asked to:

• Briefly state the nature of the issue, concern, or problem of interest;

• Identify the specific program reference (i.e., where the issue is found

in enabling legislation, NFIP regulations, insurance manuals,

insurance policies, forms, procedures) and cite specific references to

sections, subsections, pages, paragraphs, or lines of the reference;

• Explain why the issue is a problem for NFIP customers and why a

change should be made;

• Offer a specific suggestion for addressing the issue, including specific

language changes where appropriate and where such changes should

be made; and

• Explain the benefits of the change to NFIP customers.
Introduction

FEMA’s NFIP Call for Issues Status Report, June 2000 xxvi

Summary of Responses

In response to the Call for Issues, FEMA received 173 written responses via

U.S. mail, express mail service, facsimile transmission, and e-mail.

Responses were received from NFIP partners and customers in the groups

listed below. The percentage of respondents in each category is also shown in

Table 1.

Table 1. Percentage of Respondents per Group.

Federal agencies and officials 12 percent

State agencies and officials 18 percent

Local agencies and officials 24 percent

Colleges and universities 1 percent

Construction/real estate industry 1 percent

Lending industry 8 percent

Flood zone determination companies 2 percent

Insurance industry 13 percent

Professional associations and societies 8 percent

Private design/building service companies 2 percent

Individual property owners 8 percent

Others 3 percent

The respondents submitted information concerning 739 individual issues,

which were grouped into 485 issue types, within the 16 Chapters. Of these,

419 issues concerned insurance aspects of the NFIP, 149 issues concerned

floodplain management, and 171 concerned mapping aspects of the NFIP.

Each submission was reviewed thoroughly by the appropriate FEMA

Directorate: insurance issues by Flood Insurance Administration staff, and

floodplain management and risk identification/mapping issues by Mitigation

Directorate staff.

Report Structure and Content

The Call for Issues Status Report is divided into three parts, then further

separated into Chapters, which identify individual issues. The three parts

include:

Part I. Federal Insurance Administration Issues,

Part II. Mitigation Floodplain Management Issues, and

Part III. Mitigation Hazard Identification/Mapping Issues

The chapters, as summarized in the tables above, were developed to

categorize or group the issues submitted. In many cases, issues submitted

from different Respondents addressed the same topic, therefore one issue

could contain several Respondent’s Recommendation(s). For those issues for

which FEMA received multiple comments and Recommendation(s), they

were summarized collectively under one main issue topic. FEMA then

responded to each issue submitted with a definitive decision or action. The

FEMA Response could have one of seven possible categories (summarized

below). FEMA also provided an Explanation for each issue to further clarify

their decision and possible actions to be taken.

The categories of the report are summarized below:

• “Issue ,” each of which is shown in a shaded highlight line, is a oneline statement of the general subject matter discussed in the

Respondent’s Recommendation(s).
Introduction

FEMA’s NFIP Call for Issues Status Report, June 2000 xxvii

• “Respondent’s Recommendation(s),” which is shown on the left

side immediately below the “Issue” line, is a summary of the issue

and any recommendation submitted by the Respondent(s).

• “FEMA’s Response,” which appears on the right side of the issue

page, presents the FEMA decision regarding the Respondent’s

Recommendation. The response or decision categories are as follows:

− Adopted/Action Underway indicates the Recommendation has

already been adopted or efforts to implement the Recommendation

will be during Fiscal Year (FY) 2000 or FY 2001.

− Evaluation/Study Required indicates that FEMA must

investigate and assess the issue then review the results prior to

making a determination.

− Assigned for Further Study indicates that the issue has been

assigned for further study and the results of the study will be

reviewed before making a determination.

− No Further Action Required indicates the suggested decision

cannot be implemented, and FEMA has determined that no further

action to address the issue is necessary.

− Addressed in Program/Other Actions To Be Taken indicates the

suggested decision is already supported in the NFIP, but other

resource information is available or will be developed to clarify the

NFIP requirements.

− Will Not Adopt/Other Actions To Be Taken indicates the

suggested decision will not be implemented as recommended, but

FEMA has taken or will take other actions to address the issue, or

that FEMA offers other supportive information that relates to the

identified issue.

− Other indicates FEMA has or will respond to the Respondent, or a

combination of actions may be used to respond to the issue.

• “Explanation,” which appears on the lower right side of the issue

detail page below “FEMA’s Response,” provides a brief explanation

of the actions to be taken by FEMA to address the issue or the reasons

why no action will be taken.

Issues

The FIA Issues and their associated Recommendations ranged from largescale issues, such as expanding the mandatory flood insurance purchase

requirement to apply regardless of location and seeking alternative, less

complicated approaches to flood insurance rating, to small-scale issues, such

as changing wording on a particular form or guidance document. The

Mitigation Issues also ranged greatly with many issues addressing the same

subject matter with a focus from different perspectives. Therefore, the level

of effort required to review and respond to each issue varied considerably. To

facilitate the detailed review of each issue, the issues were categorized and

placed into Chapters. By doing this, FEMA ensured issues of similar subjects

with similar Recommendations were considered together, and responded to

collectively.

The Chapters used and the percentage of issues in each are shown in Tables 2

and 3.
Introduction

FEMA’s NFIP Call for Issues Status Report, June 2000 xxviii

Table 2. Federal Insurance Administration Issue Summary.

Insurance Chapters

Total # of

Insurance

Issues

% of

Insurance

Issues

% of

Total

Issues

I. Federal Insurance Administration Issues

 1. Claims 17 4 % 2 %

 2. Coastal Barrier

Resources Act

(COBRA)

6 1 % 1 %

 3. Communication/

Public Information

64 15 % 9 %

 4. Community Rating

System (CRS)

30 7 % 4 %

 5. Coverage 95 23% 13 %

 6. Lender Compliance 42 10 % 6 %

 7. Rates 56 13 % 8 %

 8. Training/Education 33 8 % 3 %

 9. Underwriting 20 5 % 3 %

10. Other Insurance

Issues

56 14 % 8 %

Sub-Totals 419 100 % 57 %

Table 3. Mitigation Directorate Issue Summary.

Mitigation Chapters

Total # of

Mitigation

Issues

% of

Mitigation

Issues

% of

Total

Issues

II. Floodplain Management Issues

 1. Community Eligibility

and Compliance

12 4 % 1 %

 2. General Construction

Requirements

9 3 % 1 %

 3. Policy Review 80 25 % 11 %

 4. Technical Assistance,

Training, Communications, and Publications

20 6 % 3 %

 5. Other FEMA

Programs

28 6 % 4 %

III. Hazard Identification/Mapping Issues

 1. Other Flood

Insurance Issues

171 53 % 23 %

Sub-Totals 320 100 % 43 %

Totals 739 N/A 100 %
Introduction

FEMA’s NFIP Call for Issues Status Report, June 2000 xxix

Availability of This Report

FEMA will send complete copies of this report to those individuals and

organizations that responded directly to the Call for Issues. This will be done

to show FEMA’s appreciation for their interest and efforts. Those individuals

and others interested in the Call for Issues may also download this report

directly from the FEMA Web site at www.fema.gov/nfip. Interested parties

may also obtain printed copies of this report, after August 15, 2000, by calling

FEMA’s publication center, toll-free, at 1-800-480-2520, or by writing to the

following address:

Federal Emergency Management Agency

Publication Center

500 C Street SW

Washington, D.C. 20472 • USA

Planned Updates

For many of the issues submitted by respondents, FEMA must perform

additional studies or coordinate follow up activities with its NFIP partners in

government and the private sector. Therefore, FEMA will issue updates to

this report annually until all issues are addressed. Updated reports also will be

posted on the previously referenced FEMA Web site and announced through

notices in the Federal Register.

Acknowledgments

FEMA wishes to express its appreciation to all those who participated in the

Call for Issues process. It is because of the time and effort you contributed to

this effort that we are able to improve the NFIP – by taking into account the

comments and suggestions of the NFIP customers.

Sincerely,

Jo Ann Howard Michael J. Armstrong

Administrator Associate Director

Federal Insurance Administration Mitigation Directorate
I Federal Insurance Administration

1 Claims

FEMA’s NFIP Call for Issues Status Report

June 2000
Claims

FEMA’s NFIP Call for Issues Status Report, June 2000 I-1-1

Issue: Uniform reinspection procedures for Direct and WYO companies

Respondent’s Recommendation(s):

Two actions need to be taken by FIA to comply with recommendations made

by the FEMA Office of the Inspector General: 1) change the language in the

Write Your Own (WYO) and Federal Insurance Administration (FIA)

agreement; and 2) develop uniform procedures for performing WYO and

Direct reinspections.

FIA has not heeded the recommendation of uniform reinspection procedures

be implemented for Direct and WYO claims. In its comments on the

recommendation, FIA argued that the procedures were the same, but did agree

to implement the recommendation. FIA, however, has not implemented this

recommendation even though it was made in 1993.

FIA is not getting the potential benefits of its reinspection effort on WYO

claims because reinspection procedures are more lenient for WYO claims than

those used for Direct. WYO claims are not adjusted for judgmental errors,

such as overscoping, depreciation, cost verification, and repairs versus

replacement. Direct claims, however, are adjusted for judgmental as well as

non-judgmental errors. Significant savings to FIA can accrue if uniform

procedures are applied.

FEMA’s Response: No Further Action Required

Explanation: Reinspection procedures are now not different for the Direct

Program and the WYO Program. These were changed in 1994, when the

Direct Program was considered to be another WYO company. From 1989 to

1991, WYO activities and the Direct Program were under one contractor, and

the reason for the large “savings” in the Direct Program was that the General

Adjusters reinspected a much greater number of direct claims than were done

on the WYO Program. Overscoping is not a judgement area. No change is

necessary.

In the 3rd quarter of FY 2000, FIA however, met with the FEMA OIG and

agreed to provide that office with information on the claim re-inspection

process. This action satisfies the concern of the FEMA OIG and addresses the

issue without implementing the recommendation as submitted.
Claims

FEMA’s NFIP Call for Issues Status Report, June 2000 I-1-2

Issue: Adjuster assignment procedures

Respondent’s Recommendation(s):

The automatic assignment of flood claims before an actual claim is made

results in payment of a flood fee to the adjuster, usually an independent

adjuster, and distortion of the number of claims reported and not paid. FIA

seems to be concerned with the expense of the administration of this program

and this is an unnecessary expense. This may also lend itself to a skewing of

the numbers in regards to claims closed without payments and, ultimately, the

fee paid for this item.

FEMA’s Response: No Further Action Required

Explanation: When it is deemed necessary to activate the Single Adjuster

Program by the State Windpool, in cooperation with FIA, certain areas of the

State are declared to be under this claims adjustment program. When a wind

claim is made by the insured and is forwarded to the Windpool, a matching

process is initiated. If a flood policy is found, both claims are assigned to the

same adjuster, even if no flood claim was reported. If this were changed, the

Single Adjuster Program would not be workable. If the dual assignment were

not made at the outset, then the adjuster would need to go out a second time

for the flood claim. In the meantime, it is probable that the flood claim would

be filed and assigned to another adjuster, thereby negating the program for

those claims. In the past, FIA found that in some cases a flood claim was not

filed until the insured thought he or she did not get enough money from the

wind claim to complete all repairs. Then the flood claim was made, but this

was very late in the process, making the flood adjustment impossible. On a

dual assignment, the adjuster must complete an inspection, take photographs,

and complete a report stating there is no flood/wind damage; for that, the

adjuster is paid a Claim Without Payment fee. No changes to the adjuster

assignment process are contemplated in FY 2000 or FY 2001. However, this

process will be reviewed for cost effectiveness in FY 2002.
Claims

FEMA’s NFIP Call for Issues Status Report, June 2000 I-1-3

Issue: Revisions to flood contract language concerning proof of loss

Respondent’s Recommendation(s):

Change the language in the flood contract to require that the proof of loss be

received within 60 days from the receipt of the Notice of Loss.

FEMA’s Response: No Further Action Required

Explanation: FIA will not adopt this recommendation. To extend the

period when we would receive a proof of loss would delay our investigation of

the claim and might prejudice our ability to adjust the claim.

Issue: Overpayment of flood insurance claims

Respondent’s Recommendation(s):

Eliminate the overpayment of flood insurance claims by changing the way

insurance adjusters are paid to a flat fee (instead of a sliding scale), and

developing a procedure to hold the insurance companies accountable if they

overpay.

FEMA’s Response: No Further Action Required

Explanation: A flat fee indicates that an adjuster would be paid the same

for a claim of $500.00 or $500,000.00. This would not be equitable because

the adjuster spends more time on complicated and highly damaged structures

than on the lesser damaged ones. An alternative would be to pay the adjuster

on a time and expense basis, which was the way NFIP paid adjusters in the

past. This was found to be unworkable because there was continual

controversy over how many hours the adjuster should have used to adjust each

claim. The NFIP pays based on a fee schedule. Extensive study was done

before this was made effective. The fee schedule adopted by the NFIP is

based on industry fee schedules.

Write Your Own (WYO) companies are held accountable for claims. The

companies sign an agreement with FIA, stating that if they overpay a claim

and the overpayment is discovered, the company is responsible to refund the

overpayment to the fund. Overpayments are discovered in one of two ways:

1) biennial audits, or 2) on reinspections of claims. Reinspections will be

ongoing in FY 2000.
Claims

FEMA’s NFIP Call for Issues Status Report, June 2000 I-1-4

Issue: Designation of NFIP liaison to DFO for post-disaster recovery efforts

Respondent’s Recommendation(s):

Assign an NFIP liaison to each disaster. The liaison must have the resources

and authority to coordinate with all policy writers and to assure compliance

with NFIP regulations as they relate to claims and distribution of funds in a

timely manner. Develop a payment-against-claim to stabilize the impact of the

event on the policyholder. If a policyholder is displaced, the NFIP or WYO

companies need to provide funds immediately. Such a payment should never

be in lieu of a claim or as a settlement. It can, however, be deducted from the

final claim payment.

FEMA’s Response: Adopted/Action Underway

Explanation: Established procedures and guidelines for coordinating FIA

with DFOs already exist, and DFO staff has access to FEMA’s system

insurance database. There is no way to have an NFIP liaison person control all

the claims audits and reinspections for quality control. FIA instructs the

adjusters to offer advance payments to insured who are displaced.

Issue: WYO control of single adjuster program assignments

Respondent’s Recommendation(s):

Single adjuster program assignments should be controlled by the WYOs, not

the wind pools.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA does not agree with the respondent’s premise that all

Windpools provide poor service. Each State entity operates differently. FIA

agrees that the easy way for the Single Adjuster Program to work would be for

the WYO company to assign the claim when there is a match; however, some

Windpools have a very sophisticated electronic way to match and assign

claims. Some of the Windpools take advantage of the NFIP Bureau’s and

Statistical Agent’s Claims Coordinating Office’s System, which is a

sophisticated matching system. When this is used, the assignments are made

jointly by the Windpool and the Bureau. Other States use other systems.
Claims

FEMA’s NFIP Call for Issues Status Report, June 2000 I-1-5

Issue: WYO control of single adjuster program assignments

When they are not effective, FIA and the Bureau work with the States to

improve their systems. FIA plans to obtain in FY 2000 an agreement with

each State Windpool.

Issue: WYO company identification of adjusters

Respondent’s Recommendation(s):

Require WYO companies to identify the adjuster for each loss. This enables

FIA to identify companies and adjusters with patterns of above average-claims

payments.

FEMA’s Response: No Further Action Required

Explanation: In any type of review, such as audits and reinspections, the

adjusters are identified. These activities allow FIA to identify trends, not only

by adjuster, but by company as well.

Issue: Claims inspection process for WYO companies

Respondent’s Recommendation(s):

Discount the practice of allowing WYO companies to select which claims are

inspected. Restore the percentage of claims that are reinspected to its previous

level.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA is looking for ways to improve on the number of claims

that are reinspected. FIA is also looking at ways to inspect more claims earlier

in the storm’s aftermath. The General Adjusters will be choosing files to

reinspect from the Quick Claim data on the Web site.
Claims

FEMA’s NFIP Call for Issues Status Report, June 2000 I-1-6

Issue: Guidelines for determining replacement cost for claims

Respondent’s Recommendation(s):

The government and the WYO companies need to establish guidelines for

replacement cost. There are too many discrepancies surrounding replacement

cost, especially when a claim is filed. When a company issues a homeowners

policy, they use different methods for obtaining replacement cost. Even if that

company uses the Boeckh software for the homeowners, there is no guarantee

that the adjusters will come up with the same figure when they verify it at the

time of loss.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will explore the option for determining replacement cost

estimates for condominium properties covered under the Residential

Condominium Building Association Policy (RCBAP) and primary residences

under the dwelling policy. The NFIP does have a requirement that standard

industry practices should be used to determine such amounts, but will in FY

2000 explore ways to clarify this.

Issue: Pre-storm coordination of general adjusters and local adjusters

Respondent’s Recommendation(s):

The respondent suggests that general adjusters meet with Home Depot and at

least five or six major contractors before a storm and get a uniform pricing

system worked out before the storm hits. Much money is wasted without a

uniform pricing system.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will look into the feasibility of obtaining software in FY

2000 and FY2001 that has the capability of creating a local price guide, on a

national basis. FIA will solicit help for the required study from independent

adjusters and WYO companies.

Issue: Elimination of public adjusters as legal representatives

Respondent’s Recommendation(s):

Change the FEMA policy and delete the public adjuster as a legal

representative.

FEMA’s Response: No Further Action Required

Explanation: While FIA believes that public adjusters are not needed for

claims under the NFIP, the NFIP is not in a position to state that insureds

cannot have claims representation of their choice.
Claims

FEMA’s NFIP Call for Issues Status Report, June 2000 I-1-7

Issue: Revision to the flood policy regarding receipts and bills for previous floods

Respondent’s Recommendation(s):

Revise the flood policy to clarify the need to maintain receipts and bills for

previous floods.

FEMA’s Response: Will Adopt

Explanation: FIA believes it needs bills and receipts of current losses and

previous losses, when appropriate, and will incorporate this provision in the

final revision of the Standard Flood Insurance Policy (SFIP).

Issue: Guidelines for Flood Final Report

Respondent’s Recommendation(s):

The respondent suggested that FIA establish standard guidelines for

completion of the Final Flood Report.

FEMA’s Response: Adopted/Action Underway

Explanation: The WYO companies/adjusters do not have to use the exact

NFIP form; however, the adjusters are required to submit the Final Flood

Report, and it has the same information as the NFIP Final report form.

Issue: Guidelines for building and contents assessments by adjusters

Respondent’s Recommendation(s):

Do not pay for contents manipulation to effect building repairs when there is

no contents coverage. When there is contents coverage, do not overlap the

contents damage payment with the necessary manipulation.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA agrees with this recommendation
Claims

FEMA’s NFIP Call for Issues Status Report, June 2000 I-1-8

Issue: Adjustment requirements regarding openings

Respondent’s Recommendation(s):

Change adjustment requirements to delete openings from estimates.

FEMA’s Response: Adopted/Action Underway

Explanation: As a general rule, FIA agrees. However, if a room to be

painted has two wooden frame windows that also require painting, then FIA

disagrees, as long as there was no separate charge for the windows. When the

adjuster is faced with an “L-shaped” room, the missing wall should be

removed. In other words, the adjusters should correctly “adjust” each loss,

being fair to all concerned. The Bureau’s General Adjusters will pay

particular attention to this detail when reinspecting losses to determine if there

is a problem.

Issue: Reprocessing of denied Group Flood Insurance Policy (GFIP) claims

Respondent’s Recommendation(s):

Reprocess all denied Group Flood Insurance Policy (GFIP) claims in Ohio

from August 1997 to the present. The State of Ohio Individual Family and

Grant (IFG) program staff can provide a listing of GFIP policyholders that

have filed flood claims, if necessary. Although this would be time consuming,

it would ensure GFIP policyholders were appropriately processed.

FEMA’s Response: Adopted/Action Underway

Explanation: All of these claims were reviewed and agreement was

reached with the insured except for one claim for which the insured did not

return a Proof of Loss.
Claims

FEMA’s NFIP Call for Issues Status Report, June 2000 I-1-9

Issue: Mechanism for reporting problems with claims adjusters

Respondent’s Recommendation(s):

Establish a mechanism to report problems with adjusters to ensure they are

appropriately addressed.

FEMA’s Response: Adopted/Action Underway

Explanation: Such mechanisms already exist. The general business

conduct of claims adjusters is under the jurisdiction of the State Insurance

Departments. Problems with adjusters adjusting flood insurance claims under

the NFIP should be reported to their WYO company, FIA, or both. Claims

under the NFIP Group Flood Insurance Policy are handled by FIA.
I Federal Insurance Administration

2 Coastal Barrier Resources Act (COBRA)

FEMA’s NFIP Call for Issues Status Report

June 2000
Coastal Barrier Resource Act (COBRA)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-2-1

Issue: COBRA certification by community

Respondent’s Recommendation(s):

Remove the paragraph referring to the “certification from a community

official...” and replace it with the following: “Verification from the producer

that the building is either not located or no longer located in a designated

CBRS area or otherwise protected area, based on the information used to

determine the flood zone. If the producer is unable to make the determination,

then a certification from a community official must be submitted.” Obviously

many producers are submitting the information themselves, as any reasonable

approach would dictate. Take action to change the language so as few as

possible need to contact community official for certification of the location. If

the language has already been changed, please send me a copy so I may have it

available to quote to those who continue to call.

FEMA’s Response: Adopted/Action Underway

Explanation: The Flood Insurance Manual (Agent’s Manual) was revised

effective 5/1/98 to instruct Producers to review the current NFIP FIRM to

determine eligibility for insurance based on the location of the risk in relation

to the CBRS boundary. A procedure for CBRS determinations to be made by

the U.S. Fish & Wildlife Service, in close call cases, has been established and

these procedures are also outlined in the Flood Insurance Manual.

It should be noted, however, that the Manual does continue to direct inquirers

to the Community for help with building permit date or date walled and roofed

information. This is only necessary in cases where the risk is determined to be

inside of the CBRS boundary but is still eligible for coverage through the

NFIP because the building was permitted/constructed prior to the date of

enactment of the COBRA legislation.

The current Flood Insurance Manual may be ordered by calling

1-800-358-9616 or may be reviewed on the Internet at

http://www.fema.gov/nfip/manual.htm.
Coastal Barrier Resource Act (COBRA)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-2-2

Issue: Creation of new COBRA zone, with buffer for close calls

Respondent’s Recommendation(s):

Create a new COBRA zone, with a buffer for close calls. FIA also should

mandate that only NFIP can write in a buffer. An additional flood zone to

identify CBRS areas could be added to the flood maps, perhaps a new zone

could be CB. The zone should also include a buffer area for close calls.

Mandate that only the NFIP can write in this buffer zone.

FEMA’s Response: Adopted/Action Underway

Explanation: Several steps have been taken within the past 12 months to

assist WYO Insurers and Agents with identifying risks located within the

CBRS.

• A database is now available in hard copy format and on the NFIP Web

site that captures all FIRM panels that have CBRS and/or Otherwise

Protected Areas (OPAs). This allows producers to quickly identify

risks that require further underwriting review to determine eligibility.

(Refer to the Community Information section on the NFIP Web site or

call the FEMA fax back line for fax copies.)

• A process in now in place for the U.S. Department of the Interior’s

Fish & Wildlife Service to make determinations if a risk’s location is

close to the CBRS boundary. (Refer to the Flood Insurance Manual

for details.)

• A collection of Q3 CDs for CBRS communities use with GIS software

is now available through the Map Service Center.

• CBRS-related FIRM changes are now being distributed as Letter of

Map Amendments (LOMAs), are to provide notice of changes in a

more timely manner.

As an objective of the Map Modernization Plan, FEMA Mitigation is working

with the U.S. Fish & Wildlife Service to assist and encourage production of

source maps using digital vector mapping techniques suitable for NFIP

DFIRMs.
Coastal Barrier Resource Act (COBRA)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-2-3

Issue: Revisions to COBRA mapping and determination process

Respondent’s Recommendation(s):

Revise the mapping tools and process to accurately identify CBRS

areas/properties. The base mapping sources for identifying flood zones should

be used to identify the CBRS areas/properties. This would reduce, and

possibly eliminate, appeals. Inquiries are directed to WYO companies

regarding properties located in the vicinity of CBRS-designated areas. The

companies are told that the policies were issued in error because the properties

are in the identified areas. The property locations are researched and

investigated and in, most cases, it is determined that the property was not

located in an identified area. The impact of this process results in expenses

related to research, producing documentation and time consuming back and

forth communication with the WYO company and servicing agent.

FEMA’s Response: Adopted/Action Underway

Explanation: Several steps have been taken within the past 12 months to

assist WYO Insurers and Agents with identifying risks located within the

CBRS.

• A database is now available in hard copy format and on the NFIP Web

site that captures all FIRM panels that have CBRS and/or OPAs. This

allows producers to quickly identify risks that require further

underwriting review to determine eligibility. (Refer to the Community

Information section on the NFIP Web site or call the FEMA fax back

line for fax copies.)

• A process in now in place for the U.S. Fish & Wildlife Service to

make determinations if a risk’s location is close to the CBRS

boundary. (Refer to the Flood Insurance Manual for details.)

• A collection of Q3 CDs for CBRS communities for use with GIS

software is now available through the Map Service Center.

• CBRS-related FIRM changes are now being distributed as LOMAs

are, to provide notice of changes in a more timely manner.

As an objective of the Map Modernization Plan, FEMA Mitigation is working

with the U.S. Fish & Wildlife Service to assist and encourage production of

source maps using digital vector mapping techniques suitable for NFIP

DFIRMs.
Coastal Barrier Resource Act (COBRA)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-2-4

Issue: Certification of awareness by property owner

Respondent’s Recommendation(s):

Any time a building permit is secured for development in a CBRS or OPA, the

person issuing the permit should require a signed statement from the property

owner. The statement should document that the property owner is fully aware

that the property they are building on is part of a CBRS or OPA and that

Federal financial assistance, including flood insurance, is not available for

these properties. The property owner should be held responsible to notify any

prospective buyer in writing of these regulations prior to the time of sale. New

owners should be required to sign the same statement, and it should be

maintained on file with the deed to the property. It should never come as a

surprise to a property owner that their property is not eligible for Federal flood

coverage.

FEMA’s Response: No Further Action Required

Explanation: While FIA agrees that it should never come as a surprise to a

property owner that their property is not eligible for Federal flood coverage,

any CBRS disclosure requirement would have to be administered at the State

and local levels. Land use and building permits are under the jurisdiction of

local governments. FEMA has no authority over real estate transactions.

Therefore, any CBRS disclosure requirement would have to be established by

governmental bodies other than FEMA.
I Federal Insurance Administration

3 Communication/Public Information

FEMA’s NFIP Call for Issues Status Report

June 2000
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-1

Issue: Notification of residents in areas where zone changes occur (general mailing)

Respondent’s Recommendation(s):

Notify residents in localities where changes occur to the zones or in the

eligibility of the community. A general mailing to the residents would alert all

concerned homeowners, renters, and business owners. Lenders would not

have a complete list of all residents; therefore, FIA would have to complete

this task.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Mailing notification to all residents in every community when

a map or community status changes is deemed to be too costly for the benefits

derived. Further, many would be returned as undeliverable due to occupancy

changes. However, FIA uses other means for notification of residents in areas

where zone changes occur, relying on community officials, insurance

companies, agents, and others to communicate these changes as needed

through:

• FEMA’s Web site.

• FEMA’s Compendium of Map Changes.

• Local newspaper notices paid for by FEMA.

• Free public awareness materials provided by FEMA to local officials.

• FIA feels that the best way to get the word out to residents of areas

where zone changes occur is through local officials. By the end of FY

2000, FIA will have procedures in place to alert FEMA’s Offices of

Congressional Affairs and Intergovernmental Affairs and the FEMA

Regions to share information with local officials whose areas would be

affected by zone changes.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-2

Issue: Shift of enforcement to State level

Respondent’s Recommendation(s):

Change the current enforcement to the State level from the current local

community/lender basis.

FEMA’s Response: Assigned For Further Study

Explanation: This issue will be considered in connection with the NFIP

assessment/evaluation study targeted for implementation in FY 2000.

Issue: Evaluation and revision of marketing plan

Respondent’s Recommendation(s):

Develop a comprehensive marketing plan that contains, at a minimum, the

following: the plan’s goals and objectives, the options identified and chosen

for achieving them, target audiences, the means that will be used for

evaluating the effectiveness of the efforts, and a list of the specific

accomplishments realized each year against the goals and objectives. Make

this information available to all interested parties. Review and evaluate the

results of each year’s efforts against the plan and publicize the results.

FEMA’s Response: Adopt/Action Underway

Explanation: FIA has completed one component of this recommendation.

FIA evaluated the Cover America campaign through an independent study

performed by Gallup and Robinson, Inc. in FY 1999. FIA developed a

marketing plan, with goals, for Cover America II. The remainder of the plan

will address marketing activities performed by other components of the

organization. FIA expects to complete this plan by the first quarter of FY

2001 and the plan will be widely distributed and evaluated annually.

Issue: Community access to policy and claims data

Respondent’s Recommendation(s):

Make data from local offices available.

FEMA’s Response: Assigned For Further Study

Explanation: A FEMA Task Force on access to insurance data will address

this together with similar issues by the end of FY 2000. Privacy Act concerns

will also be addressed by this Task Force.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-3

Issue: Lead time for making changes

Respondent’s Recommendation(s):

Provide WYO companies a minimum of 9 months lead-time from final

notification of specification changes to effective date of the changes so that the

required system revisions can be made in a timely and appropriate manner.

FEMA’s Response: No Further Action Required

Explanation: FIA works to provide 6 months lead time and, at a minimum,

to give notice of changes 6 months in advance, if all final specifications are not

ready. Our goal is to limit changes to no more than twice per year. However,

various political or flood events do not always permit limiting changes too

only twice per year. Such changes are limited, as FIA recognizes the

disruption to all parties when changes must be made.

Issue: Annual updates to Flood Insurance Manual

Respondent’s Recommendation(s):

Set a standard date once a year when revisions to the Flood Insurance Manual

become effective.

FEMA’s Response: No Further Action Required

Explanation: FIA works to provide 6 months lead-time and, at a minimum,

to give notice of changes 6 months in advance. The goal is to limit changes to

no more than twice per year; however, this is not always possible.

Issue: Performance of edits

Respondent’s Recommendation(s):

Perform the edits over all policy periods each month, and clear the error if the

address is added to the database by the USPS. This will also alleviate the

timing differences in the revisions being installed at different time periods.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA reviewed the NFIP edits process and has made

refinements to it. The NFIP Bureau now receives updated address and other

information, performs edits, clears errors, and makes corrections to policies on

a bi-monthly basis.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-4

Issue: State and community access to claims and repetitive loss data

Respondent’s Recommendation(s):

Allow NFIP State Coordinators and State Hazard Mitigation Officers

(SHMOs) to get this information with a telephone call, or supply this

information quarterly to these government employees. This information is

important for putting together a Flood Mitigation Assistance (FMA) proposal,

a Hazard Mitigation Grant Program (HMGP), or doing a CAV.

FEMA’s Response: Assigned for Further Study

Explanation: A Task Force has been set up at FEMA consisting of

insurance, mitigation, and information technology specialists to address the

issue of enabling customers to access such data quickly. As part of FEMA’s

strategy, beginning May 1, 2000, a system is expected to be in place to provide

information more quickly about recently filed claims.

Issue: Community access to claims data

Respondent’s Recommendation(s):

Provide communities with more information as to amount and reason for loss.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA made more claims and repetitive loss information

available to State officials in FY 1999. We will continue in FY 2000 to

improve dissemination of this information.

Issue: Conflicts between NFIP regulations and Flood Insurance Manual

Respondent’s Recommendation(s):

The requirements of 44 CFR Section 60.3 should be changed to be consistent

with those of the Flood Insurance Manual. A review of the two sets of

regulations for consistency is required. For example, Section 60.3(c)(5) of the

regulations states that either enclosures below the lowest floor of an elevated

building must meet the opening requirements or the enclosure’s design must

be certified by a registered Professional Engineer. The Flood Insurance

FEMA’s Response: Adopted/Action Underway

Explanation: FIA agrees that real inconsistencies should be resolved and

will endeavor to do so. However, the two examples submitted for

consideration do not appear to be inconsistent. Considering the size of an

enclosure in insurance rating is not inconsistent with floodplain management

regulations that allow enclosures of any size. FIA believes that there are

differences in risk even among the allowable building practices. The other
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-5

Issue: Conflicts between NFIP regulations and Flood Insurance Manual

Manual only recognizes the opening requirements. Also, Section 60.3(e)(5)

does not contain a limitation on the size of the space below a building’s lowest

floor. However, the Flood Insurance Manual requires that, where such space

exceeds 300 square feet, the building must be submitted for rating. Another

inconsistency is how enclosed spaces at ground level in Zone V are rated. The

floodplain management requirements under 44 CPR Section 60.3(e)(5) states

that enclosed spaces below the Base Flood Elevation (BFE) are compliant if

they are constructed with nonsupporting breakaway walls, open latticework, or

insect screening. The Flood Insurance Manual, under the Rating Section XII

(D)(2), rates enclosed spaces which use breakaway walls higher rather than

those using open latticework or insect screening. This results in a homeowner

being compliant with the floodplain requirements, but being penalized by the

flood insurance requirements.

Another inconsistency is the requirement under 44 CFR Section 60.3(3)(ii)

that floodproofed structures be certified as watertight only to the BFE, while

under the flood insurance requirements contained in the Special Certifications

Section of the Flood Insurance Manual (Floodproofing Certification 3-Rating)

a structure must be certified as watertight to at least 1 foot above BFE.

Therefore, a non-residential structure which is floodproofed according to the

requirements of 44 CFR Section 60.3(3)(ii) will not be considered fully

floodproofed for flood insurance purposes, resulting in higher insurance rates

for the property owner.

example relates to openings in enclosures and whether the insurance criteria

appropriately recognize both standard and specially engineered openings. The

insurance rating criteria do recognize both possibilities for openings.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-6

Issue: Media and public agency involvement in notification of public about availability of flood insurance

Respondent’s Recommendation(s):

Use local media and public agencies to publicize the availability of flood

insurance.

FEMA’s Response: Adopted/Action Underway

Explanation: Local media and public agencies are encouraged to do so.

FEMA issues numerous press releases and has a comprehensive public

awareness campaign using television, radio, magazines, and public relations

activities to inform people about flood insurance. FEMA and FIA recognize

that misinformation still exists and are continuing efforts through various

media and NFIP strategic partners to improve public understanding regarding

flood insurance. Our Web site, http://www.fema.gov/nfip, is updated weekly

to provide flood insurance information, and we are piloting satellite

conferences with groups such as the realtors, as a means of outreach.

Issue: Database listing of flood insurance risk zones for all structures/addresses

Respondent’s Recommendation(s):

Based on the fact that NFIP is a Federal program requiring a unique

combination of mitigation and insurance, FEMA should strengthen the

community compliance requirements to require evidence of compliance.

Include this information through Community Rating System (CRS)

classifications and discounts to provide a rating structure of three possible

rates per community (VD, AE, X). Additionally, the specific zone for every

structure/address in the U.S. should be published.

The zone statistical information would still be compiled for rate-making and

mitigation purposes, yet it would reduce the cost and streamline the process for

writing flood insurance. This would benefit the consumer by reducing cost (no

FEMA’s Response: Assigned for Further Study

Explanation: A set of pilot demonstration rating projects, including

consideration of different ways to provide zone information, was conducted at

the Flood Insurance Conference in May 2000.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-7

Issue: Database listing of flood insurance risk zones for all structures/addresses

zone determination or Elevation Certificate), and facilitating a much easier

buying decision. This would benefit the agent by reducing cost (handle each

prospect once vs. possibly four times) and making it easier to quote/write flood

policies. This would benefit the WYO company/NFIP by reducing cost in

eligibility, records retention/forms (zone determination and Elevation

Certificate) and drastically reducing complications of inspections, definition of

rates and rating criteria, and problem trends, such as CBRS area and Preferred

Risk Policy (PRP) eligibility.

Issue: Repetitive loss database for access by local floodplain administrators

Respondent’s Recommendation(s):

Tie the Floodplain Management Program to the NFIP and require flood

insurance claims paid to be reported to the Floodplain Administrator so they

can keep accurate records. The current NFIP’s record keeping system is not

even able to sort repetitive loss homes alphabetically.

FEMA’s Response: Other

Explanation: FEMA has developed a Repetitive Loss Strategy and is in the

process of implementing it. More repetitive loss property data have been made

available to State and local communities as part of that strategy. During 2000,

the means for providing such data will be refined.

Issue: Increased activities of ISO/CRS specialists

Respondent’s Recommendation(s):

Increase activities of Insurance Services Office and Community Rating System

specialists to target community officials; the general public; and other

stakeholders, such as insurance companies, agents, and lenders.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will be reviewing its strategy for outreach to different

organizations in FY 2000. As part of this review, FIA will consult with the

CRS Task Force on ways to accomplish such outreach.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-8

Issue: Brochure to inform borrowers about LOMA, LOMR, and LODR processes and PRP

Respondent’s Recommendation(s):

Create an informational brochure for borrowers contesting the need for flood

insurance. The brochure would help borrowers understand the alternatives

offered by FEMA in a clear and objective manner. The recommended

brochure would:

1. Outline the mechanisms available for resolving specific situations

(i.e., Letter of Map Amendment (LOMA), Letter of Map Revision

(LOMR), and Letter of Determination Review (LODR));

2. Guide the borrower in the selection of the appropriate mechanism

(e.g., a LOMA is the appropriate mechanism for situations where the

need for flood insurance is being contested because the flood map

shows the property as clearly being located in a SFHA and the

building on the property is actually above the BFE.);

3. Describe the steps the borrower needs to follow to process the

appropriate request (e.g., extent of borrower, lender and/or

community involvement; timing requirements, if any; mailing

addresses; supporting documentation required to evaluate the

request);

4. Direct borrowers to consult their lending institutions regarding their

specific flood insurance requirements; and

5. Inform borrowers on the availability of “preferred risk” insurance.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will do this in FY 2000. FIA is already developing a

brochure for lenders on these topics, and will develop a version designed for

borrowers in FY 2000. FIA will coordinate this with the appropriate FEMA

Directorates.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-9

Issue: Development of “public friendly” and easily understood flood zone terminology

Respondent’s Recommendation(s):

The NFIP needs to develop a “public friendly” and easily understood

terminology system. Simplify flood zone terminology to improve public

understanding of the program and to improve NFIP penetration. The current

system of alpha zones (A, B, V, etc.) and the technical definitions (100-year

and 500-year floodplains) are not understood by the public and are difficult for

producers to explain to the public.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will develop user-friendly language to make it easier for

the public to understand. Once new terminology is approved, text changes

will be required in almost every NFIP document. This effort will begin in FY

2000 and continue until texts are revised using plain language.

Issue: Improved homeowner access to Elevation Certificate information

Respondent’s Recommendation(s):

Require communities to make Elevation Certificate information available to

the homebuyers in their communities through a local government office.

There should be a nominal-processing fee associated with the request for an

Elevation Certificate. Reduce the time required to provide the data by

requiring this information to be on file and readily available at the time of a

request.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: While FIA does not plan to require communities to do this in

FY 2000, FIA strongly encourages communities to provide access to Elevation

Certificate data through community contacts, through local officials,

participation in the CRS, and other sources.

Issue: Marketing campaign to improve lender and WYO company partnering

Respondent’s Recommendation(s):

Develop a new marketing campaign referring lenders to WYO carriers and/or

offering incentives to lenders for partnering with a WYO carrier for the

FEMA’s Response: No Further Action Required

Explanation: Regarding incentives for lenders such as an expense

allowance for contracting with a WYO Company, the NFIP is a public
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-10

Issue: Marketing campaign to improve lender and WYO company partnering

issuance of flood insurance to borrowers. Appeal to the lender by offering

them the incentive because they have multiple needs and the customer data.

The marketing campaign could take many forms, such as:

1. Incentives, such as a separate expense allowance to lending

institutions to contract with a WYO carrier for flood insurance policy

issuance;

2. Advertisement slicks listing the WYO carriers’ names, addresses, and

telephone numbers;

3. Direct mailings to lenders listing the WYO carrier in their geographic

area;

4. A new NFIP toll free number designated and advertised to federally

regulated lending institutions to contact for referral to a WYO carrier;

5. A listing to each WYO carrier of all federally regulated lending

institutions in their geographical area to contact;

6. A listing of each WYO company sent to each federally regulated

agency for further distribution to their lending institutions; and/or

7. A new compliance requirement for any lending institutions whose

loan portfolio is not in compliance to contact a WYO carrier within a

designated time period.

program funded by policyholders with taxpayers backing. Lenders, falling

under the jurisdiction of the National Flood Insurance Act, as amended, are

required by law to require flood insurance. FEMA encourages these lenders to

work with NFIP WYO companies to assist them with this process. It is,

however, inappropriate to use NFIP monies to facilitate such business

relationships. As for other recommendations, FIA has a number of ongoing

efforts that should assist lenders:

• Web site lists WYO companies.

• “Choice Is Yours” brochure.

• National Flood Conference assembles lenders and WYO companies.

• Mortgage Portfolio Protection Program (MPPP) notice attaches list of

participating WYO companies.

• FIA articles in lender trade magazines.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-11

Issue: Creation of a formal notification system to ensure insurance companies have accurate zone information

Respondent’s Recommendation(s):

FIRM and zone changes should be indexed and companies should be notified,

similar to the ISO Fire Protection Classification System. The company can

update the FIRM or zone during the present policy term so that the next

renewal is processed accurately.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: WYO companies are currently notified of zone changes on a

panel by panel basis through the NFIP Bureau bulletin board transmissions. It

would be very costly for FEMA to provide WYO companies with property

specific information. However, flood zone determination (FZD) companies

can provide such services to the WYO companies. In FY 2000, FEMA will

review possible posting of information on map panel activity on the FEMA

Web site, allowing users to decide if underwriting changes are necessary.

Issue: Implementation of campaign to educate renters about flood risks and availability of flood insurance

Respondent’s Recommendation(s):

Conduct a marketing campaign modeled after the flood insurance ads to

educate tenants about their vulnerability and their eligibility for flood

insurance under the NFIP.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will expand its marketing communication efforts in FY

2000 to better educate renters about flood risks and flood insurance. FIA will

create and implement a plan to communicate to renters via advertising, public

relations, strategic partnerships, etc.

Issue: More timely NFIP notification of monthly statistical results

Respondent’s Recommendation(s):

Obtain timely, monthly notification, especially for companies that are over

tolerant.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Starting in May 2000, WYO company error information has

been completed 10 days earlier in the WYO data cycle than it used to be. It is

now available to WYO companies by the 10th of the month instead of the end
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-12

Issue: More timely NFIP notification of monthly statistical results

of the month. The NFIP Web site contains the community data file and for the

May 2000 changes it will also include Quick Claim reporting and the

repetitive Loss Target Group information. Also, in the May 2000 changes,

WYO companies will be able to send their data via the FTP method, which is a

more secure site.

Issue: Public outreach campaign to explain benefits of flood insurance for condominium owners

Respondent’s Recommendation(s):

The public outreach campaign could be expanded to show condominium

owners that a pro rata distribution of the charge appropriately reflects their

interest in the common areas, regardless of the flood risk of individual units.

FEMA’s Response: Adopted/Action Underway

Explanation: By the end of FY 2000, FIA will have a plan in place for

outreach and communications to condominium associations.

Issue: Reinstitution of Flood Insurance Interagency Task Force

Respondent’s Recommendation(s):

Ask the members of the Flood Insurance Interagency Task Force to continue

to be available for consultation on a volunteer basis and to make

recommendations to FEMA on flood insurance issues.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: The Task Force has previously agreed to continue meeting

periodically in FY 2000 and beyond, even though the statutory authority for

the Task Force ends.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-13

Issue: Community access to insurance policy and flood loss data

Respondent’s Recommendation(s):

Share data on insurance policies and flood losses with community officials.

FEMA’s Response: Other

Explanation: A FEMA Task Force on access to insurance data will address

this together with similar issues by the end of FY 2000. Privacy Act concerns

will also be addressed by this group.

Issue: Development of policy to warn consumers of history of flooding prior to purchase

Respondent’s Recommendation(s):

Institute a policy to warn customers of the histories and the estimates (on

FEMA maps) of flooding from any source. Prospective buyers should be

given information to contact multiple agencies, if applicable.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Disclosure rules are best handled at the State level. FIA

however seeks every opportunity to support efforts to promote disclosure of

flood risks. FIA does this through continuing education efforts with realtors,

the print media, the NFIP Web site, and links to other Web sites. FIA is also

using technology – its Web site – to inform the public and others of the flood

risk. In April 2000, FIA also conducted a pilot satellite conference with

Alabama realtors for continuing education credit which included duties of

disclosure of known flood risks.

Issue: Exclusions in each section of SFIP

Respondent’s Recommendation(s):

Revise the SFIP to better reflect the setup of a homeowners’ policy. For each

section, include the exclusions specific to that particular article.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA is in the process of revising the three forms of the SFIP

to better conform with the homeowners policy format and to be easier to read.

These changes will be implemented by December 31, 2000.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-14

Issue: Simplification of Flood Insurance Manual

Respondent’s Recommendation(s):

Simplify the Flood Insurance Manual.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA has undertaken numerous efforts over the years to

simplify the Flood Insurance Manual. Recently, a task force has completed a

major effort to rewrite the individual NFIP physical flood insurance policies

into plain language, more easily readable and understood documents. The

results of that effort will be incorporated into a revised version of the Flood

Insurance Manual to be effective 12/31/00. Since the Manual is simply a

reflection of the rating and underwriting processes, FEMA will continue its

efforts to explore other ways to simplify those processes. Elsewhere in this

report there are other examples of individual rating and underwriting efforts

that are underway or will be undertaken that will, when completed, contribute

to the simplification of the rating and underwriting processes, and therefore the

manual.

Issue: Community list of surveyors for consumers

Respondent’s Recommendation(s):

Have the community supply a list of surveyors at a reasonable cost.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FEMA will contact surveyor trade associations in FY 2001

for their help in reaching the public (voluntary, rather than imposing a

requirement on communities). Other vehicles for sharing information on

surveyors exist rather than requiring communities to do so.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-15

Issue: Revised NFIP insurance brochures to include information on substantial damage

Respondent’s Recommendation(s):

Consumers should be informed before they purchase flood insurance about the

substantial risk they face if damage to their house exceeds 50 percent of its

value. NFIP brochures should prominently display a notice or warning similar

to the following:

Note: This flood insurance policy may not protect or repay the cost to repair

your home if the damage it sustains exceeds of 50 percent of its current market

value. Check with your local community’s floodplain management office to

determine if your community has enacted the “substantial damage” provision

required by FEMA for participation in the NFIP.

Consumers should be required to sign a statement attesting they understand the

above notice. This is similar to a “truth in lending” provision now required for

consumer loans.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: The point is well taken; however, FIA believes the concern is

being addressed through other means. FEMA has recently increased coverage

form $15,000 to $20,000 effective May 1, 2000. We are also working to

expedite the process of getting damage assessment and claims information to

communities. On February 22–23, 2000, FEMA brought together State and

local officials, Federal regional and Headquarters officials, the Association of

State Floodplain Managers, adjusters and others to discuss “lessons learned” as

a result of recent flooding to discuss further programmatic and process

improvements for increased cost of compliance coverage. The consensus was

that the Increased Cost of Compliance (ICC) process is working, albeit slowly,

and no major structural changes in legislation, coverage or policy are needed at

this time.

Issue: Revision to forms used to inform borrowers about SFHA designations and flood insurance purchase

requirements

Respondent’s Recommendation(s):

Combine forms used to inform borrowers about SFHA designations and flood

insurance purchase requirements.

FEMA’s Response: No Further Action Required

Explanation: FEMA has provided a sample form that can be used to inform

borrowers about SFHA designations and flood insurance purchase

requirements. Mortgage lenders are required to notify only those prospective

borrowers whose loans secure a building located in an SFHA. The purpose of

the notice is to advise the borrower about the Federal flood insurance coverage

requirements and whether Federal disaster relief assistance is available in that
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-16

Issue: Revision to forms used to inform borrowers about SFHA designations and flood insurance purchase

requirements

location. The notice can be accomplished using the sample form provided by

FEMA, or, a lender may personalize and change the format of the sample

form, but must provide the borrower with the minimum information contained

in the regulations.

Issue: More policy/claim issue bulletins

Respondent’s Recommendation(s):

When determinations are made in the field, FIA, through its contractors, needs

to compile the issues, send out policy/claim issue bulletins to all companies

and vendors, and have meetings.

FIA, with the help of companies and vendors, should discuss the paperless

environment in the industry. The group should help FIA issue directives

incorporating use of the electronic environment for audits, transfer of agents’

business, proof of flood insurance, and distribution of the flood business to

increase growth.

FEMA’s Response: No Further Action Required

Explanation: All technical bulletins are already posted on the FEMA Web

site at http://www.fema.gov/nfip. We try to be alert to issues that need to be

communicated in bulletins, rather than turning every fact situation into a

bulletin. FIA’s Business Process Improvement project will also look for

improvements in disseminating policy/claims determinations or decisions

using electronics means.

Issue: Rewriting of Manual for the WYO side

Respondent’s Recommendation(s):

If a company is allowed to use its normal business practices, the manual

should advise the agent to check with the company. Incorporate policy

issuance bulletins and coverage interpretations into the Manual. To distribute,

FEMA’s Response: No Further Action Required

Explanation: Our preferred way of handling such changes is through

program-wide rules and procedures for the direct side. We then make such

changes available to the WYO companies in a generic form so that the
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-17

Issue: Rewriting of Manual for the WYO side

look into ways to download the Manual and updates to a network environment

via the Internet. Print-ready materials or CD-ROMs with updates are needed,

and print copies will be needed for companies/agents that prefer print.

companies may implement these changes through their own specific

procedures.

Issue: Revised WYO Accounting Procedures Manual

Respondent’s Recommendation(s):

A statement about FIA’s position regarding the method a WYO company can

elect should be included in the WYO Accounting Procedures Manual. This

would clarify the issue for accountants and auditors.

FEMA’s Response: Adopted/Action Underway

Explanation: The WYO Accounting Procedures Manual has been revised to

allow the company to deduct the expense allowance from the premium either

before the premium is placed in the restricted account or at the time the policy

is processed.

Issue: Reduced use of terms “100-year” and “500-year” floods

Respondent’s Recommendation(s):

Continue to reduce use of the terms “100-year” and “500-year” floods through

advertising; educate FEMA regions and Disaster Field Offices (DFOs) about

the new terms used in Cover America: low, moderate, and high.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will place greater emphasis on educating internal

audiences regarding the new terminology in FY 2000. This will involve

training for FEMA staff, coordination with other FEMA offices to include

these messages in training sessions, and articles for FEMA newsletters.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-18

Issue: Clarification to lending and FZD industry about use of effective FIRMs

Respondent’s Recommendation(s):

When the Mandatory Purchase Guidelines are revised or reprinted, include a

clearly written statement that instructs the lender and map determination

company to use the effective FIRM as the basis for requiring flood insurance.

Publish a reminder notice or article in the next issue of Watermark to remind

agents and lenders to use the effective FIRM to rate flood insurance policies

and to make flood zone determinations. It would also be helpful to agents and

lenders to have an overview of the FIS adoption process and to understand that

the preliminary information is subject to change until the process is complete

and the maps become effective.

FEMA’s Response: Adopted/Action Underway

FIA will emphasize in the next revision of the Mandatory Purchase Guidelines

and in Watermark that agents and lenders must use the effective FIRM.

Issue: Development of NFIP database for policy and claims information for access by Regional Offices, State

Coordinators, and SHMOs

Respondent’s Recommendation(s):

Establish an NFIP database for policy and claims information that could be

accessed by FEMA Regional staff, State NFIP officials, and SHMOs on a

“read-only” basis. Upon receipt of legal assurances of compliance with the

Privacy Act, allow local community official’s access to the insurance and

claim data on a “read-only” basis.

FEMA’s Response: Assigned for Further Study

Explanation: FIA made more claims and repetitive loss information

available to State officials in FY 99. We will continue in FY 2000 to improve

dissemination of this information.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-19

Issue: Revisions to Flood Insurance Manual to clarify policies for scheduled buildings

Respondent’s Recommendation(s):

The Flood Insurance Manual should state that policies for scheduled buildings

are not available. Otherwise, all qualifications should be clearly stated in the

General Rules section of the NFIP Manual. Examples of what does and does

not qualify would help to clarify this. Qualifications should also be relaxed so

agents and insureds can take advantage of the program. In addition, include

contents coverage in basements, beyond what is currently offered.

FEMA’s Response: Assigned For Further Study

Explanation: FIA has only a small number of scheduled building policies

in its book of business. As a result, FIA is proposing to eliminate the option

for a scheduled building policy in the current proposed rule to revise the SFIP.

The NFIP scheduled building policy has had little use. The only incentive for

the insured to select this option, if eligible, is a small saving on the expense

constant.

Issue: Development of system to allow insurance companies to test submitted transactions

Respondent’s Recommendation(s):

The NFIP should provide a test system so that test submitted transactions can

be tested. This will ensure that the transactions are correct before being

processed by the NFIP. The NFIP should provide WYO companies with a

copy of their batch/reject program. This will allow WYO companies to run

corrective transactions through a preliminary edit before sending them to the

NFIP.

FEMA’s Response: Assigned for Further Study

Explanation: FIA will address this request as part of the Business Process

Improvement activity. As FIA creates the new platform in FY 2001, it may be

able to include a test function that WYO companies can access.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-20

Issue: Notification to WYO companies concerning problems with Bulletin Board Service

Respondent’s Recommendation(s):

An e-mail notification to the respective WYO companies of any problems, or

posting this information on the Internet is recommended.

FEMA’s Response: Adopted/Action Underway

Explanation: The Bulletin Board Service became obsolete on December

31, 1999. The FTD site has replaced this same process which operates very

much like a Web site. WYO companies are notified by email whenever there

are problems with the system.

Issue: Improved response time to inquiries from WYO companies

Respondent’s Recommendation(s):

A service-level agreement with the NFIP should be established.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA agrees with improving response time on inquiries from

WYO companies. FIA has assigned a staff member of the Financial Division

to be the primary FIA contact for WYO Companies. FIA will also will

improve the existing NFIP Bureau and Statistical Agent system for WYO

inquiries in FY 2000 by establishing procedures to track inquiries,

acknowledge them, respond as quickly as possible, or follow up to let the

inquirer know the status of those inquiries that may require longer turnaround.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-21

Issue: Revision to NFIP Edit Dictionary in Flood Insurance Manual

Respondent’s Recommendation(s):

Change the NFIP Edit Dictionary to cross-reference the index page where the

problem is explained.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA brought this issue to the attention of the NFIP Bureau

and Statistical Agent and the NFIP Bureau did a reprint of the “edit spec” with

the May 2000 changes which included the updated cross-reference at the end

of the document.

Issue: Improved process for notifying WYO carriers of program changes

Respondent’s Recommendation(s):

Limit changes to twice a year and mutually establish a time limit to notify

WYO. If the time period cannot be met, the change should occur the next time

changes are released.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will work to ensure that any program changes are

scheduled as follows: major changes in May and minor changes in October.

FIA will draft schedules of changes and share them with the IBHS Flood

Committee and FIPNC in FY 2000 It is important to note that changes to the

program are often driven by legislation or budget considerations and that FIA

works diligently to give WYO companies as much advance notice of these

changes as possible.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-22

Issue: Issuance of monthly reports to WYO companies

Respondent’s Recommendation(s):

Ensure timely issuance of monthly reports.

FEMA’s Response: Adopted/Action Underway

Explanation: Recently, FIA developed a new measure for company growth

that would include new business growth and policy retention. Due to this

change the monthly progress reports have been delayed. These reports will

start going out on a monthly schedule starting at the end of April 2000.

Issue: Improved access of WYO companies to NFIP/FIA technical people

Respondent’s Recommendation(s):

Improve access of WYO companies to NFIP/FIA technical people.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will ensure in FY 2000 that NFIP Bureau and Statistical

Agent staff provides timely responses to WYO technical inquiries and that

they provide on-site technical assistance to companies as needed.

Issue: Clarification of policy regarding debris removal and appliance coverage

Respondent’s Recommendation(s):

Clarify language in policy regarding debris removal and appliance coverage.

FEMA’s Response: Assigned for Further Study

Explanation: FIA has addressed this issue in the proposed revision to the

SFIP published for comment in the third quarter of FY 2000. The plain

language flood policies are expected to be implemented in early 2001.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-23

Issue: Clearer wording in bulletins

Respondent’s Recommendation(s):

Improve clarity in wording included in bulletins.

FEMA’s Response: Adopted/Action Underway

FIA has instituted tighter, internal editorial reviews to ensure that future

technical bulletins are clearer and easier to understand.

Issue: Centralized call center to handle all NFIP-related telephone calls

Respondent’s Recommendation(s):

Create a centralized call center in order to enhance customer service and

reduce the amount of toll-free numbers related to the NFIP. Subjects

addressed by this call center should, at a minimum, include NFIP rules and

regulations; insurance policy language, the Flood Insurance Manual,

procedures, and forms associated with the NFIP; flood hazard mapping

guidelines, specifications, and procedures; and marketing, training, and public

information efforts.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Because FEMA has several contracts that involve call centers

for different audiences, we are unable to establish one call center at this time.

We do, however, work to emulate a one-stop shop for customers by

transferring calls to the other call centers when necessary. In addition, we will

work to better publicize the various telephone numbers available for NFIP

stakeholders in FY 2000.

Issue: Training for TRC staff regarding disaster assistance

Respondent’s Recommendation(s):

This process should be expanded. For instance, wording addressing the

benefits of flood insurance protection should be incorporated into the scripts

used by the National Processing Service Center (NPSC) in all locations, and

referrals to the NFIP Telephone Response Center (TRC) 800 number should

be made on behalf of disaster assistance to encourage callers to purchase flood

FEMA’s Response: Adopted/Action Underway

Explanation: The TRC staff has been trained regarding disaster assistance,

and they refer calls to NPSC.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-24

Issue: Training for TRC staff regarding disaster assistance

insurance. NFIP/TRC staff should be trained on disaster assistance and the

National Processing Service Center (NPSC) and Small Business

Administration (SBA) staff should be trained in the NFIP.

Issue: Availability of post-flood disaster data

Respondent’s Recommendation(s):

Digitize post-flood disaster data and make it available to the flood

determination industry.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA’s Mapping and Analysis Center now routinely

captures the boundaries of floods during presidentially declared disasters and

distributes the data via its Web site at http://www.gismaps.fema.gov.

Issue: Improved communication with condominium associations

Respondent’s Recommendation(s):

Contact condominium associations through direct mail, insurance agents, or

the media to increase awareness of their responsibilities.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will in FY 2000 seek advice regarding the best ways to

target condominiums from the companies on the WYO Marketing Committee

who insure condominiums, from members of agents associations, who

specialize in condominium insurance for floods, and from community

associations.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-25

Issue: Use of direct mail and/or media to improve familiarity of agents and communities with flood insurance

requirements

Respondent’s Recommendation(s):

FEMA or the NFIP should conduct more awareness training through direct

mail or through the media.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA will expand ongoing efforts in FY 2000 to conduct

agent training and public information activities using various training

programs, conferences, direct mail, the Internet, and the media. In addition,

through regional mini-conferences and national annual conferences, FIA will

bring together representatives of the insurance and lending industries, and

State and local officials to improve the interaction of all NFIP stakeholders in

implementing NFIP requirements. Further, for local officials, the Mitigation

Directorate is developing a home study course on NFIP requirements. This

should help reduce confusion and conflicting information.

Issue: Better information for policyholders regarding requirements for maintaining receipts of insurance settlements

Respondent’s Recommendation(s):

The respondent requested that FEMA address the following:

• Are clients advised in their policy of the period of time that they

should keep receipts after their flood claims are settled?

• How long should clients who receive settlement payments retain

receipts to prove how they spent their settlements?

• If there is a set time, but everything owned was destroyed by flooding,

including receipts, is there customer service to assist with receiving

any portion of a settlement?

FEMA’s Response: No Further Action Required

Explanation: The FEMA committee that is rewriting the three SFIPs,

believes that the present language in the policy is clear and needs no change.

Refer to Article 9 – General Conditions and Provisions, particularly Paragraph

J – Requirements in Case of Loss; specifically Numbers 4 and 5.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-26

Issue: Mechanism for verifying accuracy of repetitive loss lists used by State administrators of NFIP, HMGP, and

FMA

Respondent’s Recommendation(s):

Coordinate with the HMGP, NFIP, and FMA administrators in each State to

verify the accuracy of repetitive loss lists. These lists should be verified at

least semiannually and provided to the appropriate program administrators.

FEMA’s Response: Adopted/Action Underway

Explanation: This has been accomplished. It will be updated annually and

posted online.

Issue: State supply of National Flood Policy Consumer Guides for distribution to consumers

Respondent’s Recommendation(s):

Provide a supply of these guides to the appropriate State agencies to be passed

along to consumers who inquire about the NFIP.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will enhance its outreach to the State Insurance

Departments in FY 2000. We will create a consumer guide to flood insurance

and offer this and other NFIP literature to State Insurance Departments for

their distribution.

Issue: Replacement of “100-year Flood” and “500-year Flood” with other terminology

Respondent’s Recommendation(s):

Eliminating and replacing this terminology would more clearly express

flooding exposure and improve consumer awareness and perceived need for

flood insurance.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will place greater emphasis on educating internal

audiences regarding the new terminology in FY 2000. This will involve

training for FEMA staff, coordination with other FEMA offices to include

these messages in training sessions, and preparation of articles for FEMA

newsletters.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-27

Issue: Earlier release of rate and/or policy changes to insurance companies

Respondent’s Recommendation(s):

Allow a minimum 90-day advance notification to the companies of any

rate/program change, to allow time for the companies to receive, test, and

announce the changes and distribute the rating software to the agency force 30

days before the effective date.

FEMA’s Response: Adopted/Action Underway

Explanation: A 90-day minimum advance notification to the companies is

already established.

Issue: Regular updates to CD-ROM version of Flood Insurance Manual

Respondent’s Recommendation(s):

Include updates on the CD-ROM version of the NFIP Manual as a regular

ongoing activity, in conjunction with printing the hardcopy version of the

updated NFIP Manual.

FEMA’s Response: Adopted/Action Underway

Explanation: This is already being done. An updated CD-ROM of the

Manual is being distributed to the WYO companies. Further, the Manual is on

the NFIP Web site, and new material will be featured there. Future updates to

the CD-ROM will occur regularly.

Issue: Development of a booklet on applicability of flood insurance to various community associations

Respondent’s Recommendation(s):

Develop a sample booklet on the applicability of flood insurance for the

various types of community associations (condominium, cooperative, and

homeowner). This would be helpful to the association, the lender, and the unit

owner and reduce the potential risk of loss resulting from inadequate coverage.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will develop the recommended booklet by December

2000.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-28

Issue: Revised approach to following up on print responses to flood insurance advertisements

Respondent’s Recommendation(s):

Two ideas were proposed: 1) to consider all print responses qualified for agent

follow-up; 2) modify the agent follow up system (at the TRC) to handle print

leads in a simple fashion.

While there is a concern that a respondent may already have an insurance

agent who sells flood insurance, and that this person would be contacted by an

agent from another company, there are several arguments against this:

The print advertising asks the reader to call his/her own insurance agent, call

the toll-free number or send in the RSC. People who respond by mail and

RSC are already aware that they can get information from their own agents.

By sending the RSC, they are indicating that they are open to exploring other

channels.

Insurance agents who have a good relationship with their customers will be

called by their customers who are interested in flood insurance. Such

customers would seek out the agent with whom they have a relationship before

pursuing other channels.

Even if a competing agent calls a respondent who has a relationship with

another agent/company, it is unlikely that the new agent could negatively

affect the respondents’ relationship with the respondent’s agent if a good

relationship exists between the respondent and their regular agent. However,

if the existing agent does not sell flood insurance, there is a good sales

opportunity for the follow-up agent.

FEMA’s Response: Adopted/Action Underway

Explanation: In FY 2000, FIA will start referring consumers who respond

to the Cover America II campaign via business reply cars (from magazines and

direct mail) to leads for program agents. These referrals will begin once the

NFIP Telephone Response Center has made appropriate system changes (now

underway) to track and follow-up with referrals resulting from written

responses.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-29

Issue: Revised approach to following up on print responses to flood insurance advertisements

Individuals generally expect follow-up contact after submitting requests for

information. Prohibiting agent follow-up may give the impression that “the

ball has been dropped.”

If the existing lead follow-up system is inadequate to handle print responses, a

separate system could be established at the TRC or elsewhere. This system

could be designed to report on follow-up activity in the same way that followup to phone leads are reported, or merge print response information with

telephone response information.

Issue: Easy-to-read flood insurance information for consumers

Respondent’s Recommendation(s):

A simplified kit should be produced solely for the fulfillment of consumer

inquiries. (Lender, agent and State/local official kits should also be reviewed

and revised.) The kit should include a personalized letter to each respondent

that:

• Thanks them for their inquiry.

• Reinforces the reason why they responded.

• Refers them to the enclosed information, with a brief description of the

knowledge they will gain once they read the literature.

• Provides them with clear direction about how to purchase flood

insurance.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA is improving the consumer fulfillment kits and will

examine other ways to improve the kit and the provided information.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-30

Issue: Easy-to-read flood insurance information for consumers

• Contains all the information that currently appears in various

brochures.

A new kit would enhance the image of the NFIP and provide a “user friendly”

environment for digesting a great deal of information.

Issue: Improved coordination with State NFIP Coordinators on all NFIP-related matters

Respondent’s Recommendation(s):

Ensure that State NFIP Coordinators are sent pertinent correspondence in a

timely manner. Coordinators should also be included in discussions of

proposed changes to the program that may affect their ability to administer the

State NFIP programs.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA plans to begin in the last quarter of FY 2000 regular

communications with the State NFIP Coordinators. The planned, regularly

scheduled communication with the State Coordinators will include notification

of agent and lender workshop, program updates, and Cover America II

updates.

Issue: Improved communication between adjusters and agents

Respondent’s Recommendation(s):

Adjusters should be encouraged and required to keep the agent in the loop

during the flood claim settlement process. Institute workload controls on

adjusters and consider requiring continuing education for adjusters.

FEMA’s Response: Adopted/Action Underway

Explanation: Good claims adjusting includes the adjuster’s keeping the

agent abreast of developments in the claim process as they arise. The FY 2001

adjuster workshops will emphasize this.
Communication/Public Information

FEMA’s NFIP Call for Issues Status Report, June 2000 I-3-31

Issue: Lender inclusion of FZD information when enforcing mandatory flood insurance purchase requirement

Respondent’s Recommendation(s):

Require that lenders include the flood zone designation when they are

enforcing the mandatory flood insurance purchase requirement for a property.

FEMA’s Response: No Further Action Required

Explanation: The National Flood Insurance Reform Act (NFIRA) of 1994

focuses on compliance with the mandatory purchase requirement as the

responsibility of federally regulated private lenders and Government

Sponsored Enterprises that purchase loans in the secondary market. The

notice must be provided a reasonable time before completion of the loan

transaction to ensure that a flood insurance determination is made as a

condition of a loan being closed. Completion and delivery of the notice serves

both to inform the borrower and to protect the lender.

Independent of the notice requirements a separate provision was added in the

1994 Reform Act that now requires a lender to document a loan by entering

information on the Standard Flood Hazard Determination Form. Lenders are

neither required to provide nor prohibited from providing the borrower with a

copy of the form. The Statute mandates flood insurance coverage even if the

SFHA designation is first identified after settlement, but during the term of the

loan, because of remapping or other reasons.

Issue: Development of public information campaign to increase condominium association purchases of RCBAP

Respondent’s Recommendation(s):

Develop a public information campaign to increase condominium association

purchases of RCBAP.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will in FY 2000 seek advice on the best ways to target

condominiums from the companies on the WYO Marketing Committee who

insure condominiums, from members of agents associations, who specialize in

condominium insurance for floods, and from the community associations.
I Federal Insurance Administration

4 Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report

June 2000
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-1

Issue: Percent of policies in Special Flood Hazard Areas (SFHAs) as CRS rating criteria

Respondent’s Recommendation(s):

There should be a penetration threshold for communities receiving the highest

discounts. This could be phased in. For example, to retain a 4 rating, a

community would have to reach a 50 percent penetration. The next year both

4 and 5 rated communities would have to reach a 50 percent penetration, etc.

FEMA’s Response: No Further Action Required

Explanation: The objective of CRS is to recognize activities beyond NFIP

minimum requirements. Recognition of loss reduction activities should not

depend on market penetration.

Issue: CRS credits for improvements

Respondent’s Recommendation(s):

Award credits for stricter regulations for development before problems occur.

If a community adopted a regulation that required all improvements (i.e.,

streets) to be built to the community’s Base Flood Elevation (BFE,) then

several problems have been addressed before the first potential buyer makes a

purchase.

1. A developer will be reluctant to develop low-lying flood-prone

property where it would be expensive to fill to the BFE. If a

developer wishes to build a street in a low-lying area which requires

extensive fill, the developer may look to developing higher, nonflood-prone areas.

2. Individuals looking for property would be able to identity the

elevation of lots as below the BFE if those lots are substantially

lowers than the street.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA notes that credit for improvements above the BFE are

already recognized by the CRS. However, the respondent recommends

providing an increase in points. The CRS Task Force has recommended that

this change should be implemented with the next CRS schedule change, which

is anticipated in 2001 or later, depending on the number of changes needed.
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-2

Issue: CRS credits for improvements

3. Property owners would be able to access their property by normal

transportation means when a community is faced with floodwater.

(There are many areas in a community where the actual structures do

not flood, but individuals need a boat to get to their structure during

flooding periods.)

By requiring all development to be at the community’s BFE, the program

would go a long way in providing protection and assurances that only the

highest and most suitable areas would be developed for residential and

commercial use. Communities with such requirements should receive

additional credits towards CRS accreditation.

Issue: Provide CRS discount for those properties outside the floodplain

Respondent’s Recommendation(s):

Review the NFIP policy of flood insurance discounts to properties outside

SFHAs because any property, regardless of its location, can be subject to

drainage problems and flooding under the correct circumstances. If greater

benefits were available to properties outside SFHAs, knowledge and public

acceptance of the program would improve. The advertising community says

the best form of advertising is word of mouth, and this area may improve if

citizens are pleased with a discount and tell their neighbors. It will also

provide an incentive for communities to upgrade their CRS activities and

encourage NFIP participation by all community residents, not just those within

the flood hazard area.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA still believes there are good reasons not to apply the

full discount; however, some additional recognition may be appropriate. The

issue was referred to the FEMA CRS Task Force which has recommended that

Class 6 and higher communities get a 10 percent discount in areas outside the

SFHA. This would be a May 1, 2001 change.
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-3

Issue: Evaluate and restructure CRS

Respondent’s Recommendation(s):

The FEMA CRS Task Force should use a broad advisory team to complete a

comprehensive evaluation of the program and reshape it. Strongly consider

developing two distinct types of applications for the CRS program. The

current CRS program is geared toward meeting the needs of both small and

large communities. Currently, a large community that is aggressive and

proactive in CRS and floodplain management activities is actually penalized,

or is not recognized in the same way that a small community is. A possible

solution is for FEMA to divide communities into separate CRS programs and

categorize them by similar size and/or population. In this scenario, small town

activities would then be compared and rewarded on more equal terms, as

would large communities. More importantly, the CRS program could then be

designed to encourage promoting flood insurance and floodplain management

activities on a more equitable basis.

FEMA’s Response: Assigned for Further Study

Explanation: A multi-year evaluation of the CRS was completed in 1998.

Changes being implemented in 1999 are a result of that effort. The issue of

how the CRS treat small vs. large communities was carefully scrutinized. It is

suggested by the author of this comment that large communities are at a

disadvantage compared with small communities. The evaluation found that on

average, larger communities earn 10–15 percent more points than small

communities. FEMA has found that various advantages and disadvantages can

work both ways and believes that a restructuring of the system to separately

recognize small and large communities is not warranted. In one particular set

of activities related to this issue, however, some important changes are being

made in 1999. Certain creditable mitigation activities, such as retrofitting and

relocating buildings, are expensive to carry out. For a large community, the

number of buildings addressed can be a small percentage of the total problem,

even though there is still a high level of effort associated with the number of

buildings addressed. The CRS point system is being adjusted to provide more

credit for the initial number of buildings mitigated to better recognize that

level of effort.

Issue: CRS discount ratings of structures/addresses

Respondent’s Recommendation(s):

Based on the fact that NFIP is a Federal program requiring a unique

combination of mitigation and insurance, strengthen the community

FEMA’s Response: Assigned For Further Study

Explanation: The suggestion to change the rating classification system for

the NFIP needs to be addressed in the context of what the NFIP has
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-4

Issue: CRS discount ratings of structures/addresses

compliance requirements to provide evidence of compliance. Include this

information through CRS classifications and discounts to provide a rating

structure of 3 possible rates per community (VD, AE, X). Additionally,

publish the specific zone for every structure/address in the United States. The

zone statistical information would still be compiled for ratemaking and

mitigation purposes, yet it would reduce the cost and streamline the process for

writing flood insurance. This would benefit the consumer by reducing cost (no

zone determination or Elevation Certificate), and make it a much easier buying

decision. This would benefit the agent by reducing cost (handle each prospect

once as opposed to possibly four times) and make it easier to quote/write flood

policies. This would benefit the Write Your Own (WYO) company and the

NFIP by reducing cost in eligibility, records retention/forms (zone

determination and Elevation Certificate). And drastically reduce

complications of inspections, definition of rates and rating criteria, and

problem trends, such as Coastal Barrier Resources System (CBRS) area and

Preferred Risk Policy (PRP) eligibility.

accomplished with regard to floodplain management and how much that has

depended and will continue to depend on the NFIP insurance

classification/mitigation model. These issues will be addressed in two ways:

1) as part of the larger issue of the interface of floodplain management and

community compliance with the insurance component in a study which will

begin in FY 2000 assessing the NFIP; and 2) in the project which was

introduced at the 2000 Flood Conference as pilot alternative rating prototypes.

Issue: Increased CRS points for nonstructural floodplain management

Respondent’s Recommendation(s):

The CRS should be improved by awarding a greater percentage of total credits

to nonstructural floodplain management efforts, including: local floodplain

maps and community education programs about flooding potential; data on the

potential inundation area caused by dam failure; adding dam failure inundation

shadow(s) on floodplain maps; using television and newspaper ads to publicize

FEMA’s Response: Assigned For Further Study

Explanation: The CRS Task Force is studying in FY 2000.
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-5

Issue: Increased CRS points for nonstructural floodplain management

map information services provided by the community; requiring real estate

agents to inform buyers of existing flood hazards; and considering impact of

new development on receiving, working, and implementing warning systems

that include use of radio and television.

Respondent’s Recommendation(s):

Allow credit under the CRS when television and newspaper ads are used to

publicize map information services provided by a community.

FEMA’s Response: Other

Explanation: This is already allowed under the CRS program.

Respondent’s Recommendation(s):

Simplify the flood hazard disclosure requirements, give CRS credit to

communities that provide information to local, regional, or State real estate

boards that recommends real estate agents inform prospective buyers to

existing flood hazards. Credit should also be given if forms include disclosure

statements indication whether the property is/is not within an special flood

hazard zone.

FEMA’s Response: Other

Explanation: Credit is already available for disclosure.

Respondent’s Recommendation(s):

CRS credit should be given to those communities that consider the impact of

new development on receiving waters but does not require the use of onsite

basins for new developments because system has been designed with adequate

capacity.

FEMA’s Response: Other

Explanation: Credit is already available.
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-6

Issue: Increased CRS points for nonstructural floodplain management

Respondent’s Recommendation(s):

Allow credit points under activities 610.b and 610.c independent of 610.a.

Credit should also be given to warning systems that include the use of radio

and television. Consideration needs to be given to the fact that the type of

warning systems used by local communities varies depending on the size and

geographical location of the community. Warning systems that may be

practical in rural areas may be impractical in populated urban areas.

FEMA’s Response: Adopted/Action Underway

Explanation: This was implemented with 1999 CRS Schedule changes.

Issue: Expansion of the CRS program to include all communities

Respondent’s Recommendation(s):

Expand the CRS to include all communities, whether or not identified with

flood hazards and regardless of participation in the NFIP. Although the CRS

touts coverage for much of the insured, most individual properties are not in

fact in CRS communities. The CRS should ideally be a program paralleling

Fire Rating. Communities that do not participate in the NFIP, those that do

that do not enforce, and properties individually rated with a higher inherent

risk are examples of how the CRS rating could be used to assign higher

premiums. Communities that meet minimum NFIP criteria, limit development

in floodplains, or have higher standards could be given positive ratings.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: The CRS Task Force recommended that the CRS is not the

right vehicle to accomplish this recommendation. According to NFIP

legislation, participation in the CRS is voluntary, and the Task Force believes

that the program should be kept voluntary and operate by providing incentives.

The group further recommends evaluating the NFIP probation mechanism and

developing a refined set of clear steps leading to probation or suspension. This

issue will also be addressed in the overall NFIP assessment project. FIA

agrees with both of these recommendations and will initiate the assessment

project in FY 2000.
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-7

Issue: Correct the Elevation Certificate to CRS class code and compliance

Respondent’s Recommendation(s):

The respondent proposes simplifying rating. The requirement for obtaining

Elevation Certificates could be linked to that of the CRS class code and

compliance. For example, the Elevation Certificate would not be required for

properties in a CRS Class 6 community or below. The elevation difference

would be set for all properties within that community requiring Elevation

Certificates.

FEMA’s Response: Assigned For Further Study

Explanation: FEMA believes that the issue of the need for Elevation

Certificates in the rating process should be examined in the context of

evaluating the level of compliance on the part of communities in the NFIP and

how much that depends on using Elevation Certificates in the rating process.

A study conducted in 1995 to determine whether the suggested rating

simplification could be adopted in CRS communities did not produce results

that indicated this should be done. Limiting the measure to CRS Classes 6 and

above may have merit, although at this time that would only affect a few

communities. This issue will also be addressed in the alternative rating

schemes project.

Issue: Tightening of CRS flood prevention activities

Respondent’s Recommendation(s):

It is too easy for communities that participate in the voluntary flood prevention

programs to meet the criteria. The criteria to qualify for points may be abused.

Strengthen and enforce the flood prevention activities criteria. Points must

rely on what is truly done and adhered to, not for piggybacking on county

floodplain activities. Conduct thorough field reviews of cities’ and counties’

flood prevention practices. Post on FEMA’s Web site a list of flood

prevention practices criteria and community rating classifications.

FEMA’s Response: Other

Explanation: CRS classifications for communities are now posted on the

FEMA Web site. As for field verification of community activities, the CRS

Task Force will continue to review documentation and verification issues as

part of its ongoing responsibilities.
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-8

Issue: Development of “Negative CRS” structure

Respondent’s Recommendation(s):

Develop a negative CRS (NCRS) structure that would increase flood insurance

premium rates for those communities that put the flood insurance fund at risk.

The NCRS could easily be implemented through both the current Community

Assistance Visit (CAV) process and/or by broadening the scope of the FIA

contract with Insurance Services Organization (ISO). FEMA Regional and

State staffs have long considered the probation procedures cumbersome and

political. The NCRS would provide a quicker way to protect the flood

insurance fund, encourage compliance, and reflect real risk. This process

would also allow us to deal with an escalating scale of premium savings. As

communities improve their floodplain management programs, the rates would

go down. Suspension could still be used in instances of ordinance

noncompliance or if a community that does not require permits.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: The CRS Task Force recommended that the CRS is not the

right vehicle for carrying this out. According to NFIP legislation, participation

in the CRS is voluntary, and the Task Force believes that the program should

be kept voluntary and operate by providing incentives. The group further

recommends evaluating the NFIP probation mechanism and developing a

refined set of clear steps leading to probation or suspension. This issue will

also be addressed in the overall NFIP assessment project. FIA agrees with

both of these recommendations and will initiate the assessment project in FY

2000.

Issue: CRS points for floodplain management issues addressed by local and State hazard mitigation plans

Respondent’s Recommendation(s):

Recognize State and community efforts by awarding points in all instances

where floodplain issues are being addressed through a State and local hazard

mitigation plan. Award credit where mitigation measures address floodplain

management in a way not covered through the existing CRS. Although

mitigation “makes sense” and may saves money in the long run, States and

communities are putting significant resources into mitigation planning with

little incentive from FEMA. Awarding and recognizing these efforts through

FEMA’s Response: Adopted/Action Underway

Explanation: The 1996 CRS Schedule was revised to incorporate a new

Activity 510 – Floodplain Management Planning. This new activity was

designed to credit the planning process versus just the activities being

implemented. This process was developed in conjunction with FEMA’s

Disaster Response side of the agency as well as other agencies involved in

mitigation planning. Through this joint effort, the planning process that is

credited is the same that would be used by communities that are required to
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-9

Issue: CRS points for floodplain management issues addressed by local and State hazard mitigation plans

the CRS, which ultimately provides benefits through discounted flood

insurance premiums, would be a start toward recognizing these efforts.

prepare Hazard Mitigation Grant Plans, Floodplain Management Assistance

Plans (FMAP) as well as Corps of Engineers plans for some of their funding.

As a result, communities do not have to create or develop separate plans for

different funding programs.

In summary, the efforts expended by the Emergency Management community

in Hazard Mitigation Planning is being recognized by the CRS in that these

plans that go through the identified 10-step process are in most cases readily

credited under the CRS.

Issue: Adjustment of CRS point system based on community size

Respondent’s Recommendation(s):

The current point system has no incentive or great reduction capability for

flood insurance premiums in larger cities. The same premium reduction is not

fairly appropriated for larger cities, even though there are a higher number of

flood insurance policies in a larger city. Smaller cities have an advantage over

larger cities, since their mapping can provide better floodplain management

criteria. Larger cities are scaled on the same point system, even though they

provide a greater outreach to their citizens.

FEMA’s Response: No Further Action Required

Explanation: A multi-year evaluation of the CRS was completed in 1998.

Changes being implemented in 1999 are a result of that effort. The issue of

how the CRS treats small versus large communities was carefully scrutinized.

It is suggested by the author of this comment that large communities are at a

disadvantage compared to small communities. The evaluation found that on

average, larger communities earn 10 to 15 percent more points than small

communities. FEMA has found that various advantages and disadvantages can

work both ways and believes that a restructuring of the system to separately

recognize small and large communities is not warranted. In one particular set

of activities related to this issue, however, some important changes were made

in 1999. Certain creditable mitigation activities, such as retrofitting and

relocating buildings, are expensive to carry out. For a large community, the

number of buildings addressed can be a small percentage of the total problem,
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-10

Issue: Adjustment of CRS point system based on community size

even though there is still a high level of effort associated with the number of

buildings addressed. The CRS point system has been adjusted to provide more

credit for the initial number of buildings mitigated to better recognize that

level of effort.

Issue: CRS points for public information activities to the public and voluntary purchase funding

Respondent’s Recommendation(s):

The current point system does not give enough points for distribution of

floodplain information and for a city’s voluntary purchase of structures.

Provide more points to participants that provide NFIP information to the

public. Also provide more points for participants that encourage and provide

funding for voluntary purchase.

FEMA’s Response: Adopted/Action Underway

Explanation: A multiyear evaluation of the CRS was completed in 1998.

Changes are being implemented in 1999 are a result of that effort. The

schedule of points provided for a community outreach efforts have been

revamped based on recommendations of a panel of experts in that discipline.

Also, the points provided for retrofitting and relocating buildings at risk have

been significantly increased. This suggestion was already adopted.

Issue: Increased CRS credit for regulations to protect flood fringe and open space

Respondent’s Recommendation(s):

Assign a higher credit value to regulations that protect the storage capacity of

the flood fringe and programs for the acquisition of open space. While the

NFIP has come to recognize the importance of maintaining the storage

capacity of the flood fringe, local governments do not receive a proportionally

high enough credit for implementing regulations to protect flood fringe. There

are a number of complex issues related to the limitation of fill or modification

FEMA’s Response: Adopted/Action Underway

Explanation: A multiyear evaluation of the CRS was completed in 1998.

Changes are being implemented in 1999 are a result of that effort. The points

provided for open space and for protection of storage capacity have been

significantly increased. This suggestion was already adopted.
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-11

Issue: Increased CRS credit for regulations to protect flood fringe and open space

of land uses within the flood fringe. While the NFIP recognizes the significant

benefits of preserving the flood fringe, the program does not award a

proportionally significant number of credits for this activity as an incentive to

communities.

Issue: Prorated CRS points for dam safety programs

Respondent’s Recommendation(s):

When points are given for State dam safety programs through the CRS, the

number of points should be prorated based on the number of dams meeting the

definition of a dam under the National Dam Safety Program and regulated by

the State or Federal Government versus the total number of dams within that

State meeting that definition. This information should be readily available

through the National Inventory of Dams and would more accurately reflect the

intent of the credit.

FEMA’s Response: Assigned For Further Study

Explanation: The CRS Task Force will address this issue in FY 2000.

Issue: Increased CRS points for local and regional structural flood control projects

Respondent’s Recommendation(s):

Local flood control projects that reduce the exposure of the flood insurance

pool should be awarded a significant number of CRS points. Structural flood

control projects funded by local governments (usually through taxes) are

legitimate floodplain management activities that go beyond the NFIP

FEMA’s Response: Assigned For Further Study

Explanation: The CRS Task force is addressing this issue. An issue paper

on structural measures and the NFIP, which is primarily a nonstructural

program, was prepared for circulation to appropriate groups for comment. Of

particular interest to the Task Force is how such measures address currently
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-12

Issue: Increased CRS points for local and regional structural flood control projects

minimum requirements. Further, these projects reduce the risk to the flood

insurance pool by reducing the number of structures at risk.

identified NFIP loss problems such as repetitive losses and other losses in X

Zones. Target for releasing the issue paper is winter 1999/2000.

The CRS Task Force will be addressing the issue of how CRS should be

crediting structural measures during 2000. This issue will be part of that

effort.

Issue: Reduced CRS paperwork

Respondent’s Recommendation(s):

Continue past efforts to reduce paperwork associated with the CRS, including

coordination of required information between neighboring jurisdictions and

between Federal programs with similar information requirements.

The current amount of paperwork required to apply to and remain in the CRS

has been reduced from the time it was first initiated, but there is still room for

more improvement. Many urban areas are fragmented among local

jurisdictions, each of which are individual participants of the NFIP and CRS.

As such, each jurisdiction must submit its own paperwork, resulting in

duplicate work for regional efforts, such as flood warning plans and

stormwater management efforts. Other Federal programs also require

submission of essentially duplicate information from time to time.

FEMA’s Response: Adopted/Action Underway

Explanation: This suggestion has been substantially adopted. As FIA has

gained more experience with the CRS, significant reductions in paperwork

have been adopted over the last few years. Today, communities have a much

simpler application, with formula calculations made by CRS field staff.

Emphasis has been placed on providing technical assistance to communities in

both the initial applications and reverification cycle process and reducing the

need for communities to submit application paperwork. Credit calculations

have been simplified by offering default options, and model program

documents are available to provide communities more information and

examples on certain activities.
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-13

Issue: Reduced CRS paperwork

Respondent’s Recommendation(s):

Appreciate a CRS evaluation process which demonstrates more trust in the

local agencies. Continue to seek a balance between trust of local community

efforts and level of documentation needed to verify activities. Use the

experience of field representatives and review by the CRS Task Force to guide

that balance. It is NAFSMA’s position to continue past efforts to reduce

paperwork associated with the CRS, including coordination of required

information between neighboring jurisdictions and between Federal programs

with similar information requirements.

FEMA’s Response: Other

Explanation: The CRS Task Force will address this issue as part of its

continuing review activities. The CRS Task Force will address this issue as

part of its continuity review activities.

Issue: Independent evaluation of CRS

Respondent’s Recommendation(s):

Determine what can be done to provide incentives for communities to

strengthen their floodplain management programs to receive more CRS points.

Evaluated the CRS by an independent outside group, using community case

studies to provide recommendations. Because current incentives go to the

property owner, not the community (and the community is the one that has to

undertake the actions to get reduced premiums for the property owners),

consider how incentives can be provided to communities rather than

individuals. Perhaps some system of community-based insurance, tied to

community cost-share for disaster relief, would encourage more local action.

Consider simplifying CRS procedures.

FEMA’s Response: Adopted/Action Underway

Explanation: A multi-year evaluation of the CRS was completed in 1998.

Changes are being implemented are a result of that effort. The evaluation

included the use of an independent evaluation contractor and extensive

reviews of various aspects of the CRS by State, local, and Federal

representatives, insurance industry professionals, and members of academia.

Among the various techniques used to gather information about the CRS was a

survey of local officials, which provided feedback that local communities

consider the CRS to be a strong incentive for undertaking efforts to reduce

flood losses. The evaluation report is available on the FEMA Web site and has

also been provided to Congress and extensively distributed by mail to known

interested parties. Some time will have to pass before the effects of the many
Community Rating System (CRS)

FEMA’s NFIP Call for Issues Status Report, June 2000 I-4-14

Issue: Independent evaluation of CRS

changes made to the CRS in 1999 can be evaluated. In the meantime, it is

FIA’s intention to look for post-flood event opportunities to review the

effectiveness of the CRS.

Issue: Basis of CRS credit for stormwater facilities

Respondent’s Recommendation(s):

The maintenance of storm water facilities is crucial in ensuring that the

capacity of those facilities is not compromised or diminished. However,

requiring public maintenance of private facilities is unreasonable. In most

cases, public facilities make up the major storm water facilities within the

community. The respondent suggested that credit allocation under this activity

be revised so that credit is based solely on the total storm water facilities

publicly maintained by the community.

FEMA’s Response: Adopted/Action Underway

Explanation: This issue was implemented with 1999 CRS schedule

changes.
I Federal Insurance Administration

5 Coverage

FEMA’s NFIP Call for Issues Status Report

June 2000
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-1

Issue: Changes in contents coverage

Respondent’s Recommendation(s):

Make contents a standard percentage of the building coverage. For example,

FIA could restate the policy so that the insured would have contents coverage

equal to 20 percent of the building limit. Optional contents coverage could be

purchased in different percentages. The current limits of $100,000 could

enforce some caps on the percentage. As a corollary to this proposal, it would

be necessary to introduce a renters’ policy that covers contents only.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: The NFIP already experiences product and price resistance to

flood insurance, especially the mandatory purchase requirements of the 1973

and 1994 Acts. This proposed standard add-on would work against FIA’s

efforts to make flood insurance acceptable to the general public by almost

doubling the premium that people have to pay for the required coverage. One

fear is that FIA would be adding a requirement that the statute did not envision.

Now contents coverage is required only when the contents are used as security

for the mortgage. However, this issue has been referred to the WYO marketing

Committee for their views on the advisability of providing this coverage.

Issue: Creation of farmowners policy

Respondent’s Recommendation(s):

Study the feasibility of a farmowners policy. Consider giving a discount to a

policy that can be considered providing coverage to an appurtenant structure.

To qualify, the policy covering the primary building would have to be

identified. The discount could take the form of a reduction in the basic limits

rate (since, under Proposal 3, that is where the fixed expenses are loaded).

This discount could be restricted to apply to only appurtenant buildings by

requiring the building value of the appurtenant to be less than a stated

percentage of the primary building. The FPF could also be waived. Other

possibilities should also be explored.

FEMA’s Response: Assigned For Further Study

Explanation: FIA brought this issue to the attention of several of the WYO

companies that write significant business for agricultural structures to gauge

the desirability versus the perceived difficulties of such a product. The limited

use of this approach by agents in the past may work against introducing a

farmowners policy as a new product under the NFIP. FIA expects to receive

responses by mid-2000 and will evaluate the feasibility of such a policy

thereafter.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-2

Issue: Improved coordination of coverage limits for condominiums and other residential and non-residential buildings

Respondent’s Recommendation(s):

Flood insurance coverage is often available for condominiums and other

residential and non-residential buildings from the private insurance market.

However, this coverage often involves higher retention limits. The owners of

these buildings should be more knowledgeable about insurance options.

Coordinate coverage of condominiums and other residential and nonresidential buildings. Consideration should be given to developing a working

relationship with the insurance industry, and the Reinsurance Association of

America, in particular, to better coordinate these limits.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA will continue to seek advice from the Flood Insurance

Producer National Committee (FIPNC), IBHS, and NFIP Marketing

Committee to ensure coordination of the NFIP with private industry. Toward

that end, FIA set up an advisory work group consisting of insurance industry

representatives to review drafts of the SFIP rewrite to ensure maximum

coordination with the industry. The coverage limits of the NFIP are set by

statute. As a matter of policy, however, whenever FIA contemplates a change

it coordinates the change or proposal with the insurance industry, particularly,

the Flood Advisory Committee, FIPNC, and NFIP Marketing Committee.

One of the FY 2000 major initiatives for FIA was the rewriting of the SFIP so

that it conforms, as much as possible, to the homeowners policy.

Issue: Provision of disaster relief assistance

Respondent’s Recommendation(s):

Provide “disaster relief” insurance. When a specific hazard is identified,

provide local communities with the capability of purchasing a 30-day waiver

for their residents.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Section 579 of NFIRA added subsection ( c ) to Section 1306

of the National Flood Insurance Act of 1968 to establish a 30-day waiting

period before flood insurance coverage would take effect. The intention of

Congress was to minimize the risk of property owners buying flood insurance

only when flooding was imminent and then canceling the policy once flood

waters receded. There were several very limited exceptions to the mandatory

waiting period that apply to the initial purchase of flood insurance in
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-3

Issue: Provision of disaster relief assistance

connection with either “the making, increasing, extension, or renewal of a

loan” or the revision or updating of FEMA’s flood maps.

Also this type of product would send a message that people may in fact not

have to buy flood insurance on their own and wait until the last minute, letting

their community apply for such a waiver. This proposal then could

unintentionally work against one of FEMA’s strategic goals for the year 2000

of increasing NFIP policy sales by 475,000.

Issue: State modification to homeowner’s policies to include flood insurance

Respondent’s Recommendation(s):

Require States to modify homeowner’s coverage to include flood peril. Link

this requirement to some Federal funds, such as disaster relief funds.

FEMA’s Response: No Further Action Required

Explanation: FEMA has no regulatory authority over the private insurance

industry. State insurance departments regulate private-sector property

insurance under the McCarran-Ferguson Act.

Issue: Changes to RCBAP

Respondent’s Recommendation(s):

1) Make coverage available under both Dwelling and RCBAP policies the

same. Either change the Dwelling policy to conform to the RCBAP or vice

versa. All single family and condominium residential buildings should be

provided coverage on a replacement-cost basis. The RCBAP was changed in

1994 to incorporate replacement cost coverage and co-insurance. Those

changes are both very much misunderstood and strongly disliked. Therefore,

FEMA’s Response: Assigned For Further Study

Explanation: 1) FIA will develop a comprehensive list of coverage issues

resulting from this Call For Issues, prioritize the recommended changes, and

price them in FY 2000 and FY 2001. The prioritization and pricing will be set

against the national policy implications of some of the proposals. For

instance, the proposal to add replacement cost for non-primary, recreational

homes must be viewed against national disaster policy on benefits for
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-4

Issue: Changes to RCBAP

consider changing the RCBAP to conform to the Dwelling Policy, and

changing the Dwelling Policy to remove the replacement-cost restriction on

non-primary residence buildings.

Such changes would not only provide replacement cost coverage to all NFIP

residential insureds, but would have the added benefit of removing the virtual

mandate for condominium associations to have to insure their buildings to

value, which has caused enormous increases in premiums, even though their

rates are likely to rise. It might provide a significant positive psychological

change in the attitude of condominium associations towards the NFIP,

although for the wrong reasons.

2) Review the rating of post-FIRM, post-1981 V Zone properties to determine

if there is a better way of rating such buildings without using the current ratio

of coverage to replacement-cost value. Agents selling such policies and those

insured by them believe that they are being penalized for not purchasing

enough coverage when they purchase the maximum amount available under

the NFIP. They do so in spite of the fact that the value of their building is

significantly higher than that amount.

secondary homes. The SBA does not provide disaster loans for secondary

residences; the regulations of FEMA’s Response and Recovery Directorate for

the IFG program exclude any benefit for repairing or replacing secondary

residences. We will look at the pros and cons, the relative priority, and the

pricing of these proposals.

2) FIA believes that because of the higher risk in V-zones and the associated

higher premiums, the use of this rating criteria is necessary to prevent the

cross-subsidization of (a) higher valued buildings by those policy holders with

lower valued buildings and (b) underinsured buildings by those who have

insured to value. The FIA will include an explanation of the reasoning behind

this rating in the Flood Insurance Manual in FY 2001.

Issue: Revisions to SFIP to include mudslide coverage

Respondent’s Recommendation(s):

Resolve the issue of mudslide coverage. The approach being taken does not

fulfill the intent of the U.S. Congress to provide insurance to citizens for this

hazard and to achieve its mitigation. Without appropriate action, increasing

FEMA’s Response: No Further Action Required

Explanation: FIA has had a definition of “mudflows” that has worked well

in the settlement of claims for more than 20 years. FEMA has not issued maps

identifying areas of subject to mudslide hazards for several reasons. First, the
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-5

Issue: Revisions to SFIP to include mudslide coverage

development on alluvial fans throughout the nation will only increase the

losses from the mudslide hazard. As this coverage is now administered:

1. The definition of mudslides in the policy is unclear and scientifically

incorrect.

2. Mudslide hazard areas are not mapped, even though required by law.

3. Mitigation by communities is not required.

4. The hazard is not separately rated for insurance coverage. Further, in

California communities where mudslides are a known hazard along

with flooding, unjustified rates are applied over wide areas to

somewhat reflect the risk from this hazard. In Oregon, coverage for

the mudslide hazard wrongfully is denied. Administration of the

mudslide provisions in other States appears arbitrary and capricious.

mapped SFHAs, as a rule, overlap with areas of mudslide hazard. Secondly,

while the state-of-the-art technology for representing mudflow hazard areas

now permits reasonably accurate mapping of mudflow areas, FEMA has

decided not to issue such maps (about 100 total) because they would trigger

hazard mitigation requirements for communities that would be nearly

impossible to enforce. FIA does not believe that the suggestion is in the best

interest of the NFIP.

Issue: Revisions to common-wall rule

Respondent’s Recommendation(s):

The current coverage for building property includes a common-wall provision

that results in some unfair consequences for residential type risks. Issue an

interpretation and revise the policies so the common-wall provision only

applies to non-residential and 5-plus-unit apartment or condominium

buildings.

FEMA’s Response: Assigned For Further Study

Explanation: In FY 1999, FIA set up an industry-FEMA Work Group to

reformat the SFIP along the lines of the homeowners policy and to make the

SFIP easier to read (FIA’s industry support was provided by IBHS and

FIPNC.) In its proposed rewrite of the SFIP published in FY 2000, FIA

addressed the “common wall” issue in its rewrite of the SFIP.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-6

Issue: Elimination of PRP

Respondent’s Recommendation(s):

The current eligibility rules with respect to loss history and zone have created

an administrative nightmare for the WYO companies and caused a large

number of cancellations. Some agents are now hesitant to market this product.

Eliminate Preferred Risk Policies (PRPs) or develop rules that are fair and

reasonable to policyholders and feasible to administer. A WYO company can

not adequately explain to current policyholders why they are no longer eligible

if they have never had a loss.

FEMA’s Response: No Further Action Required

Explanation: FIA does not foresee eliminating the PRP it is a valuable and

fair product for properties that have never suffered a flood loss in certain risk

zones. Still one of the highest priorities for FEMA is to address the problem

of repetitive loss structures. FIA does not want to subvert this goal by

rewarding with a lower premium a structure that has already suffered a flood

loss. Also, FIA does not believe it can consider a property that suffered a

flood loss at any time in its history a preferred risk property. This change in

philosophy and definition, which was based on firm data, went into effect

May 1, 1998.

Issue: Revision to Reformation of Coverage provision in policy

Respondent’s Recommendation(s):

The current Reformation of Coverage provision in the policy is difficult to

administer, impossible to understand, and out of step with current insurance

industry practice. It’s critical that a policy should not be subject to

reformation if it was initially rated correctly.

FEMA’s Response: No Further Action Required

Explanation: FIA believes that the policy should be reformed at the time of

a claim based on rates and underwriting principles in force at the time of the

loss. FIA has in fact simplified the process. Originally, FIA reformed policies

and collected premiums at the time of loss if necessary back to the statutes of

limitations. FIA simplified this practice and collects two (2) years worth of

deficient premiums, which resulted from misrating for the current policy year.

First, FIA needs to impose rating discipline to the underwriting process.

Second, this procedure of reforming is in fact much easier to administer than

the proposal that would require the agent to reconstruct a history of

underwriting that may go back many years to determine whether the policy

was initially rated properly.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-7

Issue: Upgrade of contents coverage to enhance value

Respondent’s Recommendation(s):

A perception among current and prospective flood insurance policyholders is

that the value of the coverage does not justify the cost, due to the limited

coverage available for contents of the building. Therefore, evaluate the

potential for upgrading contents coverage within the NFIP. This will enhance

the public’s perception of the value of coverage and entice more property

owners to invest in flood insurance. In addition, make available through the

NFIP, an appropriately priced buy-back endorsement that allows a property

owner to obtain coverage for scheduled personal property located in the

basement.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA conducted a study on this issue after the devastating

floods of the Upper Midwest in 1996. Many flood victims had personal

property in basements and expressed an interest in flood coverage. FEMA

instructed FIA to investigate the feasibility of providing coverage under the

SFIP for personal property in basements. After gathering data, and

considering every approach, FIA reported that the cost to buy such coverage

was prohibitive for the consuming public. For only $7,000 worth of basement

contents coverage, the policyholder would have to pay an additional $300 each

year in premium, thereby increasing the cost of flood insurance from an

average annual premium of $560 per policy, where the NFIP has experienced

price resistance, to almost $900 a year. FIA believes that to offer coverage for

property in such a high-risk area at anything less than full-risk premiums and

to have the taxpayers support flood insurance coverage for such property is

simply poor public policy. FIA has however informed the NFIP Marketing

Committee of the potential consumer interest in coverage against flood for

basements beyond what FIA has determined is appropriate for the NFIP to

cover. The private industry can then decide whether it wants to offer such

coverage on its own.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-8

Issue: Expansion of waiver for waiting period

Respondent’s Recommendation(s):

Expand the number and type of transactions for the which the 30-day waiting

period could be waived for flood insurance policies to include cash purchases,

title transfers, PRPs where coverage is not included, and all policies for

structures outside SFHAs, coverage increases, and coverage additions at

renewal. The respondents indicated the imposition and application of the

waiting period to property owners in these situations was inconsistent with the

basic objective of the waiting period.

FEMA’s Response: Assigned For Further Study

Explanation: In FY 2000, FIA sought a legal opinion from FEMA’s Office

of General Counsel to determine whether other exemptions from the current

statutory 30-day waiting period are appropriate, such as an exemption to the

waiting period when a cash transaction rather than a mortgage is involved in

the sale of a property in a Special Flood Hazard Area.

FEMA’s proposals for 2000 have already been formulated. FIA will consider

this recommendation for the agency’s next legislative cycle in FY 2001.

Before the NFIRA, the NFIP provided the flexibility to waive the waiting

period in connection with title transfers, which included not only lending

activity but also cash transactions, the focus of this proposal.

Issue: Addition of landslide buy-back endorsement to SFIP

Respondent’s Recommendation(s):

A “landslide” exclusion buy-back should be added to the SFIP by endorsement

so that the insured can be covered for landslide loss that is the approximate

result of a flood.

FEMA’s Response: No Further Action Required

Explanation: The intent of the U.S. Congress in authorizing the NFIP was

to provide insurance coverage against losses from floods. This authorization

was to fill a void in the private insurance industry. Whenever the U.S.

Congress saw fit to broaden the definition of “flood” under the SFIP, those

changes were for flood-related perils such as “flood-related” erosion and

“mudflows.” FIA does not agree that this definition should be further

expanded to include “landslide” unrelated to flooding.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-9

Issue: Elimination of enclosure coverage for pre-FIRM structures

Respondent’s Recommendation(s):

Eliminate the standard coverage for enclosures on pre-FIRM buildings and add

an appropriately priced buy-back endorsement that allows the insured to obtain

the coverage. This scenario would provide some equity in coverage between

post-FIRM and pre-FIRM enclosures.

FEMA’s Response: No Further Action Required

Explanation: We believe that providing flood coverage for pre-FIRM

buildings is acceptable policy since these buildings were constructed BEFORE

the NFIP’s floodplain management restrictions/requirements took effect.

Issue: Increased residential coverage limits

Respondent’s Recommendation(s):

The total insurance limits for dwellings should be increased to $500,000 and

limits on coverage for residential policies should be increased to $150,000–

$200,000.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA will monitor insurance sales and home mortgage sales to

see if such a proposal needs to be raised at the national policy level. In the

meantime, FIA plans to inform the Write Your Own companies of this

proposal and encourage them, on their own, to provide such excess coverage

by offering a value-added flood insurance policy.

The average purchase for a single-family residential structure is about

$100,000. And while this proposal has been made in the past, FIA does not

believe there is a genuine market for value-added policies on flood insurance.

For “high end” properties, there are already carriers that provide excess

coverage over what the NFIP by statute provides.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-10

Issue: Inclusion of decks in property covered

Respondent’s Recommendation(s):

Article 6 – Subparagraph D.2 of the SFIP lists “decks”, as property not

covered under the NFIP. While Article 4, paragraph A.1 lists covered property

as “Additions and extensions attached to and in contact with the dwelling by

means of a common wall...” the application of these two articles results in

“porches” being covered while “decks” are not. In reality, however, there

often is very little distinction between these types of structures. “Decks”

should be eliminated from Article 6.

FEMA’s Response: No Further Action Required

Explanation: FIA reviewed this issue during the SFIP rewrite of the SFIP

in FY 2000. FIA concluded that decks should not be covered under the SFIP.

In reaching this decision, FIA considered two issues: (1) FIA’s need to

simplify rather than complicate the underwriting process. (2) Decks in coastal

areas tend to become indistinguishable from walkways while porches tend to

be enclosed and structurally connected to the structure itself, i.e., generally

sharing the same roofline.

Issue: Provision of buy-back endorsement for swimming pools

Respondent’s Recommendation(s):

Article 6 of the SFIP lists indoor and outdoor swimming pools as property not

covered under the NFIP, creating an undue financial burden on many property

owners by forcing them to self-insure their swimming pools. Afford property

owners insured through the NFIP the option of purchasing an appropriately

priced buy-back endorsement that provides coverage for their swimming

pools.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA considers this to be the type of coverage that would be

more suitable for the WYO companies to offer on their own outside of the

NFIP. FIA will develop a list of recommended products and endorsements

that will be more suitable for the private sector to offer. FIA will provide the

WYO companies with this list in early FY 2000 for their consideration to offer

on their own. This recommended endorsement will be included on that list.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-11

Issue: Evaluation of benefits of restriction versus confusion and difficulty in implementation

Respondent’s Recommendation(s):

The restrictions on increasing coverage limits on renewals that were effective

with the October 1, 1998 manual revisions are extremely confusing and

difficult to implement, without providing significant benefits to the NFIP. Reevaluate the benefits of the restrictions on increasing coverage for policies

versus the confusion and difficulty involved in implementing the restrictions.

FEMA’s Response: Assigned For Further Study

Explanation: FIA raised this issue with the Flood Advisory Committee,

FIPNC, and IBHS during the fall of 1999 to obtain their input. These groups

reviewed the issue and concluded FIA’s current guidance is sufficiently clear

on this issue.

Issue: Provide buy-back endorsement for full replacement cost on contents

Respondent’s Recommendation(s):

The property owner should be able to obtain replacement cost coverage for

dwelling contents. An appropriately priced buy-back endorsement would

allow policyholders to purchase optional replacement cost coverage for this

property.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA will develop a comprehensive list of coverage issues

resulting from this Call for Issues, prioritize the recommended changes, and

price them in FY 2000 and FY 2001. The prioritization and pricing will be set

against the national policy implications of each of these proposals.

Issue: Expanded application of replacement cost coverage for single-family dwellings

Respondent’s Recommendation(s):

One respondent indicated Article 8 of the SFIP provides replacement cost

coverage for single-family dwellings that are primary residences.

Consequently, a property owner who insures a second dwelling pays the same

rate as a primary residence owner, but does not receive replacement cost

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: This suggestion raises, in part, the question to what degree

should national disaster policy provide benefits for secondary homes and

vacation residences.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-12

Issue: Expanded application of replacement cost coverage for single-family dwellings

coverage. Eliminate the reference to primary residence so that the same

coverage is afforded for secondary dwellings insured at the same rate.

Use replacement cost for building coverage in all aspects of the flood

insurance program, including substantially damaged structures. “Replacement

cost” is easily ascertainable and should be the measure of value in the flood

insurance program, as it is in all other property insurance programs. The

program should pay on a replacement cost basis, require a replacement cost

calculation to view the values at risk, and establish percentage to value

requirements on all items.

Currently, SBA does NOT provide below-market interest rates for repairs

under its disaster loan program for secondary or vacation homes.

Additionally, the IFG program, which is administered by FEMA and

implemented by each State after presidentially declared disasters on a costsharing basis, does not provide any benefit for vacation homes or secondary

residences. (While most recipients of IFG grants tend to be low-income or

fixed-income individuals who do not have the capability to repay disaster

loans, eligibility is not income-tested per se. So there are at least theoretically

IFG recipients who might have a second home.)

The working assumption for FIA in examining this issue is the NFIP to the

extent possible must be consistent with other Federal programs that provide

benefits to the victims of floods and other natural disasters, and to what degree

should a program providing subsidized flood insurance offer benefits such as

replacement cost insurance for a population of insureds that can most likely

afford the risk.

FIA has informed the NFIP Marketing Committee of the interest in this issue.

FIA will not provide replacement cost coverage except for single-family

dwellings, but the NFIP industry partners may wish to consider whether there

is a potential market for such coverage that they may want to offer on their

own.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-13

Issue: Expansion of ICC coverage to structures in non-floodway SFHAs damaged by flooding

Respondent’s Recommendation(s):

The ICC coverage is limited to structures that are “repetitive loss” properties

with damages incurred under two or more flooding events. In many

communities, this limits the coverage to a minute percentage of the existing

flood insured pre-FIRM build stock. If it is FEMA’s goal to mitigate

“repetitive loss” properties and to minimize flood damages so that the number

of repetitive loss properties does not increase, ICC coverage should be

available for any properties which receive damages as a result of a hazard

event. The coverage would need to be limited to elevating residential

structures above the BFE, demolishing existing structures below the BFE,

relocating structures that are below the BFE, or floodproofing non-residential

structures in A zones below the BFE. In this way, funding would be available

to assist property owners with retrofitting their pre-FIRM or otherwise noncompliant structures to be in compliance with the NFIP, regardless of the

number of times they had been flooded, when repairs are performed if a

structure is damaged by a hazard event. This could reduce the number of “atrisk” structures in a community, and ultimately potentially reduce the number

of flood insurance claims paid by the NFIP. A condition could be placed on

the funding that it be limited to a non-floodway Special Flood Hazard Area

(SFHA) for anything except demolition or relocation and/or that the structure

be required to be elevated a minimum of 1 foot above BFE, if the concern is

that the flood conditions may change in the future, leaving structures which

have received claim payments still vulnerable to flood losses. This program

could be funded through ICC insurance premiums.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Section 555 of P.L. 103-325 mandates that FEMA enable the

purchase of ICC coverage for structures that are substantially damaged by

flood and structures that suffer repetitive flood losses (i.e., structures that

suffer at least two losses during a ten year period where the loss averages 25

percent per occasion). Hence, the recommendation could require a statutory

change. Above the need to change NFIP authorizing legislation, the proposal

is not cost effective. The NFIP is able to provide a maximum of $20,000

effective May 2000, for the two classes of properties authorized by statute.

FIA would have to reduce the maximum ICC benefit to accommodate this

recommendation at a time when a number of NFIP stakeholders recommend

increasing the maximum payoff of ICC because there would be a substantial

increase in the population of structures that would collect benefits under

Coverage D of the SFIP. FEMA has developed a repetitive loss strategy that

will address the most serious repetitive loss structures. The focus and priority

of the NFIP and FEMA’s initiatives on repetitive losses must be on the most

serious risks rather than a population of structures that may not have as serious

national policy implications.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-14

Issue: Development of exclusive residential co-operative policy similar to RCBAP

Respondent’s Recommendation(s):

First, develop an exclusive residential co-operative policy similar to the

RCBAP, or make individual unit policies available to residents of co-operative

buildings. FEMA’s policy is that residential co-operative buildings must be

insured under the General Property Policy (GPP). See NFIP Policy Issuance

6-96. Under the GPP, the maximum amount of coverage for a residential cooperative building in a community that participates in the NFIP’s Regular

Program is $250,000 for the structure and $100,000 for its contents. In our

experience, this is frequently an inadequate amount of coverage for large

residential co-operative buildings with many units.

On the other hand, a residential condominium association may purchase the

Residential Condominium Building Association Policy (RCBAP), which

provides coverage in the amount of 80 percent of the building’s replacement

cost, or the total number of units times $250,000, whichever is less.

Alternatively, residential condominium unit owners may purchase a dwelling

policy, which would provide coverage of $250,000 for the individual unit

structure and $100,000 for contents.

Secondly, the procedures for force placing flood insurance require a lender to

send the borrower notice after the expiration of the policy, informing the

borrower that the flood insurance policy has lapsed. The notice also informs

the borrower that flood insurance coverage must be obtained in an appropriate

amount within 45 days or the lender will force place the insurance. The

problem lies in the 45-day period in which there is no flood insurance

coverage and the lender may be exposed to risk of losses due to flooding.

FEMA’s Response: No Further Action Required

Explanation: Because of the legal nature of ownership of co-operatives, cooperative units are owned not by those who occupy them but by a corporation

in which the occupants own stock. Accordingly, the NFIP limits flood

coverage to members of a co-operative to what they own and have an insurable

interest in their contents. (The NFIP offers contents coverage only to cooperative unit owners.)

By law, the NFIP offers individual coverage for units under the RCBAP and

replacement cost for the unit through the Dwelling Policy because of the

nature of the ownership of the property and the nature of the occupant’s

insurable interest in the unit.

For co-operatives, no such insurable interest or ownership arrangement exists.

The member of a co-operative has only an insurable (ownership interest) in the

contents of the unit he or she occupies. And consistent with what the

individual co-operative unit owner owns (the contents and stock in a

corporation), the NFIP offers the appropriate coverage. Because of the above,

the suggestion cannot be adopted.

FIA has informed the WYO Marketing Committee of the interest in this issue

so that the NFIP industry partners may consider whether there is a potential

market for such coverage that they may want to offer their own.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-15

Issue: Development of exclusive residential co-operative policy similar to RCBAP

Unless a lender is willing to absorb the cost of purchasing an annual policy,

the property is uninsured during this 45-day force placement period.

Issue: Lowering of minimum deductibles and/or premiums for structures of little value

Respondent’s Recommendation(s):

Flood insurance requirements apply to loans in excess of $5,000, regardless of

the value of the improvement that serves as collateral. For example, if a lender

makes a loan for $5,500 and the value of the improvement is $1,500, the NFIP

advises that the amount of insurance coverage be 80 percent of the value of the

structure, or $1,200. The annual premium cost for this coverage is the NFIP

minimum of $80. In the event of a total loss, however a minimum $500

deductible would be applied and the total amount of the flood insurance

coverage is only $700. Thus, the annual premium in this example would

exceed 10 percent of the total insurance proceeds. Therefore, explore the

feasibility of lowering minimum deductible amounts and/or lowering policy

premium fees for structures of little value.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Regardless of the value or the face amount of a policy, certain

expenses are constant. The administrative and programming costs to issue a

$5,000 policy are essentially the same as the costs to issue a $500,000 policy.

(That “expense constant” is therefore appropriately the same for each policy.)

FIA has also discussed with the U.S. Congress the matter of Federal Policy

Fees (FPFs) that support the costs of mapping and floodplain management

activities. The U.S. Congress has supported the view that each policyholder

should pay the same fee that will support mapping and floodplain management

activities under the NFIP.

In addition, as part of the National Flood Insurance Reform Act of 1994, the

Congress exempted from the requirement to purchase flood insurance, loans

with an outstanding principal balance of $5,000 with a repayment term of one

year or less.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-16

Issue: Development of “bridge” insurance coverage

Respondent’s Recommendation(s):

Develop “bridge” insurance policies, available at lender’s expense, to provide

protection during the 45-day period between lapse of policy and forced

placement.

FEMA’s Response: Assigned For Further Study

Explanation: This recommendation will be referred to the NFIP Marketing

Committee in late FY 2000 to determine private sector interest to offer this

coverage by the private insurance market. FIA will also consider this

recommendation during the agency’s next call for legislative issues for a

possible statutory change that would address the issue of low value loans.

Issue: Changes to ICC claims process to remove the local administrator’s involvement

Respondent’s Recommendation(s):

The burden of making a determination should be taken completely out of the

hands of the local administrator and be placed solely and insurance-based

requirement. The ICC insurance benefit should kick in as currently intended,

as tracked through FIA record keeping. Allow any policyholder to take

advantage of an ICC claim, regardless of community passage of a repetitive

loss definition. This could ultimately improve the policy base when noninsured residents see the benefit to their neighbors from carrying flood

insurance. It will also improve the long-term balance of the insurance fund,

and decrease future flood damages, by accelerating the conversion of noncompliant pre-FIRM structures into compliant structures.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Under Section 555 of P.L. 103-325, ICC coverage is by

definition payable to help a policyholder comply with a State or local

floodplain management requirement after a flood loss. This recommendation

would de-couple ICC coverage from its essential compliance component under

the statute. The recommendation would require a legislative change and FIA

does not plan to recommend this proposal for legislative change in the near

future.

When FIA priced ICC coverage and decided what the appropriate limits of

coverage would be at first, it included in the pricing that there would be a

certain number of repetitive flood loss structures made to comply with local

floodplain management requirements for repetitive loss structures. This

proposal which would de-couple the coverage from enforcement by State or
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-17

Issue: Changes to ICC claims process to remove the local administrator’s involvement

local governments of cumulative flood loss ordinances would reduce the limits

of ICC coverage at the very time when the NFIP stakeholders want FIA to

increase the limits of ICC coverage.

Of the three categories of structures eligible for ICC coverage under the

statute, substantially flood damaged structures are the primary concern of the

NFIP since every participating community under the NFIP must have in force

an ordinance that requires the elevation or flood-proofing of a structure that

has been substantially damaged, i.e., 50 percent or greater than its market

value at the time of loss. The second category eligible for ICC – repetitive

flood loss structure – is a priority but FIA has far less experience with the

compliance of this type structure with State and local floodplain management

ordinances because cumulative damage ordinances for floodplain management

are not a requirement of the NFIP for participation. FIA’s strategy has been to

make ICC work in its initial phase for substantially damaged structures – the

most structures that would be eligible for the coverage. FIA believes the

public is better served by the following approach: FIA increased ICC limits of

coverage from its previous $15,000 to $20,000 effective May 1, 2000, rather

than lowering premiums or liberalizing the criteria for eligibility which this

proposal cause.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-18

Issue: Lowering of ICC policy rider fee for pre-FIRM structures

Respondent’s Recommendation(s):

Lower the ICC policy rider fee for pre-FIRM structures to a more affordable

base, and by doing so, take steps to increase the policy base. Lowering the

ICC fee for pre-FIRM structures could help the insurance fund in two ways.

By decreasing the cost of insurance, more people will be willing to purchase

flood insurance, thus helping the overall policy base and decreasing the burden

on other flood relief programs. Secondly, allowing more property owners to

take advantage of ICC coverage will lower future claims payments by

converting more at risk structures to compliant structures, with reduced flood

risk.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA decided to pursue higher limits of ICC coverage in FY

2000 rather than lowering premiums, which would prevent FIA from

providing higher limits due to the actuarial approach the FIA must take for the

NFIP. ICC limits of coverage were increased to $20,000 effective May 1,

2000.

FIA needs to consider two issues when dealing with ICC issues: 1. FIA is

limited by statute as to the amount we can charge for ICC coverage, i.e., a

maximum surcharge of $75 per policy, and 2. FIA is expected by the U.S.

Congress to operate the program on an actuarially sound basis. Therefore, we

need to have an actuarial basis for pricing ICC coverage within the limitations

of the surcharge. From initial analyses, FIA concluded that to operate on an

actuarially sound basis and charge no more than $75 per policy, it could offer a

maximum of $15,000 in introducing ICC coverage. From the NFIP’s limited

experience with ICC so far, many stakeholders of the NFIP have shared the

concern that the limits of ICC coverage should be increased whenever possible

since $15,000 while a start will not in a variety of cases pay for the total

amount of bringing a structure into compliance with State and local floodplain

management standards after a flood loss.

FIA is looking carefully at the loss experience for ICC. One issue to be

considered is disconnects between the large claim payments for physical

damage from flood under Coverage A of the SFIP and the relatively fewer ICC

claims for those same properties. (Large flood losses should be indicating

substantial flood damages triggering ICC claims.)
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-19

Issue: Elimination of ICC coverage for historic buildings

Respondent’s Recommendation(s):

Eliminate ICC coverage and the increased premium on historic buildings. ICC

insurance coverage cannot be justified on historic buildings, which comprise

an estimated 50 percent of pre-FIRM buildings in Vermont. Within the past

few years, the NFIP has added ICC coverage to all policies and has increased

the premium to cover the cost. The increased premium on historic buildings in

$75.00/year. Yet, in most cases, historic buildings cannot be made compliant

with NFIP standards without destroying their historic value. Therefore, the

owners of these buildings are paying for coverage they cannot claim if

damaged.

FEMA’s Response: No Further Action Required

Explanation: FIA has had limited experience with ICC claims since its

introduction in 1997. FIA has had even less experience with ICC claims for

historic structures. However, FIA does not agree that policyholders are paying

for coverage they will never collect on. One of the eligible activities for ICC

benefits under the SFIP is relocation. It has been FEMA’s direct experience at

its own Emmitsburg, Maryland facility that historic structures may be

relocated without destroying their historic character. The historic character of

structures has been preserved with flood-proofing methods. Also, with any

bundle of coverage, there will be a range of covered perils some of which the

policyholder may feel are unlikely to occur, e.g., under homeowner’s

coverage.

Issue: Denial of flood insurance coverage for new development in SFHAs where base flood depths are 5 feet or

more

Respondent’s Recommendation(s):

The NFIP should refuse to provide flood insurance for new development in

floodplains where the flood depth is 5 feet or higher, no matter if levees are

provided or not. This prevents additional people and property from being put

at risk of flooding behind levees.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FEMA’s Mitigation Directorate will in FY 2002 review all

relevant documentation (NAS study, Galloway report) and FIA will look at the

NFIP’s loss history that may involve failed levees. FIA and MT will then

explore policy issues for FEMA in mapping areas behind levees, namely,

protection and providing flood insurance coverage for any structures built after

levees were completed.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-20

Issue: Removal of mandatory flood insurance purchase requirement for existing structures when levees are

discredited

Respondent’s Recommendation(s):

Political reality might require a phased approach to implementing this policy.

Grandfather all existing property owners to exempt them from the mandatory

flood insurance without a standard project flood level of protection. Whenever

the property is sold, then flood insurance would be required of the new owner.

This gives communities time to work on getting the flood control system to

handle the standard project flood.

An alternative would be to phase in mandatory flood insurance for all existing

property. The cost would be very low to start and would increase over 15 to

20 years to full value. Political pressure from an organized group is more

likely with this approach. By combining the two ideas contained here, one

could grandfather existing property and then apply the phased flood insurance

requirement over the 15–20 year period.

FEMA’s Response: No Further Action Required

Explanation: FIA disagrees that using the Standard Project Flood as a basis

for mapping and even a phased in flood insurance purchase requirement,

would be useful for the program or even feasible. Whatever changes to the

mandatory purchase requirements should be made will be addressed as part of

a comprehensive assessment of the NFIP which will begin in FY 2000.

Issue: Replacement of PRP using credits and surcharges within SFIP

Respondent’s Recommendation(s):

A PRP is allowed for low-risk flood zones and locations without prior flood

claims and it carries its own rules, rates, and form. Eliminate PRPs and its

rates, rules, forms, and expenses and use credits and surcharges within the

Standard Program to accomplish a low-cost and low-risk flood coverage.

Tremendous savings should result. It is illogical to penalize flood

FEMA’s Response: Assigned For Further Study

Explanation: FIA will raise this issue with the WYO companies in early

FY 2002 to see if there is a way the PRP concept can be retained while making

the application procedure and forms for PRP and the standard policy more

consistent and convenient for agents to use.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-21

Issue: Replacement of PRP using credits and surcharges within SFIP

policyholders for having a flood. The problem is with premium incentive and

actuarial soundness, which should be achieved within the present program.

Issue: Increased coverage limits to reflect increasing house values

Respondent’s Recommendation(s):

Basic limits available within the system should be increased. Both emergency

and regular program maximum limits should be increased as house values

keep increasing and willing participants within the NFIP should be offered full

replacement cost limits.

FEMA’s Response: No Further Action Required

Explanation: FIA will monitor policy sales and recommend, when

appropriate, a change in the limits of coverage when future circumstances

warrant the increase under the NFIP. Consistent with industry practices during

the renewal process, the NFIP offers policyholders the chance to adjust the

face amount of the flood insurance policy for their dwelling, within he

statutory limits, to account for inflation. To increase policy limits for

residential dwelling would require a change in the statute. FIA studies trends

of policy sales, market demand, coverage and losses under the program ad

have periodically recommended to the U.S. Congress increases in the statutory

limits during oversight hearings. Currently, however, FIA does not see the

need to recommend that Congress increase the limits of flood coverage for

residential structures. The average policy purchased under the NFIP for a

single-family dwelling is $100,000 – well below current limits of $250,000.

The recommendation speaks to excess coverage over what the statute currently

offers. FIA has informed its industry partners represented on the NFIP

Marketing Committee of this proposal and the potential market for excess

flood coverage that the industry might consider offering.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-22

Issue: Clarification of insurance coverage for residential condominiums

Respondent’s Recommendation(s):

Condominium rating contemplates business use occupancy of lower floors.

Residential condominium coverage should consider overall occupancy of the

structure. If the condominium is primarily for habitation, then it should be

eligible for residential coverage and rated as such. If it is for business,

mercantile, or non-habitational, then it should not be eligible for residential

coverage and use non-residential rates.

FEMA’s Response: Adopted/Action Underway

Explanation: Condominium buildings containing one or more residential

units and in which at least 75 percent of the floor area is residential are eligible

for residential coverage and rates.

Issue: Reconsideration of coverage for finished basements

Respondent’s Recommendation(s):

Consider alternatives such as offering the coverage as optional on the

homeowners policy. No flood insurance coverage is available for finished

basements. While the optimal solution would be to have no basements in

SFHAs, the reality is that many people use basements as living spaces. Also,

in tornado-prone parts of the country, basement space is also disaster safety

space. Although the FIA has already studied this issue and recommended that

such coverage would be cost prohibitive, a further review is recommended.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA conducted a study on this issue after the devastating

floods of the Upper Midwest in 1996: Many flood victims had personal

property in basements and expressed an interest in flood coverage. FEMA

instructed FIA to investigate the feasibility of providing coverage under the

SFIP for personal property in basements. After gathering data, and

considering every approach, FIA reported that the cost to buy such coverage

was prohibitive for the consuming public. For only $7,000 worth of basement

contents coverage, the policyholder would have to pay an additional $300 each

year in premium, thereby increasing the cost of flood insurance from an

average annual premium of $560 per policy, where the NFIP has experienced

price resistance, to almost $900 a year. To offer coverage for property in such

a high-risk area at anything less than full-risk premiums and to have the

taxpayers support flood insurance coverage for such property is simply poor

public policy. FIA has, however, informed the NFIP Marketing Committee of
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-23

Issue: Reconsideration of coverage for finished basements

the potential consumer interest in coverage against flood for basements beyond

what FIA has determined, and is appropriate for the NFIP to cover. The

private industry can decide whether it wants to offer such coverage on its own.

Issue: Improvement to flood insurance product by adding new coverage, either as a core element or option

Respondent’s Recommendation(s):

Improve the flood insurance product by adding new coverage, either as option

or as core element. Several respondents requested that FIA improve the flood

insurance product by adding new coverage, either as an option or as a core

element of the SFIP for Additional Living Expenses, Business Interruptions,

Ordinance and Law, and Wells and Septic. Most of the respondents also

recommended that FIA, prior to making these changes, involve the insurance

industry in a comprehensive evaluation of these options and the additional

premium needed to secure requested insurance.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will begin a comprehensive study in late FY 2000 of all

the additions in coverage under the SFIP. The study will involve coordinating

within FEMA and with industry partners, gathering relevant data, prioritizing

the recommendations, and pricing each recommendation. A form of

Ordinance and Law Coverage is already a part of the NFIP policy coverage for

the increased cost of construction following flood loss, resulting from local

Ordinance and Law requirements.

Issue: Addition of coverage for commercial and municipal infrastructures and lost income protection

Respondent’s Recommendation(s):

The NFIP should make more coverage options available, especially for

commercial and municipal infrastructure, lost income protection, and offset

setup costs to better serve and attract a wider consumer base.

FEMA’s Response: No Further Action Required

Explanation: Coverage for infrastructure and income loss from floods is

being offered in the private sector. The NFIP is designed to meet needs for the

public not met or under served in the private sector.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-24

Issue: Increased policy limits to match property values, construction costs, and replacement cost valuations

Respondent’s Recommendation(s):

Increase policy limits to match property values, construction costs, and

replacement cost valuations.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: This proposal would require a change in legislation if FIA

were to pursue it. FIA does not believe, however, that an increase is needed at

this time. The face amount of the average dwelling policy is $100,000. (The

current statutory limits for a single-family dwelling in the regular program are

$250,000.) There does not appear to be a need, under the NFIP, for increased

coverage limits at this time. And while this proposal has been made in the

past, FIA does not believe there is a genuine market for value-added policies

on flood insurance. For “high end” properties, there are already carriers that

provide excess coverage over what the NFIP by statute provides. FIA will

monitor insurance sales and home mortgage sales to see if such a proposal

needs to be raised at the national policy level. FIA has informed the Write

Your Own Companies of this proposal and encouraged them, on their own, to

provide such excess coverage by offering a value-added flood insurance

policy. FIA also will continue to monitor market and sales trends, and, if

appropriate, consider recommending in a future legislative cycle, an increase

in policy limits to Congress.

Issue: Investigation of disadvantages of adding “flood peril” to homeowners insurance policies

Respondent’s Recommendation(s):

Investigate disadvantages of adding “flood peril” to homeowners insurance

policies before making any recommendation.

FEMA’s Response: No Further Action Required

Explanation: Although it would be desirable and easier for the public to

understand and obtain, FIA is of the view that the private insurance industry is

not ready to add flood insurance to the homeowners policy. FIA believes that

the NFIP, under its current partnership arrangement with the insurance
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-25

Issue: Investigation of disadvantages of adding “flood peril” to homeowners insurance policies

industry, is providing the flood coverage the public wants and needs for flood

risks. It is conceivable that if and when pre-FIRM risk rates are no longer

subsidized under the NFIP, that the private insurance industry may decide to

include this peril in its homeowners’ policies. Nothing prohibits an insurance

company from writing this coverage today as a separate policy and retaining

the liability.

Issue: Elimination of the 3-year policy

Respondent’s Recommendation(s):

Eliminate the 3-year policy.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA has decided to eliminate the 3-year policy. This change

became effective May 1, 1999. FIA plans to examine retention rates for the

next three years to determine whether this forthcoming change will affect

retention rates. If this change does not work, we will consider revising this

decision.

Issue: Coverage for replacement plywood sheathing of the foundation walls below BFE

Respondent’s Recommendation(s):

Clarify existing rules regarding the plywood sheathing of the foundation walls

of the building below the rated elevated floor. For some reason, this issue

really did not seem to come to the forefront until 1997 flooding and claims.

On policies using post-FIRM rates, whether post- or pre-FIRM construction,

claims were denied for damages to this plywood sheathing because it was

FEMA’s Response: Adopted/Action Underway

Explanation: FIA agrees that plywood sheathing, meeting certain

standards, should be considered part of the foundation wall. FIA will by the

end of FY 2000 issue guidance to WYO companies specifying when plywood

sheathing can be considered part of the foundation wall and therefore eligible

for flood coverage.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-26

Issue: Coverage for replacement plywood sheathing of the foundation walls below BFE

assumed that the plywood was decorative/cosmetic, rather than a required part

of the foundation. In California, these foundation walls must be sheathed with

plywood to provide proper shear strength for earthquake standards. Therefore,

the claim should not be denied for the sheathing.

Issue: Changes in coverage effective date

Respondent’s Recommendation(s):

The Government force-placed insurance product causes a gap in coverage that

exposes the lender to loss and is rated so as to be a significant burden to the

consumer and lender. Revise the rules to allow coverage to be effective from

the first day of lender notification to the borrower. The MPPP rules require

the lender to send 3 notification letters over a 45 day period prior to placement

of coverage. Coverage in this instance should be effective the date of the

lender’s first letter to the borrower. It should be noted that the “30-day waiting

period” is a result of a lender request, and it should be waived here, too.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA has informed the NFIP Marketing Committee of this

recommendation; namely, that there is interest in a product that provides

blanket coverage for the lender to cover lapses in flood coverage before forced

placement takes effect. The MPPP was designed as an exception vehicle for

lenders that discover one of their mortgage loans is not covered by flood

insurance when it is required. Coverage would have been in place without a

waiting period if due diligence had been performed by the lender at loan

closing instead of during the life of the loan upon purchase of the loan on the

secondary market. The waiting period is designed to allow the borrower either

to prove existence of flood coverage or purchase a regular policy at a much

lower cost. FIA does not agree that MPPP coverage should begin upon

“notification.” Such coverage may be available from the private sector.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-27

Issue: Self-certification from policyholders to ensure below-BFE enclosures are not converted to other uses

Respondent’s Recommendation(s):

Many communities wrestle with the problem of compliant elevated structures

with enclosures constructed below BFE having the enclosures converted to

uses other than parking, storage, and building access, often without benefit of a

permit or code inspections. Because only limited insurance coverage is

available to this area, many property owners think that they should be able to

assume their own risk and convert the enclosure to finished living space.

Require an annual policyholder self-certification to state that the property has

not been altered. Cancel the policy or assess a substantial penalty for false

certification.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will review this issue with other FEMA offices during

the fourth quarter of FY 2000.

Issue: Quarterly or semi-annual policies

Respondent’s Recommendation(s):

Allow quarterly or semi-annual policies. Although this would generate more

time spent issuing renewals and policies, if the premium was affordable for

more people, this would generate more business.

FEMA’s Response: No Further Action Required

Explanation: Premiums under the NFIP are considered fully earned

because of the seasonal nature of flooding and the desire of some to seek

coverage only during “Flood Season.” Allowing such short-term coverage

would significantly increase the cost of the coverage due to the higher

potential for loss. FIA does not believe that quarterly or semi-annual policies

are in the best interest of the NFIP or the public.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-28

Issue: Requirement of PRP for structures removed from SFHA by LOMA

Respondent’s Recommendation(s):

The NFIP is losing its mandatory flood insurance policy base by issuing

LOMAs. When the LOMA is issued, the producing insurance agent may

cancel the SFIP, provided the lender agrees to waive the mandatory insurance

requirement. A full refund of premiums and fees, sometimes for 2 years, is

usually provided. Rather than providing a premium and fee refund and policy

cancellation because a structure may be close to, but not “in” the SFHA,

convert the SFIP to a PRP for 1, 2, or 3 years (depending on how much the

paid premium will provide). This will help retain the policy base and the

producer, providing benefits to the NFIP.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: In FY 2000, FIA will look at how it can target people more

effectively with information on the benefits of flood insurance and the value of

the PRP as an inducement to buy flood insurance voluntarily. Part of that

effort will involve reviewing materials by FEMA that are sent to those

requesting and receiving LOMAs and LOMRs to emphasize the value of flood

insurance as a voluntarily purchased product.

Issue: Allowing multiple policies to eliminate “shortfalls” in coverage

Respondent’s Recommendation(s):

Only one flood insurance policy may exist on a property at one time. If it is

discovered during the term of the loan that the property is underinsured, and if

the customer does not increase the amount of insurance appropriately at the

next renewal, the bank cannot force-place a policy for the shortfall. This also

presents a problem when a bank has a junior lien on a property and the first

lien is held by another lender. This rule also prevents the bank from forceplacing flood insurance when the bank makes a loan secured by a junior lien

where the first lien was with a different lender who did not require an adequate

level of flood insurance. Often the borrower resists purchasing flood

FEMA’s Response: No Further Action Required

Explanation: Having more than one policy on a building presents problems

with assuring that statutory limits are not exceeded on the building and allows

an opportunity for abuse or fraud at claim time if a claim is paid twice.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-29

Issue: Allowing multiple policies to eliminate “shortfalls” in coverage

insurance, taking into account the outstanding balance on both loans. The

bank should not be responsible for ensuring that the shortfall is insured or be

permitted to force-place a second policy.

Issue: Allowance of condominium associations’ umbrella policy to cover units located outside SFHAs

Respondent’s Recommendation(s):

If one building in a condominium complex is in a SFHA and another building

in the complex is not, any loan in the complex must have flood insurance on it.

This is a very difficult concept to convey to potential borrowers who wish to

obtain a loan secured by a unit which is not in the SFHA, especially those

whose condominium associations do not have the required umbrella flood

insurance policy. An association’s umbrella flood insurance policy covering

all units in a SFHA should be considered adequate proof of coverage, even

though the unit to be secured by the loan may not be in a building in the

SFHA. If that change is not possible, then awareness training for

condominium associations should cover this requirement.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: The RCBAP is not an umbrella policy. It is written as a

specific building coverage of the common areas as well as individual units in

that building and its coverage is rated according to its design, age, and

location. The RCBAP was designed for condominium associations to cover

their building in the same manner as other forms of property insurance.

Because flood insurance is required under the law only on property (condo

units) located in SFHAs or in buildings located in SFHAs, evidence of an

RCBAP in an amount sufficient to meet statutory requirements should be

sufficient. Although flood insurance is not required outside SFHAs, its

purchase is encouraged, as many losses occur in such areas. FIA will continue

its efforts to educate condominium associations about the details of the NFIP.

We have asked the NFIP Marketing Committee for help in conducting a public

information campaign on the NFIP targeting condominium associations.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-30

Issue: Changes in the requirement for minimum flood insurance coverage

Respondent’s Recommendation(s):

Change the minimum amount of flood insurance coverage required to the

lesser of the following:

1. the outstanding mortgage balance on the structure;

2. the anticipated repair cost of the flood damages to the structure under

the 100-year flooding condition; or

3. $250,000 for residential and $500,000 for industrial/commercial

structures. Further, require that lenders not require the higher

amounts.

FEMA’s Response: No Further Action Required

Explanation: FIA has emphasized that it is purely the lender’s discretion if

the lender decides, in the interest of a sound business judgment, to require

more flood insurance than that required by law. FIA maintains that this is the

appropriate policy to follow – to ensure that the requirement for flood

insurance intended by Congress be adhered to while giving lenders the

flexibility to require more flood insurance than is required by law or in areas

outside of SFHAs. While FIA has published guidelines to lenders for

complying with the mandatory purchase of flood insurance, each lender must

look to the Federal agency that regulates its activities. This proposal would

add a third option for the amount of flood insurance to be required by lenders –

i.e., estimated repairs in shallow rather than deep flooding areas. This would

cause creative and compliance difficulties that the NFIRA did not intend.

Because the concern seems to reflect, in part, a concern over the amount of

flood insurance and the rates paid for coverage in areas subject to shallow

flooding, it is important to understand that FIA in setting rates that take into

account the damage to be expected from shallow flooding events as well as the

damage expected from deep flooding.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-31

Issue: Addition of flood insurance premiums to property tax bills

Respondent’s Recommendation(s):

It would be fair to all if the local participating communities have a box on the

annual property tax bill notifying the property owner of its flood status. The

community could then place flood insurance on all properties located in a

flood hazard area and collect the premium as part of their property tax bill.

FEMA’s Response: No Further Action Required

Explanation: This proposal is a creative approach to coverage of properties

in flood hazard areas. It is also in keeping with the philosophy of the 1966

Flood Insurance Feasibility Study, which envisioned all floodplain occupants

and business owners “paying their own way” through flood insurance.

However, the proposal would add a significant resource burden on

communities and a potentially heavy cost for Federal taxpayers. (Current

legislation prohibits any unfunded mandates by the Federal Government on

local governments.) The proposal would also delink the mandatory purchase

requirement for insurance from lenders where it is traditionally handled for

other lines of property insurance. For instance, the requirement by lenders that

mortgagors buy and maintain homeowners or fire coverage is imposed by the

lender. The Government has a direct link with lenders through the insurance it

provides on deposit and with Federal agencies providing financial assistance to

property owners directly and indirectly. The Federal Government does not

have such a direct link to local governments to impose such a requirement.

Issue: Extension of ICC coverage

Respondent’s Recommendation(s):

Change the ICC coverage, indicating it is not sufficient to cover the costs of

the work required to make a structure compliant after it is damaged during a

flood. Specifically: 1) extend ICC coverage to cover the full costs of elevating

a home above the BFE to meet NFIP-approved local floodplain management

codes; 2) give property owners the option of purchasing more ICC coverage

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: The amount of premium FIA can charge for ICC is limited by

Section 555 of P.L. 103-325 to a maximum of $75 per policy per year. The

limits of coverage were established based on the maximum charge allowable

and the expected loss experience. On May 1, 2000, ICC benefits were

increased to $20,000.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-32

Issue: Extension of ICC coverage

for an additional premium; and 3) revise the coverage amounts based on a

study of the actual market costs for making a structure compliant.

Issue: Allowing lenders to require borrowers to carry replacement cost rather than loan balance level

Respondent’s Recommendation(s):

This is a three-part issue: 1) change the mandatory purchase requirement to

provide lenders with the ability to require borrowers to carry replacement cost

versus loan balance, just as they require for fire/homeowners coverage;

2) change the policy provision to provide replacement cost coverage on all

properties insured to at least 80 percent of replacement cost, or maximum

allowable, regardless of occupancy; and

3) provide replacement cost coverage as an option with an additional premium

payable for contents (personal property). Each part of this issue will improve

the NFIP and provide greater protection to insureds, agents, and lenders. It

will make the NFIP follow the premise of other property policies more closely.

FEMA’s Response: Assigned For Further Study

Explanation: A similar suggestion was made to the U.S. Congress during

deliberation of NFIRA and a part of the legislative process in 1999, but it was

rejected on both occasions. FIA will include the issue of mandatory purchase

coverage amounts in the NFIP assessment for FY 2000.

FIA informed the NFIP Marketing Committee of the interest in this issue. FIA

will not provide replacement coverage except for single-family dwellings, but

the NFIP industry partners may wish to consider whether there is a potential

market for such coverage that they may wish to offer on their own.

FIA will in FY 2000 look into the feasibility of providing replacement cost

coverage for contents as part of the study on the list of coverage changes

suggested in the Call For Issues project.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-33

Issue: Development of PRP for commercial properties

Respondent’s Recommendation(s):

To encourage the sale of more commercial flood insurance, develop a PRP for

commercial properties. A format similar to what is used on the current PRP

should be used, but with higher levels of coverage, using wider spreads

between options, and going from $50,000 to $500,000 in building/contents

coverage.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will discuss the issue with the NFIP WYO Work Group

in late FY 2000.

Issue: Reduction or elimination of coinsurance requirement for RCBAP

Respondent’s Recommendation(s):

Eliminate the coinsurance requirement, as there is no coinsurance requirement

for any other type of building in any of the NFIP’s other programs.

Eliminating the requirement will allow for affordable premiums by way of

lower coverage limits. In turn, more associations would carry flood insurance,

allowing for a broader premium base to help FEMA absorb large shock losses

and help minimize “adverse selection.”

If limits are required, they should more accurately reflect the realistic exposure

to loss. In the majority of circumstances, only a small portion of the building

is actually at risk, particularly in areas where the risk of catastrophic flooding

is low. Undertake an actuarial study to determine realistic rates that accurately

reflect risk of loss. Devise a risk-based system rather than the present

inaccurate mapping system.

Establish guidance regarding valuation. Consistency in valuation will reduce

the opportunity for an association to be unknowingly underinsured.

FEMA’s Response: Assigned for Further Study

Explanation: FIA will begin a review of its rating of condominium

property in late FY 2000.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-34

Issue: Changes in process for cancellation of condominium association policies

Respondent’s Recommendation(s):

All mortgage holders in a condominium structure should be notified by mail

and have an opportunity to be heard by way of association meetings.

Cancellation of the policy should not require each mortgage holder’s approval.

FEMA’s Response: No Further Action Required

Explanation: At this time, the NFIP Flood Insurance

Cancellation/Nullification Request Form instructs the insurance agent to

provide a copy of the completed form to the mortgagee(s) on file. After

processing the Cancellation/Nullification Request Form, the NFIP will send

the insurance agent, mortgagee(s), and insured a notice of cancellation. When

either the insured or insurance agent cancels an NFIP policy, the policy

remains in force for the benefit of a mortgagee(s) and trustee for 30 days after

the date of mailing the written notice of cancellation to the mortgagee(s) or

trustee.

Further, Boards of Directors of condominium associations typically are

responsible under their by-laws for maintaining all forms of property insurance

necessary to protect the common property of the association against all hazards

to which that property is exposed for either the insurable value or replacement

cost of those common elements. This responsibility would typically include

providing adequate flood insurance protection for all common property located

in SFHAs. Such by-law requirements could make the individual members of

the boards of directors of such associations personally liable for insurance

errors or omissions, including those relating to flood insurance.

The NFIP has no authority over the conducting of association meetings or any

other activities performed by condominium associations on behalf of unit

owners.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-35

Issue: Provide higher deductibles and lower premiums for condominium associations

Respondent’s Recommendation(s):

Provide for higher deductibles so that associations can afford to carry flood

insurance. Increased coverage will reduce the risk of loss due to the perils of

flood, heavy rains or other water sources. Attendant to higher deductibles

should be dramatic reductions in rates. Since the majority of flood claims

occur in the first dollar layers of coverage, self-insuring associations (those

that choose high deductibles) will be rewarded by significant reductions in

premiums. In essence, this will return coverage to catastrophic level and may

provide an incentive for private insurers to provide lower levels of coverage on

back-up of sewer and drains.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will conduct an overall review of its treatment of

condominium property in late FY 2000.

Issue: Implementation of effective strategy to address repetitive losses

Respondent’s Recommendation(s):

Develop alternatives to establish an effective repetitive loss strategy for the

nation.

1. Increasing premiums for more than 2 losses – go to or toward

actuarial rates.

2. Effectively implementing ICC coverage.

3. Assisting communities in developing mitigation plans for repetitive

losses, using FMA; HMGP; Project Impact; or other local, Federal,

or State funding sources.

FEMA’s Response: Adopted/Action Underway

Explanation: As part of FEMA’s Repetitive Loss Strategy, mitigation

assistance will be offered to many of the highest-risk repetitive losses. If a

property owner refuses a mitigation assistance offer, one of the consequences

under consideration, is to henceforth offer insurance on that property at

substantially higher rates, and possibly only at full-risk premium. Rulemaking

and legislation are being pursued to clarify the specific procedures and to

determine whether this should be implemented in FY 2001.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-36

Issue: Implementation of effective strategy to address repetitive losses

4. Helping communities implement mitigation plans to reduce repetitive

losses that would elevate, relocate, or otherwise reduce the flood risk

to most of these structures. This should include actions to ensure

community compliance with substantial damage standards, and added

incentives for communities to adopt and implement cumulative

damage requirements, as well as adopting comprehensive community

drainage and mitigation plans.

5. Property owners who refuse to mitigate should be required to pay

higher flood insurance rates, be subject to higher deductibles, or be

refused flood insurance coverage and disaster recovery assistance,

making sure to tie those benefits losses into other programs like IA,

HOME, etc.

6. Finding funding for those who cannot afford the mitigation measures

– other funding sources should be sought and coordinated through the

community, the State, and FEMA. In many post-flood situations,

rather than make repairs to a damaged structure, the affected families

should be allowed to remain in temporary housing until a complete

package is developed for the structure or neighborhood.

7. Clean up the database of repetitive loss structures, using State NFIP

coordinators through the CAP program, to include data to show the

risk and reason for flooding of each structure.

8. Providing increased information on the advantages and processes for

mitigation at the property owner and community level.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-37

Issue: Implementation of effective strategy to address repetitive losses

9. Adopting a three-claim maximum for repetitive-loss structures.

10. Restricting availability of funds and insurance.

11. Increasing deductible amounts.

12. Removing flood insurance availability.

Issue: Clarification of coverage concerning non-owned debris

Respondent’s Recommendation(s):

Wording in Coverage C – Debris Removal, paragraph A, reads “non-owned

debris from beyond the boundaries of the described premises which is

physically on the insured property.” In this instance, the “insured property” is

the structure. Non-owned debris located on the insured’s real property or

premises is not covered. Change wording to read “non-owned debris from

beyond the boundaries of the described premises which is physically on the

insured structure.”

FEMA’s Response: Adopted/Action Underway

Explanation: FIA made the change in wording during the SFIP rewrite in

FY 2000.

Issue: Elimination of “common wall” from flood insurance policies

Respondent’s Recommendation(s):

Eliminate the term or add it to the exception for buildings with a common roof.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA addressed the common wall issue in its rewrite of the

SFIP in FY 2000.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-38

Issue: Use of 80 percent insurance to value requirement as basis for replacement cost coverage

Respondent’s Recommendation(s):

Rely on an 80 percent insurance to value requirement as the basis for

replacement cost coverage and not require the dwelling to the principal

residence of the insured.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: This issue raises a national Federal disaster policy question.

To what extent should the NFIP be consistent with Federal disaster assistance

programs? Currently, SBA does NOT provide below-market interest rates to

repair properties under its disaster loan program for secondary or vacation

homes. Additionally, the IFG program, which is administered by FEMA and

implemented by each State after presidentially declared disasters on a costsharing basis, does not provide any benefit for vacation homes or secondary

residences. (While most recipients of IFG grants tend to be low-income or

fixed-income individuals who do not have the capability to repay disaster

loans, eligibility is not income-tested per se. Therefore, there are,

theoretically, IFG recipients who might have a second home.)

The working assumption for FIA in examining this issue is that the NFIP, to

the extent possible, must be consistent with other Federal programs that

provide benefits to the victims of floods and other natural disasters. To what

degree should a program providing subsidized flood insurance offer benefits

such as replacement cost insurance for a population of insureds that can most

likely afford the risk?

FIA informed the NFIP Marketing Committee of the interest in this issue from

the respondents to the Call for Issues. FIA will not provide replacement cost

coverage except for single family dwellings, but NFIP industry partners may

wish to consider whether there is a potential market for such coverage that

they may want to offer their own.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-39

Issue: Coverage for business contents for in-the-home businesses

Respondent’s Recommendation(s):

A homeowner must have a separate policy to cover business contents of an inthe-home business. Offer the addition of a limited amount of coverage in the

dwelling policy, as there is in most homeowner’s policies, to cover business

contents of an in-the-home business.

FEMA’s Response: Adopted/Action Underway

Explanation: The proposed SFIP has a limited amount of coverage for inthe-home businesses.

Issue: Additions and alterations coverage in policies for non-residential condominiums

Respondent’s Recommendation(s):

Currently, tenants in commercial buildings can get coverage for additions and

alterations to a total of only 10 percent of the amount of contents coverage.

The policy should allow for additions and alterations coverage (interior

structural items and wall/floor/ceiling coverings) in the unit owner’s own

name.

FEMA’s Response: Adopted/Action Underway

Explanation: In the proposed SFIP revision, we have added the

recommended change.

Issue: Reduction in waiting period for flood insurance policies

Respondent’s Recommendation(s):

Several respondents recommended that FEMA shorten the waiting period for

flood insurance policies from the present 30-day period. The recommended

waiting periods ranged from 5 to 21 days. The respondents indicated the

imposition and application of the waiting period to property owners in these

situations was inconsistent with the basic objective of the waiting period. The

FEMA’s Response: Assigned For Further Study

Explanation: FIA will in FY 2000 determine whether, during next year’s

legislative review, it would be appropriate to recommend that the agency seek

a reduction in the statutory 30-day waiting period before flood insurance

becomes effective.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-40

Issue: Reduction in waiting period for flood insurance policies

applicability of the waiting period was intended to serve congressional intent

to prevent abuse (i.e., property owners would purchase insurance only when a

flood was imminent) and to facilitate lender compliance with the mandatory

purchase of flood insurance. The 5-day waiting period was extended to 30

days to halt flood insurance sales immediately before an impending flood. The

rule establishing the 30-day waiting period is found in the Flood Insurance

Manual in the General Rules section on pages GR 7-9. NFIP customers do not

recognize the need for flood insurance, and are not aware of its impact when

an extended period like 30 days is imposed. The purchase of catastrophe

coverage (which is what flood insurance obviously is) is generated by the

threat of flooding within a reasonable measurable period of time. Thirty days

has proven to be too long and negatively affects the sale of flood insurance at

times when its protection is needed.

Issue: Waiver of waiting period for RCBAP

Respondent’s Recommendation(s):

Waive the waiting period for an RCBAP when the mortgagees who hold

mortgages for association unit owners require evidence of the condominium

association flood coverage. Although there is no mortgagee on the association

policy, the impact of the RCBAP coverage for the unit owners is the same “in

connection with making, increasing, extending, or renewing the loan...”

Furthermore, an individual Dwelling Policy purchased by the unit owner

would not afford the same extent of protection provided by the association’s

RCBAP.

FEMA’s Response: Adopted/Action Underway

Explanation: In FY 2000, FIA will issue clarification to the 30-day waiting

period exemptions as they affect condominiums.
Coverage

FEMA’s NFIP Call for Issues Status Report, June 2000 I-5-41

Issue: Changes in mandatory purchase requirements to replacement cost or maximum amount of insurance

available

Respondent’s Recommendation(s):

The amount of insurance required in the mandatory purchase rules is the

amount of the mortgage. Many times, this figure would be inadequate for

proper insurance protection and is not consistent with the amounts of insurance

carried in the homeowners or commercial property policies. Require that the

amount of insurance be the replacement cost of the property or the maximum

amount of flood insurance available, whichever is lower.

FEMA’s Response: Assigned For Further Study

Explanation: FIA referred this issue to the Lender Compliance Work

Group for review and recommendation. FIA also will include the issue of

mandatory purchase coverage amounts in the NFIP assessment study targeted

for FY 2000.
I Federal Insurance Administration

6 Lender Compliance

FEMA’s NFIP Call for Issues Status Report

June 2000
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-1

Issue: Flood insurance coverage for all federally backed mortgages

Respondent’s Recommendation(s):

1. Undertake an effort to more accurately determine the number of

structures/households at risk of flooding throughout the nation, both

in and out of SFHAs.

2. Seek to amend NFIP laws so that flood insurance is required for all

Federal or federally related financial assistance to improved real

property, regardless of location.

Such a simple change to the law would provide for a more universal

mandating of flood insurance. This would eventually lead to a substantial

broadening of the numbers of properties protected by flood insurance, which

would likely parallel the numbers of properties protected by fire insurance,

about 40 to 50 million properties. In addition, lenders would no longer have to

use the flood insurance maps or property locator services, and would likely act

more uniformly in requiring flood insurance, as they could simply treat it like

fire insurance. The maps and the need to determine the location of every

property being mortgaged have been the largest single obstacles in the way of

uniform lender compliance with flood insurance requirements and a

significantly increased flood insurance policy base.

Broadening the policy base should also provide more flexibility in the NFIP’s

risk-based rating because there would be a much broader spread of risk among

properties of all degrees of risk. This would largely eliminate the severe

adverse selection underwriting problem that exists in the NFIP, due to the

focus on SFHAs. Such a change would also significantly reduce the number

FEMA’s Response: Assigned For Further Study

Explanation: FIA will conduct a study to accurately determine the number

of structures at risk from flooding (both in and out of the SFHA) in FY 2000

using existing data.

FIA will also investigate whether to amend the NFIP laws by removing the

limiting of the mandatory purchase focus to SFHAs alone and requiring flood

insurance for all federally related real property improvements. This will be

done as part of the overall NFIP assessment study that will begin in FY 2000.

FEMA has asked the U.S. Congress for increased borrowing authority. The

issue of requiring flood insurance in B, C, and X zones is among the issues

that FIA will consider as part of an overall NFIP assessment study that will

begin in FY 2000.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-2

Issue: Flood insurance coverage for all federally backed mortgages

of uninsured flooding victims, and their corresponding need for Federal

financial disaster assistance.

Issue: Lender submittal of annual certification

Respondent’s Recommendation(s):

Federal law should require that lenders annually verify that flood insurance is

in force when it is required to comply with the mandatory purchase

requirement. Properties no longer covered by flood insurance should not be

eligible for Federal aid or Federal loans. These lenders should be able to

terminate the loan agreement if flood insurance is not in force. An alternative

is to offer rate incentives to encourage people to keep their Policies in Force.

Examples are: 1) Years In Force credit and 2) Loss-free credit.

FEMA’s Response: Assigned For Further Study

Explanation: Title 42 U.S.C. 401a(b)(1) directs Federal regulators to adopt

regulations requiring the lenders subject to their jurisdiction to compel

borrowers to purchase flood insurance protecting any “improved real estate or

mobile home” located in an Special Flood Hazard Area (SFHA), if the

building, mobile home, and any applicable personal property securing such

loan is to be the security for the loan. While the 1973 Act only required the

purchase of flood coverage, the 1994 Reform Act clearly specifies that flood

insurance is required for the term of the loan, or any time during the term of

the loan when the lending institution determines that the building or mobile

home is located in an SFHA. On a regularly scheduled basis, Federal

regulators conduct bank examinations to determine a banking institution’s

level of compliance with the mandatory flood insurance purchase requirement.

Regarding eligibility for Federal aid, Section 582 Prohibited Flood Disaster

Assistance provides that no Federal disaster relief can be made available in a

flood disaster area to a person, if that person at any time has received flood

disaster assistance that was conditional on the person first having obtained

flood insurance under applicable Federal law and subsequently having failed

to obtain and maintain flood insurance as required under applicable Federal

law on such property.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-3

Issue: Lender submittal of annual certification

The terms and conditions of the mortgage agreement fully describe the rights

and conditions of the parties in reference to lenders terminating a loan

agreement if flood insurance is not in force.

Regarding rate incentives, FIA will not consider because the risk does not

change.

Issue: Extension of borrower response time to lender determination

Respondent’s Recommendation(s):

The legislation should be changed to provide additional time for a homeowner

to react. Presently, 45 days are allowed, but obtaining FEMA maps and other

supporting documentation and evidence can take several days.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: It is the belief of the FIA that an extension beyond the current

45 days would further extend the period of time that the subject risk remains

uninsured. FIA will discuss with the National Lenders Insurance Council

(NLIC), Federal Regulators and National Flood Determination Association

(NFDA) in FY 2000 to determine if this is a large-scale problem.

Issue: Placement of burden of proof for determination on FEMA and FZD Company

Respondent’s Recommendation(s):

The burden of proving a property’s location relative to the SFHA should be

placed upon the Federal agency and the map determination company rather

than the local government or individual homeowner.

FEMA’s Response: No Further Action Required

Explanation: The law placed the burden on FEMA to designate flood areas

on maps, and required regulatory and nonregulatory agencies to require their

lenders to determine whether the property is in or out of a special flood hazard

area. FEMA has established an appeals process to assist the homeowner who

disputes a determination.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-4

Issue: Exemption for federally defined “Abundance of Caution” loans from flood insurance coverage

Respondent’s Recommendation(s):

Federally defined “Abundance of Caution” loans should be exempted from

flood insurance coverage.

FEMA’s Response: No Further Action Required

Explanation: FIA will not follow this suggestion because it is contrary to

the intent of the law. The act looks to the collateral securing the loan, not to

the purpose of the loan. If the lender takes a security interest in improved real

estate, the Regulation applies without regard to the purpose of the loan.

Issue: Changes in lender requirements for lenders to check flood status

Respondent’s Recommendation(s):

Eliminate requirement to check flood status for anticipated annual renewals,

short-term extensions, and change in terms shortly after a loan is made.

FEMA’s Response: No Further Action Required

Explanation: FZD companies offer life of loan service to discover a change

in flood hazard status, thereby minimizing administrative burden for the lender

or service. Assuming the requirements in section 528 are met and the lender

made the first mortgage, then a new determination would not be necessary.

FIA cannot dictate bank transactions; the banks must weigh the burden and

determine which services meet their specific needs.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-5

Issue: Changes in Federal lending regulations regarding checks of flood status

Respondent’s Recommendation(s):

The regulations implementing Section 102(b) of the Act should be clarified to

require Federal lending regulators to require regulated lenders, expressly, to

follow procedures necessary to comply with the Act, such as performance of

flood checks where appropriate and monitoring of renewals of required flood

insurance policies. Citations in an examination report of an institution for

violation of the requirements to follow such procedures would help ensure

compliance by the institution with the mandatory flood insurance requirements. In addition, such citations would serve to alert the institution’s senior

management to deficiencies in the institution’s procedures that could lead to

the assessment of Civil Monetary Penalties (CMPs) against the institution.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will suggest appropriate language to regulators in FY

2000, because FEMA has no regulatory power. Legally, the specific

responsibility for §102 lies with each Federal Agency under the jurisdiction of

law. FIA supports assisting in the development and holding of hearings.

Issue: Clarification of guidelines for making “pattern or practice” determination to assess CMPs

Respondent’s Recommendation(s):

Section 102(f) of the Act should be clarified with respect to guidelines for

making a “pattern or practice” determination. Such guidelines should establish

a reasonable threshold for assessment of CMPs in terms of the percentage of a

bank’s loans subject to the flood insurance requirements for which flood insurance in the required amount for the property securing the loan is not in place.

In addition, the ability of an institution to detect and take steps to correct

deficiencies in its compliance with the mandatory flood insurance

requirements prior to an examination by the Federal lending regulator should

weigh heavily against the imposition of CMPs.

FEMA’s Response: Assigned For Further Study

Explanation: In FY 2000, FIA will raise this regulatory concern with both

the regulatory and nonregulatory agencies to consider language that would

clarify “pattern or practice.”
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-6

Issue: Escrow of premium payment into monthly payments and notification of mortgagees when policy is close to

expiration

Respondent’s Recommendation(s):

Allow flood premiums to be escrowed by the mortgagee to divide the premium

payment into manageable monthly payments. The NFIP should provide a

notice to the mortgagee when the flood insurance policy is close to the

expiration date to give the mortgagee the opportunity to renew the policy and

protect their property.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Escrowing is at the lender’s discretion based on loan

documents. The requirement to escrow is limited to instances where a lender

establishes an escrow account for a loan for another purpose (NFIRA). The

mandatory purchase law also states that escrow accounts established under the

Act are subject to the escrow provisions of RESPA. FIA encourages

escrowing where applicable.

Forty-five days prior to the policy expiration date, the NFIP mails a Renewal

Premium Notice to the insured and interested parties (if the payer), or other

payer, if any. If the renewal and premium are not received by the NFIP by the

date of expiration, an Expiration Notice is mailed to the agent, insured, and

mortgagee. The Expiration Notice advises the mortgagee that protection under

the policy shall continue after the expiration of the policy for 30 days from the

mailing date.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-7

Issue: Improved enforcement of lender compliance policies

Respondent’s Recommendation(s):

Improve and increase the monitoring of compliance by mortgage lenders.

Increase public education about this requirement.

FEMA’s Response: Assigned For Further Study

Explanation: FIA is coordinating with Lending Regulators to determine

how to improve enforcement within the lending community. To determine the

extent of compliance, FEMA has formed a working group that will undertake a

study of this issue. The Government Accounting Office has also been tasked

by Congress to review lender compliance. No start date has been set.

Issue: NFIP responsibility for FZD process

Respondent’s Recommendation(s):

Make the NFIP responsible for all zone determinations (for insurance rating

purposes). Mandate that the responsibility for accurate zones be assigned to

the NFIP. Rates for flood policies are based on correct zones, but there is

concern that incorrect zones are being used. Because the Government creates

the maps, they should maintain responsibility for insuring accurate zones.

This would also assist with the CBRS issue and may move the program closer

to being actuarially sound.

FEMA’s Response: No Further Action Required

Explanation: Because this is an underwriting responsibility of the WYO

Companies, map digitization should make this an easier task for the WYO

Companies, but it will still remain WYO company responsibility. There is

already an established industry that provides the services of flood zone

determinations.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-8

Issue: Improvement of FZD process for contracted firms

Respondent’s Recommendation(s):

Consider whether suggested standards for the performance of flood

determinations would be appropriate. It is not recommended that FEMA set

up a bureaucracy or regulations for these entities, but rather that standards for

the tests would give lenders more assurance that determinations are accurate.

FEMA’s Response: No Further Action Required

Explanation: FZD have formed an association (NFDA) that is looking into

certification and standards for the industry. FEMA will work with the NFDA

to create a certification program in FY 2000 that will include performance

instructions and an evaluation scheme. FEMA will also post more information

on its Web site to assist consumers, lenders, and others in reading and using

FEMA FIRMs. Videotapes and other methods for educating people about

flood maps will also be explored.

Issue: Handling of expired policies

Respondent’s Recommendation(s):

Establish a mechanism to identify policies written to close mortgage loans that

expire at renewal.

FEMA’s Response: Assigned for Further Study

Explanation: In FY 2000, FIA will investigate the feasibility and available

means to implement the recommendation.

Issue: Improved cooperation between insurance companies/agents and lenders

Respondent’s Recommendation(s):

Have lender and insurance company guidelines correspond with each other.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will investigate further in FY 2000 and also confer with

the NLIC to determine the extent of the problem for the lending industry.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-9

Issue: Changes in LODR processing

Respondent’s Recommendation(s):

Allow either borrower or lender to unilaterally request a LODR from FEMA,

without the joint request of the other party. It is recommended that the nonrequesting party be notified of FEMA’s review and results.

FEMA’s Response: No Further Action Required

Explanation: NFIRA was written to encourage the borrower and the lender

to work out their differences before coming to FEMA as the final arbiter.

Issue: Replacement cost coverage guidelines

Respondent’s Recommendation(s):

The NFIP guidelines should be revised to reflect replacement cost coverage on

the first lien to protect all lenders lending against the structures’ value. An

alternative might be to allow “contributing insurance,” i.e., more than one

policy in place, which is currently prohibited. This would allow the lienholder

to force place coverage when the borrower refuses to increase limits (in the

case of underinsurance) to cover the value of all the liens, up to 100 percent of

replacement costs.

FEMA’s Response: Assigned For Further Study

Explanation: FIA referred this issue to the Lender Compliance Work

Group for review and recommendation in late 1999. FIA will also include the

issue of mandatory purchase coverage amounts in the NFIP assessment study

targeted for FY 2000.

Issue: Lender provision of FZD information to consumers/agents

Respondent’s Recommendation(s):

Lenders should provide the consumers/agents with flood zone determination

information to make writing the policies less costly and faster to process.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will encourage in FY 2000 lending regulators to require

lenders to provide zone information to consumers, because consumers have, in

most cases, already paid through the mortgage loan process. This information

should also be available to consumers on (some) plat surveys. The WYO
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-10

Issue: Lender provision of FZD information to consumers/agents

company and FZD Companies are still responsible for ensuring they provide

accurate underwriting. While this is not a requirement, this information can be

provided upon request.

Issue: Insurance and disaster assistance in non-participating communities

Respondent’s Recommendation(s):

The Act should be changed to remove the word “special” from the lender

requirements, and, instead, require flood insurance in flood hazard areas as

long as the community is participating the program. If the community is not

participating, then no flood insurance and no flood disaster assistance is

available. Require Project Impact communities to require flood insurance for

all properties. For communities with 100 percent coverage, provide a special

credit in the form of discounts.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will use the ongoing NFIP effectiveness study to look at

removing the word “special” from the lender requirements. In FY 2000, FIA

will need to examine whether this is feasible with Congress.

FIA will in FY 2000 refer to the CRS Task Force the issue of whether a

community can be given CRS rating discounts for 100 percent community

coverage. Activities, flood insurance coverage for all properties, etc., in

Project Impact communities cannot be required because it is a voluntary

program.

Issue: Impact of NFIP procedures on lending industry expenditures

Respondent’s Recommendation(s):

Do not make further changes in the NFIP that would require additional

changes to lender loan servicing requirements. System continuity should be

the primary issue. Small changes could entail further expenditures,

particularly in computer programming, and could require deferral of other

FEMA’s Response: Adopted/Action Underway

Explanation: While sensitive to the impact of changes to the NFIP on the

private sector, FIA will continue to weigh the costs and benefits of changes to

the program, especially those that may impact Y2K compliance.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-11

Issue: Impact of NFIP procedures on lending industry expenditures

projects. This concern is particularly relevant now that the banking industry is

devoting considerable computer resources to ensuring Y2K compliance.

Issue: Examination criteria for lenders

Respondent’s Recommendation(s):

Work with the various regulatory agencies to improve the level of compliance

by making flood zone determination accuracy a required examination criteria.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA has participated with the NFDA to develop a

standards and accreditation system for their members. The suggested product,

a Certification Program, was unveiled at the NFDA Conference in March

2000. FIA will also investigate working with regulators in this area in FY

2000 to create a checklist to encourage FZD company accuracy.

Issue: Increased flexibility of MPPP

Respondent’s Recommendation(s):

The MPPP policy should allow for coverage to be bound effective from the

notification of an exposure, and contingent upon completion of the defined

letter cycle parameters. Additionally, the flexibility of the existing letter cycle

should be modified to indicate that the notice cycle should be completed

within a specified time frame (i.e., 60 days), rather than dictating the specific

terms. The number of letters in the notice cycle should be reduced from 3 to 2.

Furthermore, we suggest that the legal language required in the letter be

FEMA’s Response: No Further Action Required

Explanation: FIA will not adopt the recommendation because: 1) the 45-

day time period allows the borrower to get flood insurance on their own; 2)

FIA does not recommend this change because keeping the number of letters at

three protects the borrower and gives them time to purchase flood insurance on

their own; and 3) FIA is not in competition with Lloyd’s. The rates are

deliberately high to discourage forced placement.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-12

Issue: Increased flexibility of MPPP

minimized so that the communication can be more borrower- or insuredfriendly. The existing MPPP and Lloyd’s of London rates should be reviewed

to ensure the MPPP policy remains a competitive option in the marketplace.

Issue: Clarification of “affected area” for which lenders may charge for FZD

Respondent’s Recommendation(s):

Parts 59.1, 65, and 70 of the NFIP regulations should identify “affected area or

areas” as limited to those map panels which have had the SFHA changed. A

letter should be sent to the regulators notifying them of this clarification and

asking them to forward the information to the lenders they regulate. This

would require FEMA and the NFIP to provide clear instructions to lenders so

they can quickly identify which map panels they should be looking at. Where

possible, the lenders should only do determinations in the vicinity of the

changed SFHAs.

FEMA’s Response: Adopted/Action Underway

Explanation: The mandatory purchase of Flood Insurance Guidelines

recommends that lenders review their loans located within the geographic

area(s) impacted by the changes as printed in the compendium of FIRM panel

changes. FIA will consider revising the regulations in FY 2000 to define

“affected areas” more clearly.

Issue: Uninsured flood damage resulting from lender non-compliance

Respondent’s Recommendation(s):

Amend or adopt new legislation regarding the mandatory flood insurance

purchase requirement to convey a private right of action to borrowers who

suffer uninsured flood damage that would have been covered under the SFIP if

the lender imposed the insurance as required.

FEMA’s Response: Assigned For Further Study

Explanation: Through the comprehensive NFIP evaluation study to begin

in FY 2000 and other analyses of lender compliance to be conducted in FY

2000, FIA will learn how widespread the problem is and whether a legislative

initiative such as this is necessary.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-13

Issue: Federal and non-Federal audits of mortgage lenders

Respondent’s Recommendation(s):

The Single Audit Act and government auditing standards require audits of

“financial assistance” and compliance with applicable laws. When a Federal

or non-Federal audit involving Federal funds is conducted, the auditor is

required to provide audit coverage of all Federal programs that meet certain

OMB guidelines. Audits of mortgage lenders could include procedures to

review loans that require flood insurance. These procedures could be

patterned after FEMA’s current Disaster Assistance Single Audit Compliance

Requirements and Suggested Audit Procedures. Inclusion of appropriate audit

procedures would identify uninsured risks at minimal additional cost. The

audit process could supplement the back-end review of uninsured losses to

reduce the number of uninsured risks.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will initiate two studies regarding NFIP lender

compliance in FY 2000: 1) one will be part of an overall NFIP assessment;

and 2) the other will be a stand-alone study. FIA will review the Single Audit

Act in FY 2000, and whether it applies to the Mandatory Purchaser

Requirements. FIA will also raise the issue with the Federal Financial

Institutions Examination Council (FFIEC) in FY 2000.

Issue: Calculation of minimum insurance required

Respondent’s Recommendation(s):

The calculation formula should be revised in the law or by appropriate

regulation or policy to provide more specificity and to ensure the bank will be

fully covered in the event of a disaster.

FEMA’s Response: No Further Action Required

Explanation: FIA will in FY 2000 refer to FFIEC (payment is based on the

amount of coverage they acquired). This would require a legislative change

based on loan documents. Lenders have the option to require more than the

minimum established by law.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-14

Issue: Payment of loss payees

Respondent’s Recommendation(s):

Compliant lenders listed as loss payees should be paid before non-compliant

lenders when disasters occur.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will review in FY 2000 whether a compliant lender can

be paid before a non-compliant lender.

Issue: Lender notification requiring LOMAs or LOMRs

Respondent’s Recommendation(s):

A mechanism or a note should be included in the original transaction or

property deed to: 1) identify the flood hazard classification; and 2) as an

advice of an existing LOMR determination. This note should only be used for

quick identification of a flood hazard determination for a specific property,

and should not automatically remove the flood insurance requirement until the

determination is corroborated and updated. This is only to expedite the

research that the property owner should do to investigate the flooding

condition of the property. In case of a new owner, this would help clear up

any decision to be made previous to continuing the transaction. There should

also be a new subsection indicating that the lending institution must include a

note in the property deed stating the property’s zone designation; any LOMC

determinations; and the dates of such determinations, if any. This would

expedite any research about the property’s flood hazard determination for any

future transactions and provide borrowers with information [about the

determination].

FEMA’s Response: Assigned For Further Study

Explanation: FIA will contact the American Bar Association Property Law

Committee in FY 2000, and determine whether other information could be

included, i.e. the specific elevation of a structure. FEMA has produced the

LOMA 2000 (a 1-page form, versus the letter), available online.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-15

Issue: Use of technical evidence from local officials in FZD process

Respondent’s Recommendation(s):

Revise procedures so that map determination companies are allowed to accept

credible technical evidence from local government officials regarding the

determination of flood insurance purchase requirements.

FEMA’s Response: Adopted/Action Underway

Explanation: FZD companies may use all available data to augment but not

substitute for the NFIP maps provided by FEMA to delineate flood insurance

risk zones. FEMA does not regulate FZD companies.

Issue: Addition of flood insurance premiums to property tax bills

Respondent’s Recommendation(s):

Provide information about a property’s flood risk to county clerks to reduce

costs and provide property owners with information about a property’s risk.

The flood risk determination would appear on a property’s tax bill, next to its

tax identification number. This would also prevent properties not financed

from falling through the cracks and being unprotected from flood risks.

FEMA’s Response: No Further Action Required

Explanation: The U.S. Congress created the NFIP in 1968 in the face of

mounting flood losses and escalating costs of disaster relief to the general

taxpayers. Prior to the Act of 1973, property owners could make their own

decisions whether to purchase flood insurance. Although the intent of the

statute is to require borrowers to purchase flood insurance, the Act’s directives

and prohibitions are directed to federally regulated primary lenders and to

secondary market entities involved in mortgage loan transactions. The law

requires Federal agency lenders and regulators to develop regulations to direct

their federally regulated lenders not to make, increase, extend, or renew any

loan on applicable property unless flood insurance is purchased. The lending

community has the vested interest in improved real estate and this is where the

Federal interest lies for the protection of their investments through insurance

against all hazards, including flood insurance.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-16

Issue: Extension of property owner’s timeframe to contest lender determinations

Respondent’s Recommendation(s):

To avoid a burden to property owners and their financial institutions and

possible damage to client/bank relationships, there should be a 60-day grace

period after each remapping for rebuttal by affected property owners prior to

the beginning of the 45-day force placement period. As both the property

owner and financial institution are required to request a review by FEMA, both

should be informed of FEMA’s decision.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: It is the belief of the FIA that an extension beyond the current

45 days would further extend the period of time that the subject risk remains

uninsured. FIA will discuss with the NLIC, Federal Regulators and NFDA in

FY 2000 to determine if this is a large-scale problem.

Issue: FEMA-approved FZD

Respondent’s Recommendation(s):

To ensure consistency, FEMA or the NFIP should make all determinations

before the loss occurs. Alternatively, endorse approved zone determination

companies.

FEMA’s Response: No Further Action Required

Explanation: FEMA does not believe it would be appropriate for FEMA

staff to make initial determinations, as there is already an industry that

provides such services. The U.S. Congress rejected a suggestion to require

standards for making flood zone determinations in view of allowing

competition in the marketplace. Additionally, FEMA’s digital mapping

program will make flood risk information readily available and accessible to

the public. FEMA has no legislative authority to regulate FZD companies;

however, the NFIP does maintain a list of FZD companies, as a source of

reference only, not for the purpose of endorsement. FEMA has established a

partnership with the NFDA and other concerned parties to address mapping

issues that contribute to the number of inaccurate flood zone determinations.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-17

Issue: Clarification of loan transactions as “the making of a new loan”

Respondent’s Recommendation(s):

Modify legislation/regulations to identify home equity, second mortgage, and

refinance loan transactions as “the making of a new loan.”

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: In order to fulfill statutory requirements, the Federal

Regulatory Agencies issued a joint final rule for Loans in Areas Having

Special Flood Hazards. The joint final rule addresses which types of loans

serve as a “tripwire” for compliance with the flood insurance purchase

requirements. Home equity, second mortgages, and loan refinancing are

defined as “designated loans” that are subject to the Act.

Issue: “Out as shown” letters

Respondent’s Recommendation(s):

Expand provisions to include letters designating a structure as “Out as Shown”

as an acceptable way to change the map or overturn a determination, or

eliminate this type of letter and include in the LODR process.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA has referred this to another FEMA office for action in

FY 2000.
Lender Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 I-6-18

Issue: County official involvement in property transfer

Respondent’s Recommendation(s):

The county registrar of deeds or similar official should require proof of flood

insurance before a property could be transferred, and unpaid premiums should

be a lien against the property. Thus, all future sales of property in flood hazard

areas would be required to carry flood hazard protection through the NFIP.

FEMA’s Response: No Further Action Required

Explanation: The intent of the statute is to require borrowers to purchase

flood insurance in SFHA’s; however, the statute’s directives and prohibitions

are directed to federally regulated primary lenders and to secondary market

entities involved in mortgage loan transactions. The lending community has

the vested interest in improved real estate; the compliance aspect of the NFIP

rests with them.

Issue: Local government entity authority over flood insurance purchases

Respondent’s Recommendation(s):

The NFIP should be implemented by a government entity and that entity be

given authority to assure that flood insurance is purchased and reviewed.

FEMA’s Response: No Further Action Required

Explanation: In 1968, flood insurance coverage was virtually unavailable

in the private sector. The private insurance industry was then, and remains

now, largely unwilling to underwrite and bear the risk of flood because of its

catastrophic nature. Consequently, the U.S. Congress decided to provide

coverage through a Federal flood insurance program to help reduce the costs

of expensive disaster relief payments.

The history of flooding has indicated that there would not be a stable market

for flood insurance outside of the Federal Government because of the

purported adverse selection of the most desirable risks.
I Federal Insurance Administration

7 Rates

FEMA’s NFIP Call for Issues Status Report

June 2000
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-1

Issue: Change/eliminate grandfathering of rates

Respondent’s Recommendation(s):

Several respondents recommended changing or eliminating the grandfathering

rules for rating structures.

FEMA’s Response: Assigned For Further Study

Explanation: An inquiry was submitted by FIA to the IBHS Flood

Committee for technical assistance in reviewing the practice of grandfather

rating of a policy based on an older map. Grandfathering was partially

eliminated for PRP. The experience with that effort over the last year will be

studied for how easily other grandfathering could be eliminated. Although

limited to zone changes only, and not BFE changes, Q3 data will be used to

study the impact of current grandfathering rules. The public policy aspects of

grandfathering will be examined by FIA in FY 2001.

Issue: Quality control program to monitor accuracy of flood zone ratings

Respondent’s Recommendation(s):

The most effective tool in the administration of local floodplain management

laws is to deter unwise development through actuarial rating of flood insurance

policies. A better system of review of policy rating must be established to

insure that a development is properly rated.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA will investigate the expansion of our use of computer

verification of zone rating based on digitized map and geocoded property in

FY 2000. In the mean time, there are a number of efforts that already address

this Issue. Routinely, geocoded property data are now matched with risk zone

information to edit eligibility for PRP and for NFIP coverage in CBRA areas.

Particular efforts were undertaken in the past year to use address software to

edit and improve property address information submitted with policy data,

which will make geocoding more accurate. FIA’s condominium inspection

program was implemented to examine post-FIRM properties. As it enters into
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-2

Issue: Quality control program to monitor accuracy of flood zone ratings

its second phase, FIA is contemplating using it to examine pre-FIRM properties also. In addition, operational reviews of WYO company underwriting and

claims procedures were reinstituted.

Issue: Common building/contents deductible on policies

Respondent’s Recommendation(s):

Create a common building/contents deductible. This would make the NFIP

policy more similar to the standard homeowners policy.

FEMA’s Response: No Further Action Required

Explanation: This Issue was addressed by the FlA Committee working on

the SFIP, which determined that the mandatory purchase of flood insurance is

for building coverage only, and it is not practical to provide automatic contents

coverage. Without such coverage, a single deductible would not be

appropriate.

Issue: Consideration of risk-based rating system

Respondent’s Recommendation(s):

Decide whether the percentage of properties at risk from flooding that

currently have flood insurance is adequate, and whether that base of insureds,

together with the current rate of growth on that base, is adequate to satisfy the

intent and purposes of Congress when they created and expanded the NFIP.

If not, decide what percent of properties at risk should be insured under the

NFIP and when. If that time frame is less than 30 years then consider other

alternatives to the current complicated rating system. One alternative would

be to develop a system that continues to be risk-based, but not map-based.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA is developing an overall plan in FY 2000 for evaluating

the NFIP and addressing various public policy Issues. This Issue is one that

will be incorporated into that structure. There are currently technical solutions

that reduce the need to read maps. The best continued use of the risk

information represented on the maps depends in part on the availability of

funding to adequately keep the information up to date. The data for a

building’s lowest floor elevation, the other important risk indicator that

introduces some complexity in the rating process, may also be subject to some
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-3

Issue: Consideration of risk-based rating system

Freeing up the agents and companies from the need to use maps in order to

underwrite a risk would both simplify the system and go a long way towards

normalizing the NFIP along the lines of other forms of property insurance.

This creates a positive atmosphere with agents, which serves as an incentive

for agents to treat and promote flood insurance the same as other forms of

insurance. A task force could be assembled to review the option and

determine its feasibility. The task force should be made up of FEMA and nonFEMA individuals with underwriting claims experience, property insurance

rating background, and experience with, at a minimum, WYO company and

insurance agent representation.

technical solutions, but they have not as yet been developed to the same extent

as the map data. A set of pilot rating alternative demonstration projects will be

undertaken in FY 2000.

Issue: Collection of Elevation Certificate at closing

Respondent’s Recommendation(s):

Develop procedures with lenders so Elevation Certificates, which should be

available to owners, are secured at the time of loan closing,. This would

reduce the costs people incur to purchase flood insurance.

FEMA’s Response: Other

Explanation: FIA is developing an overall plan in FY 2000 for evaluating

the NFIP and addressing various public policy Issues. This Issue is one that

will be incorporated into that structure. There are currently technical solutions

that reduce the need to read maps. The best continued use of the risk information represented on the maps depends in part on the availability of funding to

adequately keep the information up to date. The data for a building’s lowest

floor elevation, the other important risk indicator that introduces some

complexity in the rating process, may also be subject to some technical

solutions, but they have not as yet been developed to the same extent as the

map data. A set of pilot rating alternative demonstration projects will be

undertaken in FY 2000.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-4

Issue: Preemption of rebating and surcharges

Respondent’s Recommendation(s):

Preempt both surcharges and rebating levied by States or local governments.

FEMA’s Response: Assigned For Further Study

Explanation: FIA has dealt with the matter of surcharges through language

in the arrangement, in the hope that States and municipalities would accept

such language and not levy companies with surcharges beyond State premium.

That has been effective in most cases, though certain additional surcharges

remain in place. Consideration was given to a legislative amendment to

clearly preempt the program from such levies. It was removed from proposed

legislation, though there is some thought that additional legislation is not

required in order to pursue preemption. Before a final decision on preemption

is made, the FIA needs to understand all the possible program ramifications of

such a decision.

On the matter of rebating, FIA has refrained from addressing it directly on the

basis of the conclusion that it is primarily a State regulatory matter.

Issue: Simplify rates structure to only with/without enclosure (no reference to equipment)

Respondent’s Recommendation(s):

Simplify the rating structure so that there are only two different rates for an

elevated building, depending upon whether there is an enclosure. This rating

structure would mirror the with/without basement rates currently in place.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: As long as the NFIP covers the machinery and equipment,

FIA believes that it is necessary to obtain information pertinent for rating.

However, whether and how much such coverage should be provided in

enclosures, considering the coordination of insurance coverage and disaster
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-5

Issue: Simplify rates structure to only with/without enclosure (no reference to equipment)

relief coverage and how insurance coverage should best be balanced with

floodplain management objectives, will be included in the overall NFIP

assessment project in FY 2000.

Issue: Phase out subsidy for flood policy after two or more losses

Respondent’s Recommendation(s):

Remove the subsidy after the cumulative of both structure and contents claims

paid exceeds a certain percentage of the structure’s value, or after two or more

losses.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA’s repetitive loss strategy in FY 2000 includes rulemaking

and legislation to charge full-risk premiums if a property owner refuses

mitigation assistance under HMGP or FMA.

Issue: Standards for nonsupporting breakaway walls

Respondent’s Recommendation(s):

Either change the standard and remove “nonsupporting breakaway wall” and

add “open lattice work or insect screening only,” or add a note in parentheses

“(nonsupporting breakaway wall encompassing 300 square feet or more will

significantly increase cost of flood insurance).”

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Buildings that are compliant with minimum NFIP standards

can still represent different degrees of insurance risk. Therefore, FIA does not

believe that there is necessarily an inconsistency in differentiating the

insurance rates. The example provided by the submitter is the charging of

higher rates for large enclosures (greater than 300 square feet) constructed

with solid breakaway walls. A new coastal construction manual is currently

under development. FIA will look at the entire Zone V rating system in light

of that new manual in FY 2000.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-6

Issue: Resolution of inconsistencies between insurance and floodplain standards

Respondent’s Recommendation(s):

Undertake a careful review of the NFIP rules and regulations to look for

requirements that are vague or inconsistent with the insurance aspects of the

NFIP or are not enforceable.

Inconsistencies remain between the insurance and the regulatory side of the

NFIP. For example, Section 60.3(c)(5) of the regulation states that enclosures

below the lowest floor of an elevated building must either meet the opening

requirements or the enclosure’s design must be certified by a registered

Professional Engineer. The Flood Insurance Manual only recognizes the

opening requirements. Also, Section 60.3(e)(5) does not contain a limitation

on the size of the space below a building’s lowest floor. However, the Flood

Insurance Manual requires that, where such space exceeds 300 square feet, the

building must be submitted for rating.

FEMA’s Response: No Further Action Required

Explanation: FIA agrees that inconsistencies should be resolved and will

continue to do so. However, the two examples submitted for consideration do

not appear to be inconsistent. Considering the size of an enclosure in

insurance rating is not inconsistent with floodplain management regulations

that allow enclosures of any size. FIA believes that there are differences in

risk even among the allowable building practices. The other example relates

to openings in enclosures and whether the insurance criteria appropriately

recognize both standard and specially engineered openings. The insurance

rating criteria do recognize both possibilities for openings.

Issue: Use of Diagram #8 on Elevation Certificates for structures with crawl spaces in winter climate areas

Respondent’s Recommendation(s):

A new interpretation of flood regulations has caused crawl spaces to be rated

as basements. Engineers use Diagram 2, Section C, Paragraph 1 of the Flood

Elevation Certificate (FEMA Form 81-31), not Diagram 8 for this type of

construction. Rating a crawl space as a basement causes a significant increase

in flood insurance premiums. ICC coverage, effective June 1, 1997, states that

a basement is described as any area of a building with its floor subgrade

(below ground level) on all sides.

FEMA’s Response: No Further Action Required

Explanation: The new FEMA Elevation Certificate makes it clear that a

crawl space that is below grade on all sides is a basement under FEMA rules

and that diagram #2 should be used. This is not a new interpretation. We have

re-evaluated the risk that this type of construction presents, and have

developed specific rates for it. These rates have been given to insurance

companies and are lower than the rates that apply to other types of basement

buildings.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-7

Issue: Insurance premiums for policies purchased before map becomes effective

Respondent’s Recommendation(s):

Change regulations so that insurance premiums will not change if flood

insurance is purchased before a map becomes effective.

FEMA’s Response: Other

Explanation: The NFIP currently follows this practice for post-FIRM

buildings built in compliance with the superceded map and for policies where

there is no break in coverage. Since May 1998 there is on exception to this;

i.e. buildings covered by Preferred Risk Policies must still be located in an X

zone upon renewal to maintain the lowest rate. Otherwise, they must at least

be rated with the standard X zone rates. We will be looking at other

appropriate grandfathering rule changes once we have examined the

experience with the PRP change in FY2000.

Issue: Premium rate structure based on true risk and loss history factors

Respondent’s Recommendation(s):

The rate that a homeowner pays for insurance should be relative to the risk

factor. This risk factor is less in areas that have been filled to or above the

BFE compared to areas that are below the BFE. Also, publish regulations to

restructure premiums based on the true risk and loss history, as other insurance

is.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: A number of risk factors are considered in rating flood

insurance policies in addition to the flood risk zone. Most notable is the

elevation of the building relative to the BFE. This risk factor is used for postFIRM construction in most SFHAs. Pre-FIRM structures can also optionally

be rated using this elevation factor if doing so produces a lower insurance rate.

FEMA’s repetitive loss strategy includes rulemaking and legislation to charge

full-risk premiums if a property owner refuses mitigation assistance under

FEMA’s HMGP or FMA. Those rulemaking and legislative proposals will be

pursued in FY 2000.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-8

Issue: Insurance policy rates for pre-FIRM structures

Respondent’s Recommendation(s):

Lower pre-FIRM insurance rates and market flood insurance to pre-FIRM

property owners. This, along with greater use of ICC coverage, will lower

disaster costs and hasten the conversion of pre-FIRM structures to compliant,

post-FIRM structures.

FEMA’s Response: No Further Action Required

Explanation: FIA is mindful of the issue of affordability versus rate

adequacy for pre-FIRM structures. This class of business, on average, pays

only about 38 percent of the estimated full-risk premiums. FIA will continue

to explore options and make adjustments to the NFIP that contribute to the

objectives of equitable distributing of flood recovery costs among those

insured and the general public and encouraging appropriate use of the

floodplain.

Issue: Mandatory purchase requirement for new structures in riverine erosion hazard zones

Respondent’s Recommendation(s):

There should be a mandatory insurance purchase requirement for newly

constructed structures in riverine erosion hazard zones. In the most dangerous

erosion hazard areas, consideration should be made of not allowing insurance

coverage for new structures.

FEMA’s Response: Assigned For Further Study

Explanation: A study by the Heinz Center is underway to examine the

erosion Issue for the NFIP, as authorized by the 1994 NFIP Reform Act. FIA

will await the results and advice of that project in FY 2000 before addressing

this Issue.

Issue: Flood insurance rating based on depth of flooding and flood history of building

Respondent’s Recommendation(s):

Rate all flood insurance actuarially, based on depth of flooding and the flood

history of the building.

FEMA’s Response: No Further Action Required

Explanation: The nature of the flood peril is such that in relatively small

areas, even a 20-year history of few losses may not be an accurate predictor of

future losses. This is why the NFIP was implemented with the concept of
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-9

Issue: Flood insurance rating based on depth of flooding and flood history of building

using engineering studies to establish risk zones and why a nationwide policy

base is important to the insurance pool. Assuming that the respondent is not

taking Issue with the engineering studies themselves, then the following is

illustrative. A building located at a 40-year flood elevation, average for preFIRM construction, has a 60-percent chance of suffering no loss in a 20-year

period. Yet, the insurance rates charged pre-FIRM buildings are on average

only 38 percent of full-risk rates. There are two ways that pre-FIRM buildings

may obtain more accurate rating than the broader class rates provide. In the

SFHA, a building can be optionally rated with an elevation certificate and

post-FIRM rates, which may provide a lower premium. Outside the SFHA, a

building with minimal to no losses is eligible for a PRP that is offered at lower

premiums than a standard policy. Also, the CRS was implemented to

recognize local efforts that can be expected to reduce flood losses and thus

warrant premium reductions.

Issue: Renewal of provisionally rated policies

Respondent’s Recommendation(s):

Allow provisionally rated policies to renew, allowing two choices for

borrowers with elevated structures: 1) obtain an Elevation Certificate, which

uses the existing rate tables for elevated dwellings; or 2) have a provisionally

rated policy issued without elevation information and let this policy renew and

stay on forever, offering the insured at each renewal the option to obtain the

Elevation Certificate.

FEMA’s Response: No Further Action Required

Explanation: FIA does not believe that those opting to retain the

provisional rating could adequately price such coverage due to the adverse

selection.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-10

Issue: Schedule for program changes

Respondent’s Recommendation(s):

To avoid confusion, FEMA should implement program changes only once or

twice a year and make sure there is only one effective date for these changes.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA agrees this is the preferred way of implementing

changes. Circumstances permitting, this will be followed in FY 2000.

Issue: Elimination of 3-year policies

Respondent’s Recommendation(s):

Renewal rates are low for 3-year policies with additional administrative costs;

therefore, eliminate 3-year policies.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA adopted this recommendation as of May 1, 1999.

Issue: Individual building insurance rating system

Respondent’s Recommendation(s):

Develop an individual building insurance rating system, to examine a

particular building’s risk of flood from factors such as frequent small flood

(e.g., 2- and 10-year flood) hazards, flash floods, or positively, use of floodresistant materials and methods and other measures that are not necessarily

NFIP compliant but that reduce risk. This could be linked to broader mapping

and national mandatory flood insurance.

FEMA’s Response: No Further Action Required

Explanation: A rating system must balance the level of precision regarding

individual buildings with the cost and practicality of administering the system.

Generally, individual risk rating for the size book of business the FIA strives

for is not practical. Certain large risks have warranted the introduction of

more individualized rating such as is available in Zone V, the inspection of

condominium buildings and the submit-for-rating procedures used for postFIRM buildings constructed below the BFE.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-11

Issue: Reduction in cost of condominium insurance

Respondent’s Recommendation(s):

Explore all possible avenues to reduce the cost of flood insurance, especially

for condominium owners.

FEMA’s Response: Assigned For Further Study

Explanation: This Issue will be reviewed as part of an overall review of

NFIP condominium practices in FY 2000.

Issue: Changes in rates to discourage repetitive claims and encourage mitigation

Respondent’s Recommendation(s):

The Government should promote rebuilding out of danger zones. If the

insured chooses not to elect the rebuilding option, the Alliance believes the

Federal Government should be allowed to either raise the insureds’ rates

appropriately or not continue to offer flood insurance or disaster relief.

FEMA’s Response: Adopted/Action Underway

Explanation: As part of FEMA’s Repetitive Loss Strategy, mitigation

assistance will be offered to many of the highest-risk repetitive losses. If a

property owner refuses a mitigation assistance offer, one of the consequences

under consideration, is to henceforth offer insurance on that property at

substantially higher rates, and possibly only at full-risk premium. Rulemaking

and legislation are being pursued to clarify the specific procedures and to

determine whether this should be implemented in FY 2001.

Issue: Introduction of payment plans

Respondent’s Recommendation(s):

Introduce payment plans to enhance affordability.

FEMA’s Response: No Further Action Required

Explanation: FIA remains very concerned over the seasonal nature of

flooding and how this can lead under payment plans to nonpayment of the

remaining premium once that season is over. Currently, the NFIP offers

alternatives. The Program allows the use of credit cards for premium payment

(and the Government absorbs the service fees, not the WYO companies) and
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-12

Issue: Introduction of payment plans

the 1994 NFIP Reform Act requires that, if a lender escrows other insurance

premiums, the flood insurance premium must also be escrowed.

Issue: Premiums included in monthly mortgage payments

Respondent’s Recommendation(s):

Flood premiums should be included in monthly mortgage payments.

FEMA’s Response: Adopted/Action Underway

Explanation: Premium payments already can be escrowed. In cases where

a lender escrows other insurance payments, the NFIRA requires the escrowing

of flood premiums.

Issue: Rating of pre-FIRM homes

Respondent’s Recommendation(s):

When a home is elevated, the risk for flood damage to that home decreases

dramatically. Flood insurance rates should reflect that decrease.

FEMA’s Response: Adopted/Action Underway

Explanation: The Program already does this and is not planning to change

this practice.

Issue: Adjustment of condominium rating structure

Respondent’s Recommendation(s):

The condominium insurance rating structure should be adjusted to reflect riskbased pricing based on the average risk to loss.

FEMA’s Response: Assigned For Further Study

Explanation: This Issue will be reviewed as part of an overall review of

NFIP condominium practices in FY 2000.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-13

Issue: Rates for “disaster-proofing” a structure

Respondent’s Recommendation(s):

The NFIP should take the lead and provide credits for homeowners and

businesses who voluntarily participated in retrofitting their structures to

prevent natural disasters. Organizations, such as the various standing flood

committees, should be enlisted to encourage insurance companies to consider

various policy discounts for disaster-proofed homes and businesses. Providing

a “Certificate of Completion” when homeowners or businesses complete the

suggested steps to disaster-proofing a property. The certificate would be used

to obtain the credit provided by the insurance companies and the flood

program.

FEMA’s Response: Other

Explanation: The NFIP has taken a lead role in providing premium credits

for structures that have been retrofitted. The Community Rating System

recognizes these efforts on a community basis and the NFIP rate schedules

recognize how structures have been elevated or flood-proofed on an individual

basis. The CRS Task Force has shared information on what flood-related

measures could be incorporated into the IBHS effort to implement a “Seal of

Approval” for structures that have been retrofitted to prevent damage.

Issue: Incremental removal of subsidies

Respondent’s Recommendation(s):

Incrementally remove the flood insurance subsidy for properties after two or

more losses. Remove subsidy after the cumulative of both structure and

contents claims paid exceeds a certain percentage of the structure’s value.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: As part of FEMA’s Repetitive Loss Strategy, mitigation

assistance will be offered to many of the highest-risk repetitive losses. If a

property owner refuses a mitigation assistance offer, one of the consequences

under consideration, is to henceforth offer insurance on that property at

substantially higher rates, and possibly only at full-risk premium. Rulemaking

and legislation are being pursued to clarify the specific procedures and to

determine whether this should be implemented in FY 2001.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-14

Issue: Formalized procedure for re-rating noncompliant structures

Respondent’s Recommendation(s):

Use the submit-to-rate process as an additional and effective tool to achieve

compliance. Establish a simple, formalized procedure so that noncompliant

structures could be submitted for re-rating by either the FEMA Regional

Office or the State. To provide closure, notify the FEMA Regional Office, the

State, and the local community when the re-rating has been completed. The

policyholder should be notified formally that the structure was re-rated, the

reasons why the action was taken, and that when the policy is renewed, flood

premiums will be rated based on different data.

FEMA’s Response: Adopted/Action Underway

Explanation: A process for this is already available. FIA will provide

additional information about the procedures to the Regional Offices in FY

2000.

Issue: Dry floodproofing for floodplain management in flood insurance rating

Respondent’s Recommendation(s):

For nonresidential structures on which floodproofing measures have been

undertaken, Subparagraph 60.3(c)(4) allows floodproofing to be considered in

meeting elevation requirements. Furthermore, floodproofed nonresidential

buildings often qualify for a reduced flood insurance rate. Extend these

considerations to residential structures in all communities, provided a qualified

registered professional engineer or architect to meet minimum NFIP criteria

certifies the floodproofing. Although such measures should not eliminate the

mandatory flood insurance requirement, the insurance rating should consider

the protection afforded by floodproofing measures.

FEMA’s Response: No Further Action Required

Explanation: Except under limited circumstances, FEMA does not believe

floodproofing for new residential construction is appropriate. The maintenance requirements and warning time necessary to make floodproofing an

effective mitigation measure are too problematic. With regard to existing

construction, the CRS recognizes these actions. FEMA believes that this

mechanism, rather than the individual rating of a building, provides an

adequate level of recognition.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-15

Issue: Rating of post-FIRM properties when no Elevation Certificate is available

Respondent’s Recommendation(s):

Continue with an existing program, but develop a simple rate that is adequate

to handle the potentially higher exposure. Allow lower rate on renewal if an

Elevation Certificate is obtained later and results in a lower rate. This

provision would eliminate much of the frustration and delay in Issuing postFIRM policies, allowing insureds to close their loans speedily and eliminating

the necessity of returning applications sent in without one. However, optional

rates should be available for Issuing policies with FEMA Elevation

Certificates.

FEMA’s Response: Assigned For Further Study

Explanation: A provisional rating process is already available for postFIRM properties when no Elevation Certificate is available, so that loan

closing should not be held up. FIA is developing an overall plan for

evaluating the NFIP and addressing various public policy Issues in FY 2000.

This larger Issue of how best to obtain and use elevation data for post-FIRM

properties is one that will be incorporated into that structure. The data for a

building’s lowest floor elevation, an important risk indicator that introduces

some complexity in the rating process, may be subject to some technical

solutions. FIA will undertake development of a set of pilot rating alternative

demonstration projects.

Issue: Attachment to Elevation Certificate

Respondent’s Recommendation(s):

Important information regarding structure-specific risk is left out of the

Elevation Certificate and policy application. Develop an attachment to the

Elevation Certificate to implement a more comprehensive rating process. The

attachment should include an assessment of construction materials, techniques,

and inspection practices for regionally varied preferences. The actual risk

determination process can be implemented, by either a professional selfcertification or submit-to-rate procedures administered by the FIA. The

following list is a sample of the kind of data that would be helpful to a process

that assigns risk to structures with basements: watershed size (for duration of

flooding); height of lowest adjacent grade above (or below) BFE; soil

FEMA’s Response: No Further Action Required

Explanation: FIA does not believe that individual risk rating is practical on

a large scale. As part of the current submit-for-rate process, when necessary,

additional risk and engineering information is considered in determining a

proper insurance rate, although a particular form has not been developed.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-16

Issue: Attachment to Elevation Certificate

type/horizontal buffer distances; foundation type; basement floodproofing

measures (drain type, sump, auxiliary power, etc.); certified presence of

individuals responsible for construction monitoring on floodproofing

measures; and drain type (combined or separate storm and sanitary sewer).

Issue: State or regional adjustments to rate structure

Respondent’s Recommendation(s):

Using actual claims history, Regional or State adjustments to the current rate

structure should be published in a manner similar to that used by the auto

insurance industry. The numerical difference in these adjustments may in fact

be small; lower flood risk in the areas of the Nation’s interior may not be as

significant as some believe. However, the adjustment would deliver needed

credibility in these markets.

FEMA’s Response: No Further Action Required

Explanation: The engineering study approach was adopted for the NFIP

because actual flood loss experience, even over a 20-year period, is not

necessarily a credible predictor of future flood damage. Thus, it would be

extremely difficult to quantify regional differences that are more meaningful

than the current use of flood zones. Certain zone designations do represent

regional differences in flooding conditions such as V zones on the coast and

AO zones in the West. The CRS was implemented as a mechanism to adjust

rates in an area based on an assessment of specific actions taken to reduce

flood losses.

Issue: Adjustments to premiums in areas behind levees with insufficient freeboard

Respondent’s Recommendation(s):

Develop a prorated system to adjust flood insurance premiums accordingly.

Also, consider a system in which property owners would not be required to

incorporate floodproofing requirements (which can be very expensive) when

FEMA’s Response: Assigned for Further Study

Explanation: The CRS Task force is addressing this issue. An issue paper

on structural measures and the NFIP, which is primarily a nonstructural

program, was prepared for circulation to appropriate groups for comment. Of
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-17

Issue: Adjustments to premiums in areas behind levees with insufficient freeboard

the levees that protect them are adequate to contain the 100-year flood without

freeboard.

particular interest to the Task Force is how such measures address currently

identified NFIP loss problems such as repetitive losses and other losses in X

Zones. Target for releasing the issue paper is winter 1999/2000.

Issue: Rating of policies for repetitive loss structures

Respondent’s Recommendation(s):

NFIP rates should be based on actual damages and risk. Current rate

schedules for mandatory flood insurance are not an equitable reflection of risk.

Establish rates that reflect the risk, i.e. low risk equals lower rates – high risk

merits higher rate. This would proportionately distribute the true risk of the

flood hazard to the appropriate property owners.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: As part of FEMA’s Repetitive Loss Strategy, mitigation

assistance will be offered to many of the highest-risk repetitive losses. If a

property owner refuses a mitigation assistance offer, one of the consequences

under consideration, is to henceforth offer insurance on that property at

substantially higher rates, and possibly only at full-risk premium. Rulemaking

and legislation are being pursued to clarify the specific procedures and to

determine whether this should be implemented in FY 2001.

Issue: Premiums for pre-FIRM buildings with enclosures below the lowest floor

Respondent’s Recommendation(s):

Require that pre-FIRM buildings with enclosures (that have proper openings)

below the lowest elevated floor remain pre-FIRM, or limit coverage on preFIRM buildings rated using post-FIRM rates. This would ensure that the

correct premium is being charged for the appropriate amount of risk.

FEMA’s Response: Adopted/Action Underway

Explanation: The Issue of appurtenant structures is being addressed by FIA

in the policy rewrite that is to be completed in FY 2000.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-18

Issue: Inequities in rating coverages for post-FIRM structures

Respondent’s Recommendation(s):

Simplify the program by removing appurtenant structure coverage from the

Dwelling Form. Restrict contents coverage to contents located in the insured

building as defined on the application form, or at another location if they are

removed due to imminent danger of flooding. Require a separate policy per

building. Rate structures according to the lowest floor of the building and

contents according to their exposure.

FEMA’s Response: Adopted/Action Underway

Explanation: The examples provided by the submitter involving

appurtenant structures are being addressed in the policy rewrite currently

under development in FY 2000.

Issue: Simplification of the rating system

Respondent’s Recommendation(s):

Simplify the rating system and make flood insurance more affordable.

FEMA’s Response: Assigned For Further Study

Explanation: FIA strives to balance simplicity with what is necessary to

reflect varying degrees of risk of insured properties. In the case of post-FIRM

construction, it is integral to the goals of the NFIP to reflect the risk so that

new construction building requirements are encouraged. The data for a

building’s lowest floor elevation, an important risk indicator that introduces

some complexity in the rating process, may be subject to some technical

solutions. A set of pilot rating alternative demonstration projects was

conducted at the National Flood Conference, May 2000.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-19

Issue: Development of a “claim history factor” for rating tables

Respondent’s Recommendation(s):

Develop a claim history factor which would consider both the dollar amount of

the claims made and the number of claims.

Unlike other forms of insurance, flood insurance premium rates are not tied to

the claim history of a structure. This leads to premiums which do not reflect

the actual risk faced by a structure. The failure of premium rates to reflect the

risk removes incentives to mitigate and creates huge drains on the NFIP

through repetitive claims. Without the economic incentive of higher premium

rates, mitigation is not considered a financially wise choice.

FEMA’s Response: Adopted/Action Underway

Explanation: As part of FEMA’s Repetitive Loss Strategy, mitigation

assistance will be offered to many of the highest-risk repetitive losses. If a

property owner refuses a mitigation assistance offer, one of the consequences

under consideration, is to henceforth offer insurance on that property at

substantially higher rates, and possibly only at full-risk premium. Rulemaking

and legislation are being pursued to clarify the specific procedures and to

determine whether this should be implemented in FY 2001.

Issue: Additions to post-FIRM structures

Respondent’s Recommendation(s):

Additions to post-FIRM structures that meet all NFIP requirements should not

result in a significant increase in flood insurance premiums.

FEMA’s Response: Assigned for Further Study

Explanation: The example provided by the respondent involves a PostFIRM building built outside the floodplain with a basement, where a deck is

added that extends into the floodplain. The NFIP rules require such a building

be rated as a Post-FIRM building in the floodplain with a basement. While we

believe the principle that a building with part in one rating zone and part in

another rating zone should be rated using the higher rated zone, this particular

example does pose a problem. We will look into whether there is a feasible

way to provide some relief in such situations.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-20

Issue: Reduction/elimination of need for Elevation Certificates

Respondent’s Recommendation(s):

Use a rate-averaging method for specific locations (communities) to reduce or

eliminate the need for Elevation Certificates. If Elevation Certificates must be

continued for certain types of properties in certain types of situations, then

employ the most modern techniques and reduce the cost (which discourages

the purchase of flood insurance).

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA is developing an overall plan for evaluating the NFIP

and addressing various public policy Issues for FY 2000. This Issue is one

that will be incorporated into that structure. There are currently technical

solutions that reduce the need to read maps. The best continued use of the risk

information represented on the maps depends in part on the availability of

funding to adequately keep the information up to date. The data for a

building’s lowest floor elevation, the other important risk indicator that

introduces some complexity in the rating process, may also be subject to some

technical solutions, but they have not as yet been developed to the same extent

as the map data. A set of pilot demonstration rating projects was conducted at

the National Flood Conference, May 2000.

Issue: Enactment of an automatic inflation guard increase at renewal time

Respondent’s Recommendation(s):

Enact an automatic inflation guard increase at renewal time, unless the insured

specifically opts not to accept the new coverage limits. Recommend applying

the Inflation Coverage Index to increase the limits of coverage on building

coverage and the CPI for contents coverage.

FEMA’s Response: Assigned For Further Study

Explanation: This will be referred to the IBHS Flood Committee for advice

in FY 2000.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-21

Issue: Software package to simplify rating process

Respondent’s Recommendation(s):

Develop a software package that eliminates the visibility of rate complications

and the need to use rate pages to any significant degree should be developed.

Using average rates in communities should be considered.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will conduct a survey in FY 2000 to find out what is

currently available among vendors and WYO companies, how much of the

agent force has access to rating systems, and how much is not served. A set of

pilot demonstration rating projects was conducted at the National Flood

Conference, May 2000.

Issue: Prohibition of rebates of Federal flood insurance premiums

Respondent’s Recommendation(s):

Prohibit rebating because it is detrimental to the growth and development of

the entire flood program.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA is not inclined to override the State regulatory process.

This Issue is primarily associated with flood insurance policies for

condominiums where the agent commissions are large enough to invite

rebating. FIA will consider this Issue in FY 2001 in connection with the WYO

Expense Allowance and the commission allowance for condominiums.
Rates

FEMA’s NFIP Call for Issues Status Report, June 2000 I-7-22

Issue: Connection of Elevation Certificate to CRS class code

Respondent’s Recommendation(s):

The requirement for obtaining Elevation Certificates should be tied to the CRS

class code. For example, the Elevation Certificate would not be required for

properties in a Class 6 community or below.

FEMA’s Response: No Further Action Required

Explanation: This suggestion may have merit in the future, but for now, the

potential population represents a small portion of the NFIP business. In

addition, it should be considered that even current Class 6 communities may

have been poor performers in the past. As for new Elevation Certificates,

these documents should be readily available for construction taking place in

CRS communities subsequent to their entry into the CRS.

Issue: Reduction in cost of RCBAP

Respondent’s Recommendation(s):

Consider all possibilities that could translate into lower RCBAP costs.

FEMA’s Response: Other

Explanation: This will be examined as part of an overall review of the

condominium rating system in FY 2000.
I Federal Insurance Administration

8 Training/Education

FEMA’s NFIP Call for Issues Status Report

June 2000
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-1

Issue: Improved training for lenders and insurance agents

Respondent’s Recommendation(s):

More intensive and frequent training for all those involved at the local level is

a must.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA is developing advanced training courses for agents and

lenders as well as a seminar on the new Elevation Certificate. FIA is

developing videotapes for use in training seminars and posting training

materials on the NFIP Web site. In addition, FIA recently issued an interactive

CD-ROM called the Basic Agent Tutorial. FIA will continue to work to

improve agent and lender training, pursue various modes to reach these

audiences, including the Internet, videotapes, CD-ROMs, and live courses and

seminars. All of this will be made available/implemented in FY 2000. FIA

will also work within FEMA to develop ways to better train surveyors,

engineers, and local officials.

Issue: Improved lender training on procedures for dual zones

Respondent’s Recommendation(s):

Make mortgage lenders aware of the rating procedure in dual zones by using a

lender bulletin and reference in the Flood Manual, and indicate dual zones on

the Flood Declaration page.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will ascertain in FY 2000 whether the problem described

is widespread or isolated. If widespread, FIA will address this matter with the

FFIEC, and in the revised Mandatory Purchase of Flood Insurance Guidelines

in FY 2000. Regarding including dual zones on the declarations page, WYO

companies have the ability to do this.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-2

Issue: Inclusion of a separate Elevated Building section, diagrams, and ratings examples in the Flood Insurance

Manual

Respondent’s Recommendation(s):

Facilitate consistent and accurate rating of elevated buildings with attached

garages, add rating examples of this type of property to the Building Drawings

Section of the Manual. Add or separate Elevated Building Section to the

Flood Insurance Manual.

FEMA’s Response: Will Not Adopt/No Further Action Required

Explanation: The Work Group that established the organization of the

Manual felt that it was more important to get all of the rates in the Rate

Section and all of the rules in the Rules Section. The Drawings of Buildings

Section of the Manual has 47 pages and covers the types of buildings that give

people the most trouble. Every conceivable possibility cannot be covered.

Issue: Instruct agents, lenders, and map determination companies to use current FIRM in Mandatory Purchase

Guidelines, Watermark

Respondent’s Recommendation(s):

When the Mandatory Purchase Guidelines are revised or reprinted, include a

clearly written statement that instructs the lender and map determination

company to use the current effective FIRM as the basis for requiring flood

insurance.

Publish a reminder notice or article in the next issue of Watermark to remind

agents and lenders to use the current effective FIRM to rate flood insurance

policies and to make flood zone determinations. It might also be helpful to

agents and lenders to have a brief overview of the lengthy Flood Insurance

Study adoption process and to understand that the preliminary information is

subject to change until the process is completed and the maps become

effective.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will instruct agents, lenders, and others to use the

currently effective FIRM, not the preliminary FIS data, as the basis for

requiring flood insurance. FIA will do this through the Mandatory Purchase

Guidelines, Watermark , agent and lender workshops, and other vehicles in FY

2000.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-3

Issue: Minimum training/certificate for insurance agents

Respondent’s Recommendation(s):

Minimum hours of agent training in flood insurance and a certificate before

writing policies should be required. Also require photograph of 4 sides of

building.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Through FIA’s work with State Insurance Commissioners,

most States allow agents to earn Continuing Education Units (CEUs) for

attending NFIP training, thus providing an incentive for agents to learn more

about flood insurance. FIA is also working with the National Association of

Insurance Commissioners (NAIC) to encourage them to include flood

insurance questions on agent licensing exams. To broaden the results of these

efforts and provide greater incentives for agents to become more

knowledgeable about flood insurance, FIA will ask the WYO companies in FY

2000 to recognize “Master Flood Agents” who achieve a certain level of flood

insurance knowledge/production/expertise/customer service/error-free

underwriting (i.e. in news releases, on Web sites, and in Watermark).

Further, FIA will explore flood insurance competency designations with the

CPCU training organization and university-based insurance programs in FY

2000.

Issue: Improve insurance industry education of agents and employees about CRS discount

Respondent’s Recommendation(s):

Require the insurance industry to better educate their agents and workers about

the CRS.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA is performing operational reviews of WYO companies in

FY 2000 will consider assessing the agent training as part of these reviews.

Further, the NFIP Bureau and Statistical Agent holds train-the-trainer sessions

for WYO companies and vendors that conduct agent training, and FIA will

ensure that the CRS discounts are included in those sessions in FY 2000.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-4

Issue: Improve insurance industry education of agents and employees about CRS discount

Insurance agent trade associations also conduct flood insurance training and

FIA will share this suggestion with them as well.

Issue: Educational program for insurance agents

Respondent’s Recommendation(s):

Conduct educational training for insurance agents to stress overall coverage

benefits of the NFIP, including homeowner mitigation efforts to reduce losses.

FEMA’s Response: Adopted/Action Underway

FIA will involve FIPNC, IBHS, and other offices within FEMA in discussions

in FY 2000 on ways to more effectively train insurance agents in flood

insurance coverage benefits and homeowner mitigation efforts to reduce

losses.

Issue: System for standards, training, compliance, and enforcement to reduce misrated policies by insurance

companies

Respondent’s Recommendation(s):

The NFIP needs a system for standards, training, compliance, and

enforcement. The NFIP needs to update the NFIP policy Manual, provide

copies to all NFIP State Coordinators, and train insurers in the NFIP’s Leads

Program.

The mortgage/lending business needs more training. Appraisers are the first

line of defense when determining if a property is in the floodplain. Often,

appraisers rely solely on the courthouse records for a map determination.

Better mapping and required training would help administratively with

property determination.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will assess in FY 2000 whether the Manual needs a full

or a partial revision and will seek input from FIPNC and IBHS as to whether it

needs reformatting FIA will seek the cooperation of the Association of State

Floodplain Managers (ASFPM) to help improve communication with State

NFIP Coordinators. FIA will ask for ASFPM’s input on the information and

training State Coordinators need and want regarding flood insurance. FIA will

invite State Coordinators to agent and lender training and NFIP mini

conferences. FIA will also ask the State Coordinators to encourage local flood
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-5

Issue: System for standards, training, compliance, and enforcement to reduce misrated policies by insurance

companies

In addition, the NFIP needs to be more aggressive in educating the local

insurance companies about selling flood insurance. More educational visits,

workshops, and public outreach regarding regulations locally by the NFIP are

recommended. Adjusters also need more training in basic regulations,

insurance, and the ICC. Currently, there seems to be no standard to apply to

rating and enforcing how insurers write policies.

Require NFIP certification for adjusters. A certification process would train

adjusters about policies and procedures for the rating of policies. Offer some

type of incentive for each company that complies or is certified.

experts to participate in NFIP agent and lender training sessions where they

can emphasize the severity of the flood risk.

FIA is pursuing ways to broaden the number of agents trained on flood

insurance using various media.

FIA is also pursuing a more aggressive training program, in connection with

our strategic partners.

The NFIP Direct requires adjusters to undergo flood insurance certification.

The WYO companies can use their discretion in the adjusters they employ.

Issue: Timely updates to Flood Insurance Manual

Respondent’s Recommendation(s):

Make certain that all policy statements that have an effect on a rule stated in

the Flood Insurance Manual also generate a revision to the manual that is

distributed in a timely manner.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA’s annual cycle for issuing Manual changes occurs in May

and October. FIA makes every attempt to fold policy issuances into the

Manual, the Watermark and the Web site. Further, consolidation of all policy

issuances is now underway to ensure they are in the Manual. FIA is looking at

an array of mechanisms for maintaining the guidance that is not appropriate

for the Manual.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-6

Issue: Revised language in Flood Insurance Manual concerning map revisions

Respondent’s Recommendation(s):

Currently, a policy can be cancelled using Reason 9, provided that the

mortgagee confirms in writing that the insurance was required as part of the

mortgage and the mortgage requirement for flood insurance no longer applies.

Amend the required documentation to include a copy of the map revision

showing a date subsequent to the issuance date of the policy.

FEMA’s Response: Assigned For Further Study

Explanation: FIA’s policy is that if a lender makes a mistake in a flood

zone determination, it is the lender’s responsibility to fix it. FIA will assess

the extent of cancellations for Reason 9 and the severity of the problem of

lender errors and discuss remedies with the lender trade associations and WYO

companies. FIA has agreed to look into this with the NFIP Bureau, lender

trade associations, and WYO companies in FY 2000.

Issue: Wind and flood adjuster certification

Respondent’s Recommendation(s):

Creating a combined wind and flood adjuster certification. Assignment of all

combined losses to the wind pools, regardless of who makes the assignment,

should be made to adjusters who are qualified wind adjusters and certified

flood adjusters.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA has agreed in principle to conduct joint workshops with

the Florida Windstorm Underwriting Association. There are about 21 other

coastal States that agree to use the Single Adjuster Concept and we will have

joint workshops with some, but not all of them.

Issue: Revisions to adjuster certification training document to make it a modular format, allowing topics to be inserted

or removed more easily

Respondent’s Recommendation(s):

Structure the certification training plan in modules to allow topics to be

inserted and removed as needed.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will revise the certification training material in FY 2000

so that topics can be inserted and removed as needed.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-7

Issue: Improved agent knowledge about flood insurance

Respondent’s Recommendation(s):

Improve agent knowledge about flood insurance.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA is working to develop more incentives to encourage

agents to become more knowledgeable about flood insurance. In addition to

live seminars, FIA will develop interactive training CD-ROMs, training

modules for posting on the Web site, videotapes, and various online training

sessions. Agent trade associations also work to educate their members about

flood insurance via training seminars, magazine and newsletter articles, Web

sites, etc. In operational reviews of WYO companies in FY 2000, FIA will

assess companies’ efforts to train and communicate with their agents.

Issue: Incentives to State Insurance Commissions for flood insurance questions on State licensing exams

Respondent’s Recommendation(s):

Provide incentives to State Insurance Commissions to include a significant

number of flood insurance questions on the State licensing exam and as part of

continuing education for insurance agents.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: States receive $30 million in NFIP premium taxes to assist

them in their insurance activities related to overseeing companies writing flood

insurance and agent licensing. FIA plans to better educate State Insurance

Commissioners about these funds, which are paid by the NFIP to a State’s

general revenue fund.

FIA and its contractors work to encourage State Insurance Commissioners to

provide CEU credits for flood insurance training and to include flood insurance questions on State licensing exams. FIA will ask the WYO Marketing

Committee for assistance in contacting State Insurance Commissioners to

encourage them to promote flood insurance education for agents.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-8

Issue: Incentives to State Insurance Commissions for flood insurance questions on State licensing exams

Additionally, FIA is conducting an outreach effort to State Insurance

Commissioners to ensure they have the flood insurance information they need

to serve their constituents before, during, and after flood events.

Issue: System resources for WYO companies with overtolerance errors

Respondent’s Recommendation(s):

Provide immediate system resources to work with WYO companies who have

an overtolerance errors. This could expedite the resolution of the

overtolerance error.

FEMA’s Response: Adopted/Action Underway

Explanation: The NFIP Bureau and Statistical Agent is creating an online

correction process that may solve this problem in FY 2000.

Issue: NFIP Policy Issuance Bulletin and Flood Insurance Manual update on use of electronic transactions

Respondent’s Recommendation(s):

Create an NFIP policy issuance bulletin that provides WYO companies

guidelines on the use of electronic transactions. Update the NFIP Flood

Insurance Manual. Clarify record retention requirements in the Arrangement.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA submitted an inquiry to the IBHS Flood Insurance

Committee regarding electronic transactions. In December 1999, FIA issued

guidance on electronic signatures and other related matters. FIA also wants to

ensure companies have the data required in files for audits and operational

reviews.

With regard to the recommendation to clarify record retention requirements in

the Arrangement, FIA is willing to streamline its requirements.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-9

Issue: Certification of community officials for teaching flood insurance locally

Respondent’s Recommendation(s):

Community officials should be certified to teach pertinent topics to adjusters,

insurance agents, real estate agents, and lenders.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: Certification procedures are impractical for FEMA to

administer. Rather, FEMA offers a number of training opportunities to

insurance agents, lenders, adjusters, real estate agents, and others through live

training sessions, conferences, mini conferences, as well as through the

Internet, CD-ROM, videotapes, and other media. Local officials who are

interested in teaching flood insurance topics can use these tools. Furthermore,

the NFIP’s CRS credits such efforts by local officials.

FIA recognizes the great need for training more NFIP stakeholders on the

latest NFIP topics and is working to improve the training and the number of

people reached.

Issue: FZD training for insurance agents/companies and lending institutions

Respondent’s Recommendation(s):

FEMA/NFIP should become more proactive in educating insurance and

lending institutions in the processing of flood insurance policies, which also

includes training in properly obtaining floodplain determinations.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will use its Web site and other vehicles in FY 2000 to

better explain who needs flood zone determinations, why, and how to obtain

them. FIA has posted a list of companies that provide FZD services.

Communities participating in the CRS Program can earn credits for

performing FZD services.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-10

Issue: Training liaison for State insurance commissioners

Respondent’s Recommendation(s):

Appoint a person or persons in each State as a liaison, or have NFIP

information more readily available.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA is in the process of expanding outreach to State Insurance

Commissioners. Three FIA staff members have responsibility for coordinating

with State Insurance Commissioners, and the NFIP regional staff also has

ongoing relationships with the State Insurance Commissions. FIA will

conduct a pilot flood insurance training through an online system with an

insurance department staff in FY 2001. Based on the results of that effort, FIA

will conduct similar training for other insurance commissions.

Issue: Improved adjuster training on NFIP

Respondent’s Recommendation(s):

Adjusters need to be more educated about the NFIP.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA, through the NFIP Bureau and Statistical Agent (BSA),

conducts more than 30+ adjuster workshops annually between January and

June. In addition, some adjusting companies and WYO companies conduct

“Train-the-Trainers” workshops or staff adjuster workshops. FIA/BSA has

taken under advisement some suggestions to make the workshops a more

enjoyable experience and in the last quarter of FY 2000, the workshops will

concentrate on the newly rewritten policies that are projected to go into effect

December 2000.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-11

Issue: Advise lenders that homeowners of non-SFHA properties do not need to purchase insurance

Respondent’s Recommendation(s):

Either advise lenders that coverage is not mandatory outside the SFHA or have

the consumer purchase coverage. Based on current weather and claim

statistics, not to mention the increasing costs to rebuild, it is wise to spread the

risk a little further. This will probably bring the price down considerably for

those in the SFHA and prevent a future deficit for the NFIP.

FEMA’s Response: No Further Action Required

Explanation: FIA and the Federal regulatory agencies do inform lenders

that flood insurance is only mandatory in SFHAs and that lenders may, as a

business decision, require flood insurance outside those zones. Through the

Cover America campaign, FIA encourages everyone to buy flood insurance

because floods often extend beyond the boundaries of SFHAs.

Issue: Education for insurance industry on NFIP

Respondent’s Recommendation(s):

Ensure that the insurance industry understands the NFIP and, in turn,

adequately informs the customer.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA has been working throughout FY 2000 to inform

insurance agents about the PRP through agent training seminars, CD-ROM,

NFIP Web site, Watermark , and articles and advertisements in agent trade

publications. FIA also works with agent trade associations to inform their

members about flood insurance.

Issue: Replace post-flood claims workshops for adjusters with pre-flood workshops

Respondent’s Recommendation(s):

Have the general adjusters go by history, review the claims data, find out

which areas flood and when, and hold seminars before storms.

FEMA’s Response: Assigned For Further Study

Explanation: FIA’s practice is to conduct adjuster workshops in historically

flood-prone cities, in addition to post-flood sessions. We will evaluate in FY

2000 whether this can be expanded.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-12

Issue: Technical training program for adjusters separate from policy and rules training

Respondent’s Recommendation(s):

Establish a technical training program for adjusters that is separate from policy

and rules training.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will contact the writer to understand the distinction

between technical training and policy and rules training and determine any

necessary action to be taken in FY 2000.

Issue: Certification program for independent processing vendors

Respondent’s Recommendation(s):

Develop a certification program for independent processing vendors.

FEMA’s Response: No Further Action Required

Explanation: FIA does not believe training and certifying vendors used by

the WYO companies would be appropriate. NFIP training at the Bureau and

Technical Conference is open to all. Further, FIA holds WYO companies

responsible for following program rules, and companies are free to choose any

vendor they feel can do the job. Vendors are responsible for training their

staff. FIA believes the marketplace determines the relationship between a

WYO company and its vendor.

Issue: Certification process for NFIP representatives assigned to WYO carriers

Respondent’s Recommendation(s):

Develop a certification process for NFIP representatives assigned to WYO

carriers.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA has required the NFIP Bureau and Statistical Agent to

develop and implement a development plan to improve the NFIP expertise of

the program coordinators in FY 2000.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-13

Issue: Training for local insurance carriers, mortgage companies, and environmental firms on flood map maintenance

and reading

Respondent’s Recommendation(s):

Require local insurance carriers, mortgage companies, and environmental

firms to receive training to learn how to read and interpret the maps.

FEMA’s Response: Adopted/Action Underway

Explanation: The ability to read and interpret flood maps is critical for

WYO companies and their agents in carrying out their responsibility to rate

policies and for mortgage companies in making flood zone determinations. It

is also important for community officials, developers and others, including

environmental firms, to be able to read and interpret flood maps and

understand their community’s flood risk.

FIA offers workshops and other training opportunities to WYO companies,

mortgage lenders and other interested parties that cover how to read and

interpret flood maps. Information on these workshops is posted on the

insurance portion of FEMA’s Web site (www.fema.gov/nfip). FIA also works

through the professional association for WYO companies/agents and lenders to

publicize the availability of the workshops.

FIA makes the workshops available and encourages participation in them.

Participation is voluntary, not a mandatory requirement.

Issue: Annual training for States regarding flood policies, coverages, and deductibles

Respondent’s Recommendation(s):

Train departmental staff on an annual basis. Provide the training at a location

convenient to the staff and include general updates on changes to the flood

policy coverages.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will develop a plan in FY 2000 to better inform State

Insurance Departments regarding the NFIP. In addition, FIA will piggyback

the NAIC meetings and set up 1- to 2-hour briefing sessions for
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-14

Issue: Annual training for States regarding flood policies, coverages, and deductibles

Commissioners and key staff. FIA will coordinate with the NAIC to set up

these meetings and include them in the NAIC meeting brochures well in

advance.

Issue: Establish a formal training program for flood map determination companies

Respondent’s Recommendation(s):

Employees of flood certification companies should be required to attend a

certain number of classroom training hours before they may make

determinations and identification of the location of the structure should be

required for determinations.

FEMA’s Response: Will Not Adopt/Other Actions to be Taken

Explanation: FEMA will post on its Web site more information to assist

consumers, lenders and others in reading and using FEMA flood insurance rate

maps. Videotapes and other methods for educating people about flood maps

will also be explored.

Issue: Rating systems and procedures training for agents and WYO companies

Respondent’s Recommendation(s):

Investigate why so many rating errors occur. Possible causes include undertrained agents or inadequate auditing of new business. Agents and WYO

companies should be educated thoroughly and systems and procedures should

be studied and redesigned to reduce future error ratios.

FEMA’s Response: Assigned For Further Study

Explanation: Agents and WYO companies are required to follow NFIP

rules regarding rating coverage. Accurate rating for condominiums is part of

that requirement. Over the past 2 years, FIA has conducted a study of the

rating of NFIP policies on condominium property. Although the results are

not yet final because of the need to verify such things as the effect of

grandfathering, FIA is concerned about initial results that do show evidence of

misrating. FIA is in the process of having these misratings corrected and

determining how to address the problem. In late FY 2000, FIA will begin a

review of its entire rating structure for condominium property. Any changes to
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-15

Issue: Rating systems and procedures training for agents and WYO companies

current policy that result from that review will be implemented in FY 2001 or

2002. This review will involve discussion with the WYO companies and

agents that write NFIP policies on condominiums and representatives of the

condominium industry.

Issue: Improve agent knowledge of flood insurance through targeted mass mailing

Respondent’s Recommendation(s):

Require that all WYO companies supply FIA’s advertising contractor with the

names and addresses of their agents who sell flood insurance. Commit to

mailing information about products and/or marketing to the list once a quarter.

Include direct agents in the mailing as well. The mailing would need to be a

high-impact piece to gain the attention of agents who are typically inundated

with paperwork, and are not inclined to do extensive reading. A threedimensional piece may be needed. By having the agent lists sent directly to

the advertising contractor, WYO companies may be less threatened by the

FIA. In addition, all quarterly mailings would be routed to WYO companies

for review prior to production and mailing.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Due to companies’ concerns about the proprietary nature of their agent lists,

FIA does not believe that it should require them to disclose such information

to FIA or it’s advertising contractor. Rather, FIA will continue in FY 2000 to

develop informational and educational materials that agents can access directly

or that WYO companies can provide to their agency force. In addition, WYO

companies are paid a fee for selling and servicing policies under the NFIP.

Part of those responsibilities include the marketing of the NFIP. FIA

marketing efforts are intended to supplement not supplant those efforts.
Training/Education

FEMA’s NFIP Call for Issues Status Report, June 2000 I-8-16

Issue: Improved marketing of flood insurance

Respondent’s Recommendation(s):

1. Publicize the loss situations involving heavy rains, snow melts, etc. in

addition to the more catastrophic events.

2. Encourage FEMA to increase its mention of flood insurance

whenever it is mentioning disaster assistance funds, especially from

the standpoint of the dollars it would save taxpayers.

3. Contact all property and casualty insurance companies doing business

in the U.S. and ask that they include with their direct bill customer

billings a flyer on the subject of flood insurance.

4. Broaden the “Cover America” program to continue to zero in on

agents, particularly in those areas where studies show that flood

insurance is drastically undersold.

5. Include emphasis on local building departments. Encourage

communities to include flood information with their utility bills and

other mass mailings.

6. Many adjusters are not schooled in the intricacies and idiosyncrasies

of flood insurance. We encourage additional schooling as well as

“crash courses” at the scene of a catastrophe.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA agrees with the recommendations to improve the

marketing of flood insurance and will work with its strategic partners to

implement them in FY 2000:

1. Publicize the loss situations involving heavy rains, snow melts, etc. in

addition to the more catastrophic events.

2. Encourage FEMA staff to mention flood insurance whenever they

discuss disaster assistance funds, especially from the standpoint of the

taxpayers savings.

3. Contact all property and casualty insurance companies doing business

in the United States and ask that they include with their direct-bill

customer billings a flyer on the subject of flood insurance.

4. Broaden the Cover America program to continue to zero in on agents,

particularly in those areas where studies show that flood insurance is

drastically undersold.

5. Include emphasis on local building departments. Encourage

communities to include flood information with their utility bills and

other mass mailings. FIA will use the CRS newsletter to encourage

this practice.

6. Encourage additional schooling as well as “crash courses” at the

scene of a disaster.
I Federal Insurance Administration

9 Underwriting

FEMA’s NFIP Call for Issues Status Report

June 2000
Underwriting

FEMA’s NFIP Call for Issues Status Report, June 2000 I-9-1

Issue: Underwriting requirement for RCBAP

Respondent’s Recommendation(s):

Adopt an underwriting requirement for RCBAPs that mirrors, to the best

extent possible, the property insurance industry’s own replacement cost

estimate requirement, and adjust the details of that requirement to remove any

differences between the NFIP and private coverage.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will publish new requirements in the December 2000

revisions to the Flood Insurance Manual. Examples of acceptable

documentation will be included.

Issue: Policyholder self-certification for improvements and alterations

Respondent’s Recommendation(s):

Require an annual policyholder self-certification to state that the property has

not been altered, and should cancel the policy or assess a substantial penalty

for false certification.

FEMA’s Response: No Further Action Required

Explanation: We have determined that the expense and the administrative

burden would be too great for the limited benefit to the NFIP.

Issue: Flood zone validation system for PRP renewal records

Respondent’s Recommendation(s):

Apply the new flood zone validation system, or similar system, to all active

renewal records 90–120 days prior to the PRP policy expiration dates. The

edit would generate a list of policies not eligible to renew. The companies

would have sufficient time to notify the agent and insured of the circumstances

and acquire the additional underwriting data to issue the policy as a SFIP.

This would avoid both the time-consuming tasks of fixing things after the fact

FEMA’s Response: No Further Action Required

Explanation: It is the WYO companies’ responsibility to verify the

eligibility of their PRPs prior to expiration. FIA edits to ensure that the

companies fulfill their responsibilities. FIA offers a way that companies can

get their verification process approved so that FIA can turn off the edit.
Underwriting

FEMA’s NFIP Call for Issues Status Report, June 2000 I-9-2

Issue: Flood zone validation system for PRP renewal records

and the bad publicity that is being caused by the present process. The practice

of validating flood zones on renewal records by effective date could be

immediately suspended in favor of this recommendation and all errors

identified to date could be set aside.

In addition, the processing procedures should be changed to allow data to be

edited for correctness before renewal, so the renewal can be issued correctly.

This avoids the complexity of canceling and rewriting, along with the

consumer reaction to increasing premiums. Cancel/rewrite is being done on

PRPs with invalid zones, causing much expense and confusion.

Issue: Assignment of account executives to assist WYO companies

Respondent’s Recommendation(s):

Reorganize or assign more account executives to assist the WYO companies in

their requests for assistance related to underwriting and changes in the NFIP.

FEMA’s Response: Adopted/Action Underway

Explanation: The NFIP Bureau and Statistical Agent (BSA) will complete

an assessment of WYO companies and vendors to match staff expertise and

resources with company needs. The NFIP BSA has filled two account

executive vacancies. Periodic Conference calls with companies experiencing

data monitoring problems will be implemented to assist companies by the end

of FY 2000.
Underwriting

FEMA’s NFIP Call for Issues Status Report, June 2000 I-9-3

Issue: WYO expense allowance

Respondent’s Recommendation(s):

Revisit the WYO expense allowance. Part of the 32-percent or so the average

company receives on its regular property business is used to pay expenses

unrelated to flood insurance (e.g., statistical collection costs, advertising costs,

trade association affiliation, etc.), so at least those expenses should be

quantified and removed.

FEMA’s Response: Assigned For Further Study

Explanation: In the absence of hard data (see note below) on the costs

associated with selling flood insurance, FIA uses a proxy for similar lines

(allied and fire) to determine what the flood costs should be. We met with

WYO companies in January 1999 to discuss the expense allowance and to get

their thoughts on the factors that affect the expense allowance. We made a

decision from that meeting and from the comments submitted during

rulemaking to lower the expense allowance. A key reason for lowering the

expense allowance is that for years we had been using the Best’s figures which

include reinsurance. Since flood insurance doesn’t involve reinsurance for the

companies, we started to use Best’s direct premium numbers, which do not

include reinsurance costs. We will continue to examine costs and we will

make any further adjustments based on the actual cost of writing flood

insurance, but lowering the expense allowance using direct rather than net

premiums is sound policy which has resulted in savings of $20 million.

Note: Only recently have companies begun to report to States the costs

associated with flood insurance.
Underwriting

FEMA’s NFIP Call for Issues Status Report, June 2000 I-9-4

Issue: Procedures for correcting flood zones on policies

Respondent’s Recommendation(s):

Change the rules to allow correction of a zone within the present policy form

to avoid reformation, which is confusing, expensive, and complex.

Reformation of an insurance policy should only occur in rare situations when

there is no other way to correct the policy within present rules.

FEMA’s Response: No Further Action Required

Explanation: FIA’s rules do not prohibit the endorsement of a policy to

correct a zone. The only limitation is a lack of data in the company’s files that

limits its ability to endorse from a PRP to a standard rated policy.

Issue: Accuracy of rates used by WYO companies

Respondent’s Recommendation(s):

WYO companies should provide data on all rating elements for each policy,

including BFE, LFE, elevation difference, zone, occupancy type, etc. FIA

may then check the accuracy of the rates used by the WYO company and

servicing vendor, and, as part of post-disaster map review, identify areas

where the flood level in a given event is inconsistent with the return frequency

(e.g., 30-year, 100-year, 500-year) determined for that event. Such areas may

need to be remapped.

FEMA’s Response: No Further Action To Be Taken

Explanation: FIA has been requiring WYO companies to provide the BFE,

lowest floor elevation, grade elevation, and diagram number since October

1997 with the intention of setting up a computer program to check the

accuracy of the underwriting. Recent changes to the building diagrams

relating to the new Elevation Certificate (EC), that no longer require the EC to

show the reference level, will make this possible. Also, FIA is doing this with

CRS communities and has developed a CD-ROM for EC use by CRS

communities.
Underwriting

FEMA’s NFIP Call for Issues Status Report, June 2000 I-9-5

Issue: FIA monitoring of WYO compliance

Respondent’s Recommendation(s):

WYO companies should identify the mortgagee of each insured property. FIA

could then monitor compliance with mandatory purchase requirements in cases

where policies are not renewed.

FEMA’s Response: Assigned For Further Study

Explanation: While mortgagee information is requested on the flood

insurance application, it is not included as a data field the WYO companies

must provide in their required reporting. FIA has experienced difficulty

obtaining accurate lender information for insured structures because of

frequent mortgage selling and servicing changes in the lending industry. FIA

will ask the NLIC and others in the fourth quarter of FY 2000 how accurate

lender information is obtained and maintained for other lines of insurance so

that renewal bills are sent to the current lender. FIA will determine whether

those procedures can be applied to flood insurance.

Issue: FIA auditing of WYO vendors

Respondent’s Recommendation(s):

WYO companies that have servicing vendors process their policies and/or

claims should allow FIA auditors to audit the vendors directly. This would

facilitate FIA’s ability to identify and correct consistent error patterns.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA will conduct underwriting and claims operation reviews

at vendors’ offices and will be able to assess how the vendor processes the

work.
Underwriting

FEMA’s NFIP Call for Issues Status Report, June 2000 I-9-6

Issue: Simplification of policy writing process

Respondent’s Recommendation(s):

Several simplifications for policy writing should include:

1. Develop and provide a national database of known elevations and

zones.

2. Offer 1-, 2-, and 3-year policies with reduced rates (besides no fees)

for 2-year and 3-year policies.

3. Discount the premium for policies that have been continuously

renewed 3 or more years without a loss (exclude 2- and 3-year

policies).

4. Place the rating and flood zone determinations on the Internet. In this

manner the CRS, rates, and rules would all be current.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FEMA believes that it is more appropriate for the private

sector to develop a building flood elevation database capability and strongly

encourages it to do so. The FIA had the concept of an all inclusive rating

prototype demonstrated at the NFIP Conference in May 2000, encouraging

those in attendance to consider pursuing the development of either such a

database or the capability of providing such information to insurance

agents/companies writing coverage under the NFIP.

Individual flood zone information is available from a number of sources in the

private sector. FEMA maintains a list of those sources on its Web site for the

NFIP in the portion on flood insurance. As such, FEMA sees no reason to

develop such a duplicate database on its own.

The 3-year policy option was eliminated on May 1, 1999. FIA’s review of the

pros and cons of the 3-year policy option showed that there were pressing

reasons to make the change from a rating, underwriting, and program revision

standpoint.

The recurrence period for floods is so long, that being loss free for 3 years is

not a creditable predictor of future losses, so this recommendation will not be

adopted.

NFIP rates and underwriting rules are already on FEMA’s Web site under the

flood insurance portion and changes are posted to keep that information

current as the changes become effective and the flood zone information is

available from the private sector.
Underwriting

FEMA’s NFIP Call for Issues Status Report, June 2000 I-9-7

Issue: Cancellation of flood policies for paid-off loan

Respondent’s Recommendation(s):

Allow 1-year flood policies to be canceled when the loan is paid off. This

would eliminate the frustration felt by insureds and agents when the mortgagee

requirement for coverage no longer exists, and they expect a premium refund.

In the section of the Manual on cancellations, a cancellation reason could read,

“Mortgage Paid Off During a 1-Year Policy – This reason issued to cancel a 1-

year policy after the mortgage has been paid off. A statement from the

mortgagee to this effect must be attached to the Cancellation/Nullification

Request Form.”

FEMA’s Response: Adopted/Action Underway

Explanation: The change to allow 1-year policies to be canceled when a

loan is paid off became effective on May 1, 1999.

Issue: Change arrangement with WYO carriers

Respondent’s Recommendation(s):

Include stronger language in the Arrangement to preclude WYO carriers from

being hit with assessment fees and taxes outside the premium tax.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: This issue has come up consistently for a number of years in

connection with the WYO program. Changing the WYO Arrangement any

further will not resolve the problem. We believe we have provided in the

Arrangement the strongest possible language for companies to use in order to

avoid such charges. We have always consented to pay State premium taxes

since we rely on the States to regulate companies on business conduct and

solvency issues. But when local assessments have arisen we try to deal with

the unit of government at the request of the company to explain that in our

view such assessments should not apply since the WYO program is a Federal

program. We have through this approach been generally successful.
Underwriting

FEMA’s NFIP Call for Issues Status Report, June 2000 I-9-8

Issue: Legal action against insurance agents

Respondent’s Recommendation(s):

The FIA as an “especial class,” or a FEMA employee as an individual, should

sue two or three insurance agents (for costs plus $1) who provide erroneous

advice that results in a building owner suffering an uninsured loss. Or, FIA or

a FEMA employee should seek an E&O claim against the agent(s) on behalf of

the U.S. Treasury, because of the increased liability to the Federal Government

for the damage and publicize these actions in insurance industry trade journals.

That should get the attention of the agents and their E&O carriers, compelling

them to learn more about the NFIP.

FEMA’s Response: No Further Action Required

Explanation: FIA does not have the authority to take legal action against

insurance agents who give erroneous advice to building owners that result in

uncovered losses. The building owners have that right. They can and do sue

agents for bad advice. Agents buy Errors and Omissions Insurance to protect

themselves from these suits.

Issue: Vice President Gore’s Plain Language Initiative

Respondent’s Recommendation(s):

Comply with the Plain Language Initiative and incorporating the provisions of

the Policy on Government-to-Government Relations with American Indians

and Alaska Native Tribal Governments as you proceed with revisions to the

NFIP.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA has followed the Vice President’s “plain language”

initiative in the proposed major rewrite of the SFIP. (One of the early versions

of this rewrite was reviewed by a focus group specifically for its readability,

which our customers confirmed.) We are applying plain language principles

to all new documents and revisions of exiting ones. FIA has also incorporated

and will continue to incorporate the provisions of the Policy on Governmentto-Government with American Indians and Alaska Native Tribal Governments

with each revision to and initiative for the NFIP.
Underwriting

FEMA’s NFIP Call for Issues Status Report, June 2000 I-9-9

Issue: Electronic signatures on insurance forms

Respondent’s Recommendation(s):

Use electronic signatures as more insurance companies move toward

automation and to reduce paperwork. Require any agency using electronic

submission to sign a document stating that any electronic data records

submitted by the agency are true to the best of the agent’s knowledge, similar

to what they are signing on each application, thereby eliminating the

requirement for actual signature on each data record.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA published a Policy Issuance on 12-21-99, which details

the guidelines for electronic flood insurance transaction processing. This

document details the WYO companies’ obligations. FIA will further establish

its position regarding WYO company use of electronic interchange for

processing and issuance of flood insurance, parameters for security of data and

authentication of signatures, dates and receipt of premiums in FY 2000.

Issue: ACORD standards

Respondent’s Recommendation(s):

Conform the flood application form to ACORD standards.

FEMA’s Response: No Further Action Required

Explanation: ACORD has developed a flood application which agents and

WYO companies are free to use. For legal reasons, FIA cannot require the use

of this form.

Respondent’s Recommendation(s):

Reformat the SFIP to make it look like the homeowners policy.

FEMA’s Response: Adopted/Action Underway

Explanation: In FY 1999, FIA formed a work group from FEMA offices,

IBHS, and FIPNC to reformat the SFIP to resemble the homeowners and to

make the SFIP easier to read. The three forms of revised SFIP are scheduled

to be effective December 31, 2000.
Underwriting

FEMA’s NFIP Call for Issues Status Report, June 2000 I-9-10

Issue: Software for automated flood zone lookups

Respondent’s Recommendation(s):

Pursue development of mapping software as a means of facilitating the sale

and rating of flood insurance. Mapping software would lead to significant

simplification and improvement in the sales process and serve as an incentive

for more agencies to sell flood policies. Agents would no longer have to

secure zone determination from a third party, which would save the customer

money. Such software would allow agents to open a program that contained a

mapping utility; the agent would enter the address and look up the flood zone

at the address. Software should also list the FIRM date, the BFE, and other

relevant data. This information could then be transferred to a rating program

that would provide quoted coverage options, and to a program containing the

ACORD form for completion.

FEMA’s Response: No Further Action Required

Explanation: FEMA believes that the private sector is engaged in

developing the computer program(s) described. FEMA has and will continue

to make available its maps and mapping data. Efforts to improve the mapping

processes and employ current technologies in the production of new maps

should also facilitate these kinds of activities.
Underwriting

FEMA’s NFIP Call for Issues Status Report, June 2000 I-9-11

Issue: Conformance of flood insurance policies to resemble fire and homeowners policies

Respondent’s Recommendation(s):

Conform the flood policies to the policies of private industry, with the advice

and counsel of professional policy writers. Under General Conditions,

eliminate the Voidance, Reduction, and Reformation sections and include that

terminology in the Flood Insurance Manual. Publicize the restrictions on

sewer backup/land subsidence/seepage of water. Determine if there should be

any reference to “mortgagee clause” or “mortgagee obligations” in the General

Conditions of the RCBAP. Eliminate entirely the use of the 100-year and 500-

year floodplains. Review the results of the Policy Work Group, which will

include a complete rewrite of the three flood policies and will contain many

revisions in addition to the ones above.

FEMA’s Response: Adopted/Action Underway

Explanation: In FY 1999, FIA formed a work group from FEMA offices,

IBHS, and FIPNC to reformat the SFIP to resemble the homeowners and to

make the SFIP easier to read. The three forms of revised SFIP are scheduled

to be effective December 31, 2000.
I Federal Insurance Administration

10 Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report

June 2000
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-1

Issue: Cutoff date for insurance eligibility

Respondent’s Recommendation(s):

It is understandable that in historic communities built in close proximity to

waterways people should be entitled to flood insurance coverage. However,

given the current wealth of knowledge and information about the hazard of

living in flood-prone areas, new suburban developments in 100-year

floodplains should not be eligible for insurance. A cutoff date should be

established that states that structures built in the 100-year floodplain, whether

elevated, floodproofed, or not, are not eligible for Government-backed

insurance. Communities that are not aggressively enforcing their floodplain

management regulations are doing so at the expense of those communities that

are, and that of the American taxpayers. Rather than spend liberal sums of

money on an insurance program that, to some extent, encourages development

in flood-prone areas, funding could be more wisely used for acquisition,

relocation, and similar measures, which result in long-term or permanent

solutions rather than shortsighted, temporary fixes.

FEMA’s Response: No Further Action Required

Explanation: Land-use decision-making has always been the prerogative of

State and local governments. The NFIP was never intended to be placed

directly in the land use business. The NFIP was created to identify areas

subject to flood risk, offer property insurance protection against that risk, and

require local governments to adopt and enforce minimal building safety

standards for new construction in the identified flood areas. Insurance

availability is offered as a quid pro quo for sound floodplain management.

Insurance rating for new construction directly reflects the degree of risk faced.

The better the community does in promoting sound floodplain management

the lower the rates. The reverse is also true. This relation between the Federal

Government offering property insurance protection incentives and local

governments providing sound floodplain management practices should prove

over time to be the best combination aimed at creating safer communities and

reducing the exposure of property and lives to loss from flooding.

Issue: Tax assessor notification of property owners

Respondent’s Recommendation(s):

The tax assessor in each county should identify the property owners of all

structures within the flood zone. The tax assessor would then write to each

property owner advising them that the law requires that the property be insured

against flood, and giving the owner three options: (1) the property owner may

FEMA’s Response: No Further Action Required

Explanation: The NFIP’s statutes only require flood insurance to be

purchased in connection with a loan from a federally regulated lending

institution in which case it is the responsibility of the lender, or in connection

with Federal financial assistance in which case the Federal agency is
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-2

Issue: Tax assessor notification of property owners

purchase the coverage directly from the Federal Government; (2) the coverage

may be purchased from any independent insurance agent through any of the

WYO carriers; or (3) if the property owner fails to provide evidence of

insurance, the tax assessor will purchase the coverage for them and the

premium will be added to the property tax bill. The tax assessor then compiles

a list of the “uninsured” properties, giving the name of the property owner,

value of the structure(s), and the location. The insurance company issues just

one policy in the name of the tax assessor and any property owner identified

on the tax assessor’s list. The premium is established by one rate per 100.00

of insurance. The premium is paid to the insurance company by the county,

who withholds a percentage to cover the cost of administration.

Claims are settled directly with the property owner. The insurance company

appoints an agent in each county to act as liaison between the insurance

companies, the property owners, and the tax assessor. Flood-damaged

property is stricken from the rolls until repairs have been made. The

premiums are not subject to prorating adjustment.

responsible for ensuring that flood insurance is purchased. There is no role for

local governments to require the purchase of flood insurance unless they want

to enact their own local requirements.

Issue: Elimination of expense constant

Respondent’s Recommendation(s):

Eliminate the Expense Constant. This provides another possibility for

distributing the fixed expense portion – simply eliminate the current Expense

Constant and add it to the Basic Limits Rates per hundred.

FEMA’s Response: No Further Action Required

Explanation: Because the expense constant mechanism works and there are

other more pressing rating issues to address at this time, FIA has determined

that no change is needed.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-3

Issue: Elimination of 3-year policies

Respondent’s Recommendation(s):

The way the 3-year policy is currently offered, the expense constant and FPF

that those policyholders do not pay has to be spread over all policyholders. So

when that fact is combined with the reality that those policyholders with the

lowest annual premium are the individuals that are most likely to be able to

pay the 3-year policy, the result is considered contradictory. That is, the

individuals who have to pay the highest premiums end up paying even higher

premiums because of the additional Expense Constant and FPF subsidy they

pay. However, a 3-year policy might make some sense for the PRP.

FEMA’s Response: Adopted/Action Underway

Explanation: New and renewal 3-year policies were eliminated as of May

1, 1999. No other uses for 3-year policies are being planned.

Issue: State flood insurance funds

Respondent’s Recommendation(s):

Encourage the States to set up State flood insurance funds. State governments

would retain a portion of the premiums to cover administrative expenses. In

turn, the Federal Government would reinsure the State funds. The reinsurance

arrangement with any individual State could be less than 100 percent, if the

State didn’t meet certain minimum requirements. The reinsurance rate would

vary with that State’s premium adequacy, claims handling procedures,

mitigation activities, etc.

FEMA’s Response: No Further Action Required

Explanation: While not assigned for further study at this time, this could be

part of a larger assessment on how to best structure a flood insurance program.

It may be part of the planned program evaluation.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-4

Issue: Establishment of policy to pay NFIP policyholders back premiums on buyouts

Respondent’s Recommendation(s):

NFIP could pay back the premiums, or better yet, apply a deductible, similar to

the “first bite” applied to municipalities, to those in the buyout program who

did not purchase flood insurance.

FEMA’s Response: Assigned for Further Study

Explanation: FIA agrees that policyholders who are offered mitigation

buyouts should get credit for owning flood insurance. This issue will be raised

with other appropriate offices of FEMA in FY 2000.

Issue: WYO reimbursement formula

Respondent’s Recommendation(s):

Change the formula and the approach to allow the companies to compete on

one or more portions or components of the formula. Break the formula down

to its various components and decide which components could/should be

offered on an optional basis. Consider providing a basic fee for certain

baseline services and then let each company decide which of the optional

services it wants to provide. For each additional service they wanted to

provide, the fee associated with it would be added to their basic fee. To do

this, a certain level of effort would have to be developed for each service that

would have to be agreed to by the company in order to be eligible for that fee.

For example, marketing (including agent training and education) services

currently represent about 3 percent of the fee formula, but there are no

standards of performance. This service could be optional, and the company

could buy it back. Commissions might be another optional fee. Some

companies don’t have agents, others clearly don’t currently pay their agents

what they receive as part of their fee formula.

FEMA’s Response: No Further Action Required

Explanation: While FIA will continue to evaluate the WYO reimbursement

formula, it would be very difficult to break the current formula down into

various expense components, since data on discrete units of expense are

limited. Furthermore, a formula tailored to each of the 90+ companies would

be difficult to administer. Nevertheless, as information on such expense

components becomes available, it will be factored into the ongoing evaluation

process.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-5

Issue: WYO reimbursement formula

Claims services, although the associated costs are reimbursed on a separate

basis, could likely be purchased directly by the FIA from the same adjustment

firms and possibly at a lower cost. This service could also be offered as an

option.

State and local taxes could be offered as an option as in the early 1980s.

Either a flat fee could be included in the basic formula as it currently is, or

FIA, regardless of the total cost of such fees incurred by the company, could

remove it from the formula and pay such taxes directly to the appropriate

jurisdictions.

Issue: Payment of State/local premium taxes on policies

Respondent’s Recommendation(s):

Review the current practice of paying State and local premium taxes indirectly

by including a factor in the WYO reimbursement formula, then determining

what the services are and whether they are worth the cost. If they are

determined to be worth the cost, then notify, at least on an annual basis, each

insurance department and/or Governor of the revenue the State collects from

NFIP premiums, the number of policies in effect in that State, the NFIP

activity in that State, and the program needs/support that FEMA/FIA would

like from that State in support of the NFIP. If they are determined not to be

worth the cost, then notify the States that FEMA is considering changing or

eliminating paying of these taxes.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will review the current practice of paying State and local

premium taxes in FY 2001.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-6

Issue: NFIP independence from FEMA

Respondent’s Recommendation(s):

Two respondents suggested the NFIP become independent of FEMA. One

suggested this to ensure the NFIP’s continuity in an atmosphere of

Congressional budget cuts. The other suggested making the NFIP a

governmental chartered entity with a goal and timetable of making it a viable,

quasi-private insurance mechanism. This would end flood insurance claim

payment inconsistencies between States in similar continuous lake flooding

situations.

FEMA’s Response: No Further Action Required

Explanation: FIA does not believe it is appropriate to make the

organizational structure of the NFIP independent of FEMA. The

recommendation will not be adopted. One of the primary reasons for creating

FEMA was to pull together many of the disaster-related programs that had

been scattered throughout the Federal Government to have them more

centralized and afford the opportunity to improve the efficiency and

effectiveness of those programs. The NFIP was considered essential to this

effort. FEMA continually reviews its NFIP loss history and adjusts NFIP rates

to reflect risk. FEMA is working with the U.S. Congress to develop a plan on

further reducing or eliminating the declining subsidy on pre-FIRM structures

to achieve a long-term goal of making the NFIP self-supporting and actuarially

sound. The floodplain management and risk identification components of the

NFIP also serve as a major building block in FEMA’s comprehensive natural

hazard mitigation program. FIA believes the insurance and mitigation efforts

of the NFIP have benefited the Nation and are essential elements of FEMA’s

overall goals and objectives.

Federal programs by their very nature are created by the U.S. Congress to

address some problem or issue that cannot be addressed by the private sector.

This affords both the legislative as well as executive branches with

opportunities to address issues further on a more localized basis to reflect the

possible unique and limited nature of these issues.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-7

Issue: Comprehensive evaluation of NFIP effectiveness

Respondent’s Recommendation(s):

Consider a serious evaluation of the full range of NFIP activities (including

both the insurance and floodplain management sides of the program) to

specifically determine the impact of the program on floodplain occupancy, on

the net economic value of floodplain lands, and on the natural and beneficial

functions of floodplains.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA has developed a series of assessment questions, a

statement of work has been drafted, and funds have been set aside for FY

2000. FIA presented a proposal to the academic community at the Natural

Hazards Workshop in Boulder in July 1999.

Issue: Increased flexibility of MPPP

Respondent’s Recommendation(s):

The MPPP policy should allow for coverage to be bound effective from the

notification of an exposure, though contingent upon the completion of defined

letter cycle parameters. Additionally, the existing letter cycle should be

modified to indicate that the notice cycle should be completed within a

specified timeframe (i.e. 60 days), rather than dictating the specific terms.

Additionally, the number of letters in the notice cycle be reduced from three to

two, and that the legal verbiage required in the letter text be minimized so the

communication can be more “borrower/insured friendly.”

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FIA believes the borrower must be given sufficient time to

respond to the lender’s notice. Coverage can then only begin following receipt

of the premium and after the appropriate waiting period. The existing

mortgage clause and renewal provisions of the NFIP are sufficient to allow a

lender that monitors the renewal of existing policies on loans in its portfolio to

renew that policy on behalf of the mortgagor within a limited period of time

after the policy expires to avoid any lapse of coverage to protect the interests

of the lender.

FIA believes that sufficient leeway already exists to minimize the legal

verbiage messages. The MPPP Guidelines and Requirements state, “The

lender/servicer [or their authorized representative] may add their own

messages, make minor editorial modifications to the messages to conform to

the style and practice of the WYO company or lender and structure the letter to
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-8

Issue: Increased flexibility of MPPP

their liking, but they may not alter the meaning or intent of the messages listed

here for any of the letters.”

Modifying the number of letters in the notification cycle would not be in the

best interest of the MPPP and would compromise the safeguards designed to

protect the borrower.

Issue: Financial goals and incentives for WYO companies

Respondent’s Recommendation(s):

Several respondents suggested consider the following in setting growth goals

and incentives: Number of new policies written relative to a company’s policy

base. Requirements or incentives that are independent of the expense

allowance (needed to cover administrative expenses).

FEMA’s Response: Adopted/Action Underway

Explanation: The 1999–2000 WYO Arrangement provides for a 2-percent

incentive above the base expense allowance, tied to new policy growth and

policy retention (1.5-percent maximum for new policies and .05 percent for

retention). The final formula was reached in consultation with a WYO

company task force.

Issue: FIA act as final authority rather than State courts

Respondent’s Recommendation(s):

For cancellations, nonrenewals, and rescissions that are not for nonpayment of

premium or fraud, FIA should act as the final authority, subject to appeal in

Federal Court.

FEMA’s Response: No Further Action Required

Explanation: State courts are increasingly taking jurisdiction of flood

litigation cases. FEMA’s Office of General Counsel works with WYO

companies on a case-by-case basis regarding when removal from State court to

Federal court should be sought.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-9

Issue: Lowered PIF percentage growth goals for large companies

Respondent’s Recommendation(s):

Adopt a more equitable approach to measuring Policies in Force (PIF) growth

goals for WYO companies. Companies with the greatest number of PIF

should have percentage goals somewhat lower than companies with smaller

PIFs in order to realize an equitable growth goal in PIFs. For example, a

WYO company with 100,000 policies could have a growth goal of 7 percent or

7,000 policies, while a company with 20,000 policies could have a growth goal

of 10 percent or 2,000 policies.

FEMA’s Response: Adopted/Action Underway

Explanation: There is no differentiation between companies on the basis of

size. However, all companies will receive the full base expense allowance, the

bonus is in addition to the base.

Issue: Reconfiguration of base expense percent and growth bonus

Respondent’s Recommendation(s):

Consider options for reconfiguring the base expense percentage and growth

bonus for insurance companies. If it is an expense reduction measure, give

marketing bonuses to all companies regardless of size. Graduate the expense

reimbursement according to the size of the writings. Give smaller companies

the full 32.6 percent reimbursement and larger companies smaller

reimbursements, not to go below the 31.6 percent already established.

• 0 – 50,000 PIF = 32.6 percent base plus bonus for marketing growth.

• 50,001 – 100,000 PIF = 32.3 percent base plus bonus for marketing

growth.

FEMA’s Response: No Further Action Required

Explanation: There is no differentiation between companies on the basis of

size. However, all companies will receive the full base expense allowance,

and the bonus is in addition to the base.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-10

Issue: Reconfiguration of base expense percent and growth bonus

• 100,000 – 150,000 PIF = 32 percent base plus bonus for marketing

growth.

• 150,001 and up PIF = 31.6 percent base plus bonus for marketing

growth.

If it is a marketing campaign, it should be aimed at the agents. The agents

should receive any extra amounts for their contribution to growth.

Issue: Devolution to private companies, including underwriting (French model)

Respondent’s Recommendation(s):

The NFIP should be further devolved to private insurance companies, not just

for administration, but for actually underwriting insurance. The Federal

Government only needs to be involved in the system in the event of major

flooding events. To accomplish this, FIA should be reorganized into a reinsurance organization. The French have a system of governmental

reinsurance that can be used as a basic model for reforming the NFIP.

The implementation of this concept in France is through strict control of the

private insurance industry. The heart of the program is the “catastrophes

naturelles” scheme, implemented by the law of 13 July 1982. This scheme

attaches an obligatory “rider” onto the basic insurance policy covering

property damage. This rider insures property against “uninsurable direct

material damage, the determining cause of which is the abnormal intensity of a

natural agent.”

FEMA’s Response: Assigned For Further Study

Explanation: FIA will look at other ways of structuring the NFIP as part of

the NFIP assessment study targeted for late in FY 2000.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-11

Issue: Devolution to private companies, including underwriting (French model)

The State fixes the premiums for this extra insurance, with an eye less toward

actuarial soundness, and more toward solidarity – spreading the costs across

the nation. Since the premiums are not actuarially based, the State provides

reinsurance through the Caisse Centrale de Reassurance (CCR), a State-owned

reinsurer. CCR has an unlimited authority to draw funds from the State

treasury to pay claims. The scheme is not a comprehensive insurance

program, nor is it designed to be. It is, somewhat, a voluntary system –

individual property owners who do not wish to purchase insurance coverage

do not have to, and some property owners choose to self-insure their property

(i.e., do not purchase outside insurance against risks.)

If private insurance companies undertake the underwriting of flood insurance,

it is likely that they will be able to offer flood insurance within the basic

homeowner’s insurance policy. A significant portion of the uninsured

population is uninsured because it believes that flooding is covered under their

regular homeowners policy. This uninsured base could become insured fairly

easily if flooding is written into the basic insurance. Additionally, private

insurance companies can become heavily vested in the success of the system,

and will have a greater incentive to be innovative and progressive.

As a more limited reinsurer, the Government can still use pricing power to

influence communities to pursue active flood mitigation projects, as it has

done through the CRS. The CRS might become even more effective, as

insurers in each community will have a significant incentive to lobby State and

local governments for these projects.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-12

Issue: Increased emphasis on certain repetitive loss structures

Respondent’s Recommendation(s):

Place intensive management emphasis on certain categories of repetitive loss

structures to:

1. Establish criteria by which certain structures would be designated as

“special risk.”

a. An owner of a special structure would lose the opportunity to

purchase flood insurance, unless the owner complied with local

ordinances regarding elevation;

b. Failure to elevate would cause not only loss of flood insurance,

but also denial of all other FEMA assistance

2. Cap the amount of claims to be paid on any structure.

3. Increase deductible amounts.

4. Establish criteria that would call for increased premiums in the

amount of claims reached as a designated percentage of property

worth.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: As part of FEMA’s Repetitive Loss Strategy, mitigation

assistance will be offered to many of the highest-risk repetitive losses. If a

property owner refuses a mitigation assistance offer, one of the consequences

under consideration, is to henceforth offer insurance on that property at

substantially higher rates, and possibly only at full-risk premium. Rulemaking

and legislation are being pursued to clarify the specific procedures and to

determine whether this should be implemented in FY 2001.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-13

Issue: Requirement for developing permit and Elevation Certificate with flood insurance policy applications

Respondent’s Recommendation(s):

If the policy for obtaining flood insurance were changed to include a copy of

the development permit along with the Elevation Certificate, this would be

beneficial in assuring compliance with the Flood Damage Prevention

Ordinance.

FEMA’s Response: No Further Action Required

Explanation: The existence of a building permit system is a minimum

floodplain management requirement for community participation in the NFIP.

The need for a development permit has not been deemed necessary for

insurance rating or the floodplain management purposes of the NFIP. It is,

however, the prerogative of State and local governments to adopt all measures

they deem necessary to support and comply with their Flood Damage

Prevention Ordinances, and they are strongly encouraged to do so.

Issue: Designation of regional NFIP data processing technicians

Respondent’s Recommendation(s):

Designate regional data processing technicians to closely monitor and

collaborate with WYO data processing personnel in the resolution of errors

and rejections. These individuals should also maintain a close coordination

with the WYO companies regarding changes and trends in the data processing

field that could benefit both parties.

FEMA’s Response: No Further Action Required

Explanation: FIA does not believe that designating regional data

processing technicians to closely monitor and collaborate with WYO

personnel is practical or necessary. FIA is concerned that such regional

assignments would unduly restrict the assignment of staff. The NFIP Bureau

and Statistical Agent contractor is tasked to deliver as much staff support as it

reasonably can to WYO companies. Assistance to companies is coordinated

by their Account Executive. Both Account Executives and data processing

staff have provided extensive assistance to companies, including onsite

assistance when required.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-14

Issue: Flood insurance for all structures in mapped non-participating communities

Respondent’s Recommendation(s):

Whether secured by a federally regulated home loan or not, all properties

located in mapped nonparticipating communities should be required to

maintain flood insurance. Additionally, those mapped non-participating

communities should face assessment by the NFIP to help cover losses

sustained by homes not covered by flood insurance. This would help force

communities into participating in the NFIP, as well as protect taxpayers from

paying for flood losses in non-participating communities. We hope that the

NFIP and FEMA will take the lead in urging Congress to enact legislation to

deal with non-participating communities.

FEMA’s Response: No Further Action Required

Explanation: FEMA may consider taking the lead in urging the U.S.

Congress to enact legislation regarding non-participating communities in the

future. Indications are that the number of high-risk properties in nonparticipating communities represent only a small percentage of the national

total and current sanctions for non-participation are probably adequate. The

NFIP was intended to be voluntary and serve as a quid quo pro for the

availability of Federal financial assistance in SFHAs.

Issue: Requirement for condominium associations to maintain adequate flood insurance coverage

Respondent’s Recommendation(s):

No mechanism exists to require condominium homeowners associations to

maintain a master policy covering the buildings’ common area. In the loan

origination process, lenders must verify the existence of a master flood

insurance policy on condominium buildings located in SFHAs. If the

homeowners association refuses to carry flood insurance, then lenders cannot

fund the loan. Another problem can arise after the loan has been made if the

homeowners association allows the flood insurance to lapse. Lenders do not

have the ability to ensure continuous flood insurance coverage by homeowners

associations and, if the insurance lapses, the borrower and lender are at risk.

FEMA’s Response: Assigned For Further Study

Explanation: FIA agrees that sometimes condominium associations do not

purchase or maintain adequate flood insurance that meets mortgage loan

requirements for unit owners. FIA does not agree, however, that seeking a

legislative change to require associations to maintain such adequate coverage

is the solution. FIA believes that additional work needs to be done with the

condominium industry to convince them of the need to treat other forms of

hazard insurance governed by their documents. FIA will pursue such efforts in

FY 2000 with advertising, communication, and training and education efforts.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-15

Issue: Requirement for condominium associations to maintain adequate flood insurance coverage

The NFIP and FEMA should take the lead in urging the U.S. Congress to enact

legislation that would require condominium associations to maintain adequate

flood insurance.

Issue: Broadened definition of SFHA for insurance purposes

Respondent’s Recommendation(s):

There is no question that FEMA needs to maintain maps that show the 100-

year flood level, and such maps if kept reasonably up to date would be an

important tool for establishing territory definitions. The respondent questions

the need to always follow the 100-year flood line. This is a particularly

important matter, as projections for the future are rather pessimistic with

respect to the increasing frequency of dangerous storms and related flooding.

For insurance purposes, however, FEMA needs to both broaden the definition

of the SFHA and simplify its application for insurance purposes.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: FEMA is developing an overall plan for evaluating the NFIP

and addressing various public policy issues in FY 2000. The issue of

broadening the definition of the SFHA will be incorporated into that structure.

There are currently technical solutions that reduce the need to read NFIP maps.

The best continued use of the risk information represented on the maps

depends in part on the availability of funding to keep the information up to

date. The data for a building’s lowest floor elevation, the other important risk

indicator that introduces some complexity in the rating process, may also be

subject to some technical solutions, but they have not as yet been developed to

the same extent as the map data. A set of pilot rating alternative demonstration

projects was presented at the National Flood Conference, in May 2000.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-16

Issue: Marketing plan changes

Respondent’s Recommendation(s):

Control the marketing of flood insurance and not be solely dependent on

insurance companies and agents to produce business. FIA spends millions of

dollars annually on an excellent advertising campaign and then turns it over to

uninterested companies and agents to implement. In addition to existing

approaches, FIA should contract with a sophisticated marketer to aggressively

sell flood insurance policies.

FEMA’s Response: No Further Action Required

Explanation: FIA has worked with the insurance industry since 1983 to

establish and maintain the WYO program, and believes that it would be

inappropriate to create another entity to compete with that program. Rather,

companies compete with one another for flood insurance business.

Issue: Improved State and local access to flood insurance activity, claims, and enforcement data

Respondent’s Recommendation(s):

Following an event, limited data are available for Federal, State, or local

disaster recovery and mitigation program managers. The available data are

usually in a format that is unusable during DFO operations, and are rarely

available electronically. State and local officials are told that the availability

of data is restricted because of privacy issues. However, State and local

entities are responsible for enforcement of duplication of benefits, various

other disaster program compliance issues, FMA, and related initiatives that

require strategic planning and impact analysis. During disaster recovery

operations, it is critical to have access to claims data for the declared area.

Therefore, FEMA should:

1. Modify data systems to allow for electronic transfer of policy and

claims information in a declared area or State.

FEMA’s Response: Adopted/Action Underway

Explanation: Procedures and guidelines for coordination with DFOs are

established. FEMA Regional Offices and DFOs have access to the FEMA

systems’ insurance database. During the Flood Insurance Conference, FIA

met with the WYO companies, FEMA Regional Office staff, and others to

discuss expedited reporting of data in disaster situations. A design for this

reporting was presented and FIA is awaiting the response of the companies.

FIA believes it may be possible to implement the needed changes. Release of

data to States is governed by the Privacy Act and published “routine use”

notices, as opposed to policy provisions, and these are in place with respect to

duplication of benefits and mitigation purposes.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-17

Issue: Improved State and local access to flood insurance activity, claims, and enforcement data

2. Ensure NFIP liaison has the ability and authority to secure data on

flood insurance activity, claims, and enforcement of standards with

WYO providers.

3. Modify policy language to allow for the distribution of data to entities

involved in disaster recovery and mitigation activity.

Issue: Removal of mandatory purchase requirement in Zone AR

Respondent’s Recommendation(s):

A property owner indicated the mandate that changed the flood zone code for

Long Beach and other nearby communities to Zone AR was ridiculous and

recklessly disregarded the hardship placed on homeowners. Reverse this

coding immediately and notify the lenders and community leaders involved.

FEMA’s Response: No Further Action Required

Explanation: FIA lowered the rates in Zone AR in 1998 to accommodate

cost concerns. FIA will not remove the mandatory purchase requirement

because the Zone AR designation recognizes the inadequacy of the levees to

provide adequate flood protection. The mandatory purchase requirements are

statutory and can only be amended by the U.S. Congress.

Issue: Elimination of the NFIP Direct Program

Respondent’s Recommendation(s):

There is sufficient WYO company capacity to write all NFIP flood policies,

and the Direct Program is unnecessary. Provisions could be included to place

all producers with “assigned” WYO carriers if they are not enrolled with a

WYO company. This assignment of producers works successfully in

Workers’ Compensation and Automobile residual markets.

FEMA’s Response: No Further Action Required

Explanation: The Federal Insurance Administration will not adopt this

recommendation. FIA examined the need for retaining the “direct” facility

through which insurance agents and brokers are able to write NFIP policies

directly with the Federal Government. (That examination was conducted

before the latest procurement for the NFIP Servicing Agent Contractor for
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-18

Issue: Elimination of the NFIP Direct Program

Direct operations.) The reason for the decision to retain the direct-side

included the need to provide a market for producers not affiliated with any

Write Your Own (WYO) insurance company. The Direct facility also accepts

flood insurance risks that WYO companies might decline. The Direct facility

also offers a cost-effective means opportunity to undertake some, unique

critical low-volume flood insurance activities, such as the Group Flood

Insurance Policy for certain disaster recipients (i.e., recipients of Individual

and Family grants following a presidentially declared disaster).

Issue: Extension of Financial Arrangement with WYO Companies to 2 years

Respondent’s Recommendation(s):

The current annual Arrangement does not foster stability in the WYO Program

because of its length and the uncertainty of the expense levels paid to the

WYO companies. Long-term planning and commitment by WYO companies

are difficult, and this affects the success of the Program. FIA believes the

Arrangement should be at least 2 years.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will implement an extension of the Financial Agreement

with WYO Companies to 2 years for the 2001–2003 Arrangement years.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-19

Issue: Use of Zone AR policy funds for restoring disaccredited levees

Respondent’s Recommendation(s):

All premiums collected because of a Zone AR rezoning should be placed into

a separate trust fund and used toward immediately restoring 100-year level of

flood protection for disaccredited levee. This would assist communities in

getting the mandatory flood insurance requirement lifted at the earliest

opportunity.

FEMA’s Response: No Further Action Required

Explanation: FIA does not believe a change should be made to allow

premiums collected in Zone AR to be used for levee restoration. Insurance

premiums are required for paying claims. To use them for levee repair is

contrary to the very concept of insurance.

Issue: Expanded incentives and disincentives for flood insurance purchase and flood mitigation practices

Respondent’s Recommendation(s):

Explore and expand creative, attractive incentives/disincentives for flood

insurance purchase and flood mitigation practices. For example, a scaled

system of deductibles might be an incentive for taking mitigation measures

without serving as a deterrent to the purchase of flood insurance. Recognize

and reward successful, proactive efforts.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will explore and expand incentives and disincentives for

flood insurance purchase and flood mitigation practices in FY 2000. The

NFIP generally has tried to reward mitigation efforts (e.g., CRS, ICC, rating

structure). This concept is also built into FEMA’s repetitive loss strategy.

Issue: Federal preemption on local premium taxes and other assessments

Respondent’s Recommendation(s):

Implement Federal preemption on local premium taxes and other assessments.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA is considering this recommendation for incorporation

into proposed legislation in FY 2000.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-20

Issue: Changes in restricted accounts

Respondent’s Recommendation(s):

Restricted accounts are considered Government funds, but the financial risk is

still delegated to the WYO company. If all restricted accounts were owned by

the NFIP, they could be required to reside at an NFIP-chosen financial

institution and combined for account analysis and investment purposes,

resulting in vastly improved case management for the program overall.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will explore changing restricted accounts in FY 2000 so

that they may be owned and guaranteed by the Federal Government. FIA

recognizes this has significant implications for WYO companies, but believes

the idea merits exploration.

Issue: Exclusion of flood peril from residential insurance policies

Respondent’s Recommendation(s):

Do not make any legislative or regulatory attempt to require the addition of

flood insurance coverage by endorsement to a privately issued homeowner

insurance contract. Absent a complete rethinking of the public policy behind

the program, a dual regulatory system could result. This in turn would

increase costs and regulatory burden on participating companies.

FEMA’s Response: No Further Action Required

Explanation: FIA believes flood insurance should be provided through the

private sector to the extent possible. However, FIA recognizes the industry is

not prepared to assume a larger role at this time.

Issue: Privatization of flood insurance

Respondent’s Recommendation(s):

Privatizing the NFIP could potentially result in dual regulation that would be

both burdensome and expensive for insurers. One example of possible conflict

would be in the area of rate and form regulation. Another example would be

the process by which communities are judged eligible for the program.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA believes that flood insurance should be provided through

the private sector to the extent possible. However, FIA recognizes that the

industry is not prepared to assume a larger role at this time.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-21

Issue: Privatization of flood insurance

Current Federal regulation imposes eligibility standards for entry into the

Program. Unless these standards were removed as a part of a reorganization

that privatized the program, insurers could be expected to enforce these

standards for State and local governments. Private insurers do not have the

authority or resources to replace the Federal Government in this capacity.

Issue: Increased actuarial soundness of NFIP

Respondent’s Recommendation(s):

Make NFIP actuarially sound by increasing borrowing authority beyond the $1

billion currently allowed by the U.S. Congress and requiring insurance in 500-

year zone to obtain a better spread of the flood insurance risk.

FEMA’s Response: No Further Action Required

Explanation: FEMA has asked the U.S. Congress for increased borrowing

authority. The issue of requiring flood insurance in B, C, and X zones is

among the issues that FIA will consider as part of an overall NFIP assessment

study that will begin in FY 2000.

Issue: Increased local management of flood insurance programs to minimize unprotected buildings

Respondent’s Recommendation(s):

When unprotected buildings reach a certain percentage within a community,

then a penalty should be imposed against the community.

FEMA’s Response: Assigned For Further Study

Explanation: The issue of the level of community compliance with NFIP

requirements and whether mechanisms beyond those used currently, such as

probation and suspension, will be examined as part of the overall NFIP

assessment, which is being initiated in FY 2000.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-22

Issue: Disaster assistance waiver for property owners without flood insurance

Respondent’s Recommendation(s):

More education of the insuring public is needed as they continue to build and

purchase homes in high-risk coastal areas and high-risk flood zones. If these

people’s expectation is for the Federal Government bail them out, than a

waiver of disaster benefits needs to be developed and agreed to by owners

during the home purchase or building permit process. Taxes should not be

used when people had the opportunity to protect themselves and rejected it.

FEMA’s Response: No Further Action Required

Explanation: The National Flood Insurance Reform Act (NFIRA) of 1994

has several provisions that already address the issue. First, the NFIRA

establishes penalties for lending institutions that fail to require flood insurance

as a condition for federally related financing for property in special flood

hazard areas. In this way those who borrow money to buy or build property in

special flood hazard areas must protect themselves through flood insurance

and not rely on the Federal taxpayer for Federal disaster relief. The NFIRA

also prohibits future Federal disaster relief, for flood damage, for a recipient of

Federal disaster who fails to buy or maintain flood insurance coverage as a

condition for the assistance. In addition, the agency is establishing tracking

mechanisms that track compliance of recipients of Federal disaster assistance

in meeting their obligations to buy and maintain flood insurance coverage.

Issue: Add the provisions found in 44 CFR 62.3 to settle preemption question

Respondent’s Recommendation(s):

Add the following preemption clause, which is already a part of the Federal

regulations concerning the Federal Crime Insurance Program, to the

regulations governing the NFIP:

“No Federal Crime Insurance Policy issued by or on behalf of the insurer shall

be subject to any State or local tax or insurance law or regulation, nor shall any

agent, broker, or servicing company be subject thereto with respect to any

FEMA’s Response: Assigned For Further Study

Explanation: This issue is one of several significant issues arising in WYO

claims litigation: jurisdiction, governing law, allocation of risk of adverse

judgements, and litigation reporting obligations. FIA and the FEMA Office of

General Counsel are reviewing, in consultation with WYO companies, what

possible changes in the Standard Flood Insurance Policy and the WYO

Arrangement can be made to address these issues. Also under consideration

are publication of policy guidance and litigation digests.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-23

Issue: Add the provisions found in 44 CFR 62.3 to settle preemption question

monies received or action taken in providing insurance to the public under the

authority of this sub chapter;....”

As currently operated, citizens of certain States are routinely being afforded

greater benefits under the NFIP than are citizens of other States. Specifically,

citizens in those Southern States comprising the original United States Fifth

Circuit Court.

Issue: Federal Court jurisdiction for cases against WYO carriers

Respondent’s Recommendation(s):

Nothing in the NFIP enabling legislation, or in the applicable Federal

regulations, or within the SFIP, plainly and explicitly establishes when cases

relating to flood insurance arising against WYO Carriers are to be litigated in

the Federal courts, as opposed to in the State courts. Many flood insurance

claimants file their suits against the SFIP in State court. Even more unclear

than the breach of contract cases are the cases involving claims that do not, on

their face, include a direct claim under an SFIP. The need to clarify

jurisdictional issues with regard to WYO Program carriers is the single

greatest cause of unnecessary litigation expenses involving the NFIP today.

Beyond the issue of expense, a lack of clarity on this point is at odds with

FEMA’s need to have the Courts enforce a uniform national rule. This

problem could be solved in a number of ways. First, FIA could take action

effectively end all State law claims and thus solve the problem. Another

method, though more complicated, would be to seek a Congressional

amendment to 42 USC 4072 to clarify that it applies to all types of claims

FEMA’s Response: Assigned For Further Study

Explanation: This issue is one of several significant issues arising in WYO

claims litigation: jurisdiction, governing law, allocation of risk of adverse

judgements, and litigation reporting obligations. FIA and the FEMA Office of

General Counsel are reviewing, in consultation with WYO companies, what

possible changes in the Standard Flood Insurance Policy and the WYO

Arrangement can be made to address these issues. Also under consideration

are publication of policy guidance and litigation digests.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-24

Issue: Federal Court jurisdiction for cases against WYO carriers

relating to flood insurance arising against WYO Program carriers. Third,

FIA’s position could be stated formally and published in the Federal Register,

on the authority of 44 CFR 61.14.

Issue: Regulatory change regarding WYO carrier risk of no reimbursement

Respondent’s Recommendation(s):

Under 44 CFR 62.23(g), (i)(1), (i)(5), (i)(6), and (i)(11), it would seem that the

WYO carrier is to have the final word with regard to any litigation brought

against the carrier in the context of the NFIP. However, these provisions also

require reporting to FIA and the extension of cooperation to FEMA’s Office of

General Counsel. They thus imply that a WYO carrier would be incurring risk

if it decided to settle a flood insurance lawsuit without prior FEMA/FIA

blessing. These provisions are particularly problematic for defense counsel

who represent a WYO Program carrier. This could be rectified by using the

provisions of 44 CFR 61.14. The Director should publish an announcement

stating: “In any flood insurance lawsuit arising, in whole or in part, against the

Program, the WYO carrier will not face a risk of no reimbursement in a later

audit, provided there is any good faith and articulable basis for the settlement.”

FEMA’s Response: Assigned For Further Study

Explanation: This issue is one of several significant issues arising in WYO

claims litigation: jurisdiction, governing law, allocation of risk of adverse

judgements, and litigation reporting obligations. FIA and the FEMA Office of

General Counsel are reviewing, in consultation with WYO companies, what

possible changes in the Standard Flood Insurance Policy and the WYO

Arrangement can be made to address these issues. Also under consideration

are publication of policy guidance and litigation digests.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-25

Issue: Clarification of FEMA requirements regarding WYO carriers requirement to keep FEMA fully apprised of

pending litigation

Respondent’s Recommendation(s):

FEMA must choose to either accept no more information than that which

would be revealed by examining the record of the lawsuit at the courthouse, or

institute a substantive rule of law prohibiting discovery of such matters.

FEMA’s Response: Assigned For Further Study

Explanation: This issue is one of several significant issues arising in WYO

claims litigation: jurisdiction, governing law, allocation of risk of adverse

judgements, and litigation reporting obligations. FIA and the FEMA Office of

General Counsel are reviewing, in consultation with WYO companies, what

possible changes in the Standard Flood Insurance Policy and the WYO

Arrangement can be made to address these issues. Also under consideration

are publication of policy guidance and litigation digests.

Issue: Clarification of WYO companies’ status as agents of Federal Government

Respondent’s Recommendation(s):

Upon authority of 44 CFR 61.14, publish an announcement in the Federal

Register explaining the intent behind these two provisions, and thereby

explaining why they are not in conflict.

FEMA’s Response: Assigned For Further Study

Explanation: This issue is one of several significant issues arising in WYO

claims litigation: jurisdiction, governing law, allocation of risk of adverse

judgements, and litigation reporting obligations. FIA and the FEMA Office of

General Counsel are reviewing, in consultation with WYO companies, what

possible changes in the Standard Flood Insurance Policy and the WYO

Arrangement can be made to address these issues. Also under consideration

are publication of policy guidance and litigation digests.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-26

Issue: Consistent statute of limitations to all parts of flood program

Respondent’s Recommendation(s):

All flood regulations should have a 3-year statute of limitations. It is hoped

this would eliminate future confusion regarding this issue and help reduce

costs when companies are asked to reconstruct records over 3 years old.

FEMA’s Response: No Further Action Required

Explanation: Clear and consistent requirements already exist. Therefore,

FIA does not believe a change is necessary. The requirement for retention of

Federal records is 6 years and 3 months. This requirement does apply to NFIP

Direct business, but does not apply to WYO Insurers. WYO carriers are

governed by the terms of the Arrangement. The Arrangement calls for

retention of NFIP policy records for at least 3 years and retention of claims

records for at least 3 years from the date of final settlement. FIA does not see

a need to increase the length of time requirement that is set forth in the WYO

Arrangement.

Issue: Removal of WYO carriers from Standards Committee

Respondent’s Recommendation(s):

Any and all WYO carriers sitting on the Standards Committee should be

removed. It is not proper for business practice to have the NFIP share

confidential company information with another competing company.

FEMA’s Response: No Further Action Required

Explanation: The WYO Standards Committee was established by

regulation to oversee the operation of the WYO Financial Control Plan and

performance of companies under that plan. FIA believes it is vital for this

committee to include industry executives along with Federal executives in

order to assess performance and make recommendations regarding appropriate

remedial actions. Members of the committee are not acting as representatives

of their respective companies but are participating as individuals. Further, all

deliberations and information brought to the attention of the committee are

held in confidence.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-27

Issue: Unification of insurance and floodplain management risk identification components of the NFIP under FIA

Respondent’s Recommendation(s):

To better meet the goals of the NFIP and better serve all NFIP stakeholders,

the NFIP should be reunited under the FIA.

FEMA’s Response: No Further Action Required

Explanation: While a reuniting of the functional elements of the NFIP

could facilitate the coordination of NFIP activities, this would be at the

expense of the efficiencies and other benefits of an all-hazards approach to

mitigation.

Issue: Set up centralized location to provide settlement information for IFG claims following disaster

Respondent’s Recommendation(s):

Provide States with information regarding a FEMA Flood Insurance Claims

Office (FICO) if one is opened following a presidentially declared disaster?

Regardless of whether there is a FICO, having one centralized location to

provide settlement information would expedite the processing of IFG claims.

FEMA’s Response: Will Not Adopt/Other Actions To Be Taken

Explanation: There are established procedures and guidelines for NFIP

setup and coordination of FICO operations including publicizing their

opening, location etc. However, the FICO is not designed to be the source for

Agency data regarding insurance coverage required for IFG claims processing.

Rather, State access to needed information is designed into the “NFRA”

(National Flood Insurance Reform Act) element of FEMA’s National

Emergency Management Information System (NEMIS), which is currently

under development.

Issue: Investigation of Lloyds’ programs

Respondent’s Recommendation(s):

Programs such as Lloyds have written flood coverage since the mid 1980s.

Evaluate the reasons why these programs are attracting business from the flood

FEMA’s Response: Adopted/Action Underway

Explanation: In FY 2000, FIA will explore the reasons that Lloyd’s

programs are attracting business from the NFIP and determine if they include
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-28

Issue: Investigation of Lloyds’ programs

program. Explore these reasons, features, underwriting rules, and coverages

and determine if they are viable elements to incorporate within the current

flood program.

viable elements to incorporate within the NFIP. It is important to note that

most private sector residential flood insurance exists because of the NFIP.

Further, policyholders reimbursed for losses through such policies do not need

to rely on taxpayer-funded disaster relief, thereby helping to accomplish one of

the major goals of the NFIP.

Issue: Assessment of the complete set of effects on resource use and vulnerability of the NFIP

Respondent’s Recommendation(s):

An assessment of the complete set of effects on resource use and vulnerability

of the NFIP should be undertaken as soon as possible. An integrated and

comprehensive approach, using sample areas of the Nation, should be planned

and completed. Such an effort would allow FEMA and its partners to

diagnose and prescribe modifications for congressional and administrative

changes that will benefit the taxpayers, those who are at risk of flooding, and

those who will purchase land and structures that may be at risk of future

flooding. Such an evaluation should begin with collection of information on

how many structures exist in the nation’s flood hazard areas and their

vulnerability. The broad picture of the NFIP, as part of a national strategy to

reduce flood losses and disaster costs, must be included. The issue of

requiring flood insurance for all structures, or for structures in the 0.2 percent

floodplain, also should be evaluated.

FEMA’s Response: Other

Explanation: FEMA is in the process of planning and designing a

comprehensive assessment of the NFIP in FY 2000. The scope, approach, and

methodologies for the overall assessment and for individual studies have not

yet been determined. FEMA will seek the involvement of the various NFIP

stakeholders.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-29

Issue: Balanced disaster and flood insurance approach to flood loss reduction

Respondent’s Recommendation(s):

Work with the U.S. Congress and its partners to support a balanced disaster

and flood insurance approach to reducing the Nation’s flood losses. Also,

establish a working group on insurance to include its local, State, and Federal

government and private sector partners, to review a myriad of topics,

including:

1. Requiring residual risk insurance behind levees and below dams, both

conditions which lead to catastrophic losses and disaster claims when

failure occurs;

2. Adding a provision that would require communities and States to

insure infrastructure;

3. Resolving problems with the rating structure;

4. Eliminating “grandfathering” of insurance rates for structures when

conditions change;

5. Reviewing and changing Section 1316, which is extremely difficult

to use and implement, to make it a compliance and cost-saving tool;

6. Updating and distributing the NFIP Policy Manual;

7. Improving the process for considering and supporting NFIP

compliance with post-disaster funds; and

8. Clarifying consequences in disaster assistance for public buildings

that are not covered by flood insurance.

FEMA’s Response: Assigned For Further Study

Explanation: FEMA is in the process of planning and designing a

comprehensive assessment of the NFIP for FY 2000. The scope, approach,

and methodologies for overall assessments and for individual studies have not

yet been determined. Many of the topics proposed for consideration will be

investigated during this assessment. Results and proposals will be made

available and coordinated with the U.S. Congress and other NFIP stakeholders.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-30

Issue: Interest-bearing accounts for benefit of NFIP

Respondent’s Recommendation(s):

Based on a study of bank accounts set aside to handle FEMA funds, the

respondent indicated that an average balance of approximately $3,000,000

exists. On an annual basis these accounts, if they were interest bearing and

earned interest at 5 percent, would generate interest for the NFIP of

approximately $150,000. If the entire program had interest bearing accounts

on behalf of the NFIP, there would be the potential for over $3,000,000 in

interest income.

FEMA’s Response: Assigned For Further Study

Explanation: FIA will explore the feasibility of allowing premiums and

monies drawn down for insurance claims to be placed in interest-bearing

accounts to benefit the NFIP in FY 2000. The FEMA Inspector General has

expressed informally the same opinion. FIA recognizes this involves a

potentially large impact on WYO accounting systems, but believes the idea is

worth exploring.

Issue: Repairs handled by insureds

Respondent’s Recommendation(s):

Omit the allowance for overhead and apply a flat percentage on all items on

the building estimate if the insured is completing their own repairs. This

would create a more uniformed claim process and reduce the amount of

complaints from insureds.

FEMA’s Response: No Further Action Required

Explanation: When an insured does his own repairs, the amount of effort

and time is different in each case. It would be inequitable to set a standard

percentage for each case not only to the NFIP policyholder but also the flood

insurance fund.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-31

Issue: Form 81-93 as attachment to flood insurance policy applications

Respondent’s Recommendation(s):

Because mortgage companies are required to determine the zone of the

property, FEMA Form 81-93 should be attached to the flood insurance

application as verification of the correct zone.

FEMA’s Response: No Further Action Required

Explanation: The insurance agent and the insurance company have

independent responsibilities to determine the correct zone for rating, talking

into account the NFIP grandfathering rules. We do not think that this

suggestion would help in meeting their responsibilities.

Issue: Tougher restrictions to address repetitive loss problem

Respondent’s Recommendation(s):

Underwrite risks so that repetitive loss properties would not be paid more than

two or three times. There is a point where payment on these repetitive loss

properties should stop. Penalize repetitive loss properties where corrective

measures are rejected. Institute mitigation measures, which, if not followed,

would cause flood insurance to be discontinued. Develop a political strategy

to sell these “get tough” policies to Congress.

FEMA’s Response: Adopted/Action Underway

Explanation: FIA will consider developing tougher restrictions to address

repetitive losses in FY 2000, including underwriting risks so that damages to

properties are not paid more than two or three times; penalizing the insured

when corrective measures are rejected; and denying insurance coverage if

mitigation measures are not taken. FIA also will develop a political strategy to

sell “get tough” policies to the U.S. Congress.
Other Insurance Issues

FEMA’s NFIP Call for Issues Status Report, June 2000 I-10-32

Issue: Continuation of the Flood Insurance Interagency Task Force

Respondent’s Recommendation(s):

Continue the Flood Insurance Interagency Task Force beyond the time limit

placed by legislation.

FEMA’s Response: Adopted/Action Underway

Explanation: As indicated in the Executive Summary to the Final Report of

The Flood Insurance Interagency Task Force, submitted to the U.S. Congress

in September 1998, the majority of the members agreed to continue informal

communications to ensure a coordinated approach to compliance with the

NFIRA. FIA agrees with the recommendation to request Task Force Members

to continue to be available for consultation on a volunteer basis.
II Mitigation

1 Floodplain Management – Community Eligibility and Compliance

FEMA’s NFIP Call for Issues Status Report

June 2000
Floodplain Management – Community Eligibility and Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 II-1-1

Issue: Make legislation/regulations for addressing non-compliance structures more flexible

Respondent’s Recommendation(s):

The respondent recommended that applying Section 1316 could be more

effective than enlisting FEMA probation or suspension measures to bring noncompliant structures into compliance.

FEMA’s Response: Adopted/Action Underway

Explanation: The denial of flood insurance by enforcing Section 1316 is

generally intended to be applied in those cases where a property owner has

deliberately violated the local floodplain development ordinance. However, in

many cases, violations of the local ordinance may not be due to the deliberate

fault of the owner. Rather, they may be do to any number of reasons.

Furthermore, applying Section 1316 against a structure does not make it safer

or less resistant to flood damage, which is a goal of the NFIP. In those cases

where warranted, the 1316 process is available and communities through the

assistance of the NFIP State Coordinator Office and FEMA Regional Offices

can consider using the Section 1316 process to help leverage compliance.

A major objective of the NFIP is to ensure that participating communities are

achieving the flood loss reduction standards of the program. In order to

address community performance, FEMA is developing a comprehensive

Community Compliance Strategy. This strategy will identify a broad range of

actions that will be taken to improve community compliance. Various

elements are identified as critical to this process such as building partnerships,

identifying additional resources, seeking new outreach opportunities,

providing better training, and a prioritization of communities needing technical

assistance. FEMA looks forward to implementing this strategy as an

important action plan that will help us to “work smarter” in giving our

communities technical assistance and gaining compliance.
Floodplain Management – Community Eligibility and Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 II-1-2

Issue: Establish team to develop compliance benchmarks and performance standards in each region and throughout

the U.S.

Respondent’s Recommendation(s):

The respondent recommended establishing a team similar to the Territorial

Closeout Teams to develop compliance benchmarks and performance

standards in each Region that are consistent across the country.

FEMA’s Response: Adopted/Action Underway

Explanation: The respondent’s suggestion of establishing a coordination

team fits in line with FEMA’s desire to have better-understood, wellcoordinated approach to dealing with community floodplain management.

FEMA is encouraged by this suggestion and anticipates the formation of a

territorial compliance coordination work group. Initially, the group would

function in an advisory role among other peers.

A major objective of the NFIP is to ensure that participating communities are

achieving the flood loss reduction standards of the program. In order to

address community performance, FEMA is developing a comprehensive

Community Compliance Strategy. This strategy will identify a broad range of

actions that will be taken to improve community compliance. Various

elements are identified as critical to this process such as building partnerships,

identifying additional resources, seeking new outreach opportunities,

providing better training, and a prioritization of communities needing technical

assistance. FEMA looks forward to implementing this strategy as an

important action plan that will help us to “work smarter” in giving our

communities technical assistance and gaining compliance.
Floodplain Management – Community Eligibility and Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 II-1-3

Issue: Implement a more aggressive NFIP compliance program, exercise authorities for probation and suspension,

and limit disaster assistance

Respondent’s Recommendation(s):

Seven respondents voiced the following concerns:

• When communities are turned over to FEMA for possible suspension

or probation; FEMA fails to follow through.

• A stronger compliance standard is needed by FEMA.

• FEMA must develop a strong and effective compliance program tied

to effective incentives, such as no disaster assistance, an increased

cost-share for disaster relief, or mitigation funding (or even other

Federal program funding, like CDBG, SBA, etc.) on the part of the

State or community. The program must identify and support a strong

State role in compliance, since FEMA staff is far too small to oversee

20,000 communities. The program must include a means of

monitoring and a means to quickly and effectively sanction noncompliant communities.

• Compliance must include not only adoption of NFIP standards and

requirements, but construction must also be monitored.

• A program for grading community codes and compliance, such as

done by IBHS, deserves support.

• FEMA must have a policy of “zero tolerance” for non-compliance.

• Stiff penalties and incarceration need to be included so that local,

county, State, and Federal employees do not abuse their positions.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA faces a variety of challenges in providing adequate

floodplain management assistance to communities and gaining compliance

from those communities whom are not consistently implementing their

floodplain management program. In dealing with poorly performing

communities, FEMA finds itself having to prioritize according to the most

serious non-compliant communities. Once a community demonstrates the

need for closer scrutiny, a period of fact-finding and data verification is

necessary. While this prolongs the time period a community needs to correct

its deficiencies, FEMA finds this as necessary to ensure the collection of

defensible data.

A major objective of the NFIP is to ensure that participating communities are

achieving the flood loss reduction standards of the program. In order to

address community performance, FEMA is developing a comprehensive

Community Compliance Strategy. This strategy will identify a broad range of

actions that will be taken to improve community compliance. Various

elements are identified as critical to this process such as building partnerships,

identifying additional resources, seeking new outreach opportunities,

providing better training, and a prioritization of communities needing technical

assistance. FEMA looks forward to implementing this strategy as an

important action plan that will help us to “work smarter” in giving our

communities technical assistance and gaining compliance. Additionally, the

compliance strategy will explore new avenues to implement the existing
Floodplain Management – Community Eligibility and Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 II-1-4

Issue: Implement a more aggressive NFIP compliance program, exercise authorities for probation and suspension,

and limit disaster assistance

• Communities and States that sign up for emergency programs must

strictly adhere to FEMA’s floodplain regulations.

• Compliance does not occur often enough, nor does the compliance

process happen on a timely basis.

• There needs to be more consequences for non-compliance such as no

public assistance.

• Non-compliance leads to development, which puts public dollars at

risk, and often causes higher flood elevations on other properties.

• The NFIP does not enforce the suspension option.

• FEMA must develop an effective monitoring and compliance process

that has real teeth and is tied to effective incentives, like no public

assistance for non-compliant communities.

• Implement the probation/suspension compliance mechanisms.

• At the onset of community probation, require an immediate, prorated

payment of the $50 policy premium surcharge, rather than waiting

until the time of renewal on the policy.

• Examples need to be made of communities that are not enforcing their

ordinance.

• Make all public assistance contingent on NFIP participation.

• Make changes to the Stafford Act that provides incentives to States

and counties to ensure they participate in the NFIP.

probation/suspension process. For example, under the current regulation

FEMA will be looking at how to expedite the suspension process where a

community has acknowledged its desire to not meet the community

partnership responsibilities of the NFIP but has not taken the step to withdraw.

Recognizing the responsibility local communities have to implement

floodplain management programs, FEMA offers a range of floodplain

management and emergency management training. Training is available

through FEMA’s Emergency Management Institute (EMI) in Emmitsburg,

MD, through NFIP workshops coordinated by State NFIP Coordinator offices,

in addition to training by FEMA Regional Offices. The mitigation curriculum

at EMI provides training for Federal, State, and local government and private

sector employees who are working to eliminate or reduce the long-term risk to

human life and property posed by floods and other natural disasters.

By taking advantage of these opportunities, local communities can upgrade

their floodplain management programs to meet or exceed the minimum

expectations of the NFIP and provide individually designed floodplain

management strategies based on the unique needs of each community. It is

FEMA’s view that local communities must take advantage of these training

opportunities to best implement a local floodplain management program and

avoid violations.

FEMA’s Public Assistance Program is one way Federal disaster assistance is

provided to State and local governments and to certain private nonprofit

organizations. The Public Assistance Program enables these recipients of

assistance to respond to disasters, to recover from their impact, and to mitigate
Floodplain Management – Community Eligibility and Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 II-1-5

Issue: Implement a more aggressive NFIP compliance program, exercise authorities for probation and suspension,

and limit disaster assistance

• Give communities accurate flood maps that truly reflect an accurate

regulatory floodplain.

• Develop a sliding scale or formula for financial awards.

the impact of future disasters. While these grants are provided to governments

and organizations – their final goal is to help a community and all its citizens

recover from the devastation of natural disasters. Other forms of disaster

assistance are limited to participating communities in the NFIP. Under

Section 202(b) of Public Law 93-234, if a presidentially declared disaster

occurs as a result of flooding in a non-participating community, no Federal

financial assistance can be provided for the permanent repair or reconstruction

of insurable buildings in Special Flood Hazard Areas. However, as stated

above, eligible applicants may receive those forms of disaster assistance that

are not related to the permanent repair and reconstruction of buildings. FEMA

recently undertook a review of this issue and decided to take no action at this

time since it would impact so few communities.

The NFIP’s Community Rating System (CRS) recognizes community efforts

that provide a level of protection from flooding that exceeds the Federal

minimum requirements of the NFIP minimum standards. This recognition is

in the form of reduced flood insurance premiums for the community’s property

owners. The discounts may range from 5 to 45 percent. The discounts

provide an incentive for new flood mitigation and planning and preparedness

activities that can help save lives and protect property in the event of a flood.

The CRS encourages State, local, and private programs and projects that

preserve or restore the natural state of floodplains and protect their floodplain

functions. There are now nearly 900 communities receiving flood insurance

premium discounts based on their implementation of local mitigation,

outreach, and educational activities that go well beyond minimum NFIP

requirements. The CRS also provides a tool to improve community
Floodplain Management – Community Eligibility and Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 II-1-6

Issue: Implement a more aggressive NFIP compliance program, exercise authorities for probation and suspension,

and limit disaster assistance

enforcement in those cases where a community joined the CRS but has

subsequently allowed itself to become non-compliant with the minimum

requirements of the NFIP. In such a case, the CRS status is withdrawn from

the community and it reverts to a class ten community thereby losing its CRS

designation and premium discount. This action by FEMA usually motivates a

community to become compliant.

The probationary process for a non-compliant community affords a

community an opportunity to correct their program deficiencies and reestablish their commitment to sound floodplain management. Historically, this

process effectively motivates communities to improve performance and

remain in the NFIP. The probationary process is an important due-process

opportunity for communities to be given a chance to correct their deficiencies.

FEMA is considering options to expedite the suspension of communities in

those cases where a community is flagrantly non-compliant with the minimum

criteria of the NFIP. This will be considered as FEMA works to implement a

NFIP compliance strategy beginning in March 2000.

Issue: Develop new tools to improve community compliance

Respondent’s Recommendation(s):

The respondent suggested the following improvements:

• The current tools available to gain compliance of a community are not

adequate.

FEMA’s Response: Adopted/Action Underway

Explanation: A major objective of the NFIP is to ensure that participating

communities are achieving the flood loss reduction standards of the program.

In order to address community performance, FEMA is developing a

comprehensive Community Compliance Strategy. This strategy will identify a
Floodplain Management – Community Eligibility and Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 II-1-7

Issue: Develop new tools to improve community compliance

• We suggest withholding Public Assistance funds in communities not

in “good standing” with the NFIP; develop a “negative CRS” rating

and other strategies that are not as cumbersome and staff-time

consuming.

broad range of actions that will be taken to improve community compliance.

Various elements are identified as critical to this process such as building

partnerships, identifying additional resources, seeking new outreach

opportunities, providing better training, and a prioritization of communities

needing technical assistance. An original focus of the strategy is to fully

maximize the training resources FEMA has available as a devise to effect

change and improvement of floodplain management practices at the local

level. Additionally, the strategy will explore new tools and approaches that

could be leveraged to gain improved community performance. Currently the

CRS Task Force, a managing body that recommends policy direction for the

CRS, is actively discussing a negative rating option.

In the process of implementing a NFIP compliance program nationwide, many

FEMA Regional Offices have developed innovative and effective approaches

to have communities correct violations or improve their practices. The new

NFIP Compliance Strategy is designed to promote these successes so that they

can be implemented nationwide. Through Project Impact, FEMA has learned

that communities do have a rekindled commitment to become more disaster

resistant. This has resulted in tremendous innovation and originality on the

part of communities. It is hoped that some of these approaches that work well

for communities will be applied to compliance.

Current statutes and regulations allow for limitations of Public Assistance

disaster assistance but only in those cases of an insurable structure in a Special

Flood Hazard Area. Expanding disaster assistance limitations beyond these

criteria may require new authorities from Congress.
Floodplain Management – Community Eligibility and Compliance

FEMA’s NFIP Call for Issues Status Report, June 2000 II-1-8

Issue: Establish and implement a fee structure for recovering FEMA staff time funds expended working with

communities to correct deficiencies and violations

Respondent’s Recommendation(s):

The respondent expressed two concerns:

• The regulations need to be changed to permit the recovery of costs

associated with compliance activity.

• Modify the NFIP Resolution To Join and the CFR to allow for

recovery of costs for staff time working with the community to correct

deficiencies and violations. A standard billing for services can be

developed similar to what other Federal agencies have for hourly

charges assisting the public.

FEMA’s Response: No Further Action Required

Explanation: Although it is recognized that there are staff costs and

resources expended when working with poorly performing communities,

FEMA also has a responsibility to give these communities technical assistance.

Many communities feel the responsibility to participate in the NFIP is a

burden as the program currently exists. Any fees charged to these

communities may encourage them to withdraw. This may not be in the best

interests of the community’s citizens, the financial solvency of lending

institutions, or the National Flood Insurance Program.

Issue: Change Biennial Reports to Annual Reports and make them part of the CAP process

Respondent’s Recommendation(s):

A respondent had specific comments on the Biennial Report, including:

• Lack of punctuality with Biennial Report.

• The Biennial Report forms are often filled out incorrectly.

• Transfer the report methodology to be a part of the CAP. An NFIP

official (FEMA or State) could initiate the report process with a phone

call, discuss/explain, and then send the form to the local official.

• Consider making the Biennial Report an Annual Report.

FEMA’s Response: Addressed in Program/Other Actions To Be

Taken

Explanation: The Biennial Report is an important data collection tool that

contributes to decisions concerning the NFIP. It is envisioned that as part of a

State’s role as a CAP partner that the Biennial Report data would be verified

during the routine community assistance process. Should errors in the data be

found, revisions to this data would be provided to FEMA. In an effort to

minimize the time it takes to provide FEMA the information gathered for the

Biennial Report, it is not an annual report. Currently we are considering

combining the Biennial Report data collection process with the “Five-year

map re-study survey.”
II Mitigation

2 Floodplain Management – General Construction Requirements

FEMA’s NFIP Call for Issues Status Report

June 2000
Floodplain Management – General Construction Requirements

FEMA’s NFIP Call for Issues Status Report, June 2000 II-2-1

Issue: Use model building codes as an alternate means to meet the building construction requirements of the NFIP

Respondent’s Recommendation(s):

Two respondents commented on using model building codes as an alternate

means to meet the building construction requirements of the NFIP. One

respondent suggested recognizing the Building Officials and Code

Administrators (BOCA) National Building Code. One respondent suggested

including these requirements in the International Building Code that is being

created by the International Code Council (ICC). BOCA is a member of ICC.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA agrees that the building code requirements of the

NFIP, when incorporated into model building codes, provide an effective

means to meet the building construction requirements of the NFIP. In the past,

FEMA worked extensively with BOCA and other building code and standards

producing organization to ensure that model building codes and consensus

standards and NFIP regulations were largely compatible. FEMA has worked

closely with the ICC to ensure that the International Building Code and the

International Residential Code comply with NFIP regulations. FEMA has

developed a guidance document that will describe how communities can use

these codes to meet the NFIP floodplain management regulations. FEMA has

also worked with the National Evaluation Service (NES) to develop an

“Evaluation Plan for Determination of Flood-Resistance of Building

Elements.” In addition, FEMA is committed to working with all codes and

standards producing organizations to further an all hazard mitigation approach.

Issue: Shallow flooding in A-Zones in coastal areas can present significantly different hazards than flooding in

A-Zones affected by riverine flooding

Respondent’s Recommendation(s):

The respondent suggested that velocity and wave action of these coastal Azones can cause significant damage to buildings that is not recognized by

current map designations.

FEMA’s Response: Evaluation/Study Required

Explanation: In post-disaster assessments, FEMA continues to see damages

to buildings in A-zones in coastal areas that appear to result from the velocity

of the floodwaters or from wave action. These damages include scour and
Floodplain Management – General Construction Requirements

FEMA’s NFIP Call for Issues Status Report, June 2000 II-2-2

Issue: Shallow flooding in A-Zones in coastal areas can present significantly different hazards than flooding in

A-Zones affected by riverine flooding

collapse of short crawl-space walls that are not usually seen in shallow riverine

flooding. The revised Coastal Construction Manual (FEMA 55, 3rd edition)

specifically recognizes hazards that may be present in A-zones in coastal

areas. While FEMA doesn’t plan a rule change at this time, we agree that this

issue needs evaluation and continue to develop technical guidance and reevaluate coastal building foundation systems based on post-disaster

assessments. FEMA has conducted laboratory research to complete FEMA

Technical Bulletin 9-99, Design and Construction Guidance for Breakaway

Walls Below Elevated Coastal Buildings. This bulletin clearly identifies the

extreme loads that can be transmitted to buildings by breaking waves outside

of identified V-zones. Also, FEMA worked to revise the American Society of

Civil Engineers standards ASCE 7 and ASCE 24 to include breaking wave

loads on piles and vertical surfaces. FEMA continues to monitor post-disaster

performance of coastal building foundation systems and will use this

information if required changes to the rule become needed. In addition,

FEMA is considering future research to test masonry walls under breaking

wave loads as well as other coastal and riverine targeted studies.

Issue: Residential basements in Special Flood Hazard Areas (SFHAs)

Respondent’s Recommendation(s):

Residential basements cannot be constructed in SFHA’s, except when a

community is granted an exception as provided by the specific requirements as

stated in the Code of Federal Regulations, 44 CFR 60.6 (c) (1). One

FEMA’s Response: No Further Action Required

Explanation: FEMA must consider two main criteria in evaluating whether

a community should be granted an exception to allow floodproofed basements.

These are 1) specific flood characteristics are met and 2) the community
Floodplain Management – General Construction Requirements

FEMA’s NFIP Call for Issues Status Report, June 2000 II-2-3

Issue: Residential basements in Special Flood Hazard Areas (SFHAs)

respondent suggested expanding or eliminating the prohibition on basements if

specific engineering requirements are met. The other respondent suggested

eliminating the exception and disallowing the construction of basements under

all circumstances because of the amount of damages that continues to occur in

basements.

adopts an ordinance that specifically controls how basements are constructed

and used. This exception is intended to recognize for reasonable and

administratively different floodplain management practices that are consistent

with reducing flood losses and protecting the public. This exception

recognizes those specific flooding conditions and construction methods where

basement construction will not reasonably put private property or the public at

risk. However, the regulations also recognize that with more severe flooding,

when warning times are not adequate or when basements do not receive

specific engineering and construction attention for flooding conditions,

basements can result in significant risks to private property or the public. In

addition, designing floodproofed basements requires specific detailed design

professional attention that is not present in most residential construction.

In the 1997 flooding of the Red River of the North in Minnesota and North

Dakota, FEMA sent an engineering team to investigate the performance of

basements. Since some communities had been granted basement exceptions,

this offered the opportunity to determine if the basement exception was

successful. A detailed inspection was made of 111 basements. The team only

found one engineered basement (that have been built under a basement

exception) that had failed. This failure resulted from buoyancy forces not

being addressed as required by the exception – the basement floated. There

was considerable damage to pre-FIRM basements and their contents in

SFHA’s, especially where these basement areas had been finished to use as

living spaces. In addition, because there was considerable flooding outside the

SFHA, the team saw significant structural damage to basements outside the

SFHA where engineering attention was not given to the effects of flooding on

basement design or construction. Based on this investigation, FEMA
Floodplain Management – General Construction Requirements

FEMA’s NFIP Call for Issues Status Report, June 2000 II-2-4

Issue: Residential basements in Special Flood Hazard Areas (SFHAs)

concluded that the existing regulation allowing a residential basement

exception is specific enough to allow a reasonable exception for local

conditions, but that a broader exception could put a significant number of

buildings at risk.

Issue: Change regulations to allow one toilet/sink below the BFE

Respondent’s Recommendation(s):

The respondent recommended that the regulations be changed to allow one

toilet/sink below the BFE with a cut-off/check valve.

FEMA’s Response: No Further Action Required

Explanation: FEMA regulations currently allow only storage, access and

parking as uses for areas below the BFE. This comment would provide for a

bathroom below the base flood elevation. FEMA believes that this would

encourage the use and conversion of the lower level for recreational or

habitable purposes. In addition the reliable use of a backflow device on a

sanitary line requires human intervention. Lack of intervention could result in

either backflow of raw sewage or floodwater entering the sanitary system.

Hose bibs, or potable water that is appropriately protected from backflow are

not disallowed by NFIP regulations. However, providing sanitary facilities

below the BFE has the potential to create environmental problems as well as

easing the illegal conversion of this space into habitable areas. A new FEMA

publication Protecting Building Utilities From Flood Damage FEMA 348

contains guidance on sewage management systems and potable water systems

for structures located in flood-prone areas in order to comply with the NFIP

floodplain management requirements.
Floodplain Management – General Construction Requirements

FEMA’s NFIP Call for Issues Status Report, June 2000 II-2-5

Issue: Allow for floating houses when properly engineered

Respondent’s Recommendation(s):

The respondent suggested allowing the use of foundation systems in houses to

allow them to float on floodwaters.

FEMA’s Response: No Further Action Required

Explanation: FEMA has found that requiring human intervention to

prevent flood damages is not reliable, especially for residential buildings.

Ensuring that barges or ships will float (a close analogy to what is being

proposed) requires a high degree of annual maintenance, periodic inspection

(by the Coast Guard) and considerable expertise of the owner. A homeowner

does not have the expertise to perform similar functions for a floating home.

There are innumerable other difficulties with this system. These include but

are not limited to:

• this system would encourage the homeowner to stay home during a

flood situation putting his/her family at risk;

• this could put emergency management personnel, who might need to

respond, at risk;

• qualified individuals who have to ensure that the operation of the

floating home might not be available when needed;

• there are considerable technical difficulties, such as ensuring that the

center of buoyancy of the house would be located above the center of

gravity;

• this system can only be tested in a flood to see if it performs as

expected;

• this system could be extremely vulnerable to lateral loads from winds,

earthquakes or high velocity floodwaters or waves, and
Floodplain Management – General Construction Requirements

FEMA’s NFIP Call for Issues Status Report, June 2000 II-2-6

Issue: Allow for floating houses when properly engineered

• quality control and enforcement would be non-existent since there are

no codes or consensus standards to follow.

More importantly existing methods of elevating houses on conventional

foundation systems permanently and reliably meet the NFIP objectives to

remove the house from the risk of flooding from a base flood event. FEMA

will not consider allowing floating homes unless it can be clearly demonstrated

that such technology is equal, in effect, to permanently elevated structures.

Issue: Require specific certification of breakaway walls by a design professional

Respondent’s Recommendation(s):

Two respondents recommended requiring specific certification by design

professionals for breakaway walls. One respondent suggested a certification

be required that the breakaway wall meets the specific requirements of 44 CFR

60.3(e)(5) (i) and (ii) for all breakaway walls. The other respondent suggested

that this certification be required for solid breakaway walls.

FEMA’s Response: No Further Action Required

Explanation: Currently, NFIP floodplain management regulations require

that, breakaway walls that are designed to breakaway at loads in excess of 20

pounds per square foot must be specifically certified as breaking away at the

load less than the combined load of a 100 year flood and with loads as

prescribed by local codes.

In addition in coastal high hazard areas the NFIP regulations require the local

community to also to also insure (in 44 CFR 60.3(e)(4)), “a registered

professional engineer or architect shall develop or review the structural design,

specifications and plans for the construction, and shall certify that the design

and methods of construction to be used are in accordance with accepted

standards of practice for meeting the provisions of paragraphs (e)(4)(i) and (ii)

of this section.”
Floodplain Management – General Construction Requirements

FEMA’s NFIP Call for Issues Status Report, June 2000 II-2-7

Issue: Require specific certification of breakaway walls by a design professional

Guidance on constructing breakaway wall is available in FEMA Technical

Bulletin 9-99 Design and Construction Guidance for Breakaway Walls Below

Elevated Coastal Buildings. In addition, the engineering standard, ASCE

7-98, Minimum Design Loads for Buildings and Other Structures, provides

guidance to design professionals on calculating flood loads and on considering

how the flood load should be analyzed in combination with other loads, such

as wind loads.

We believe there is sufficient guidance to both communities and design

professionals on the design and construction of breakaway walls. Many

communities have not had problems with the designs of breakaway walls. If a

community believes it has a problem with breakaway wall design or

construction, the community can amend its local floodplain management

regulations to address this issue as long as this meets or exceeds the minimum

requirements of the NFIP regulations.
II Mitigation

3 Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report

June 2000
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-1

Issue: NFIP policy guidance

Respondent’s Recommendation(s):

Three respondents recommended that a standardized NFIP policy document be

developed for distribution to FEMA regions and State partners.

FEMA’s Response: Adopted/Action Underway

Explanation: We realized that sound floodplain management could be

encouraged through a consistent and unified implementation of the NFIP

regulations. In support of consistency, there are currently nine NFIP Technical

Bulletins and one NFIP Floodplain Management Bulletin that provide

guidance and clarity to NFIP policies. In addition, policy guidance can also be

found in many NFIP publications. An available resource for policy guidance

is the Managing Floodplain Development Through the National Flood

Insurance Program (NFIP) independent study course. This independent study

course is designed to provide technical, in-depth information to community

officials who have responsibility for administering floodplain development..

However, we are currently exploring ways to standardize policy issues and to

distribute consistent guidance to regional and State offices.

Issue: Manufactured home permanent foundation

Respondent’s Recommendation(s):

Two respondents indicated that floodplain management and flood insurance

standards require a manufactured home located in the special flood hazard area

to be placed or affixed to a permanent foundation. The respondents

recommended that FEMA should define what constitutes a permanent

foundation.

FEMA’s Response: Adopted/Action Underway

Explanation: The NFIP requires that manufactured homes in special flood

hazard areas are elevated on and anchored to a permanent foundation to resist

flotation, collapse and lateral movement during a flooding event. This

requirement is intended to be a general performance criterion and not a

specific design standard. The local floodplain permit official must determine

whether the proposed foundation meets the NFIP performance standards for
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-2

Issue: Manufactured home permanent foundation

resisting flood forces at the site. If the NFIP performance requirements are

met for resisting flotation, collapse and lateral movement, generally the

property will meet the broader requirements for insuring the manufactured

home. The various State and local requirements for the placement of

manufactured homes indicate a need for pre-engineered foundation designs

that would meet the NFIP criteria. We are rewriting FEMA-85 a publication

entitled Manufactured Homes Installation in Flood Hazard Areas starting this

year. We have completed several post-flood damage assessments recently and

will include findings and new foundation technology in this multi-hazard

publication. Further study is required.

Issue: Building utilities

Respondent’s Recommendation(s):

The respondent recommended that FEMA work with EPA to create a

coordinated septic system standards.

FEMA’s Response: Adopted/Action Underway

Explanation: Generally, sewage systems are regulated through a

combination of building, land use, health or sanitary ordinances, laws and

regulations. These regulations are often, administered by State and local

departments of environmental health. Communities that participated in the

NFIP must meet or exceed the requirements of the NFIP floodplain

management regulations that require utilities, which includes the sewage

management system; to be located and designed to minimize or eliminate

flood damages. To assist communities with technical guidance for the

placement of utilities in floodplains, FEMA has developed a publication

entitled Protecting Building Utilities from Flood Damages. The overall

objective of this document is to assist in the construction and protection of
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-3

Issue: Building utilities

utilities systems that are built in the flood hazard areas. The development of

this document included a state-of-the-art search that identified current Federal,

State and local regulations and requirements pertaining to the design and

construction of septic systems.

Issue: Critical facilities

Respondent’s Recommendation(s):

Three respondents recommended that the NFIP require communities to adopt

portions of 44 CFR Subpart C to minimize location of critical facilities in

flood-prone areas. Two respondents recommended changing the definition of

residential structure. Another respondent recommended the development of a

technical bulletin on the placement and protection of critical facilities.

FEMA’s Response: Evaluation/Study Required

Explanation: The location of critical facilities is a concern to the NFIP. For

example, it is critical that emergency facilities, such as fire and police stations,

need to be operable during flood disasters. Nursing homes are a concern due

to short warning times and rapidly rising floodwaters that would prevent

evacuation in a safe and orderly manner. These facilities should be located

outside the special flood hazard area or well above the base flood elevation,

such as to the 500-year level of protection. The NFIP floodplain management

regulations currently do not require such protection. However, the

Community Rating System provides additional credits to communities that

have regulations that are tailored to protect critical facilities. The NFIP also

provide communities with additional planning considerations that encourage

the adoption of an overall comprehensive management plan for flood-prone

areas that would minimize the location of critical facilities. The adoption of

these standards is not mandatory, but is encouraged when communities are

developing its floodplain management regulations. The International Building

Code and the International Residential Code encourage greater protection for

critical facilities by requiring freeboard. In addition, under Executive Order
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-4

Issue: Critical facilities

11988, Floodplain Management, Federal agencies must consider the

implications of the occurrence of a flood larger than the 100-year flood on the

economics and safety of a proposed floodplain action. Federal agencies must

determine whether certain actions are considered a “critical action” which is

defined as an activity for which even a slight chance of flooding is too great.

These actions should be subject to a higher standard. The 500-year flood is the

standard used to evaluate critical actions. Actions, such as facilities producing

and/or storing highly volatile, toxic or water-reactive materials, hospitals,

schools, nursing homes, facilities housing essential irreplaceable records, and

utilities and emergency services, are considered critical actions when

evaluated against the potential impact from flooding on life and property. In

these situations, Federal agencies must give consideration to the larger

floodplain when the impact on life and property is too great. We agree that

this could be considered in a regulatory review of the program.

Issue: Freeboard

Respondent’s Recommendation(s):

Seven respondents made recommendations to add freeboard to the base flood

elevation and require that new construction and substantial improvements are

elevated or floodproofed to that higher elevation. Specific recommendations

include: 1) incorporating the surcharge resulting from designation of a

floodway into the BFE, 2) adding one or two feet of freeboard to the BFE for

regulatory purposes, and 3) doing both. A major concern is that, because we

allow a one foot surcharge when we designate a floodway, buildings built to

FEMA’s Response: Evaluation/Study Required

Explanation: FEMA believes that requiring freeboard or incorporating the

floodway surcharge into the BFE are worthwhile ideas that deserve further

investigation. We will consider it for future incorporation into the NFIP

floodplain management regulations. In the interim we will continue to

encourage adoption of freeboard through the flood insurance rates, through the

Community Rating System (CRS), and through our various publications and

our training and outreach efforts. In addition, the International Building Code
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-5

Issue: Freeboard

the BFE can ultimately be subject to up to one foot of flooding during the base

flood (note this is related to recommendations on adopting a zero-rise

floodway criteria). Other arguments in support of freeboard include

accounting for uncertainties in study methodologies and future increases in

BFE due to effects of urbanization and other hydrologic and hydraulic

changes, providing an extra margin of safety, and accounting for waves and

debris blockages. Other considerations cited include:

• Many States and communities have adopted freeboard requirements.

• Some communities may not by State law exceed NFIP minimum

requirements.

• Flood insurance rates for buildings built at one foot or more above

BFE are substantially lower than rates for buildings at BFE.

• Floodplain management requirements and flood insurance rates for

floodproofed buildings would be consistent.

One recommendation cited the need for freeboard to prevent damages to wood

framing members, plywood, ductwork, and insulation below the top of the

lowest floor of a building. This is already addressed by NFIP requirements.

Section 60.3(a)(3) requires use of flood resistant materials below the BFE and

that mechanical and utility equipment is elevated or protected from floodwater

entering or accumulating within the system components.

(IBC) requires freeboard for certain buildings. The IBC adopts, by reference,

ASCE-24 that requires freeboard for buildings in certain categories, including

critical facilities.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-6

Issue: Zero-rise floodway

Respondent’s Recommendation(s):

Two respondents recommended that FEMA revise its floodway criteria to

require communities to designate a floodway that causes no increase in flood

stages (also called a “zero-rise floodway”).

FEMA’s Response: Evaluation/Study Required

Explanation: Currently, communities can designate a floodway that causes

up to a one-foot increase in flood stage. The one-foot rise criteria was a

compromise that allowed some level of development to occur in the floodplain

yet minimized increased damages to upstream properties. Zero-rise floodways

in effect limit development in the floodplain to those areas that do not carry

floodwaters. There are two concerns with the current requirement. First,

allowing a one-foot increase in flood stage causes additional damages to

existing structures over current conditions. Second, new construction must

only be elevated to the BFE and would eventually be subject to up to one foot

of flooding during the base flood. Several States and many communities have

adopted floodway requirements that are more restrictive than NFIP minimum

requirements (they commonly use no-rise, .1 feet, or .5 feet). In the past

FEMA has mapped more restrictive floodways in those States that have a

statutory or regulatory provision requiring the use of a more restrictive

standard. It generally has not mapped more restrictive floodways in States that

do not. Communities continue to be able to adopt a more restrictive floodways

than that on the FEMA map, although some may be reluctant to do so in the

absence of a FEMA standard. However, communities that are Cooperating

Technical Communities (CTC) now have considerable latitude on how their

floodways are designated and could map zero-rise floodways. Communities

receive credit under the Community Rating System (CRS) for adopting a more

restrictive floodways. Note that an alternative way to address this issue for

new construction would be to require freeboard or to incorporate the increase

in flood stage into the regulatory BFE. FEMA will consider adopting a more

restrictive floodway standard or allowing communities to request that FEMA
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-7

Issue: Zero-rise floodway

map a more restrictive floodway. And we may consider, requiring one-foot

freeboard in communities that have floodways that allow a one-foot rise in the

flood fringe. In the interim, FEMA will continue to map more restrictive

floodways in those States with higher regulatory requirements and encourage

communities to adopt more restrictive floodways through the Community

Rating System (CRS).

Issue: Grandfathering of existing manufactured home parks and subdivisions

Respondent’s Recommendation(s):

Two respondents recommended that FEMA revise NFIP floodplain

management criteria to end the grandfathering of existing manufactured home

parks and subdivisions (those built prior to the community’s adoption of its

floodplain management ordinance) when a 10-year “grace” period ends in

1999.

FEMA’s Response: Evaluation/Study Required

Explanation: Under current requirements new manufactured homes placed

in existing manufactured home parks and subdivisions can be elevated on 36-

inch reinforced piers instead of being elevated to the BFE (the

“grandfathering”). If a manufactured home is substantially damaged by a

flood on a particular site, that site is no longer grandfathered. Manufactured

homes placed in new manufactured home parks; expansions to existing

manufactured home parks or outside of manufactured home parks must be

elevated to or above the BFE. The current requirements were a compromise

reached with the manufactured home industry in 1989 after lengthy

consultations with the industry and other interested parties. FEMA had tried to

end the grandfathering in 1986, but Congress suspended the implementing

regulation. The concern had been the difficulties in elevating individual

manufactured homes in narrow confines of most existing manufactured home

parks. There was no 10-year “grace” period. However, FEMA did indicate in

its proposed rule published in the Federal Register on May 19,1989 that it
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-8

Issue: Grandfathering of existing manufactured home parks and subdivisions

would re-evaluate the issue in 10 years to see if the new regulatory

requirements and natural attrition were addressing the problem. The test was

to be whether or not inordinate levels of damages in existing manufactured

home parks continued. FEMA will query NFIP claims data and disaster

assistance data to determine if current levels of manufactured home damages

in existing manufactured homes parks are significant enough to warrant

consideration of regulatory changes.

Issue: Floodway analysis for subdivisions and other development in Zone A

Respondent’s Recommendation(s):

One respondent recommended that FEMA revise the requirement at 44 CFR

60.3(b)(3) so that a floodway analysis is required for subdivisions and other

development. The current requirement is that proposals for subdivisions and

other development greater than 5 acres or 50 lots (whichever is less) in

unnumbered A zones include BFE data.

FEMA’s Response: No Further Action Required

Explanation: The rationale for the requirement is that the level investment

required for subdivisions and large-scale development and the property at risk

warrants the costs required of developing the BFE data. Most communities

put the burden on the applicant to provide this information. Floodway

analyses were not required originally to minimize costs placed on these

applicants. There was also a concern that FEMA had decided not to develop

detailed studies for these A zone areas and it was not equitable to require

substantial investments by permit applicants to develop the data. However,

many of the currently available models used to develop BFEs for small

reaches of stream (including FEMA’s model) can also perform a floodway

analysis. The idea is worth further consideration since currently available

models allow this information to be developed at minimal additional cost.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-9

Issue: Repetitive loss

Respondent’s Recommendation(s):

The respondent recommended that FEMA establish weighted categories of

repetitive loss risk based upon the percentage of damage as shown against the

insured value of the structure.

FEMA’s Response: Evaluation/Study Required

Explanation: FEMA has developed a ranking system for all of our target

repetitive loss properties (those with four or more losses and those with two to

three losses where the cumulative total of the claims exceeds the building

value). These are the properties at the highest risk from repetitive flood

damage. The ranking is based on the projected average annual damages as a

percent of building value. The top 500 ranked repetitive loss properties have

been provided to every State to assist in developing Hazard Mitigation Grant

or Flood Mitigation Assistance project applications. We will continue to

review the repetitive loss list to ensure we are effectively reducing the flood

risk nationwide.

Issue: Enclosures below the lowest floor of elevated buildings

Respondent’s Recommendation(s):

Eight respondents made recommendations regarding enclosures below the

lowest floor of elevated buildings, including the following:

• FEMA should establish a reasonable size limit for enclosures to

discourage conversion to uses for other than parking, access, or

storage or prohibit solid wall enclosures and only allow the use of

wood lattice or insect screening to enclose areas below the BFE.

• FEMA should establish a system of requiring communities to monitor

use of enclosures and require property owners to verify the status of

the enclosure. FEMA should use the flood insurance policy to make

FEMA’s Response: Evaluation/Study Required

Explanation: The issue of using the enclosed area below elevated buildings

in A zones and V Zones for other than parking, building access, or storage, is a

concern to FEMA because of the increased flood damages to the enclosure and

potential increased damages to the elevated portion of the building as a result

of improperly constructed enclosures. If the ground-level enclosure is finished

with living spaces, there is an increased risk to lives, particularly in areas with

little flood warning. FEMA recognizes that once a building is permitted,

constructed and a certificate of occupancy issued, some communities find it

difficult to monitor and enforce compliance with their floodplain management

ordinance when the use and the construction of enclosures are illegally
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-10

Issue: Enclosures below the lowest floor of elevated buildings

clear to property owners that they must provide access to local, State

or Federal officials to inspect the property. FEMA should deny the

flood insurance claim and disaster assistance for illegal construction

on the property.

• FEMA should define what is meant by “storage” in 44 CFR 59.1.

• The NFIP Regulations are unclear regarding the location of

mechanical and electrical equipment relative to enclosures and the

lowest floor.

• The NFIP floodplain management requirements and the insurance

rates pertaining to openings are inconsistent. The Flood Insurance

Manual only recognizes the opening criteria established at 44 CFR

60.3(c)(5); it does not recognize openings that are certified by a

professional engineer or architect.

• The floodplain management requirement at 44 CFR 60.3(e)(5) does

not contain a size limitation for enclosures below the lowest floor, yet

the Flood Insurance Manual requires that when the enclosure exceeds

300 sq. ft. with a breakaway wall, it must be a submit for rate which

can be an extremely high rate. Either delete breakaway walls from the

criteria or add a note in the floodplain management requirements that

the flood insurance premium will significantly increase with the

construction of a breakaway wall enclosure over 300 sq. ft.

modified. FEMA agrees that the enclosure issue needs to be addressed and

that the recommendations concerning enclosure size, definition of storage,

existence of mechanical and other utilities in enclosures below the Base Flood

Elevation, and the ability of communities to effectively enforce when improper

enclosures are constructed deserve further investigation as part of a study on

enclosures. Floodplain management issues concerning enclosures would need

to be reviewed in conjunction with insurance coverage and underwriting issues

related to enclosures.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-11

Issue: Define crawl space

Respondent’s Recommendation(s):

Three respondents believe that basements and crawl space construction

continue to confuse local officials, leading to floodplain management

violations and flood insurance rating problems. NFIP regulations define a

basement as the area of the structure below grade on all sides. Crawl space

construction is a common form of construction. Since the NFIP does not

define “crawl space,” compliance problems often develop. If the interior grade

of the crawl space is below the exterior grade, the crawl space is considered a

“basement” under the NFIP definition for “basement.” Crawl space

construction may become violations if landscape-grading results in the interior

grade of the crawl space floor below the exterior grade. Also, crawl space

heights of 6–8 feet are not uncommon due to soil conditions and local building

codes. We also received suggestions that the openings should be at the lowest

adjacent grade to address the issue of building sites on sloped land. It was

further recommended that at least one opening be at located at ground level at

the lowest adjacent grade to allow floodwaters to drain out and prevent

standing water to cause health hazards and structural problems and that a 6

inch drain pipe with one way flow be required to allow drainage inside the

crawl space. Using this approach will also allow the other flood openings to

be located at 1.5 or 2 feet above grade which can then serve also as the air

vents required in building codes.

FEMA’s Response: Evaluation/Study Required

Explanation: Residential crawl space construction has been a longstanding

issue for the National Flood Insurance Program. A specific concern to the

program is buildings constructed with below-grade crawl space floors.

FEMA’s longstanding policy has been that buildings with crawl space floors

that are subgrade (where the interior grade is below the lowest adjacent grade

on all sides) are considered “basements” under the NFIP definitions. This

policy is based on the increased hydrostatic and soil loadings placed on the

foundation that could occur during flood conditions. A specific issue that has

been raised to FEMA is that we should allow below grade residential crawl

space construction since it is standard construction practice. Another issue

that has been raised with FEMA is that the flood insurance rates are too high

and do not reflect the flood risk to below residential grade crawl space

construction. Under the NFIP, new or substantially improved non-residential

buildings in A Zones can have the lowest floor below the Base Flood

Elevation provided the building has been designed, constructed, and certified

to be floodproofed to or above the Base Flood Elevation (floodproofing means

making a building watertight, substantially impermeable to floodwaters.

Effective May 1, 1999, FEMA revised the flood insurance rates for crawl

space construction. Previously, the rates that were used for below grade crawl

space construction were the rates used for a full 8-foot basement. In reviewing

the rate structure, FIA determined that the basement rates were inappropriate

for below grade crawl space floors that were only 1 or 2 feet below grade. As

a result, an actuarial rate to address this issue was developed to address this

unique risk. As of May 1, 1999, rates for crawl space construction that has its

interior floor 1 or 2 feet below grade on all sides will be an enclosure loading
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-12

Issue: Define crawl space

for these buildings that is significantly less than a basement rate. The

additional premiums range from $140 to $260 dollars depending on the size of

the crawl space area and whether the crawl space is 1 or 2 feet below grade. If

the crawl space is more then 3 feet or more below grade, it will be rated using

the “with basement” rate tables in the Flood Insurance Manual.

For buildings constructed on extended foundation walls or have other

enclosures below the Base Flood Elevation, openings are required in the walls

in order for the walls to withstand hydrostatic pressure. The NFIP Floodplain

Management Regulations require a minimum of two openings having a total

net area of not less than one square inch for every square foot of enclosed area

subject to flooding and that the bottom of all openings shall be no higher than

one foot above grade. If the floor of the crawl space is above the BFE, then no

openings are required. If a building is located at a sloped site, local officials

should require that sufficient openings be provided in walls on the downhill

side of the building. Openings are not located at ground level so that the crawl

space area does not get wet on a frequent basis from surface waters during

normal rainfall. Also, because of problems with vermin, local building

officials may not allow openings to be at ground level openings due to

building code requirements. Therefore, it may be necessary to pump out the

remaining one foot of water inside the crawl space. If the local official allows

ground level openings then it can be done. FEMA would not consider

allowing the height the openings to be higher than 1 foot above grade to satisfy

venting requirements under building codes because it defeats the purpose of

releasing hydrostatic pressure and reduces the factor of safety built into the

requirement. Further guidance on openings can be found in FEMA’s

Technical Bulletin 1-93 Openings in Foundation Walls.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-13

Issue: Define crawl space

With regard to the floodplain management requirements for crawl space

construction, FEMA intends to evaluate crawl space construction. This study

will include evaluating the flood damage potential of below grade crawl space

construction. This study will also look into issues of standing water inside the

crawl space. The results of this evaluation will be used to determine whether

adjustments are needed in the NFIP Floodplain Management Regulations, such

as defining “crawl space” construction, and whether additional guidance is

needed. If warranted, we will also reevaluate the flood insurance rates based

on the results of this study.

Issue: Substantial improvement/substantial damage

Respondent’s Recommendation(s):

Fifteen respondents commented on strengthening and improving enforcement

of the substantial improvement/substantial damage requirement. Several of

the comments focused on the need to use “replacement cost” versus “market

value” for determining substantial improvement/substantial damage. Those

favoring this indicated that “replacement cost” is easier to calculate, would

address regional differences, and is used by insurance industry and others.

Concern was expressed that both have been used in the past resulting in

inconsistent enforcement of the requirement and it was recommended that

FEMA should evaluate their use, select one method, and consistently apply it.

The use of square footage was also recommended as an alternative to using

market value for calculating substantial improvement. We also received

several comments on the need to strengthen the definition of substantial

FEMA’s Response: Evaluation/Study Required

Explanation: Under the NFIP, communities are responsible for making

NFIP substantial improvement/damage determinations and notifying property

owners of the requirement. We agree with many of those commenting that

local officials face tremendous challenges following a flood disaster and that

the NFIP substantial damage requirement is probably one of the most difficult

issues facing local floodplain management officials and property owners. The

role of the local community is critical to the effectiveness of the program and

the implementation of the substantial improvement/damage requirement.

Critical to the successful enforcement of land use measures and building code

requirements, such as the substantial damage requirement, is that buildings be

treated similarly and consistently. The requirement must apply to insured and

non-insured buildings. Making substantial improvement or damage
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-14

Issue: Substantial improvement/substantial damage

improvement to address incremental improvements to buildings.

Recommendations were made on the need for a “cumulative” substantial

improvement requirement including establishment of a timeframe within

which improvements would be counted. Other recommendations included:

• Requiring communities to provide information about substantial

improvement or damage to property owners.

• Relaxing the substantial improvement requirement on buildings that

are not substantially or repetitively damaged to allow the owner to

improve their property.

• Requiring FEMA/NFIP certified insurance adjusters to determine

substantial improvement/substantial damage since it is not a standard

local government function.

• Improving the timeframe in which flood insurance claim information

is provided to State and local officials.

• Providing more training on evaluating and calculating substantial

improvements and substantial damages.

determinations conforms to local official responsibility in enforcing similar

requirements under the building code and the zoning ordinance for nonconforming buildings and uses. The authority to regulate floodplain

development rests solely with the State and local government. FEMA has no

land use authority. Therefore, FEMA cannot delegate substantial damage

determinations to adjusters.

As to the recommendation for relaxing the substantial improvement

requirement to allow any improvements, FEMA will not consider this

recommendation. The 50 percent threshold was selected on the basis that it is

does not make sense to pay flood losses on the same property over and over

again. This threshold was chosen as a reasonable compromise between the

extremes of 1) prohibiting all investment to structures in flood hazard areas

which does not meet the minimum NFIP floodplain management requirements

and 2) allowing structures to be improved in any fashion without regard to the

flood hazard present.

The NFIP definition of substantial improvement requires that determinations

be made on an individual basis using the 50 percent threshold. At this time,

FEMA is not considering including a cumulative definition for substantial

improvement in the NFIP because of the continued difficulties of communities

unable or unwilling to enforce the minimum NFIP requirement for substantial

improvement/damage. However, if a community, of its own volition, or as

required by State law, adopts a more restrictive standard for substantial

improvement in its floodplain management ordinance, certainly the more

restrictive standard would take precedence and must be adhere to by the

community. Adoption of a “cumulative” requirement is also a creditable

activity under the Community Rating System. While “cumulative” is not
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-15

Issue: Substantial improvement/substantial damage

specifically required by the NFIP for naturally occurring incremental

situations, the intentional phasing of improvements over a one or two year

period circumvents the intent and the letter of the substantial improvement

requirement. A community has several options to address the intentional

phasing of permits to deter circumvention of the requirement such as adopting

a timeframe (one or two years) for reviewing permits for substantial

improvement and carefully reviewing the scope of work presented in the

permit application. Because of local peculiarities, FEMA has left it to the

community’s discretion on adopting and implementing procedures that

prohibit the intentional phasing of improvements to elude compliance.

The issue of use of “market value” versus “replacement cost” has been a longstanding issue to the program. FEMA’s emphasis around 1989/1990 on

enforcing the substantial improvement/substantial damage requirement and

efforts to make floodplain management and flood insurance work together

brought issues, such determining the value of the structure, to the surface. We

have had numerous discussions on this issue with various NFIP constituents

with no overriding consensus for using one method over the other. While

some NFIP constituents are in favor of using “replacement cost” because it is

viewed as an easier value to determine and less subjective, others view

“market value” as more restrictive and achieving more mitigation. For some

States, a requirement to use “replacement cost” would be contrary to the State

statute and/or the State model floodplain management ordinance that requires

use of “market value.” Another consideration would be that if a change to the

substantial improvement definition makes it more restrictive, it would trigger

rulemaking. Still another consideration is the extent to which increased

funding such as through the Hazard Mitigation Grant Program and Increased
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-16

Issue: Substantial improvement/substantial damage

Cost of Compliance Coverage, has improved substantial damage

determinations.

FEMA does not believe that a square footage method is a better alternative to

determining substantial improvement/damage over a value method. Because

of extreme variability in building types, a square footage method would be

cumbersome to implement. However, FEMA is willing to look into the issue

of determining structure value and the use of “replacement cost” over “market

value.” Consideration of the above issues needs to a part of this review.

FEMA provides extensive guidance, especially during the post-disaster period,

and onsite training for local officials in enforcing the 50 percent rule. We have

provided a computer software tool that communities can use to estimate

whether homes have been substantially damaged along with training on the

tool. The new Homeowners Guide to Retrofitting gives homeowners easy to

read information on ways to prevent future flood losses and information on

resources and where to get assistance. FEMA continues to explore ways to get

information concerning flood losses communicated more efficiently to State

and local officials to help them identify substantially damaged buildings.

FEMA will also continue to explore training needs on substantial improvement

and substantial damage and develop necessary materials to help communities

administer the requirement.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-17

Issue: Stricter State law

Respondent’s Recommendation(s):

Two respondents indicated that the NFIP regulations should encourage more

strict State and local floodplain management standards. In addition, the NFIP

floodplain management regulations should be revised to encourage more

effective enforcement of the regulations.

FEMA’s Response: No Further Action Required

Explanation: Many States and communities choose to adopt a more

comprehensive level of standards based on its knowledge and assessment of

the hazard. The NFIP supports these more restrictive floodplain management

requirements by acknowledging at CFR 60.3(d) of the regulations that these

higher standards would take precedence over the minimum criteria of the

program. The NFIP’s Community Rating System (CRS) encourage

community’s efforts to adopt flood standards beyond the minimum criteria by

reducing flood insurance premiums for property owners. CRS discounts on

flood insurance premiums range from 5 percent up to 45 percent. Those

discounts provide an incentive for flood protection activities that exceed the

minimum NFIP requirements. The comprehensive planning that is encouraged

through our Project Impact initiative also encourage communities to adopt

higher standards of flood protection. Because of theses efforts we feel that no

further requirements are necessary.

Issue: Elevation Certificate

Respondent’s Recommendation(s):

Two respondents indicated that the NFIP regulations should be amended to

require local governments to complete Elevation Certificates for all

construction in the special flood hazard areas. The requirement to issue

floodplain development permit is confused with the Elevation Certificate. The

regulations should also require communities to complete and keep them on file

for eventual use by property owners.

FEMA’s Response: No Further Action Required

Explanation: When a community joins the NFIP, it must require permits

for development in the special flood hazard area to ensure that construction

materials and methods used will minimize future flood damage. An element

of this requirement is that the community obtain the elevation of the lowest

floor (including basement) of all new and substantially improved buildings,

and maintain a record of such information. This data becomes a part of the
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-18

Issue: Elevation Certificate

floodplain development permit file, which would contain all documentation

that substantiates how buildings are actually constructed. The community is

required to maintain this information as a part of the community records. The

International Building Code, Appendix Chapter 31-1, Section 103.3 and the

International Residential Code Chapter 1, Administration, Section R106.3 will

require communities to maintain elevation information. Even though the NFIP

require communities to obtain elevation data, it only mandates that this data is

collected by the use of the FEMA Elevation Certificate when the community is

participating in the Community Rating System. Elevation information is

necessary to ensure compliance with community floodplain management

ordinances, to determine the proper insurance premium rate, and to support a

request for a Letter of Map Amendment or Revision (LOMA or LOMR-F).

The Elevation Certificate only provides a way for a community to collect

elevation data and should never be confused with the basic requirement to

obtain and maintain a development permit for proposed construction in the

floodplain.

Issue: Structures in/out floodplain

Respondent’s Recommendation(s):

The respondent recommended that FEMA’s policy on the matter of “if any

portion of a structure is within the floodplain, then all of the structure is within

the floodplain” needs to be reconsidered.

FEMA’s Response: No Further Action Required

Explanation: Under the NFIP, communities have a responsibility to

evaluate the flood hazard and the flood risk in all official actions and require a

permit or other development in the Special Flood Hazard Area (SFHA). If a

portion of a building is to be located in the SFHA or an existing building is

located just outside the designated SFHA, but a proposed addition or
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-19

Issue: Structures in/out floodplain

extension, such as a deck, is to be located in the SFHA, NFIP communities

have a responsibility to evaluate these proposed developments to ensure that

the building or the addition or extension complies with the NFIP floodplain

management requirements and with the community’s floodplain management

ordinance. Any additions or extensions should also be evaluated ensure that

they do not increase the flood damage potential to the existing building even

though the existing building is located outside the SFHA.

Under the NFIP flood insurance rating rules, buildings located in more than

one flood zone must be rated using the more hazardous zone. These rating

rules also apply in cases where an addition or extension located in the

floodplain is attached to a building located outside the SFHA. Our loss

experience has demonstrated that these additions can cause damage to the

original portion of the building during floods, and this must be reflected in the

rates charged.

Under the Mandatory Purchase Requirement, the pushes of flood insurance

and notice requirements apply to the entire building even though part of the

building is outside the designated SFHA. The Mandatory Purchase

Requirement also applies to the entire building even if that part of the building

within the SFHA is not subject to coverage, (e.g., deck).

Issue: Floodplain management ordinance

Respondent’s Recommendation(s):

The respondent recommended that FEMA provide incentives to integrate

floodplain management regulations into land use regulations to reduce the

FEMA’s Response: No Further Action Required

Explanation: Communities vary considerably both within a State and

across the country on how they regulate floodplain development. Many
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-20

Issue: Floodplain management ordinance

incidence of free standing NFIP ordinances being overlooked in community

planning. Another respondent indicated that communities joining the NFIP

should adopt the California model ordinance for NFIP participation rather than

the provisions contained in the Code of Federal Regulations governing

floodplain management.

communities that participate in the NFIP have adopted a single ordinance to

address most, if not all, of the minimum requirements of the NFIP. In some

cases, the NFIP provisions may be the only ordinance in the community that

governs land use. The extent to which communities are successful in

coordinating their stand-alone ordinance with their building codes and other

health and safety codes varies from State to State and from community to

community. As an alternative, many communities have integrated floodplain

management functions in separate agencies such as the planning department,

zoning department, building code department, and public works department.

Even with this approach, close coordination between departments is vital to

achieving a comprehensive approach to floodplain management.

Each State has its own statutes and regulations, which may require or limit

how a community approaches floodplain management regulations, planning,

zoning, building codes, and other health and safety codes. Therefore,

regulating floodplain development cannot be approached, on a national basis,

as a “one size fits all” process.

While specific programs and functional organizations may vary from

community to community in how floodplain development is regulated or

managed, FEMA provides incentives to communities to address their flood

hazards comprehensively through the Community Rating System (CRS). The

objective of CRS is to reward communities that are doing more than meeting

the minimum NFIP requirements to help their citizens prevent or reduce flood

losses. It also provides an incentive for communities to initiate new flood

protection activities such as integrating floodplain management into

comprehensive plans, stormwater management programs, and zoning for open

space protection.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-21

Issue: Disincentives for coastal areas and incentives for limiting development

Respondent’s Recommendation(s):

One respondent recommended that FEMA create disincentives to development

in vulnerable coastal areas, while another recommended changing the NFIP to

emphasize and provide incentives for communities that limit or eliminate

development in Special Flood Hazard Areas.

FEMA’s Response: No Further Action Required

Explanation: While FEMA strongly supports efforts by States and

communities to limit floodplain development, its ability to require them to do

so is limited. The authority to regulate land use lies with State and local

government. The NFIP floodplain management regulations are primarily

designed to protect buildings constructed in floodplains from flood damages

and to protect the occupants of these buildings. FEMA will continue to

explore possible incentives and disincentives that could encourage States and

communities to discourage development in hazardous areas. This is a goal of

Project Impact: Building Disaster Resistant Communities. FEMA also is

working with States and communities through Project Impact and other

initiatives to implement local incentives that will deter building in the 100-year

floodplain. We also encourage communities to adopt stronger building codes

for all development in floodplains, especially critical facilities.

The NFIP flood insurance rates are based on the degree of the flood risk,

which ensures that the costs associated with new or substantially improved

buildings, in high-risk areas, are borne by those that occupy the floodplain, not

by the taxpayers at large. The NFIP rate structure, limitations on Federal

assistance in communities that do not participate, and the mandatory flood

insurance requirement make it more expensive to develop in flood hazard

areas and will tend to discourage development in many areas. However, for

other areas the economic forces driving floodplain development are far greater

than any incentive or disincentive that could be provided.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-22

Issue: Disincentives for coastal areas and incentives for limiting development

The idea to promote community and insurance rating in support local

ordinances that limit or eliminate development in identified FHA’s is

embodied by the NFIP Community Rating System (CRS). The CRS is a

public/private partnership that encourages communities to adopt land-use

policies that reduce or eliminates flood hazards. Currently 900 communities

receive flood insurance premium discounts between 5 and 45 percent for

programs that go beyond the minimum NFIP requirements. In addition,

FEMA will continue to be advised by the Community Rating Task Force made

up of local, State, Federal, and private professional practitioners, such as the

NEMA and the ASFPM, on for ways to provide more incentives through CRS

to discourage floodplain development.

Issue: Elevation requirements in unnumbered A Zones

Respondent’s Recommendation(s):

The respondent recommended that a requirement be added at 44 CFR 60.3(b)

that all new construction and substantial improvements in unnumbered A

zones have their lowest floors at least 2 feet above the highest adjacent grade.

The argument is that, if buildings do not have their lowest floors two feet

above highest adjacent grade, insurance rates will be extremely high.

FEMA’s Response: No Further Action Required

Explanation: While this is true, a lower flood insurance rate would be

available by obtaining or developing a base flood elevation and constructing

the building to or above that elevation. Most buildings in unnumbered A

zones are currently being rated using these locally developed BFEs. FEMA

believes that a two-foot minimum requirement would become a de facto

maximum elevation in many communities. Two foot of elevation provides

inadequate protection in most floodplains. Under current regulations the

community must obtain and use BFE data if it is available and BFEs must be

developed for subdivisions and other development above established

thresholds. If no BFE is available, the building official is responsible to ensure
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-23

Issue: Elevation requirements in unnumbered A Zones

that the building is reasonably safe from flooding and that they be constructed

using practices that minimize flood damages. We believe that this generally

will provide a higher level of protection than if a two-foot requirement was

adopted. FEMA believes that current requirements, when properly enforced,

result in a higher degree of flood protection than the suggested change.

Issue: Exceptions to NFIP criteria

Respondent’s Recommendation(s):

The respondent recommended that FEMA make greater use of the provisions

at 44 CFR 60.6(b) and (c) that allow communities to apply for exceptions to

NFIP criteria. The argument is that there may be instances where nationwide

minimum standards such as those in the NFIP may not be suitable for a

geographic area and may cause hardships or endanger the health or safety of

the public.

FEMA’s Response: No Further Action Required

Explanation: Section 60.6(b) allows for exceptions to be granted if there

would be hardship or gross inequity for the community if the exception were

not granted provided there was no adverse impacts on public safety or the

environment. Section 60.6(c) allows exceptions for construction of

floodproofed basements in communities that have specified flooding

conditions. FEMA has been open to requests for exceptions in instances

where alternative methods can be used to provide a level of protection

equivalent to that provided by NFIP minimum requirements. However, in

recent years there have been few inquiries about exceptions. NFIP

requirements are primarily performance standards that provide considerable

latitude in construction practices and we believe that most communities are

able to comply. Furthermore, the standards have proven to be highly effective

in reducing flood losses. No action is required at this time. Section 60.6(b)

continues to be available as these types of issues arise. If in the future, we

determine that there is a need for greater flexibility in the NFIP floodplain

management regulations, we will reconsider this issue.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-24

Issue: Allow communities to not designate a regulatory floodway under certain circumstances

Respondent’s Recommendation(s):

The respondent suggested allowing communities to not designate a floodway

if it intends to apply the no-rise requirement throughout the floodplain.

FEMA’s Response: No Further Action Required

Explanation: The NFIP requirement is that communities designate a

regulatory floodway. It does not have to be the floodway that FEMA includes

on the Flood Insurance Rate Map (FIRM) provided that the floodway at least

meets the minimum criteria at 44 CFR 60.3(d)(3). If the community wishes to

apply floodway requirements to the entire floodplain, it can do so by

designating the entire floodplain as floodway. In some instances we have not

designated floodways in areas where conventional floodways do not work well

if the community agrees to apply standards that better preserve the carrying

capacity of the floodplain. Communities that are Cooperating Technical

Communities (CTC) also have considerable latitude as to how their floodways

are designated. We believe that this recommendation can be done under

existing regulations and policy. No action is required. Participating

communities can already do this.

Issue: Develop a plan for addressing endangered species under the NFIP

Respondent’s Recommendation(s):

The respondent stated that several of the salmon runs in the Pacific Northwest

may be listed as endangered and are thus subject to requirements under the

Endangered Species Act. Communities in the Northwest may be developing

Habitat Conservation Plans and placing additional restrictions on floodplain

development beyond those required by the NFIP and the concern is that there

FEMA’s Response: No Further Action Required

Explanation: We are aware of the issue, but feel that it is premature to act

until the potential conflicts can be better identified.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-25

Issue: Develop a plan for addressing endangered species under the NFIP

may be conflicts between requirements. The respondent recommended that

the community begin to plan for this listing although the commentator

indicated that it may be too early to identify all issues.

Issue: Limiting increase in flood stage in unnumbered A Zones

Respondent’s Recommendation(s):

A respondent recommended that FEMA revise paragraph 44 CFR 60.3(b)(4) to

also require communities apply paragraph 60.3(c)(10) in unnumbered A zones.

Paragraph 60.3(b)(4) requires that communities obtain and reasonably use

Base Flood Elevation data from any sources in unnumbered A zones.

FEMA’s Response: No Further Action Required

Explanation: FEMA has not provided BFEs for these areas, but

considerable data exists from other agencies. FEMA does not require that

communities or permit applicants develop this data if none is already available

except for subdivisions and other development that exceed thresholds where

the level of the investment at risk warrants the cost of an engineering study.

We do encourage communities to develop BFE data for use in these areas and

provide Community Rating System (CRS) credits for those who do.

Paragraph 60.3(c)(10) requires that communities obtain encroachment

analyses in those areas designated as zone AE where FEMA has provided BFE

data, but not floodway data. The recommendation would in effect require that

an encroachment analysis be conducted for all development where there is a

BFE available from any source.

FEMA will not mandate development of BFE data and conduct of an

encroachment analyses in unnumbered A zones for other than subdivisions and

large developments due to the burden that would be placed on small

communities and individual property owners. We will continue to encourage

States and communities to develop BFE data where appropriate through the

CRS and through our outreach and training efforts. FEMA provides guidance
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-26

Issue: Limiting increase in flood stage in unnumbered A Zones

on developing BFEs in unnumbered A zones in its publication Managing

Floodplain Development in Approximate A Zone Areas, FEMA-265. Through

the implementation of the Cooperating Technical Community (CTC) program,

communities will also be encouraged to develop additional data.

Issue: E.O. 11988 Floodplain Management

Respondent’s Recommendation(s):

Four respondents stated that there needs to be improved coordination,

acceptance, and consistency among Federal agencies regarding the minimum

NFIP floodplain management requirements. Section 264.18(b) of the

Environmental Protection Agency’s regulations is sited as an example of the

inconsistent application of the NFIP requirements. This provision allows the

siting of a hazardous waste facility as long as the owner can demonstrate that

procedures are in effect which will cause the waste to be removed safely

before floodwaters can reach the facility. It was recommended that E.O.

11988 be amended to include a provision that Federal and State agencies be

required to obtain a local floodplain development permit prior to undertaking

an activity in the floodplain. It was also recommended 1) that FEMA work

with all Federal agencies on an ongoing basis to ensure agency policies and

programs are supportive of the NFIP; 2) that Executive Orders or other

measures be updated as needed; and 3) that measures tie Federal funds to

compliance with NFIP, not only for disaster relief, but to other Federal

programs like Small Business Administration, Housing and Urban

Development, etc.

FEMA’s Response: No Further Action Required

Explanation: In 1977, E.O. 11988, Floodplain Management was issued

which has brought about beneficial changes in Federal floodplain activities.

However, with time and experience, it has become apparent that the E.O.

11988 needs to be updated. The 1994 publication, Sharing the Challenge:

Floodplain Management into the 21st Century, the final report of the

Interagency Floodplain Management Review Committee, cites aspects of E.O.

11988 that need to be updated and strengthened. A coordinated effort between

Office of Management and Budget (OMB), Council on Environmental Quality

(CEQ), and several Federal agencies to revise E.O. 11988 was initiated in

1998, but a final decision has not been made to revise the E.O.

FEMA’s role under the Executive Order is a consultation role. E.O. 11988

directs Federal agencies in preparing their procedures to consult with FEMA

and update procedures as necessary. FEMA has no oversight or regulatory

authority over other Federal agencies as it pertains to implementing E.O.

11988; however, FEMA does provide Federal agencies guidance and

assistance in implementing E.O. 11988 at their request. FEMA will continue
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-27

Issue: E.O. 11988 Floodplain Management

to carry out its responsibility under the E.O. to provide consultation to other

Federal agencies.

E.O. 11988 does not explicitly recognize the existence of local or State

floodplain management regulations or the effect Federal actions may have on

them; however. Federal agencies are encouraged to coordinate with State and

local community floodplain management officials concerning actions in

floodplains.

Under E.O. 11988, agencies are mandated to take a leadership role in carrying

out actions, which affect the floodplain. As to the issue of acceptance and

consistency in applying the minimum NFIP floodplain management

requirements, Federal agencies must assure that their actions do not undermine

the NFIP. However, an agency’s application of the NFIP requirements does

not comprise full compliance with the E.O. 11988. Application of the NFIP

requirements comes after the agency has completed its avoidance, evaluation

of no practicable alternatives, and minimization responsibilities under E.O.

11988. Furthermore, E.O. 11988 recognizes the limited scope of the NFIP

requirements and thus, emphasis in the E.O. is on the NFIP as the minimum.

Because the NFIP requirements are directed toward protection of property, the

other two areas of concern (protection of lives and floodplain values) must

also be addressed.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-28

Issue: Excluding property from floodplain

Respondent’s Recommendation(s):

The respondent recommended that the NFIP regulations (60.3 (c)(2) and (3))

clearly indicate that compliance with the NFIP floodplain management

requirements does not exclude the property from the special flood hazard area.

FEMA’s Response: Addressed in Program/Other Actions To Be

Taken

Explanation: The NFIP regulations require that all new construction and

substantial improvements of residential structures have the lowest floor

(including basement) elevated above the base flood level. By meeting this

provision, the structure is not excluded from the special flood hazard area. If a

structure is being impacted or surrounded by water, a significant risk of

damage still remains and flood insurance is still required. The only NFIP

procedures that will remove a property from the special flood hazard area are

the Letter of Map Amendment (LOMA) or Letter of Map Revisions (LOMR).

These procedures allow property owner’s who believe that his property has

been inadvertently included in the designated floodplain to provide technical

or scientific data that would support the allegations. When a property owner

receives a LOMA or LOMR the property is then remove from the floodplain

and no flood insurance is required. As modifications are made to the

floodplain management regulations, this procedure may be clarified.

Issue: NFIP definitions

Respondent’s Recommendation(s):

The respondent recommended that FEMA revise critical terms and definitions

contained within the NFIP floodplain management regulations to ensure public

understanding.

FEMA’s Response: Addressed in Program/Other Actions To Be

Taken

Explanation: We realize that the general public may have difficulty

understanding several terms adopted by the NFIP. In our obligation to the

public to clarify the concept of floodplain management, we make every effort

to incorporate definitions of critical terms in correspondence and our daily
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-29

Issue: NFIP definitions

conversations with the public. During any future changes to the NFIP

regulations, all definitions will be reviewed for clarity and program

consistency.

Issue: Maintenance of the flood carrying capacity of channels (44 CFR 60.3 (B)(7))

Respondent’s Recommendation(s):

Paragraph 44 CFR 60.3(b)(7) requires that communities “assure that the flood

carrying capacity within the altered or relocated portion of any watercourse is

maintained.” This means that they must not only assure that the altered or

relocated watercourse has at least the same carrying capacity as before the

alteration or relocation, but they also assume an ongoing maintenance

responsibility. If the altered or relocated watercourse is not maintained, it

could silt up or begin to meander resulting in increased flooding. There is no

requirement to maintain natural channels or those altered prior to the

community’s adoption of its NFIP floodplain management ordinance.

Four respondents recommended the following:

• Expand channel maintenance requirements to all channels, man-made

or natural.

• Expand the application of (b)(7) to apply to the entire floodplain in

unnumbered A zones, not just an altered or relocated watercourse.

• Clarify what “alteration of a watercourse” means. Does it include only

the watercourse itself or the adjoining floodplain areas?

• Use of poorly compacted dredged materials to repair channels.

FEMA’s Response: Addressed in Program/Other Actions To Be

Taken

Explanation: FEMA has always interpreted this provision as applying to

the watercourse only and not the adjoining floodplain. Applying it to the

entire floodplain would be tantamount to placing floodway restrictions on

unnumbered A zones and would require that an engineering analysis be done

for all development. This is a financial burden we have been and are unwilling

to impose on permit applicants since FEMA has not provided engineering

information for these areas. Likewise, we believe that imposing a maintenance

requirement on natural channels and on manmade channels that pre-date the

NFIP would also impose a burden on communities although we encourage that

this be done. In addition, there are many environmental concerns that need to

be taken into consideration. Using poorly compacted dredged fill material for

channel repair is a local issue that is best handled at the community level. No

action is required at this time. The recommended changes, although they have

some merit, would place undue burdens on communities and property owners.

FEMA will consider further clarifying the provision the next time a major

revision of NFIP requirements in undertaken.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-30

Issue: Revise and reorganize the NFIP floodplain management requirements in a floodplain management ordinance

format

Respondent’s Recommendation(s):

The respondent recommended that FEMA reorganize and re-write the NFIP

floodplain management regulations in an ordinance format. The format

suggested was that of the California Model Floodplain Management

Ordinance.

FEMA’s Response: Addressed in Program/Other Actions To Be

Taken

Explanation: While there is merit to the idea of re-stating individual

requirements so that they more closely track the language that would be used

in an ordinance or building code, we do not believe they should be formatted

like a model ordinance. There are number of ways communities can comply

with NFIP requirements. They adopt freestanding floodplain management

ordinances or use provisions in their comprehensive zoning and subdivision

ordinances or building codes, and health and sanitary regulations to meet NFIP

requirements. Particularly with the new International and Residential Building

Codes, we anticipate that more and more communities will opt to use the later

approach. Using an ordinance format may help some communities, but not

others. FEMA will not re-format the NFIP requirements in ordinance format.

It will consider re-drafting the requirements so that they more closely track the

language that would be used in a zoning ordinance or building code the next

time major changes are made to the FEMA floodplain management

regulations.
Floodplain Management – Policy Review

FEMA’s NFIP Call for Issues Status Report, June 2000 II-3-31

Issue: Definition of recreational vehicle

Respondent’s Recommendation(s):

Two respondents stated that many recreational vehicles (RVs) have permanent

attachments, additions, or other improvements that render them a “permanent

structure” for floodplain management purposes. RV’s with attachments or

additions cannot be easily or quickly detached and moved, yet they are not

required to meet the community’s adopted elevation and anchoring standards.

FEMA needs to expand the definition of “recreational vehicle” under the NFIP

definitions under 44 CFR Part 59 to discourage additions or improvements that

would render the RV immobile. The definition should include a statement that

the RV does not have any permanent additions, improvements or structural

attachments that cannot be easily or quickly disconnected or that would

preclude it from being licensed and road ready.

FEMA’s Response: Addressed in Program/Other Actions To Be

Taken

Explanation: We believe the reference to having “no permanent additions

or improvements” is satisfactorily addressed in the floodplain management

provision at 44 CFR 60.3(c)(9): “A recreational vehicle is ready for highway

use if it on its wheels or jacking system, is attached to the site only by quick

disconnect type utilities and security devices, and has no permanently attached

additions.” Under the NFIP, if an addition or other improvement is attached to

a recreational vehicle, that recreational vehicle would no longer be “ready for

highway use” and would be subject to the elevation and anchoring

requirements for manufactured homes that apply to the zone where the vehicle

is located. However, we recognize that this requirement may not be well

understood. We believe this issue can be addressed appropriately in a

Floodplain Management Bulletin that specifically focuses on recreational

vehicles.
II Mitigation

Floodplain Management – Technical Assistance, Training,

Communications, and Publications

FEMA’s NFIP Call for Issues Status Report

June 2000

4
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-1

Issue: NFIP repetitive loss data

Respondent’s Recommendation(s):

One respondent stated that FEMA should provide NFIP flood insurance

repetitive loss data to State Coordinators and State Hazard Mitigation Officers

for floodplain management purposes. Another respondent stated that FEMA

should provide NFIP flood insurance repetitive loss data to communities and

States to facilitate proper floodplain management. Another respondent stated

that FEMA should provide Community Rating System (CRS) communities

with more detailed NFIP repetitive loss information (i.e., amount and reasons

for loss for community floodplain management purposes).

FEMA’s Response: Adopted/Action Underway

Explanation: Historically, FEMA has supplied repetitive loss information

to communities and States for floodplain management purposes upon written

request subject to privacy act restrictions. In response to the Director’s

National Repetitive Loss Strategy and based on a request from the Association

of State Floodplain Managers (ASFPM), in January 1999, FEMA released the

full repetitive loss listing by property in every affected community to the State

NFIP Coordinators. Our goal is to make corrections to the addresses in our

national repetitive loss property inventory, and to annotate the listings when

mitigation techniques have reduced losses to the buildings.

In addition, based on customer comments, the State’s repetitive loss property

information as well as the separate mailing to CRS communities included

much more detail about each repetitive loss property (for example flood zones,

insurance payments, building values etc.). We are continuing to receive and

review further refinements to the data contained on these lists.

FEMA will be making these data available to States via a “protected” Internet

site (updated monthly) for their floodplain management needs. The States

may then make them available to communities. In addition, this information

will continue to provide more detail as requested by States and communities.

CRS participating communities annually receive, review, and update their

listings as part of the CRS participation requirements. Non-CRS communities

should continue to request this information through FEMA, if they do not

receive them from the States, when the Internet system becomes available.
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-2

Issue: Foster training and develop certification program of floodplain managers

Respondent’s Recommendation(s):

One respondent stated that this community and neighboring communities

understand little about implementing the NFIP. The respondent would like a

certification for local floodplain building code administrators with adequate

training to assist in the implementation of the NFIP. It should be run at the

State level. A State program would benefit communities more than the broad

issues addressed at the national level.

One respondent recommended that FEMA develop a floodplain manager

certification course that focuses on complex issues. This would better serve

those working in the field and help spawn new ideas and approaches. The

basic NFIP floodplain management course s too basic and is not fully able to

be applied, given the nature and complexities of floodplain management issues

– an issue those in the field must work with on a daily basis.

One respondent recommended that FEMA encourage and support certification

of floodplain managers through a national certification program. This could

apply to adjusters, insurance agents, and other professionals. Untrained and

unknowledgeable floodplain mangers lead to poor local floodplain

management decisions, at risk development, and to more flood damages and

disaster relief costs. There is a need to develop a cadre of well-trained

floodplain managers to help the nation reduce its flood losses.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA recognizes the importance of local official education

as one of the most important ingredients of a disaster resistant community. In

support of this, FEMA – in partnership with the U.S. Army Corps of Engineers

and the National Oceanic Administration – is jointly funding the startup phase

of a professional floodplain managers certification program in cooperation

with the Association of State Floodplain Managers. Through the certification

program local officials will have an incentive to take advantage of floodplain

management training opportunities. This will ultimately produce safer

communities. More about the certification program is available on the

ASFPM Web site at www.floods.org. Local officials are encouraged to

contact the ASFPM and learn more about this opportunity for floodplain

management professionals.

Additionally, FEMA is working to develop an advanced level of course

content to bolster the existing floodplain management course offered by the

Emergency Management Institute or to be used as a stand-alone module.

Certainly, FEMA looks to our State floodplain management partners and the

private sector to initiate training tools. There are many promising examples of

this through national and State-based conferences and workshops associated

with professional organizations.

FEMA is proud to also make available its new floodplain management

independent study course, Managing Floodplain Development Through the

National Flood Insurance Program,(IS-9). The independent study course

provides an excellent resource for local floodplain managers who are unable to
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-3

Issue: Foster training and develop certification program of floodplain managers

attend the residential courses offered at FEMA’s Emergency Management

Institute in Emmitsburg, Maryland. The course is also recognized as one of

the best and most comprehensive study aids for those individuals wishing to

prepare for the Certified Floodplain Managers examination offered through the

Association of State Floodplain Managers.

Insurance industry professionals and anyone else who works with floodplain

management issues are encouraged to consider becoming a certified floodplain

manager.

Issue: Strengthen the FEMA/State partnership to better clarify for the community what floodplain and watershed

planning can do

Respondent’s Recommendation(s):

One respondent stated that the FEMA/State partnership needs to be

strengthened and the NFIP needs to better clarified as to what floodplain

management and watershed planning can do for a community. The NFIP

should also write consistent regulations and encourage its enforcement by

State governments. A good incentive is a sliding cost share, which would

encourage States to improve their floodplain management programs. The

State should be working hand in hand with local government in a strategic plan

to reduce flood losses through a holistic program.

FEMA’s Response: Adopted/Action Underway

Explanation: In an effort to put in place a workable basic level of flood

protection in support of an insurance program, the NFIP was designed to be

implemented locally on a jurisdiction by jurisdiction basis. Clearly, however,

the physical processes that influence flooding characteristics are influenced

based upon entire watershed processes. Although the minimum requirements

of the NFIP do not require communities to consider watershed based

approaches, FEMA has put in place various floodplain management

implementation approaches that support a watershed based process. Through

the “Cooperating Technical Communities” program our floodplain mapping

activities allow for greater coordination and cooperation between neighboring

communities sharing a watershed. Through the NFIP “Community Rating

System” there is abundant opportunity for communities within a watershed to
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-4

Issue: Strengthen the FEMA/State partnership to better clarify for the community what floodplain and watershed

planning can do

work together in their floodplain management practices. And finally, through

FEMA’s Project Impact initiative there are unlimited opportunities for public,

private, and academic partners to combine their resources and interests for the

betterment of the community.

As disaster damage prevention efforts progress, more emphasis is being placed

upon the Federal role as that of facilitator, and mentor rather than regulator

and monitor. Consequently, FEMA is expanding its deliveries to those communities that are committed to helping themselves do more to become disaster

resistant, rather than focus the Federal role upon regulatory approaches.

Issue: Community education regarding maps and ICC claims processes

Respondent’s Recommendation(s):

One respondent felt that communities are not well-versed on 1) making

accurate flood map determinations or 2) their responsibility in the Increased

Cost of Compliance claims process.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA and FIA have incorporated training on the use of flood

maps into all deliveries of NFIP training because accurate risk determinations

are critical to effective floodplain management and insurance rating. We have

refined our publication on the use of NFIP maps (How to Use a Flood Map to

Determine Flood Risk for a Property – FEMA 258) to take the reader through

the process of making an accurate determination and we use this publication in

our training deliveries as well.

When the National Flood Insurance Reform Act of 1994 authorized Increased

Cost of Compliance (ICC) coverage both FEMA and FIA began an effort to

educate local officials, insurance agents and lenders on the coverage which

became available on June 1 of 1997. In September of 1997, we published
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-5

Issue: Community education regarding maps and ICC claims processes

FEMA 301 National Flood Insurance Program Guidance for State and Local

Officials Increased Cost of Compliance Coverage, to further provide

information on the ICC coverage under the NFIP and how it relates to the local

community’s administration of floodplain management ordinances. We have

also incorporated ICC modules into our floodplain management training

deliveries both in residence at the Emergency Management Institute and

training conducted by FEMA Regional and State floodplain management staff.

In addition, the FEMA Web site contains some information on ICC. We will

continue to incorporate alternative delivery methods to increase the deliveries

of training on ICC and other aspects of the NFIP.

Issue: Requirement for surveyors to be educated in flood zone determinations

Respondent’s Recommendation(s):

One respondent stated that surveyors do not have enough knowledge regarding

the NFIP or making flood zone determinations.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA does not have the authority to require surveyors to be

trained because surveyors are licensed by the particular State in which they

practice. However, FEMA Regional Offices have been incorporating training

for local surveyors on the NFIP. We also worked with the American Congress

on Surveying and Mapping in the revision to the FEMA Elevation Certificate

and will continue to partner with this group (to which many surveyors have

membership) to increase our training efforts for surveyors and improve their

skills on zone determination.
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-6

Issue: A training video on the new FEMA Elevation Certificate

Respondent’s Recommendation(s):

The respondent stated that due to limited training availability, many Elevation

Certificates continue to be filled out incorrectly. The suggestion has been

made to create a training video on how to fill out the new Elevation

Certificate.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA and FIA have been assessing options on training and

education efforts to support the issuance of the revised FEMA Elevation

Certificate. An instructional Compact Disc (CD) with an electronic copy of

the new Elevation Certificate is in the final stages of development. FIA is also

revising training modules to incorporate the new certificate in all sessions

conducted for insurance agents and lenders and this training is also open to

surveyors, State and Regional staff. We are also considering the development

of a training video on the new certificate if it is deemed necessary. This video

could become a module to be incorporated into other courses currently

delivered by the Emergency Management Institute and by the FEMA Regional

Offices, or simply a stand-alone training tool.

Issue: Establishment of required outreach and education programs to reinforce the skills of local floodplain

management officials

Respondent’s Recommendation(s):

The respondent recommended that the NFIP minimum standard should be

updated to include mandatory training for communities that wish to join the

NFIP. FEMA should also provide grants to communities to hire a flood

hazard coordinator or have cooperative agreements with local officials that

hire someone to facilitate the NFIP.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA is very aware of the positive effects of adequately

trained local floodplain management staff who are responsible for

implementing the NFIP. Because participation by any community in the NFIP

is voluntary, FEMA cannot require training as a condition of participation in

the NFIP. In addition, implementation of a floodplain management program

requires local land use authority, which FEMA does not have. However, both

the Emergency Management Institute and the FEMA Regional offices offer

floodplain management training for local and State officials on the
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-7

Issue: Establishment of required outreach and education programs to reinforce the skills of local floodplain

management officials

implementation of the NFIP. Some States are exploring certification programs

for floodplain management professionals that would require continuing

education and FEMA fully supports such initiatives. In addition, the

Association of State Floodplain Managers (ASFPM) is currently developing a

certification program.

Incentives for increasing the local knowledge base in floodplain management

are already in place. The Community Rating System (CRS) rewards

communities for more progressive floodplain management programs.

Conversely, those communities that fail to adequately administer and enforce a

floodplain management program that meets minimum NFIP criteria are subject

to probation and possible suspension from the NFIP.

When a community voluntarily applies for participation in the NFIP, the

community makes a commitment to designate a floodplain administrator to

effectively implement floodplain management compliant with the NFIP in that

community. In return, FEMA provides federally backed flood insurance to

citizens of that community because the community has committed to reducing

flood risk through their local floodplain management program. It is a “quidpro-quo” program. Because land-use and permit authority rests with the local

community, it would not be appropriate, nor is it Congressionally authorized,

for FEMA to fund a position for the administration of a locally adopted

ordinance, particularly since participation in the NFIP is voluntary.
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-8

Issue: Training for surveyors, engineers, local officials, insurance agents, and lenders

Respondent’s Recommendation(s):

The respondent requested training for surveyors, engineers, local officials,

insurance agents, and lenders to be effective floodplain management

participants, and once established, the training should be frequent.

FEMA’s Response: Adopted/Action Underway

Explanation: Training and education at the local level is critical to the

effectiveness of floodplain management and successful participation in the

National Flood Insurance Program. FEMA and FIA have been working

diligently to develop and deliver quality training for delivery at the local and

State level to ensure effective implementation of all aspects of the NFIP.

FEMA currently offers a resident, field delivered (by Regional staff), and

independent study course, Managing Floodplain Development Through the

NFIP which is designed to instruct State and local officials on effective

implementation of the NFIP. We are also exploring the possibility of an

advanced NFIP course as well as other modules on particularly common issues

for a variety of audiences such as engineers and architects as well as local

floodplain administrators. We will also be piloting the new Residential

Coastal Construction course at the Emergency Management Institute in early

2000.

FEMA and FIA are continuing to develop training strategies, new materials

and alternate delivery methods in order to expand the reach of our efforts to

our target audiences and meet the demand for quality training and education

about the NFIP.
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-9

Issue: Public education and awareness that the base flood elevation is a minimum criterion and higher standards are

more effective at reducing loss

Respondent’s Recommendation(s):

The respondent indicated that the minimum 1 percent chance standard has

become the accepted maximum standard required for protection of new

development from flood hazards. Higher standards are more effective and

should be advocated to change public perception.

FEMA’s Response: No Further Action Required

Explanation: When the National Flood Insurance program was created, it

was necessary to ensure the consistent use of a standard that would be

accepted and effectively implemented. Extensive evaluation determined that

the 1 percent standard would be the least controversial and most widely

accepted standard. This particular standard had already been in use by Federal

and State agencies prior to the 1968 Flood Insurance Act.

FEMA and FIA have always emphasized that the use of the base, or 1 percent

chance, flood as the national standard was a compromise between a lower

standard, (such as the 25-year flood), that would not offer enough protection

and a higher standard that would be seen as unrealistic or prohibitive, (such as

the 500-year flood). FEMA and FIA strongly advocate and encourage

communities to adopt higher elevation standards to provide better protection

and to help their citizens realize the benefits of lower insurance premiums due

to reduced risk. In addition, the Community Rating System provides credit for

higher regulatory standards and freeboard is one of the most effective and

popular standards that is used.
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-10

Issue: Spearhead a program in unison with State and local floodplain management associations and government

officials for floodplain management cross-training and make information available

Respondent’s Recommendation(s):

The respondent suggested attaining public consensus through outreach to

support floodplain management at all levels of government and the public and

private sector to achieve successful and effective implementation of floodplain

management.

FEMA’s Response: Adopted/Action Underway

Explanation: Effective floodplain management cannot be achieved without

public support. FEMA and FIA have made a concerted effort to build

effective partnerships with other governmental agencies, professional

associations and private-non-profit organizations to gain momentum in

building disaster resistant communities across the country. The Project Impact

initiative is an example of how effective consensus building can achieve

common goals of reducing loss and making communities more sustainable.

We are continuing to develop marketing strategies to create public awareness

and demand for better floodplain management and these strategies include

partnering with these other organizations to use our resources more effectively

in achieving this goal. We will also be working with the ASFPM Public

Information and Education Committee to develop a strategy for outreach and

education on floodplain management and mitigation at the State and local level

to create an educated and active citizenry that will generate support for local

floodplain management programs.
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-11

Issue: Provide Incentives to local floodplain administrators to attend floodplain management training developed by

FEMA or a State agency at least once in a three-year period

Respondent’s Recommendation(s):

The respondent indicated that due to high turnover rates and additional

responsibilities, many local floodplain administrators lack expertise to

implement effective local floodplain management programs.

FEMA’s Response: Adopted/Action Underway

Explanation: Professionalism in any field promotes excellence and

floodplain management is no exception. FEMA has just completed year one

of a three-year project with the Association of State Floodplain Managers

(ASFPM) to develop a professional certification program for local and State

floodplain managers. Many States already have a certification program and

this has increased the effectiveness of the floodplain administrators through

continuing education. In addition FEMA have been working diligently to

develop and deliver quality training for delivery at the local and State level to

ensure effective implementation of all aspects of the NFIP. FEMA currently

offers a resident, field delivered (by Regional staff), and independent study

course Managing Floodplain Development Through the NFIP which is

designed to instruct State and local officials on effective implementation of the

NFIP. FEMA will continue to work closely with the ASFPM and State

coordinating agencies to develop a strategy for floodplain management

training that FEMA can offer as part of the professional certification process.
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-12

Issue: Distribution of information on local floodplain management accomplishments to all participating communities

Respondent’s Recommendation(s):

The respondent indicated that it is difficult to search for and acquire examples

of specific programs, strategies, or regulations that are useful floodplain

management tools for local floodplain administrators. The NFIP should

provide examples from other communities where local regulations exceed the

minimum NFIP requirements for this purpose.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA is very aware of the positive effects of information

sharing to assist communities in implementing and developing strategies to

improve local mitigation and floodplain management. While logistically it

would be difficult to provide such information to all 19,000 + communities in

the NFIP, FEMA created a Web site to showcase local mitigation successes

that can be used by all communities. Anyone with access to the Internet may

log on to this page at www.fema.gov/mit/mitss.htm to view examples or enter

their own mitigation success stories. This page is very widely viewed and is

the most effective way for FEMA to provide information to such a wide

audience. We will continue to enhance our Web page to provide useful

information for all communities to use in their efforts to become more disaster

resistant.

Issue: Manufactured home installation training

Respondent’s Recommendation(s):

The respondent would like for FEMA to develop specialized training for the

installation of manufactured homes in special flood hazard areas.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA has a publication entitled Manufactured Homes

Installation in Flood Hazard Areas (FEMA 85), which provides technical

guidance on how to reduce the risk of flood damages to these homes. This

publication is currently scheduled to be revised during FY 2000. The

installation of manufactured homes is legislatively governed by each State;

therefore, any specialized training would be more appropriately developed at

the State or local level. Many local jurisdictions have specific zoning

ordinances and regulations pertaining to installing manufactured homes inside
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-13

Issue: Manufactured home installation training

or outside the floodplain. If assistance is needed on how these homes should

be installed in floodplains, each State has designated a State coordinating

agency that manages the implementation of the NFIP, that agency would be

more familiar with the State, local and Federal requirements for building in the

flood hazard areas. FEMA has and will continue to be available to offer

technical assistance to States and other entities that desire to develop

manufactured home installation training.

Issue: Privatize (partially) disaster operations; management efficiencies at the territory level; seek additional staff

positions

Respondent’s Recommendation(s):

One respondent stated that new initiatives at FEMA such as FMA, ICC and

Project Impact are affecting the capabilities of FEMA Regions. Staff

resources are being directed to these initiatives leading to an erosion of the

NFIP at the regions. Currently the staff at the regions do not have time to deal

with the daily problems affecting the NFIP. FEMA should consider partially

privatizing disaster operations or reorganizing regions into larger territory

offices for management efficiencies. Another option might be for Congress to

provide additional staffing resources to FEMA.

FEMA’s Response: Evaluation/Study Required

Explanation: With more than 19,000 communities participating in the NFIP

it is increasingly challenging to believe that FEMA staff could function as the

sole source of technical assistance to communities in support of the NFIP. For

this reason, FEMA has deliberately looked to alternative capability at the local,

State and private sector to help support the floodplain management technical

support needs of communities. Strong NFIP State Coordinating Offices,

active State based floodplain management professional associations and local

officials that can play a mentoring role, all play a part in building the NFIP

technical assistance resource base. Project Impact has been very successful in

building local capability and fostering a broad-based momentum for

community initiative in floodplain management. There is ever increasing

willingness on the part of strong communities to share their successful

techniques with other communities. All of these approaches best prepare

FEMA to serve its communities for the future.
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-14

Issue: Privatize (partially) disaster operations; management efficiencies at the territory level; seek additional staff

positions

On a pilot initiative basis, FEMA is using the services of the private sector to

assist with community assistance and evaluation. Based upon the results of

this effort there may be future direction toward using the private sector more

fully. The Robert T. Stafford Disaster Relief Act requires that FEMA deliver

certain disaster assistance services and through this mechanism a combination

of private and public resources are used. There is no consideration at this time

of transferring all disaster assistance programs to the private sector.

Issue: Provide better training, fund FPM program implementation, and foster open communication during a CAV

Respondent’s Recommendation(s):

One respondent feels that there must be a better way to monitor and provide

technical assistance to local communities – that adequate funding to State

coordinating agencies and to local governments must be accessible to

implement floodplain management. This particular community is on probation

with the NFIP. The responder believes the root cause of this was a lack of

adequate training from the Federal and State level. The responder further

stated that this community’s responsibility was not stressed enough while in

the emergency program. CAVs should be called community-monitoring visits.

The assistance gained during these visits is limited. Furthermore, the

respondent felt deterred from asking questions during the visits for fear of

being turned into an administrative deficiency.

FEMA’s Response: No Further Action Required

Explanation: The CAV is intentionally designed to be not only a

monitoring visit but also an opportunity for local officials to pose questions to

FEMA or State personnel about floodplain development practices. If a

community official has a question, he or she could avail themselves of any one

of the following avenues for assistance: contact your NFIP State Coordinator;

direct question to the appropriate FEMA regional office; seek technical

publications through FEMA’s publications warehouse; consult information on

FEMA’s Web site; attend one of FEMA’s many floodplain management

courses offered through the Emergency Management Institute in Emittsburg,

MD; contact one of the many professional floodplain management associations

in a State or at the national level; A major objective of the NFIP is to ensure

that participating communities are achieving the flood loss reduction standards

of the program. In order to address community performance, FEMA is
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-15

Issue: Provide better training, fund FPM program implementation, and foster open communication during a CAV

developing a comprehensive Community Compliance Strategy. This strategy

will identify a broad range of actions that will be taken to improve community

compliance. Various elements are identified as critical to this process such as

building partnerships, identifying additional resources, seeking new outreach

opportunities, providing better training, and a prioritization of communities

needing technical assistance. FEMA looks forward to implementing this

strategy as an important action plan that will help us to “work smarter” in

giving our communities technical assistance and gaining compliance.

On a pilot project basis, FEMA is exploring new approaches to evaluate

compliance. For example, in Texas, FEMA has been able to use the services

of the private sector to assist with the information gathering necessary during a

CAV.

As a benefiting partner, FEMA is dependent upon communities and States

providing their own funding and resources to support floodplain management

demands. Although FEMA plays a role as a catalyst in providing funding

resources to communities and States, FEMA does not view itself as the sole

supporter of these efforts. Nationwide, there is a wide variety of commitment

among States. FEMA recommends that those communities wishing their

States would take a more aggressive role in floodplain management should

contact other strong States and learn how these strong State programs

developed and support the development of similar State programs in their own

State.
Floodplain Management – Technical Assistance, Training, Communications, and Publications

FEMA’s NFIP Call for Issues Status Report, June 2000 II-4-16

Issue: Conduct CAVs for communities before nomination for Project Impact to identify and resolve violations or

programmatic deficiencies

Respondent’s Recommendation(s):

One respondent stated that a Community Assistance Visit should be conducted

before a community is nominated for Project Impact. Some communities

nominated for Project Impact are deficient in implementing their floodplain

management ordinance. Any violation or programmatic deficiencies would

have to be resolved before a community could be nominated.

FEMA’s Response: No Further Action Required

Explanation: Once of the greatest successes of the Project Impact initiative

is that it reflects a community’s desire to be disaster resistant for the future.

As a Project Impact signatory, the community is committing to a partnership

for the future the steers the community toward becoming disaster resistant.

In response to the community’s willingness to be a Project Impact partner,

FEMA wants to support that local initiative and make available technical

assistance and other resources to help the community make itself more disaster

resistant.

It is not uncommon that during the process of evaluating community

performance in the NFIP that violations or mistakes are identified which

occurred before the current local administration managing a community. In

these cases, it would be a disservice to a community to withhold its eligibility

to become a Project Impact partner because of past mistakes, particularly if the

community has a demonstrated commitment to improve their floodplain

management activities in the future. Project Impact affords a tremendous

opportunity to work with a community to set it on an improved track for the

future. Therefore, FEMA would not support a categorical exclusion of

community participation in Project Impact where violations of the NFIP have

been found.
II Mitigation

5 Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report

June 2000
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-1

Issue: Hazard Mitigation Grant Program – simplify the acquisition process

Respondent’s Recommendation(s):

The respondent indicated a need to simplify the acquisition process.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA is always striving to improve its policies to streamline

the acquisition of flood prone property. Since the inception of large-scale

efforts to acquire flood prone property after the Great 1993 Midwest Floods,

both FEMA and the States that administer the primary program for property

acquisition, the Hazard Mitigation Grant Program (HMGP), have greatly

improved their knowledge and abilities to implement acquisition projects.

FEMA has developed a number of policies, including a policy that predetermined that substantially damaged structures within floodplains are cost

effective. This expedited the approval process for a large number of the target

flood prone properties involved in acquisition projects.

The complexity of individual and local government decisions will always be a

part of acquisition projects, which are an emotional, political, and logistical

roller coaster at the local level. Policies and approval processes are being

streamlined at the Federal and State level but there will always be tough

decisions to be made at the local level. It is the local governments that must

make the choice to extend offers to local citizens. These decisions will have

lasting effects that must be considered locally.

To provide support to local governments, FEMA has recently published

FEMA 317, entitled Property Acquisition Handbook for Local Governments.

This document will provide local governments with many tools to aid them in

implementing a project without having to “re-create the wheel.” Further in

coordinating with State governments FEMA has been providing public

information directly to the media, local governments, and citizens to ensure
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-2

Issue: Hazard Mitigation Grant Program – simplify the acquisition process

that citizens understand how acquisition projects are developed and the

appropriate avenues for requests.

FEMA continues to look for avenues to streamline the HMGP and Flood

Mitigation Assistance (FMA) process. FEMA is developing a home study

course to complement FEMA 317. Further FEMA is exploring the possibility

of developing a training course for State officials to provide them with the

proper knowledge to efficiently carry out the management of complex

Statewide acquisition programs.

Issue: Increase funding to Hazard Mitigation Grant Program and Flood Mitigation Assistance

Respondent’s Recommendation(s):

The respondent suggested increasing Flood Mitigation Assistance (FMA)

Program to mitigate prior to a disaster. Fifteen percent of total FEMA disaster

assistance for Hazard Mitigation Grant Program (HMGP) is not enough to

make serious progress, and FMA is too small to be seriously considered by

States and local governments. With too much funding poured into disaster

recovery, the Federal government continues to operate in a post-flood mode

instead of a pre-flood mode, causing problems for NFIP customers.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA has been working with Congress to develop

acceptable legislation that would provide greater pre- and post-disaster funding

to address repetitive loss properties and important State and local mitigation

needs. Recent proposed amendments to the Stafford Act, the authorizing

legislation for the HMGP, have proposed increasing the available funding

from 15 percent to 20 percent of the total disaster assistance provided by

FEMA. FEMA will continue to make efforts to secure funding to address

repetitive loss properties and support appropriate increases in mitigation

funding. Short of additional funding, FEMA has developed a repetitive loss

strategy to focus the limited pre- and post-disaster resources we do have on the

most costly repetitive loss properties. FEMA will implement the repetitive

loss strategy and support the Director’s efforts to secure greater pre- and postdisaster funding to address repetitive loss properties.
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-3

Issue: Hazard Mitigation Grant Program – allow USACE or State-certified flood control projects to be built on land

acquired using HMGP funds

Respondent’s Recommendation(s):

The respondent stated that FEMA must amend regulations to exempt any State

and/or Federal flood control projects, such as set back levees, that will serve to

mitigate future disasters. This regulation requiring open space is problematic

in that it increases the costs associated with implementing a flood protection

project that will help to mitigate damages.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA recognizes the benefits provided by these two distinct

approaches to hazard mitigation: flood control projects and permanent open

space that restores the natural flood plain functions. FEMA’s acquisition and

relocation projects are provided as an alternative, where the construction of

flood control projects is not practical or desired. Permanent open space

projects are intended to restore the natural functions of floodplains, including

restoring floodplain conveyance and storage area. Communities that are

contemplating the construction of levees to protect their community should

carefully consider the potential conflicts. They should not purchase land with

restrictions requiring permanent open space if they require the land to

construct a levee. The community should submit a levee project to the

appropriate agency or program, where the costs for land acquisition in support

of such a construction project are appropriate and do not carry the restrictions

that FEMA open space acquisition projects do.

FEMA fully supports setback levees as they serve to better accommodate the

flow of floodwaters than levees set on the riverbanks. FEMA can fund the

acquisition of flood properties on the wet side of a set back levee for the

purpose of creating permanent open space. However, the acquisition of the

flood prone property cannot be used for the construction of the levee.

It is important that communities are careful in acquiring permanent open space

lands. Those communities that do not adequately consider the different

intentions of these two approaches may foreclose their options for future
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-4

Issue: Hazard Mitigation Grant Program – allow USACE or State-certified flood control projects to be built on land

acquired using HMGP funds

construction of flood control. As with all mitigation, local long term planning

is vitally important. The obligation to do proper planning to ensure that

options are not foreclosed lies with the local government. FEMA has recently

signed a Memorandum of Agreement with the U.S. Army Corps of Engineers

to clarify the prohibition of levees on FEMA-funded open space floodplain

lands. This MOA and separate FEMA guidance to applicant communities will

ensure that communities properly coordinate and consider the choice between

structural flood control and permanent open space.

Issue: Hazard Mitigation Grant Program – offer HMGP funds for buyout to homeowners immediately after a disaster

Respondent’s Recommendation(s):

One respondent suggested that flood insurance adjusters tentatively offer

buyouts and enlist the commitment of homeowners. Once homeowners start

to clean up and rebuild they are less likely to accept an offer to be acquired.

FEMA’s Response: No Further Action Required

Explanation: FEMA funds property acquisition projects through the HMGP

and the Flood Mitigation Assistance (FMA) Program. These programs are

administered by States and implemented through local governments. Local

governments are responsible for choosing if they wish to participate in a

mitigation project that can take many forms, including acquisition of flood

prone property. FEMA is not involved in making any offers to individual

property owners. The complexity of individual and local government

decisions will always be a part of acquisition projects, which are an emotional,

political, and logistical roller coaster at the local level. Policies and approval

processes are being streamlined at the Federal and State level but there will

always be tough decisions to be made at the local level. It is the local
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-5

Issue: Hazard Mitigation Grant Program – offer HMGP funds for buyout to homeowners immediately after a disaster

governments that must make the choice to extend offers to local citizens.

These decisions will have lasting effects that must be considered locally.

To provide support to local governments, FEMA has recently published

FEMA 317, entitled Property Acquisition Handbook for Local Governments.

This document will provide local governments with many tools to aid them in

implementing a project without having to “re-create the wheel.” Further in

coordinating with State governments FEMA has been providing public

information directly to the media, local governments and citizens to ensure

that citizens understand how acquisition projects are developed and the

appropriate avenues for requests. FEMA continues to look for avenues to

streamline the process FEMA is developing a home study course to

compliment FEMA 317. Further FEMA is exploring the possibility of

developing training course for State officials to provide them with the proper

knowledge to efficiently carry out the management of complex acquisition

programs Statewide.

Issue: Hazard Mitigation Grant Program – reduce buyout payments for uninsured structures

Respondent’s Recommendation(s):

One respondent commented that those who purchase flood insurance receive

the same benefits in a buyout as those who do not.

FEMA’s Response: Addressed in Program/Other Actions To Be

Taken

Explanation: FEMA’s current policy provides for States to offer those

property owners participating in an acquisition project that had flood insurance

a credit for up to 5 years worth of premium when they receive an acquisition

offer. The concern largely stems from a marketing problem that does not

emphasize this benefit and also put the larger benefits and security of flood
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-6

Issue: Hazard Mitigation Grant Program – reduce buyout payments for uninsured structures

insurance in the context of the very small proportion of insured structures that

would ever be involved in an acquisition project. The proportion of properties

receiving acquisition offers is quite small when compared to those properties

making claims in any given year. An improvement in marketing of these

elements is being addressed through efforts of FIA.

Some have suggested that FEMA should deduct five years of premium from

those that do not have insurance but want to participate. The premium credit is

a more effective because it requires people to carry flood insurance to receive

a benefit and send a positive message. Deductions would only serve to

encourage decisions to post-pone or take a risk in delaying purchase of

insurance. For example a property owner might be inclined to say “it won’t

happen to me, but if it does I’ll just pay the five years when and if they offer

me a buyout.” The Mitigation Directorate is continuing work with FIA to

market flood insurance and will continue to implement its policy of five years

in premium credits thereby providing a positive message to maintain insurance

in the context of buyouts. We are in the process of studying the feasibility of a

policy change such as reducing buyout assistance.

Issue: Y2K impacts

Respondent’s Recommendation(s):

The respondent would like to know how the NFIP would be impacted by Y2K.

FEMA’s Response: No Further Action Required

Explanation: FEMA’s Information Technology Services Directorate

reports the agency’s entire computer network and systems was upgraded and

were ready for the Y2K transition. In a report submitted to the Office of

Management and Budget, FEMA noted that in addition to the 47 mission
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-7

Issue: Y2K impacts

critical computer systems that have been Y2K compliant since the end of

March, 1999 upgrading and testing of all 24 mission non-critical computer

systems was completed.

Issue: Stafford Act on the Internet

Respondent’s Recommendation(s):

The respondent recommended that the Stafford Act be made readily available

to cities, counties, and States.

FEMA’s Response: No Further Action Required

Explanation: The FEMA Response and Recovery Directorate, Public

Assistance Division has placed the Robert T. Stafford Disaster Assistance and

Emergency Relief Act on our Web site at http://www.fema.gov/.

Issue: Disaster assistance for infrastructure

Respondent’s Recommendation(s):

The respondent recommended that FEMA discourage disaster assistance for

infrastructure in repetitive loss areas and require State and local government to

adopt mitigation.

FEMA’s Response: No Further Action Required

Explanation: There are currently no provisions in the existing Stafford Act

that would allow FEMA to discourage disaster assistance for infrastructure in

repetitive loss areas. To date, a bill entitled Disaster Mitigation and Cost

Reduction Act of 1999 is before Congress. This bill amends the Stafford Act

to increase pre-disaster hazard mitigation activities and reduce the long-term

cost of disasters. This element of the bill if passed, would continue FEMA’s

effort to encourage pre-disaster mitigation through the Project Impact

initiative. The bill would also authorize the reduction of the Federal share of

assistance for repair, restoration, reconstruction, or replacement of any eligible

public or private nonprofit facility that has previously received significant
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-8

Issue: Disaster assistance for infrastructure

disaster assistance on multiple occasions. If this bill is enacted, FEMA will

determine the criteria for implementing this provision, within its Public

Assistance Program.

Issue: Flood Mitigation Assistance

Respondent’s Recommendation(s):

The respondent suggested revising Flood Mitigation Assistance (FMA)

eligibility requirements to exclude communities with outstanding compliance

issues until they have reached “full compliance” status.

FEMA’s Response: No Further Action Required

Explanation: The only quantitative measurement we have is when a

community is put on probation or suspended from the NFIP. When

developing the program, we considered establishing eligibility criteria for

communities – stating that in order to apply for funding, they had to be “in

good standing” in the NFIP, but we have no objective way to measure that at

this time.

Issue: Flood Mitigation Assistance

Respondent’s Recommendation(s):

One respondent suggested making the FMA projects subsequent to approved

FEMA plans by one year. FMA projects take longer to develop and

implement and would benefit from such a one year suspension.

FEMA’s Response: No Further Action Required

Explanation: FMA plans can be developed at any time. States set criteria

for selecting communities for planning grants. States can use whatever criteria

they want to have a one-year separation from plan to project development.
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-9

Issue: Flood Mitigation Assistance

Respondent’s Recommendation(s):

One respondent suggested that FEMA should ask Congress to declare these

funds non-Federal funds, similar to CDBG. FMA funds, if considered to be

part of the NFIP, can be leveraged for more flood mitigation activities.

FEMA’s Response: No Further Action Required

Explanation: FEMA is not considering this as an option at this time.

Issue: CAP-SSSE

Respondent’s Recommendation(s):

One respondent commented that if the source of CAP-SSSE funding is the

premiums collected from flood insurance policies, then as the number of

policies increases, the amount of funding to individual States must also

increase.

FEMA’s Response: No Further Action Required

Explanation: A variety of functions and activities are supported through

funds collected from NFIP policyholders through the Federal Policy Fee of

$30.00 per policy. Specifically, the Flood Mitigation Assistance Program

(FMA), floodplain mapping including Map Modernization, flood hazard

reduction activities such as the Community Assistance Program (CAP), and

Federal salaries and expenses, must all be funded through this fee. Recent

emphasis has been placed on fully funding the FMA Program at the $20

million level, and increasing the level of funding for map modernization.

Because if these competing needs, funding for the CAP program has remained

level despite increasing policy counts for the nation. In the future, FEMA is

considering reviewing, with its partners NEMA and the ASFPM, the

effectiveness of CAP in delivering technical assistance to communities as well

as the current level of CAP allocations in order to address some of these

concerns. Significant increases in CAP allocations will be dependent on

continued increases in the number of NFIP policies.
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-10

Issue: Post disaster teleregistration

Respondent’s Recommendation(s):

One respondent suggested that FEMA correct post disaster teleregistration

problems that occurred during a hurricane event in Puerto Rico.

FEMA’s Response: No Further Action Required

Explanation: FEMA constantly looks for opportunities to improve our

teleregistration process. Through the development of National Emergency

Management Information System (NEMIS), our new integrated system;

disaster processing and response times have been greatly reduced. We are

now able to provide applicants with funding within a more acceptable

timeframe. We continue to look for opportunities to improve our response and

recovery efforts.

Issue: NFIP assessment

Respondent’s Recommendation(s):

Four respondents recommended that FEMA should undertake a

comprehensive assessment of the NFIP. The assessment should evaluate the

floodplain management and insurance aspects of the NFIP.

FEMA’s Response: Adopted/Action Underway

Explanation: The Mitigation Directorate and FIA support an effort to

comprehensively look at the program and determine how all its elements,

insurance, flood hazard mapping along with floodplain management has

impacted the Nation. Efforts are underway to identify the parameters of

conducting such an assessment.

Issue: Community Information System

Respondent’s Recommendation(s):

Four respondents recommended that States have access to the NFIP

Community Information System (CIS).

FEMA’s Response: Adopted/Action Underway

Explanation: We have made tremendous progress in the effort to provide

States the capability to access to the NFIP Community Information System
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-11

Issue: Community Information System

(CIS). The NFIP-CIS was originally designed in an MS-DOS® environment.

Over the last several years, the CIS has migrated into a more technology sound

and flexible database, Oracle 8.3®, which will allow States to access the

database. Our Information Technology Directorate has identified and

developed the security measures needed to provide remote access via an

Internet Web site. Remote access to the CIS has entered its final stages of

development and FEMA plans a release in 2000.

Issue: Number of flood-prone structures

Respondent’s Recommendation(s):

The respondent would like for FEMA to develop a plan to determine the

number and types of structures that are at risk in the nation’s floodplains.

FEMA’s Response: Adopted/Action Underway

Explanation: Mitigation and FIA are initiating a cooperative effort to

improve the quality of information we have about buildings in the special

flood hazard areas. We have a number of existing databases and studies to

help estimate the number of structures at risk nationally. Some of the

information we have appears to be reliable on a national level, but not as

accurate at the State and local level. We realize that improving our

community level data will provide us with data necessary to conduct analyses,

identify market potential, and evaluate the NFIP.
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-12

Issue: Internal FEMA policy

Respondent’s Recommendation(s):

Two respondents recommended when revisions are made to the NFIP

floodplain management regulations, consideration is given to the President’s

Plain Language Initiative and FEMA’s policy on Government-to-Government

Relations with American Indians and Alaska Native Tribal Government.

FEMA’s Response: No Further Action Required

Explanation: Currently the NFIP recognizes American Indian and Alaska

Native Tribal governments as participating communities. In any future

changes to the NFIP, FEMA’s government-to-government policy will be

appropriately incorporated. In addition, we are now complying with the

President’s Plain Language Initiative in the development of regulations,

directives, and general correspondence.

Issue: Planning

Respondent’s Recommendation(s):

Two respondents suggested revising regulations (and legislation, if needed) to

require local governments to develop and adopt State-facilitated hazard

mitigation plans as a condition of receiving Federal funding for mitigationrelated activities.

FEMA’s Response: Adopted/Action Underway

Explanation: Local flood mitigation plans are currently required by

regulation as a condition of receiving funds under the Flood Mitigation

Assistance program. Current regulations implementing the Stafford Act

strongly urge communities to participate in a planning process, but do not

make it a requirement. Proposed amendments to the Stafford Act provide for a

more active planning process that strengthens support for the development of

local mitigation plans as an integral part of State planning.
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-13

Issue: Planning

Respondent’s Recommendation(s):

One respondent made a suggestion to continue fostering greater harmony in

post-disaster coordination of Federal assistance, mitigation, and floodplain

management.

FEMA’s Response: No Further Action Required

Explanation: In recent years, there has been an increased emphasis on

providing planning assistance to States and communities after disasters as

recovery and mitigation begin. This assistance guides States and communities

to identify and seek a variety of financial and technical resources available in

the post-disaster that will facilitate mitigation through the recovery process,

thus facilitating efforts to use a range of Federal programs for recovery and

mitigation. DFO staff now work closer than ever before to integrate mitigation

into Public and Individual Assistance programs, and into the messages that go

out to the public through the community relations cadres and the public

information officers.

Issue: Flood data to improve disaster response

Respondent’s Recommendation(s):

One respondent recommended that FEMA provide flood insurance data and

allied demographics with a GIS overlay in support of communities

determining emergency and recovery assistance in areas following a flood.

With this information, agencies and organizations could individually and

collectively plan for and organize a more effective and efficient disaster

response. The respondent suggests that FEMA make available to appropriate

organizations and State and Federal Agencies that facilitate planning to

respond to a flood disaster. Specific data about the number and types of

structures of risk for flooding would further support mitigation and

preparedness efforts.

FEMA’s Response: Adopted/Action Underway

Explanation: HAZUS (Hazards-US) is the Federal Emergency

Management Agency’s flagship risk assessment initiative and an essential

element of FEMA’s Project Impact initiative, a national movement to create

safer disaster resistant communities. Through Project Impact and HAZUS,

FEMA seeks to assist local and State entities and the private sector to better

understand the magnitude and potential consequences of future disaster events

and to build public support for locally based loss reduction initiatives.

Therefore, recognizing a compelling public interest to be served and a public

benefit to be derived, FEMA has undertaken the development of standard,

nationally-applicable methods for quantifying natural hazard losses and risk
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-14

Issue: Flood data to improve disaster response

and the dissemination of those methods through a user-friendly, freelyaccessible computer program, HAZUS (Hazards US). FEMA, under a

cooperative agreement with NIBS, has already developed a standardized,

nationally applicable earthquake loss estimation methodology. This

methodology is implemented through PC-based Geographic Information

System (GIS) software. HAZUS is being expanded into a multihazard

methodology with new models for estimating potential losses from wind

(hurricanes, thunderstorms, tornadoes, extra tropical cyclones and hail) and

flood (riverine and coastal) hazards. HAZUS is designed to produce loss

estimates for use by State, regional, and local governments in planning for

natural hazard loss mitigation, emergency preparedness, and response and

recovery. The methodology deals with nearly all aspects of the built

environment, and with a wide range of different types of losses.

The wind and flood models will allow practitioners to estimate the economic

and social losses from extreme winds and floods. HAZUS will assist State and

local officials in evaluating and planning for, the potential effects of mitigation

on flooding and flood loss, and damage and loss from hurricanes and other

extreme winds. The models will provide practitioners and policy makers with

a tool to help reduce wind and flood damages, reduce disaster payments, and

make wise use of the nation’s floodplains. Preview versions of the flood and

wind (hurricane) loss estimation models are scheduled for release in 2002, to

be followed later by models that possess additional loss estimation capability.

The Preview Flood Model will require the user to provide local flood hazard

data to the model. The Model comes with Q3 data by default. Under the

HAZUS umbrella, up-to-date depth-damage functions from Federal Insurance

Administration (FIA) and U.S. Army Corps of Engineers (USACE) are used in
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-15

Issue: Flood data to improve disaster response

the calculation of damages to the built environment. FEMA believes that the

following are reasons why communities should consider using HAZUS:

• HAZUS software and training and support is provided free to the user.

• HAZUS is cutting-edge technology developed by technical and

scientific experts.

• HAZUS makes it easier to explain flood impacts in human and

economic terms thereby creating consensus for remedial action and

change.

• HAZUS expands floodplain management focus from hazard-based to

risk-based approach.

• HAZUS provides quick and easy quantitative estimates of physical

damage, economic loss and social impacts from various scenarios and

built environment changes.

• HAZUS generates attention-getting maps that show flood risk, educate

public, and create demand for loss reduction and prevention.

• HAZUS contains extensive databases for the built environment

allowing it to be used ‘right out of the box' or customized with

community specific data.

Once wind and flood modules are available, almost every community in the

U.S. will find value in using HAZUS to evaluate public policies such as

legislative initiatives, land use decisions, building codes and standards,

allocation of resources, and insurance rate making.
Floodplain Management – Other FEMA Programs

FEMA’s NFIP Call for Issues Status Report, June 2000 II-5-16

Issue: Flood data to improve disaster response

One of the most powerful tools HAZUS offers is enhanced capability in

emergency management response, by significantly improving the emergency

manager’s ability to estimate disaster related losses in human, built

environment, and economic terms. This capability is most powerful in

supporting post-event response and recovery from catastrophic disasters that

occur with little warning and impact large areas and populations.

The capability afforded by HAZUS to both forecast potential impacts and

losses from various disaster scenarios and to rapidly and effectively

communicate this information through Geographic Information Systems maps

and technology represents a major breakthrough and will increase our ability

to alter public perception of risk, promote more informed risk-management

decision-making, ultimately building a safer, more disaster-resistant nation.
III Mitigation

1 Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report

June 2000
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-1

Issue: Cooperating Technical Communities – delegation of authority to issue LOCMs

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Modify existing regulations to allow State-issued letters to suffice as

Federal approval for removal of flood-prone lands, LOMAs and

LOMRs.

• Allow qualified States, under FEMA supervision, to issue LOMAs and

flood hazard determinations.

• Develop new map revision and amendment mechanisms, such as State

and local review processes, to replace existing LOMR and LOMA

processes.

• Allow communities to issue LOMAs and LOMR-Fs and distribute

them to FEMA and FEMA’s stakeholders.

• Give communities the authority to make map determinations for flood

insurance purposes.

• Decentralize permitting and mapping responsibilities to more regional

or local level.

• Because communities have adequate and accurate records, make them

responsible for map determinations for flood insurance purposes;

provide funding for the communities to handle the workload.

• Allow States to provide annual reports on technical studies, LOMAs,

LOMRs, etc., to FEMA for oversight purposes.

FEMA’s Response: Adopted/Action Underway

Explanation: The responsibility for issuing permits resides with the

community, not FEMA. FEMA has been, and continues to, investigate the

possibility of delegating some authority for issuing Letters of Map Change

(LOMCs). A meeting was held on December 9, 1998, with the State of South

Carolina and professional organizations to discuss the issues involved with

LOMC delegation. A summary report was prepared and distributed on

August 17, 1999, to the FEMA Regional Mitigation Divisions, the Association

of State Floodplain Managers Mapping Committee, and the federally

mandated Technical Mapping Advisory Council. FEMA will continue to

examine all aspects of the LOMC processes, including its regulatory and legal

obligations, and determine what can be modified to simplify the processes.

FEMA cannot give communities the authority to make map determinations for

flood insurance purposes because the responsibility for making map

determinations for flood insurance purposes resides with the lenders rather

than with FEMA. FEMA publishes the flood hazards, which the lenders are

then obligated to use. FEMA does not regulate the lending industry.

However, it would be possible for lenders to hire the community to perform

the map determinations.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-2

Issue: Cooperating Technical Communities – delegation of authority to issue LOCMs

• Allow LOMRs to be prepared by communities and provided to FEMA

for files.

• Institute a more flexible version of the Accelerated Map Revision

(AMR) program, begun by FEMA several years ago, to accelerate the

processing of LOMR and conditional LOMR requests; the AMR

program allowed qualified local agencies to do FIRM revisions.

Issue: Cooperating Technical Communities – flood mapping partnerships/transfers of responsibilities

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Allow technically competent States to manage the FIS restudy and

mapping program, LOMA and map revision processes, and approve

hydrologic and hydraulic data and analyses.

• Offer incentives to communities to assist FEMA in accurately

mapping floodplains, using GIS technology, for their communities.

• Provide funding to States for management of flood studies.

• Grant qualified communities with sophisticated GISs the ability to use

local digitized floodplain maps as the official NFIP maps.

• Allow States and/or qualified communities to review LOMR

submissions and certify their reviews.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA’s CTC initiative will accomplish many of these

recommendations. For instance, one of the CTC agreements is for hydrology

and hydraulics (H&H) analyses and floodplain mapping. This can be for

automated H&H if the CTC partner has Geographic Information System (GIS)

capability. The community also receives Community Rating Service credits

for such things as having a GIS. Another CTC agreement is for DFIRM

preparation and/or maintenance. An additional CTC activity could be for

reviewing Letter of Map Revision (LOMR) submissions.

Locally funded activities can be initiated at any time, and FEMA technical

assistance will be available. FEMA funding for flood studies is very limited;

national mapping needs determine FEMA funding priorities. FEMA funding

for CTCs is provided through a cooperative agreement.

Fiscal Year 1999 was the pilot year for the CTC initiative. During this year,

FEMA entered into partnership agreements with 30 partners. Approximately
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-3

Issue: Cooperating Technical Communities – flood mapping partnerships/transfers of responsibilities

50 percent of the partners are State agencies, and the other 50 percent are

communities and regional agencies.

Issue: Cooperating Technical Communities – policy changes

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Consider requiring flood insurance either up to the 500-year

floodplain, or for all structures.

• Consider eliminating LOMR-Fs for structures that will continue to be

surrounded by floodwater because there are too many potential flood

damages and taxpayer rescue and disaster costs involved; properties

that are on the edge of the floodplain and where fill will connect to

high ground could justifiably be removed from regulation if the

property were filled at least 2 feet above the BFE.

• Allow more flexibility in use of newer hydrologic and hydraulic

models to support map revisions.

Consider using the flood hazard study map for community regulation and

mitigation, and some other vehicle for decision making on flood insurance.

FEMA’s Response: Adopted/Action Underway

Explanation: The National Flood Insurance Act of 1968 allows the

mandatory flood insurance requirement to apply only to structures within the

1-percent annual chance floodplain.

Evidence about the performance during flood events of properties elevated by

fill is inconclusive; however, FEMA is evaluating the whole LOMR-F process

and will take the recommendation to eliminate LOMR-Fs for properties that

remain surrounded by flood water under advisement.

FEMA intends to pursue greater flexibility in the use of newer H&H models as

a CTC Mapping Activity in FY 2000.

FEMA believes the new DFIRM product will be well suited for both flood

insurance determinations and for community regulation and mitigation. The

digital flood theme can readily be used by lenders and map determination

companies to efficiently make precise determinations, and the DFIRM

database will contain the detailed data and back-up data needed for floodplain

management and mitigation.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-4

Issue: Cooperating Technical Communities – funding

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Provide funding to assist communities in conducting flood hazard

assessments and developing mitigation plans.

• Provide incentive funding to communities for development and

implementation of master drainage plans (structural and nonstructural)

as a follow-up to completed flood studies.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA will provide funding to communities as part of a CTC

agreement to perform flood hazard assessments; however, funding is limited.

FEMA does not envision a CTC agreement for developing mitigation plans

because the CTC focus is on flood hazard identification. However, a

mitigation plan could be developed under FEMA’s Project Impact initiative.

For information about Project Impact, visit FEMA’s Web site at

www.fema.gov.

FEMA will not typically fund master drainage plans. However, because much

of the data and models used to develop a flood study are also needed for a

master drainage plan, a CTC agreement could assist the community

considerably. FEMA would pay for the flood study, and the community could

use the data developed by FEMA to design a master drainage plan.

Issue: Cooperating Technical Communities – outreach

Respondent’s Recommendation(s):

The recommendation for FEMA was to increase communication with local

officials and the public, particularly regarding map revisions, new FEMA

policies, and new FEMA programs.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA’s various Map Modernization objectives have led to

an enhanced process for updating the maps. This process will increase State

and regional agency and community involvement in the mapping process,

particularly through the CTC initiative. FEMA will begin implementing this

new process in FY 2000.

Increasing public awareness and improving customer service are important

objectives of FEMA’s Map Modernization plan. FEMA’s Flood Hazard
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-5

Issue: Cooperating Technical Communities – outreach

Mapping Web site has been on-line since October 1998. This customeroriented site targets homeowners, engineers/surveyors, insurers/lenders, and

floodplain managers. It provides answers to the most frequently asked

questions and also provides users with a means of querying the status of all

active map revisions and FEMA-funded flood data updates, as well as those

that became effective within the past 60 days. In addition, the service provides

access to the map modernization newsletter, FEMA forms, digital models, and

other FEMA material. The address is www.fema.gov/mit/tsd/.

Another customer service objective, FEMA’s Map Assistance Center, has been

operational since January 1999. Customers can call the toll free number at 1-

877-FEMA MAP (1-877-336-2627) to ask questions about the procedures to

revise or correct FIRMs. The questions can be either general or specific to a

particular map revision request.

Issue: Dam-break inundation mapping

Respondent’s Recommendation(s):

Four respondents submitted recommendations regarding the dissemination of

dam failure information. The recommendations are as follows:

• Add dam failure inundation shadow overlays to NFIP maps to provide

a complete picture of the risk to downstream property owners and to

all other stakeholders. This information also would be helpful to dam

owners, so they could understand how far-reaching their liability is

concerning the dam’s potential effect on downstream property owners.

FEMA’s Response: Other

Explanation: To some degree and because of several factors, flood-related

hazards are associated with more than 23,000 dams in the United States.

These hazards are related to the failure of the dams, which may be triggered by

flooding, poor maintenance, improper operation, earthquakes, vandalism, or

terrorist activities. The potential risk of such failures was addressed in detail

in a 1997 FEMA report entitled Multi-Hazard Identification and Risk

Assessment.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-6

Issue: Dam-break inundation mapping

• Perform a dam-break analysis for any flood frequency that will

overtop a dam and include in the analysis the area from just

downstream of the dam to the point at which the water-surface

elevations for a particular flood frequency with and without the dambreak analysis are within 0.5 foot.

• Include the specifications for performing dam-break analyses in

Chapter 5 of FEMA 37, entitled Flood Insurance Study Guidelines and

Specifications for Study Contractors.

• Develop maps to delineate the potential area of impact for all dams

where development, if it were to occur, would affect a dam’s

classification as a potential hazard and the resultant required standards.

Local jurisdictions could then use this information to make informed

decisions about development.

Because of the extensive nature of the risk, considerable interest in providing

risk-related information to the public has been expressed during the past 16

years. Citizens, emergency managers, floodplain managers, dam safety

officials, and dam owners have cited the need for improved public

information, awareness, and notification. One mechanism suggested for

making information on dam-break inundation zones available is to show it on

NFIP maps.

Because public safety is an integral part of the NFIP, FEMA undertook a pilot

study to determine the feasibility of including these zones on NFIP maps. The

results of the pilot study are documented in a FEMA report entitled The

National Dam Safety Program: Dam Inundation Mapping Pilot Study,

published in January 1999.

As indicated in the pilot study report, no complex technical obstacles to

showing dam-break inundation zones on NFIP maps exist. In fact, with the

rapid development and use of Geographic Information System (GIS)

technology and the development of digital flood hazard maps, FEMA

recognizes it is now more logistically feasible than ever to include these

additional zones in the maps. However, a significant number of policy and

programmatic issues must be resolved, and the resolution process will require

the involvement of a wide audience of interested organizations and

stakeholders. In addition, more than one-half of the dams in the United States

have not been analyzed adequately enough to define the impacts of dam

failure. Also, no national standard exists for dam-break analyses; as a result,

these analyses have been prepared using several different models and different

scenarios.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-7

Issue: Dam-break inundation mapping

As discussed in the FEMA pilot study report, the following must occur before

dam-break inundation zones may be included on NFIP maps:

• FEMA must work with interested organizations and stakeholders to

address a number of policy and programmatic issues. The interested

organizations and stakeholders would include, among others, the

Association of State Dam Safety Officials, Association of State

Floodplain Managers, U.S. Army Corps of Engineers, National

Emergency Management Association, community officials, dam

owners, and water management and flood control organizations.

• A sample of dams for which information on dam-break hazards has

been given to the public should be evaluated to determine how the

information was disseminated and to assess whether having such

information on the NFIP maps would have achieved the same or

higher level of awareness.

• FEMA, in cooperation with the stakeholders cited above, would have

to develop protocols for digital dam inundation data that are

compatible with FEMA’s digital map products.

• FEMA must explore the extent to which activities under the National

Dam Safety Act of 1996 can support development of digital mapping

of dam-break inundation zones.

These activities also must be completed before FEMA can make a final

decision regarding whether FEMA will routinely perform dam-break analyses

as part of conducting a flood hazard study and include specifications for such

analyses in existing guidelines and specifications. However, FEMA is mindful

that, in most States, owners of high and significant potential hazard dams, and
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-8

Issue: Dam-break inundation mapping

those who are proposed to construct them, are required by State programs to

perform dam-break analyses and inundation zone mapping for the length of the

danger reach. Where available or required, such mapping is used to prepare

Emergency Action Plans (EAPs). The EAPs are used to the downstream

development that is vulnerable, to coordinate emergency notification

procedures with State and local officials, and to identify evacuation routes.

FEMA also is mindful that, as mentioned earlier, dam-break inundation

analyses have not been performed for more than one-half of the high and

significant potential hazard dams nationwide. Also, while 48 States regulate

the construction of new dams and 46 States have programs to inspect dams to

ensure proper maintenance, most State dam safety programs do not have the

authority to apply current analysis, mapping, and EAP development

requirements to dams and dam owners that pre-date regulatory programs.

Issue: Flood hazard zones for levee-protected areas

Respondent’s Recommendation(s):

One respondent recommended that FEMA establish a new flood hazard zone

designation for levee-protected areas, with an exemption for areas protected by

levees constructed to withstand a flood with a 0.2-percent annual chance of

occurrence. The respondent also recommended that mandatory insurance

could be rated the same as under the Preferred Risk Policy currently available

under the NFIP.

FEMA’s Response: Addressed in Program/Other Actions To Be

Taken

Explanation: The Flood Disaster Protection Act of 1973 mandates the

purchase of flood insurance as a condition of receipt of Federal or federally

related financial assistance for acquisition and/or construction of buildings in

the identified Special Flood Hazard Areas (SFHAs) of any community. The

SFHA is the area of a community that would be inundated by the 1-percent

annual chance (100-year) flood. The purchase of flood insurance on a
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-9

Issue: Flood hazard zones for levee-protected areas

voluntary basis is frequently prudent even outside SFHAs. Flood insurance

premiums for buildings located outside of the SFHA are considerably lower

than for those located inside the SFHA.

The 1973 Act prohibits Federal agencies, such as the Federal Housing

Administration, Veterans Administration, or Small Business Administration,

from making or guaranteeing a loan secured by a building in an SFHA unless

flood insurance has been purchased. The prohibition applies even if the

community in which the building is located is not participating in the NFIP.

Flood insurance cannot be purchased for buildings in nonparticipating

communities.

A lending institution may, as part of its lending policy, require the borrower to

purchase flood insurance at an amount greater than required by statute. A

lending institution may also require the purchase of flood insurance for

buildings located outside the SFHA.

For FEMA to recognize a levee or other flood protection structure as providing

protection from the base flood (and, therefore, include its effects on flood

hazard maps), data must be provided to indicate the structure provides at least

this level of protection. These requirements are summarized in Section 65.10

of the NFIP regulations. Upon receipt of the required information, FEMA will

revise or perhaps remove the SFHA shown on the FIRM in the affected areas

as warranted. If FEMA determines that the levee would be overtopped by a

flood event with a magnitude greater than the base flood, but less than or equal

to a flood with a 0.2-percent annual chance of occurrence (often referred to as

a 500-year flood), FEMA will designate the area as either Zone B or Zone X

(shaded) on the map. The area will also carry a note indicating that the level

of protection provided by the levee. If FEMA determines the levee provides a
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-10

Issue: Flood hazard zones for levee-protected areas

level of protection greater than the 0.2-percent-annual-chance flood, FEMA

will not show any flood hazard zones and will also add a note to indicate the

level of protection provided by the levee.

It is possible that a flood that exceeds the base flood may overtop a levee that

provides base flood protection or cause the levee to fail. Likewise, it is

possible that a flood with a magnitude greater than the 0.2-percent-annualchance flood could occur, thereby overtopping a levee with this level of flood

protection or causing it to fail. For these reasons, FEMA encourages

homeowners in these levee-protected areas to purchase flood insurance. In

addition, FEMA encourages State and local communities to adopt emergency

plans in the eventuality that a disaster occurs. Details such as which

communities are at risk and how to avoid loss of life are included in those

plans. FEMA consistently encourages residents to contact State, County, and

local officials to inquire about emergency plans for the area in which they live.

Under the enabling legislation, FEMA does not have the authority to make

flood insurance mandatory in areas outside the SFHAs shown on NFIP maps.

Furthermore, FEMA does not believe it is necessary to create a new flood

hazard zone for such areas. However, FEMA is cognizant of the potential risk

posed to the structures located in levee-protected areas and will consider

revising existing publications and Web site materials to highlight the risk.

FEMA also will consider providing additional materials to State, county, and

local officials to assist them in highlighting the risk in these areas.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-11

Issue: Data integrity

Respondent’s Recommendation(s):

One respondent suggested that FEMA should review and change its process

for gathering and storing data to improve the accuracy of the Q3, FMSIS, and

CIS data that are distributed to its NFIP partners. The respondent believes

there are a significant number of “data entry” errors in these products and

controls should be put in place to address the inaccuracies.

FEMA’s Response: Adopted/Action Underway

Explanation: Since its inception, FEMA has provided its NFIP partners

with useful, accurate information regarding the processing of flood maps and

the information presented on those maps. As technology has evolved,

particularly over the last 10 years, FEMA has supplemented the many hard

copy products available with an increasing number of digital products. Most

of these products may be obtained directly from the FEMA Map Service

Center (MSC). As indicated on the MSC Web site (www.fema.gov/MSC), the

following digital products, among others, are available from the MSC:

• Digital Q3 Flood Data, which are developed by scanning a hard copy

of the effective flood hazard map and vectorizing a thematic overlay of

flood risks.

• Coastal Barrier Resource Act Q3, which are specialized Q3 Flood

Data products for the coastal barriers (unique landforms that serve as

the mainland’s first defense against the impacts of coastal storms and

erosion).

• Flood Map Status Information Service (FMSIS), which is a service

through which FEMA provides map status information for effective

flood hazard maps, including community name and number, county

name, panels printed for a community, effective date for each printed

panel, and dates of previous maps.

In addition to the digital products/services above, provided through the MSC,

FEMA also distributes hard copy and digital versions of the FEMA

Community Information System (CIS). The CIS provides milestone dates and
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-12

Issue: Data integrity

other detailed processing information for all completed and in-progress

studies/restudies, map revisions, and map amendments.

FEMA has detailed quality control and quality assurance processes in place

with the contractors responsible for creating and distributing the data in

question. The quality control and quality assurance reviews that are performed

by FEMA and its contractors include both manual and automated techniques.

FEMA has and will continue to adjust these processes, when necessary and

cost effective to do so, to address data integrity issues raised by the NFIP

partners who use the data. No specific problems were cited by the respondent.

Issue: Vertical datum usage

Respondent’s Recommendation(s):

Three respondents submitted recommendations regarding the use of vertical

reference datums on the NFIP maps and collateral FIS reports. The

recommendations are as follows:

• As part of its Map Modernization Plan, FEMA should use the most

current vertical datum, NAVD88.

• To minimize confusion at the local level, FEMA should more clearly

label the vertical datum (either NAVD88 or NGVD29) being used for

a particular document, whether that document is a map, description,

Letter of Map Amendment (LOMA), or Letter of Map Revision

(LOMR).

• The marking of the vertical datum should be accompanied by a

FEMA’s Response: Adopted/Action Underway

Explanation: Historically, the most common vertical datum used for FEMA

flood hazard studies/restudies and map revisions has been the National

Geodetic Vertical Datum of 1929 (NGVD29). Subsequent to the

establishment of the North American Vertical Datum of 1988 (NAVD88), new

flood hazard studies are often referenced to NAVD88. One of FEMA’s goals

under its ongoing Map Modernization Program is to convert all flood hazard

studies/restudies and map revisions to NAVD88.

One of FEMA’s goals under its ongoing Map Modernization Program is to

convert all flood hazard studies/restudies and map revisions to NAVD88. To

this end, FEMA has established protocols for applying the proper vertical

datum to new or revised flood hazard data when preparing or revising maps

and related study materials that have been chosen for the datum conversion.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-13

Issue: Vertical datum usage

standard picture or formula that shows how to convert from NAVD88

to NGVD29 or vice versa.

• FEMA should consider converting the elevations shown on the NFIP

maps and related documents for a particular community if that

community uses a local datum and not NGVD29 or NAVD88.

FEMA recognizes that there are, and will continue to be, limiting factors in

achieving this conversion. To evaluate the suitability of a subject jurisdiction

for datum conversion, FEMA plans to gather the following information during

the initial coordination efforts for a study or restudy:

• Datum used for the existing study.

• Number (percentage) of streams that will be revised and the number of

unrevised flooding sources that must be converted to NAVD88 if the

datum conversion option is chosen.

• Conversion factor from NGVD29 to NAVD 88 for the subject

community.

• Confirmation of ability to apply a conversion factor for the subject

community without creating statistically significant variances from the

high to the low conversion values.

• Range of conversions from NGVD29 to NAVD88 across the

community.

• Reference datum used by FEMA for adjacent communities.

• Datum of choice for local surveyors and any known difficulties that

the community would have with the use of NAVD88.

Once this information has been gathered, FEMA will make the final decision

regarding the datum to which the new, revised, and unrevised flood hazard

information will be referenced. When a new or revised study is being

processed, the decision to use NAVD88 over NGVD29 will depend largely on

the data gathered early in the process. Criteria that facilitate a decision to

convert from NGVD29 to NAVD88 are as follows:
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-14

Issue: Vertical datum usage

• All flooding sources in the community are being studied or restudied.

• The conversion range from NGVD29 to NAVD88 for the community

is within 0.2 foot.

• FEMA is able to use NAVD88 for the study/restudy.

• The community is already using NAVD88.

The final decision regarding the datum conversion will be based on a case-bycase cost-benefit assessment performed by FEMA.

When a datum conversion is performed, FEMA will explain the conversion

process in the FIS report that is prepared at the same time as the flood hazard

map. This explanation will include either a picture or formula to show users

how to convert from NAVD 1988 to NGVD 1929 or vice versa. The datum

also will be clearly marked on each flood hazard map panel, on the tables that

appear in the FIS report, and on the Flood Profiles that appear in the report.

For additional information on the conversion process, users also will be

referred to FEMA Publication FIA-20, entitled Converting the National Flood

Insurance Program to the North American Vertical Datum of 1988, and to the

Web site of the Vertical Network Branch, National Geodetic Survey, Coast

and Geodetic Survey, National Oceanic and Atmospheric Administration

(http://www.ngs.noaa.gov).

For nationwide consistency, FEMA will not convert flood hazard maps and

related documents to a local datum, when one is available and used widely.

However, FEMA will continue the practice of providing an explanation of

how to convert elevations from either NGVD29 or NAVD88 to the local

datum in the FIS report.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-15

Issue: Vertical datum usage

FEMA will continue to reference the vertical datum used in making

determinations for LOMAs and LOMRs. In the near future, FEMA also will

consider the appropriateness of providing a formula or picture to explain how

to convert elevations to a local datum or to the other national datum.

Issue: DFIRMs – coordination with States and local governments

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Develop digital mapping standards and procedures in coordination

with State coordinating agencies.

• Provide seed funding to communities that meet minimum standards to

encourage data development and sharing.

• Coordinate with local governments on the availability of digital

mapping data that can be used to prepare more accurate FIRMs.

FEMA’s Response: Adopted/Action Underway

Explanation: Specifications for the new Digital Flood Insurance Rate Map

(DFIRM) are currently being developed. Draft standards for base map

accuracy, graphic representation, and the DFIRM database have been

developed and distributed to all members of the Technical Mapping Advisory

Council for comment. In addition, information regarding the development of

these standards has been provided on FEMA’s Web site for public review and

comment.

Through its Cooperating Technical Communities (CTC) initiative, FEMA is

developing partnerships with State and/or local governments. Under the CTC

initiative, a shared commitment is made by FEMA and State and/or local

governments that includes the planning, funding, and implementation of

various floodplain mapping activities. In addition to a Memorandum of

Agreement, the partners are asked to sign secondary agreements that are

developed based on a menu of work activity templates. These templates

include digital base map sharing, redelineation of floodplains using updated

topographic data, DFIRM preparation, and DFIRM maintenance.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-16

Issue: DFIRMs – coordination with States and local governments

FEMA has established minimum digital base map standards that include

provisions for the accuracy, content, availability, and ability by FEMA to

distribute the digital base map data. Community data that meet or exceed

these minimum requirements will be the first choice for use in DFIRM

preparation, and the U.S. Geological Survey (USGS) Digital Orthophoto

Quarter Quads (DOQQs) will be the default base map.

Coordination with State and local governments regarding the availability of

base map and other pertinent data will be conducted as a part of the scoping

process at the beginning of an optimized map production process designed by

FEMA under Map Modernization. Tasks to complete studies will be

distributed among the Study Contractor (SC), CTC, and Map Coordination

Contractor (MCC) to maximize the expertise and capabilities of each.

Communities, States, and/or regional agencies will also have the opportunity

to review analyses and mapping at intermediate points in the study process.

Because of increased coordination with and involvement by the community,

the number of appeals and protests to preliminary flood maps should decrease.

Issue: DFIRMs – improved base maps

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Use USGS digital orthophoto quarter quad maps as the base maps for

FIRMs to provide adequate landmarks for flood hazard rating.

FEMA’s Response: Adopted/Action Underway

Explanation: As part of FEMA’s Map Modernization Objectives, a new

Digital Flood Insurance Rate Map (DFIRM) product is being developed. The

DFIRM involves converting the existing inventory of manually produced

FIRMs to digital format. With the new digital product, map users will be able
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-17

Issue: DFIRMs – improved base maps

• More accurate base maps that include all streets and street names are

needed.

to address maintenance needs as well as restudy needs. The DFIRM will

include certain basic features and meet minimum mapping requirements.

Additional options will be included depending on available data, community

needs, and available funding.

The DFIRM product is being designed to allow for the creation of interactive,

multi-hazard digital maps. Linkages will be built into a database to allow

users options to access the engineering back-up material used to develop the

map (e.g., hydrologic and hydraulic models, flood profiles, floodway data

table, digital elevation models, and structure-specific data, such as digital

Elevation Certificates and digital photographs of bridges and culverts).

FEMA has established minimum digital base map standards that include

provisions for the accuracy, content, availability, and ability of FEMA to

distribute the digital base map data. These standards require digital base map

data to meet minimum resolution and horizontal accuracy requirements, be up

to date, include roads and road names, and cover the entire community or

county being mapped.

Community data that meet or exceed these minimum requirements will be the

first choice for use in DFIRM preparation and USGS DOQQs will be the

default base map. If USGS DOQQs are used as a base map, road names will

be added from locally available or other sources.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-18

Issue: DFIRMs – Q3 updates

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Update the Q3 Flood Data products annually to include map revisions

made during the previous year.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA is currently engaged in the development of a database

that will report the status of the Q3 Flood Data panels, indicating which ones

have been affected by map revisions or other map changes. Once the map

changes have been identified, a priority list of Q3 updates will be developed.

Issue: DFIRMs – digital conversion and data distribution

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Prepare georeferenced FIRMs in digital format and distribute them via

the Internet or FTP server.

• Continue to support digital conversion and the Map Modernization

plan.

• Deliver DFIRM data in two format(s) that will provide data suitable

for lay and technical (engineering) users.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA’s Map Modernization plan includes conversion of the

entire flood map inventory to a digital format. Additionally, the draft DFIRM

distribution plan being developed under Map Modernization includes a vision

for distribution of DFIRM products as paper or other physical products

(including CD-ROM) in addition to future distribution of DFIRM data for

Internet viewing, Internet download, and use within on-line GIS applications.

Present funding levels do not allow us to fully implement the Map

Modernization plan. However, we are implementing those initiatives that we

can and pursuing various options for funding other initiatives of the plan,

working with FEMA’s Office of Financial Management, the Federal Insurance

Administration, and the President’s Office of Management and Budget.

FEMA’s new DFIRM database design includes all of the basic DFIRM

features needed to print the paper maps and for map determination purposes.

Additional features include engineering models and other back-up information

needed for hydrologic and hydraulic studies. These features would not be
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-19

Issue: DFIRMs – digital conversion and data distribution

needed by all map users and could be unnecessarily large or confusing. The

database is being designed so that certain layers of information could be turned

off or excluded by users who do not want or need them. Follow-on

applications are envisioned that will make this process easy for users to

navigate.

Issue: DFIRMs – suggested mapping enhancements

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Add a buffer zone to the FIRMs that represents the area of uncertainty

around the SFHA based on the accuracy of the contours used to

develop the BFEs.

• Lay out FIRM panels by Township, Range, section lines.

• Include all CBRS areas.

• Prepare all FIRMs in countywide format.

• Print all panels for a community (eliminate all panels not printed).

• Prepare FIRMs at the same scale as local mapping data.

• Include flood depths for SFHAs on the FIRMs.

• Provide potential flood depths for areas behind levees based on the

assumption of no levee or levee failure analysis.

FEMA’s Response: Other

Explanation:

Buffer Zone: FEMA will take this recommendation under advisement.

Range, Township, Section Layout of FIRMs: FEMA is developing its

DFIRM specifications to address nationwide mapping needs. While many

communities and counties in the U.S. do use range, township, and sections as

an important tool in locating structures, they are not used in the New England

and Mid-Atlantic States. FEMA is planning to adopt the USGS 7.5-minute

quadrangle sheet layout (or subdivisions thereof) as its new DFIRM layout

scheme because it can be applied nationwide.

CBRS Areas: Currently, all Coastal Barrier Resources System (CBRS) areas

that have been adopted into public law are included on FIRM panels. CBRS

areas are also included as a layer in the DFIRM product. Users can determine

if a structure is in a CBRS area using the FIRM or DFIRM in conjunction with

a local tax map or property plat.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-20

Issue: DFIRMs – suggested mapping enhancements

• Update hydrologic and hydraulic analyses, especially in rapidly

growing urban areas.

• Add a note to the FIRMs indicating that BFEs are for regulatory, not

necessarily design purposes.

Countywide Layout of FIRMs: Countywide layout of FIRMs is one of the

options that can be applied as the maps are converted to digital format. While

FEMA recognizes the benefits to countywide mapping, it may not be feasible

to convert every county to this format immediately. FEMA plans to produce

DFIRMs on a countywide basis where it is cost effective to do so.

Print All Panels: DFIRMs will be created and distributed in a Geographic

Information System (GIS) format and each data layer or theme (e.g.,

transportation, streams, floodplains, etc.) will be seamless across the

community or county being mapped. Thus, the digital data set will include all

areas of the community, whether or not they are paneled or printed. However,

the cost of printing and distributing the paper maps prohibits printing map

panels in areas where no flood hazards have been identified. An index map is

provided for communities that fall on more than one panel to help orient users

and to explain why maps are not printed in certain areas.

Local Mapping Scales: DFIRMs will be created and distributed in a GIS

format that is scale-less. The scale used for data capture affects the accuracy

of the data, but the digital data can be viewed and printed at any scale. Thus,

the digital data set will allow users to print FIRM data at any scale needed for

local use. However, FEMA plans to continue to print the paper FIRMs at

several standard scales (1"=500', 1"=1,000', and 1"=2,000'). The width of the

floodplains and the complexity of the area being shown generally determine

the use of a particular scale for an area. FEMA strives to strike a balance

between the cost of printing additional panels and the usefulness of the map at

a particular scale.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-21

Issue: DFIRMs – suggested mapping enhancements

Flood Depths for SFHAs: For most areas studied in detail, FIRMs show

flood elevations referenced to a vertical datum. The flood depth at any point

can be determined by subtracting the ground elevation, relative to the same

datum, from the flood elevation. Because the ground elevation can vary

considerably even within short distances, it would be cost prohibitive for

FEMA to establish flood depths for all SFHAs. However, in relatively flat

areas of shallow ponding or sheet flow, the flood depth is provided (Zones AO

and AH) in lieu of flood elevations.

For SFHAs studied by approximate methods of analysis (Zone A), flood

elevations are not computed; consequently, flood depths could not be shown.

In the face of finite study budgets, the Zone A designation is used on NFIP

maps for areas of known flood risk but low existing and/or anticipated

development.

Levee Failure Analysis: FEMA’s policy for levees is that if a levee is

certified to provide protection from the 1-percent annual chance flood, the

model is developed to reflect the existence of the levee, and the flood

elevations shown on the FIRM are based on the protection provided by the

levee. The shaded Zone X designation is used to designate areas that would be

inundated in the event of a levee failure during the 1-percent annual chance

flood. The flood elevations that would occur within these areas if the levee

failed can be determined by taking the elevation from the flood profile for the

riverward side of the levee. If the levee is not certified to provide protection

from the 1-percent annual chance flood, the levee is not reflected in the model,

and the flood elevations on the FIRM in the area behind the levee are the

elevations that would occur if the levee failed.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-22

Issue: DFIRMs – suggested mapping enhancements

Updated Hydrologic and Hydraulic Analyses: It is a fundamental tenet of

the NFIP to provide participating communities with accurate, up-to-date flood

hazard maps. FEMA is limited in that endeavor only by funding.

If funded, FEMA’s Map Modernization plan will make it possible to provide

faster, more frequent map updates. During the 7-year modernization period,

the entire flood map inventory will be converted to a digital format. This

digital format will make revisions more cost effective, thus making it possible

to revise the maps more frequently.

To inventory and prioritize the update, maintenance, and digital conversion

needs of the flood hazard mapping inventory, FEMA developed and designed

the Mapping Needs Update Support System (MNUSS) database. MNUSS will

allow FEMA to evaluate the needs of each community’s map on a point

system that considers mapping benefits and community mitigation and growth

factors.

BFE Note: FEMA will take this recommendation under advisement.

Issue: Product and service fees

Respondent’s Recommendation(s):

Accelerated Processing Fee for LOMCs: FEMA received one response to

the Call for Issues suggesting that an option be provided to requesters of

LOMCs to have the review of the LOMC expedited for an additional cost over

the normal fee.

FEMA’s Response: Evaluation/Study Required

Explanation: A basic tenet of the National Flood Insurance Program

(NFIP) is to identify and map flood hazard areas. These maps are used for

floodplain management and flood insurance rating. The NFIP map inventory

has roughly 100,000 map panels. FEMA could not possibly physically revise

and reprint every map panel affected by projects undertaken that change flood
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-23

Issue: Product and service fees

Fee Waiver for LOMRs to Reflect Flood Mitigation Projects: FEMA

received one response to the Call for Issues suggesting that fees not be charged

for LOMRs requested to reflect public works projects undertaken to mitigate

flood hazards.

hazards each year; therefore, FEMA established the Letter of Map Revision

(LOMR), which is a document that allows FEMA to revise flood hazard

information by letter rather than through a physical map revision.

Additionally, limitations of scale or topographic definition of the source maps

used to prepare the NFIP flood hazard maps, as well as the placement of fill,

can cause small areas that are actually at or above the flood elevation to be

shown within the floodplain on the NFIP map. For such situations, FEMA

created the Letter of Map Amendment (LOMA) and LOMR-based on Fill

(LOMR-F), which are documents that amend or revise flood hazard

information. LOMRs, LOMAs, and LOMR-Fs are collectively known as

Letters of Map Change (LOMCs). A requester of a LOMC is responsible for

submitting all necessary data in support of the LOMC request.

The flood hazard mapping program is primarily funded by NFIP flood

insurance policyholders through a $30 Federal Policy Fee charged to each

flood insurance policy sold. However, the rising number of LOMC requests

annually and their drain on the mapping budget spurred FEMA to institute fees

for certain types of LOMCs to recover the costs of the engineering review of

the data submitted in support of the LOMC requests. These LOMC requests

are reviewed by FEMA in the order of their submittal.

Accelerated processing fee for LOMCs: FEMA may institute an accelerated

fee schedule for those requesters who wish to have the review of their LOMC

expedited. The issue is being taken under advisement by FEMA management.

Fee waiver for LOMRs to reflect Flood Mitigation Projects: FEMA need

to evaluate and study waiving the fees for LOMRs that reflect flood mitigation

projects designed to protect existing structures, as all NFIP policyholders
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-24

Issue: Product and service fees

would seem to benefit from these projects, even those outside the community,

because the overall NFIP flood insurance fund presumably would be

strengthened. Flood mitigation projects designed to allow for future

development, however, would not be considered eligible for a fee waiver, as

the costs of the review should be captured under the costs of the future

development.

Issue: Fees for mitigation products and services

Respondent’s Recommendation(s):

Provide cross-section data and HEC-2 model at no charge: FEMA

received one response to the Call for Issues suggesting that FEMA provide to

communities concurrent with the issuance of the NFIP maps copies of the

cross section data and hydrologic and hydraulic modeling.

Revise the fee-charge system for LOMCS: FEMA received one response to

the Call for Issues indicating that LOMCs should be distinguished between

those requested to correct an error and those requested to reflect the alteration

of topography from regrading or the placement of fill. The respondent stated

that fees should not be charged for LOMCs requested to correct an error. The

respondent suggested that fees only be charged for LOMCs that are based on

an alteration of the ground, such as regrading or placement of fill.

Establish fee for BFE determination in Zone A: FEMA received one

response to the Call for Issues suggesting that fees not be charged for LOMRs

requested to reflect public works projects, such as those to reflect

transportation projects.

FEMA’s Response: Other

Explanation: FEMA maintains facilities to store the technical and

administrative support data developed when National Flood Insurance

Program (NFIP) maps are created or updated, as well as data developed by

revision requestors. A fee charge system is currently in place for responding

to requests received from the public sector for Flood Insurance Study (FIS)

data. Requests for the FIS data typically originate from private engineering

firms hired by private homeowners or developers. Also, occasionally State or

local agencies involved in the construction of roads or bridges seek existing

technical support data from FEMA. The most frequently requested data are

the hydrologic and hydraulic models that support the flood hazard data

presented on maps. Fees are applied to all FIS data requests, except those

received from companies under contract to FEMA, Federal and State agencies,

and community officials.

A basic tenet of the National Flood Insurance Program (NFIP) is to identify

and map flood hazard areas. These maps are used for floodplain management
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-25

Issue: Fees for mitigation products and services

Waive LOMR and CLOMR processing fees for public projects: FEMA

received one response to the Call for Issues indicating that the requirement that

the requester of a LOMA or LOMR-F obtain all supporting data can be

prohibitively expensive when the property is in a Zone A floodplain because

the flood elevation must be determined by a professional engineer. The

respondent suggested that the option be provided for FEMA to develop the

flood elevation for a nominal fee. The respondent indicated that the

economies of scale may allow FEMA to determine flood elevations

inexpensively.

and flood insurance rating. The NFIP map inventory has roughly 100,000 map

panels. FEMA could not possibly physically revise and reprint every map

panel affected by projects undertaken that change flood hazards each year;

therefore, FEMA established the Letter of Map Revision (LOMR), which is a

document that allows FEMA to revise flood hazard information by letter rather

than through a physical map revision.

Additionally, limitations of scale or topographic definition of the source maps

used to prepare the NFIP flood hazard maps, as well as the placement of fill,

can cause small areas that are actually at or above the flood elevation to be

shown within the floodplain on the NFIP map. For such situations, FEMA

created the Letter of Map Amendment (LOMA) and LOMR-based on Fill

(LOMR-F), which are documents that amend or revise flood hazard

information. LOMRs, LOMAs, and LOMR-Fs are collectively known as

Letters of Map Change (LOMCs). A requester of a LOMCs is responsible for

submitting all necessary data in support of the LOMC request.

The flood hazard mapping program is primarily funded by NFIP flood

insurance policyholders through a $30 Federal Policy Fee charged to each

flood insurance policy sold. However, the rising number of LOMC requests

annually and their drain on the mapping budget spurred FEMA to institute fees

for certain types of LOMCs to recover the costs of the engineering review of

the data submitted in support of the LOMC requests.

Provide cross-section data and HEC-2 model at no charge: FEMA

recognizes the advantages of making the cross section data and hydrologic and

hydraulic models available to communities upon release of new or updated

mapping. We also recognize that many communities do not have staff or

necessary software programs to run the models; therefore, the added expense
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-26

Issue: Fees for mitigation products and services

of providing the supporting data along with the maps does not justify doing so.

Consequently, our procedure is to have communities interested in obtaining

the cross section data and hydrologic and hydraulic modeling formally request

the data.

Revise the fee-charge system for LOMCS: FEMA currently does not charge

fees for LOMRs requested to correct errors on the flood hazard maps, or for

LOMRs based solely on better data. FEMA also does not charge fees for

LOMAs. Therefore, FEMA believes that the first respondent’s suggestions are

already the standard procedure.

Establish fee for BFE determination in Zone A: Regarding waiving fees for

LOMRs requested to reflect public works projects, many of these projects,

such as transportation projects, do not provide a benefit to all NFIP

policyholders; therefore, having all NFIP policyholders pay for them is

difficult to justify. Furthermore, for most of these projects, the fee for the

LOMR is such a small percentage of the total budget that FEMA does not

believe the LOMR fee is prohibitively expensive.

Waive LOMR and CLOMR processing fees for public projects: Although

FEMA asks that all requesters of LOMAs and LOMR-Fs attempt to obtain the

1-percent annual chance flood elevation from an authoritative source, FEMA

will determine the flood elevation on behalf of private homeowners if the

flood elevation cannot be obtained from another authoritative source. FEMA

is attempting to keep the cost for LOMAs at a minimum and does not wish to

institute a fee for determining the 1-percent annual chance flood elevation.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-27

Issue: Mapping Needs Assessment Process – approximate A Zones and unmapped flood-prone areas

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Study unmapped floodplains.

• Study unnumbered A zones.

• Update maps to reflect growth and floodplain changes, to correct

inaccuracies, and to provide flood hazard information for unstudied

areas.

• Develop partnerships (FEMA/State/local/private) to map unmapped

flood-prone areas and to provide detailed information for areas

previously mapped through approximate techniques.

• Discontinue unnumbered A zone designations and replace existing A

zones with numbered A zones or D zones.

• Establish a program to perform detailed studies for all areas designated

Zone A Set priority for remapping of communities with maps showing

only approximate A zones, followed by communities with

unnumbered and numbered A zones. Once the Zone A designations

are no longer needed, delete Paragraphs 60.3(a) and (b) of the NFIP

regulations.

• Revise the mapping specifications to include elevation information for

all flood insurance risk zones (A, V, and shaded X), using information

developed by community where appropriate.

FEMA’s Response: Adopted/Action Underway

Explanation: To eliminate or study all Zone A areas immediately would be

cost prohibitive. However, as FEMA implements its modernization plan, Zone

A areas will be addressed as part of the 7-year upgrade to the approximately

100,000-panel flood map inventory. To replace existing A zones with D zones

would be imprudent because for D zones no flood data are available, insurance

is only optional, and rates are high because of the uncertainty of the risk.

FEMA’s prioritization process for flood study updates must consider factors

other than Zone A areas, such as projected development in the floodplain.

However, in the ranking system in MNUSS currently being tested, Zone A

areas are accounted for by considering them in the category with the greatest

Base (1-percent annual chance) Flood Elevation (BFE) change. This tends to

increase the benefits of updating these areas, which in turn will impact the

ranking of the community with respect to other communities nationwide.

FEMA is currently developing guidance, tools, and processes for Zone A areas

to ensure, as the flood map inventory is upgraded, that:

• Zone A areas are converted to detailed studies where the level of

existing and/or proposed development warrants doing so;

• Zone A areas are refined where detailed studies are not warranted; and

• Zone A areas that are not in the floodplain are removed.

Further, through its Cooperating Technical Communities (CTC) initiative,

FEMA is developing partnerships to map unmapped flood-prone areas and to

provide detailed information for Zone A areas.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-28

Issue: Mapping Needs Assessment Process – mapping other hazard areas

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Use future development conditions for hydrologic and hydraulic

calculations in determining flood elevations.

• Develop a process for mapping and managing special hazard areas,

such as alluvial fans.

• Require updated, accurate information for FIRMs, including dam

inundation.

• Identify other hazard areas on the maps, including dam failure and

levee failure zones.

• Develop non-floodplain, flash-flood hazard zone assessment and

mapping methodologies.

• Expand the mapping initiative to identify all watercourses and other

riverine, erosion, mudflow, and coastal flooding sources in the U.S.

FEMA’s Response: Adopted/Action Underway

Explanation: Under the National Flood Insurance Act of 1968, FEMA is

mandated to map only the existing flood hazards for flood insurance purposes;

thus, FEMA must spend its limited budget on that endeavor. However, the

new digital FIRM (DFIRM) product will be more robust, allowing for

incorporation of additional hazard information that the community may

develop easily. Specific future flood hazard mapping considerations are listed

below.

Future Conditions Hydrology: FEMA is preparing a report on

recommendations for using future conditions hydrology for the NFIP and

plans to implement a prototype map with future conditions hydrology in FY

2000.

Alluvial Fans: In response to recommendations in a 1996 report by the

National Research Council’s (NRC’s) Committee on Alluvial Fan Flooding,

FEMA has issued a revised Guidelines for Determining Flood Hazards on

Alluvial Fans (FEMA 1999). The guidelines, as well as related information on

alluvial fan flood hazards, are available on FEMA’s Web site at

http://www.fema.gov/mit/tsd/FT_alfan.htm.

Dam Inundation/Failure: FEMA’s policy on dams is that if the structure is

certified to hold the 100-year flood, the model is developed to reflect the

existence of the structure; if the dam is not certified to hold the 100-year flood,

the dam is not reflected in the model. However, the new DFIRM product will

allow for mapping of dam failure/inundation zones easily.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-29

Issue: Mapping Needs Assessment Process – mapping other hazard areas

Levee Failure: The shaded Zone X designation is used to designate areas that

would be inundated in the event of a levee failure during the 1-percent annual

chance flood.

Flash Flood Methods: FEMA must spend its limited funds on mapping

floodplains rather than on developing new methods. However, communities

that know about such hazards could develop assessment and mapping

methodologies as a CTC partner.

Identify All Watercourses and Other Flooding Sources: Whereas the old

maps include information only for the areas that were studied, usually because

of the costs involved in scribing the information, the new DFIRM product will

show all watercourses and drainage areas that are on the digital base map.

Riverine Erosion Hazard Mapping: Section 577 of the National Flood

Insurance Reform Act of 1994 requires that FEMA submit a report to

Congress that evaluates the economic impact of erosion and erosion mapping

on the NFIP (for Coastal and Great Lakes) and determine if it is

technologically feasible to map Riverine Erosion Hazard Areas. FEMA will

submit a final report to Congress in January 2000.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-30

Issue: Mapping Needs Assessment Process – frequency of map updates

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Faster map updates in developing areas.

• Update FIRMs more frequently.

• Update FIRMs more frequently (allow no more than 20 years between

mapping).

• Issue changes to FIRMs in a more timely manner.

FEMA’s Response: Adopted/Action Underway

Explanation: It is a fundamental tenet of the NFIP to provide participating

communities with accurate, up-to-date flood hazard maps. FEMA is limited in

that endeavor only by funding. However, if funded, FEMA’s Map

Modernization plan will make it possible to provide faster, more frequent map

updates. During the 7-year modernization period, new flood data will be

generated where needed, and the entire flood map inventory will be converted

to a digital format. This digital format will make revisions more cost effective,

thus making it possible to revise the maps more frequently. Further, FEMA

has designed an optimized map production process that will allow map

revisions to be completed within a shorter timeframe. This process will begin

implementation in FY 2000. Further, FEMA is simplifying its letter products

and streamlining its processes for reviewing map amendment and revision

requests initiated by communities and property owners.

Issue: Mapping Needs Assessment Process – process for prioritizing restudies

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Give update priority to Project Impact communities.

• Use the ongoing 5-Year Map Update process and other means to

prioritize restudies in a way that is more responsive to State and local

restudy priorities.

FEMA’s Response: Adopted/Action Underway

Explanation: As part of the MNUSS, FEMA has developed and is testing a

new ranking algorithm for prioritizing flood map needs. This proposed

algorithm evaluates the needs of each community’s map on a point system that

considers mapping benefits and community mitigation and growth factors.

Mapping Benefit Points are assigned for each community based on an estimate

of the total benefits of updating the maps compared to the costs. Additional
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-31

Issue: Mapping Needs Assessment Process – process for prioritizing restudies

• Give update priority to areas that have recently been declared

disasters.

• Include repetitive losses and/or high concentrations of C zone losses as

factors in prioritizing restudy needs.

• Determine where most significant flood damage occurs and allocate

funding to restudy these areas so that the FIRMs can be accurate.

points are assigned based on local mitigation efforts and other factors, such as

participation in Project Impact, the Community Rating System (CRS) rating,

and the age of the effective maps. These points are then totaled to give an

overall score for the community, which is then used for ranking and

prioritization. The flexibility of this approach allows the results to be applied

on a national, regional, State, or local level, depending on how funding

allocations are distributed. FEMA plans to begin using this new prioritization

system in FY 2001 on a limited basis.

FEMA is currently exploring legal authorities and funding for collecting data

in post-disaster environments to aid in reconstruction.

FEMA recognizes that repetitive losses in Zones B, C, and X are an indicator

of a potential mapping problem that should be evaluated when assessing the

mapping needs of a community. Repetitive loss data in Zones B, C, and X

will be provided in MNUSS for informational purposes. Incorporation into the

ranking algorithm is under consideration and is being evaluated for its

usefulness and appropriateness.

Issue: Mapping Needs Assessment Process – specific map update requests

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Glynn County, Georgia, wants help revising FIRM using LIDAR and

digital format Prepare digital FIRM for Louisville, Colorado.

• Update FIRM for Hamden, Connecticut.

FEMA’s Response: No Further Action Required

Explanation: These map update requests have been provided to the

appropriate FEMA Regional Office for consideration, and the needs have been

documented in MNUSS. Because FEMA funding for map updates is limited,

the respondents will be provided information on other FEMA procedures and

initiatives for amending and revising flood hazard maps. Procedures that may
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-32

Issue: Mapping Needs Assessment Process – specific map update requests

• Prepare digital FIRM for Glynn County, Georgia, sooner than the Map

Modernization plan of 7 years.

be initiated by a community or property owner include the Letter of Map

Amendment (LOMA), Letter of Map Revision (LOMR) and Letter of Map

Revision, based on Fill (LOMR-F) processes. CTC partnerships may be

initiated by a State or regional entity or community.

Issue: Mapping Needs Assessment Process – funding issues

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Work with Congress and the Administration to obtain alternative

funding sources so FEMA can meet Map Modernization goals.

• Increase funding for updates.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA is presently working with the President’s Office of

Management and Budget to evaluate various funding sources for map

modernization for the FY 2001 budget. Further, while most of the FY 2000

flood mapping budget comes from the sale of flood insurance policies and map

products and services, Congress did appropriate an additional $5 million for

the flood mapping program.

Issue: Mapping Needs Assessment Process – acceptance of flood data submitted by communities

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Accept studies/methodologies from capable communities.

• Once the FIRMs are digitized, accept any digital updates submitted by

the community.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA has made all of these recommendations possible

through its CTC initiative. Interested communities can contact the CTC

Coordinator at the appropriate Regional Office. For more information, they

can access FEMA’s Flood Hazard Mapping Web site at

www.fema.gov/mit/tsd/CTC_main.htm or call the FEMA Map Assistance

Center at 1-877-FEMA MAP (1-877-336-2627).
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-33

Issue: Mapping Needs Assessment Process – acceptance of flood data submitted by communities

• Employ hydrologic and hydraulic procedures and standards that have

been adopted by State agencies and reviewed by interested local

agencies, when available.

Issue: Mapping Needs Assessment Process – mapping techniques and standards

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Develop digital base map standards to ensure accurate, updated

information.

• Convert floodplain data to a digital format compatible with standard

GIS data formats.

• Update mapping techniques.

FEMA’s Response: Adopted/Action Underway

Explanation:

Digital Base Map Standards: FEMA has established new digital base map

specifications. Community data that meet the minimum requirements will be

the first choice and digital orthophoto quadrangles will be the default base

map.

Digital FIRM: As part of its Map Modernization plan, FEMA will convert all

manually produced flood hazard map panels to a new digital format that is

georeferenced and compatible with standard GIS formats.

Mapping Techniques: FEMA is actively exploring new mapping techniques.

We have been assessing Light Detection and Ranging (LIDAR),

InterFerometric Synthetic Aperture Radar (IFSAR), and LIDAR/IFSAR fusion

for use in gathering topographic and base map information for Flood Insurance

Studies. FEMA’s new LIDAR specifications can be viewed on FEMA’s

Flood Hazard Mapping Web site at www.fema.gov/mit/tsd/MM_lidar.htm.

We are also assessing the available technologies used to automate the different

aspects of floodplain analysis, including hydrology, hydraulics, and mapping.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-34

Issue: Mapping Needs Assessment Process – mapping techniques and standards

The available technologies are tools that work within a GIS using software

applications and database structures to perform any or all of the steps in

floodplain analysis.

Issue: Mapping Needs Assessment Process – requirements for developers

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Require developers to study large areas of planned development.

• If a proposed development exceeds the five acre/50 lot threshold and is

occurring on an unmapped watercourse, the developer should be

required to provide BFE data.

FEMA’s Response: Evaluation/Study Required

Explanation: Subparagraph 60.3(b)(3) of the NFIP regulations states that

the community shall require that all new subdivision proposals and other

proposed developments (including proposals for manufactured home parts and

subdivisions) greater than 50 lots or five acres include within such proposals

1-percent annual chance flood elevation data. Then, in accordance with

Subparagraph 60.3(b)(4), the community must use this 1-percent annual

chance flood elevation information to require that any new construction have

its lowest floor elevated to or above the 1-percent annual chance flood

elevation. This regulation imposes a reasonable requirement that the

developer of significant properties within the floodplain determine flood

elevation information so that the development can be planned to mitigate

potential flood damage.

Regarding a requirement that developers provide BFE data on unmapped

watercourses, Subparagraph 60.3(a)(1) requires permits for all proposed

construction so that communities can determine if the construction is in floodprone areas. Although this subparagraph does not specifically state that flood
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-35

Issue: Mapping Needs Assessment Process – requirements for developers

hazard analysis must be done, it is implied. FEMA will take under advisement

whether to change the regulations to explicitly require BFE data for floodprone, but unmapped, areas.

Issue: Future development hydrology and hydraulics

Respondent’s Recommendation(s):

Several respondents submitted recommendations concerning the use of future

conditions hydrology and hydraulics (H&H) and the depiction of future

conditions on the NFIP maps and related products. The specific

recommendations made by these respondents are summarized below.

• FEMA should create two sets of NFIP maps – one depicting current

conditions and the other depicting future, fully developed conditions.

• FEMA should use future conditions hydrology and map future

conditions whenever a new flood hazard study is performed or an

existing study is updated.

• FEMA should determine four sets of water-surface elevations for each

flooding source:

1. Existing conditions discharge with existing conditions

floodplain;

2. Existing conditions discharge with fully developed conditions

floodplain;

FEMA’s Response: Assigned for Further Study

Explanation: Historically, flood risk information presented on NFIP maps

has been based on the existing conditions of the floodplain and watershed.

Flood hazards may change significantly in areas experiencing urban growth or

changes in physical conditions caused by such geologic processes as

subsidence and erosion. Budgetary constraints have prevented initiating

actions to update NFIP maps with sufficient frequency to reflect the changing

flood hazards brought about by natural and manmade changes.

Communities experiencing urban growth and other changes have expressed a

desire to use future conditions hydrology in regulating watershed

development. FEMA completed a study in 1989 to examine the use of future

floodplain conditions on flood hazard maps. For this study, the advantages

and disadvantages of several options were explored. The recommended option

was for FEMA to incorporate future conditions data prepared by the

communities into NFIP maps for regulatory and insurance purposes, with

reduced insurance rates within the future conditions floodplain. The choice of

using future conditions floodplains was up to the community that would be

expected to use the future conditions data for floodplain management and to
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-36

Issue: Future development hydrology and hydraulics

3. Fully developed conditions discharge with existing conditions

floodplain; and

4. Fully developed conditions discharge with fully developed

conditions floodplain.

Flood insurance rating should be based on the first set of water-surface

elevations while floodplain management should be based on the last set of

elevations.

• FEMA should include future developed conditions Flood Profiles in

the FIS report. One respondent indicated FEMA should show the four

sets of the elevations described above while simultaneously deleting

the 10-, 2-, and 0.2-percent-annual-chance water-surface elevations.

• FEMA should develop guidelines for allowing the use of fully

developed conditions for an entire watershed.

defend their data in case of legal challenges. This option was never initiated,

possibly due to administrative and legal problems associated with insurance

rates within future conditions floodplains.

One of the most exciting and revolutionary aspects of the FEMA Map

Modernization Plan is that it will facilitate ownership of the flood maps by

State and local entities through greatly increased involvement in the flood

mapping process. This will be achieved through cooperative agreements with

State and/or local partners, referred to as Cooperating Technical Community

(CTC) agreements, whereby FEMA will provide flood mapping funds,

technical assistance, and mentoring to the State or local partner, which will

then develop and maintain all or a component of its flood map. The proposed

CTC agreements recognize that hazard identification and mapping must go

hand-in-hand with the responsibility of managing floodplains at the local level.

By creating a strong local program that maintains the connection between

mapping and managing flood hazard areas, the NFIP is likewise strengthened

in its ability to reduce the loss of property and life. This initiative will directly

complement activities under another important FEMA initiative: Project

Impact: Building A Disaster Resistant Community.

Many communities have promoted the use of future land-use conditions in

defining hydrology and floodplains that represent stricter land-use regulations

than the minimum requirements of the NFIP. The use of future conditions

hydrology is consistent with cooperative agreements, modernizing the flood

hazard mapping program, and FEMA’s desire to be flexible and support those

communities that would like to implement stricter land-use regulations.

While some communities do regulate based on future development, others

have been hesitant to enforce these more restrictive standards without Federal
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-37

Issue: Future development hydrology and hydraulics

support. To assist officials in such progressive communities, FEMA has

developed an approach for placing future conditions flood hazard data on the

NFIP maps and related products for informational purposes and for regulating

floodplain development. The planned approach is described in detail in a

report entitled Modernizing FEMA’s Flood Hazard Mapping Program:

Recommendations for Using Future Conditions Hydrology for the National

Flood Insurance Program. This report may be downloaded from FEMA’s

Web site (http://www.fema.gov/mit/tsd/FT_hydro.htm). This report

documents FEMA’s definition of future conditions; summarizes FEMA’s

analysis of the constraints and benefits of mapping that is based on future

conditions hydrology, from a floodplain management, flood insurance rating,

and other uses perspective; and presents specifications for mapping and FIS

report materials.

To display future conditions floodplains on NFIP maps and in the FIS reports,

FEMA must modify the NFIP regulations to incorporate several new

definitions in Section 59.1 and to expand the definition of Zone X in Section

64.3 to include “areas of future conditions 100-year flood.” During FY 2000,

FEMA will initiate the necessary rule-making and distribute a final version of

the previously referenced report to establish guidelines and specifications for

future-conditions mapping.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-38

Issue: Handling of phased improvement projects

Respondent’s Recommendation(s):

One respondent suggested that FEMA revise the NFIP regulations to allow

flood insurance requirements to be removed for portions of phased projects

involving drainage systems for large tract developments as those portions of

the projects are completed, rather than waiting for the projects to be

completed. The respondent indicated such projects are frequent in the

Southwestern United States and involve permanent drainage improvements for

the completed project areas and temporary improvements for the areas under

construction. The respondent suggested that a public agency’s certification

that upstream temporary drainage improvements will be made permanent and

that the improvement will result in the flood hazard designation being removed

should be sufficient for FEMA to revise the FIRM. To accomplish the

changes, the respondent suggested adding a whole new section within Part 65

of the NFIP regulations.

FEMA’s Response: No Further Action Required

Explanation: Historically, flood hazard information presented on NFIP

maps has been based on the existing conditions of the floodplain and

watershed. Flood hazards may change significantly in areas experiencing

urban growth or changes in physical conditions caused by such geologic

processes as subsidence and erosion. Budgetary constraints have prevented

initiating actions to update NFIP maps with sufficient frequency to reflect the

changing flood hazards brought about by natural and manmade changes.

Because the flood hazard information presented on NFIP maps is based on the

existing conditions of the floodplain and watershed, revisions to the flood

hazard information submitted by community officials under Part 65 of the

NFIP regulations also must be based on existing conditions, thus delaying

changes in flood insurance requirements for areas affected by large phased

development projects.

FEMA does, however, have procedures in place for addressing planned or

ongoing improvements within identified floodplains. Communities,

developers, and property owners often undertake improvement projects

intended to reduce the flood hazard in their communities and usually would

like to know the effects these projects will have on the flood hazard

information shown on NFIP maps. Similarly, property owners and developers

who intend to place structures in an SFHA usually must demonstrate to

lending institutions and local officials that these structures will be above base

(1-percent annual chance) flood elevation. Those who are planning such

actions may submit design plans and other engineering data to FEMA and

request that FEMA evaluate them.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-39

Issue: Handling of phased improvement projects

The FEMA response to such requests describes the changes that may

eventually be made to the effective NFIP map and are called Conditional

Letters of Map Revision (CLOMRs). The data required to support CLOMR

requests are detailed in two documents: Appeals, Revisions, and Amendments

to National Flood Insurance Program Maps, A Guide for Community

Officials; and Application/Certification Forms and Instructions for

Conditional Letters of Map Revision, Letters of Map Revision, and Physical

Map Revisions. Both documents may be downloaded from the FEMA Map

Assistance Center, toll free, at 1-877-FEMA MAP (1-877-336-2627).

FEMA also has procedures in place for evaluating ongoing large-scale projects

for construction of flood protection systems that are expected to remove

structures and property from the SFHA. The procedures to determine whether

“adequate progress” has been made on such construction projects, which

involved Federal funds, are documented in Section 61.12 of the NFIP

regulations.

Before FEMA can make a determination of adequate progress on a project,

FEMA must be provided with a copy of the affected NFIP map panels

annotated to show those portions of the effective SFHA that will be removed

and any areas of residual flooding that may remain after completion of the

project. The following information also must be submitted to FEMA to

comply with Paragraph 61.12(c) of the NFIP regulations:

• True copies of all contracts, agreements, leases, instruments, and other

documents involved;

• A statement whether, to the best of the knowledge of the person

responsible for preparing the adequate progress application for the
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-40

Issue: Handling of phased improvement projects

community, the project is the subject matter of litigation before any

Federal, State, or local court or administrative agency, and the purpose

of that litigation; and

• A statement whether the community has previously requested a

determination for the project, detailing the disposition of the previous

request.

Once all required information has been received, FEMA will revise the

affected map panels to show the revised SFHA boundaries and other flood

hazard information along the affected area and to change the SFHA

designation to Zone A99 in areas that will be protected by the flood-control

project once the project is completed. Paragraph 61.12(e) of the NFIP

regulations requires that, following FEMA’s determination that adequate

progress has been made, a responsible community official must annually

certify to FEMA that no present delay in completing the system is attributable

to local sponsors of the project, and that a good-faith effort is being made to

complete the project. Further, Paragraph 61.12(f) of the NFIP regulations

requires that the community notify FEMA if at any time all progress on

completing the project has been halted, or if the project has been cancelled.

For projects that do not involve Federal funds, FEMA can issue LOMRs for

phased projects, provided that the revised portion of the development ties into

the effective flood hazard information shown on the flood hazard map.

FEMA believes the existing procedures and the related NFIP regulations

discussed above are sufficient to address the type of phased project referenced

by the respondent. FEMA will not make the requested changes to the

procedures or regulations.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-41

Issue: LOMA and LOMR – other hazard identification/mapping issues

Respondent’s Recommendation(s):

The recommendation/comment for FEMA was as follows:

• Allow lenders to waive flood insurance requirement when elevation

survey shows structure outside SFHA.

• Replace LOMA and LOMR process with a simple administrative

waiver.

• Provide funding for, and work with the Natural Resources

Conversation Service to update the Rainfall Frequency Atlas of the

United States (TP-40).

FEMA’s Response: Adopted/Action Underway

Explanation: Currently, the National Flood Insurance Program (NFIP)

Regulations are written so that only the Federal Emergency Management

Agency can issue a revision or amendment to the official NFIP maps. Also,

the criteria for determining whether a structure is located outside the Special

Flood Hazard Area (SFHA) vary greatly depending on the date and type of

construction of the structure. Most lenders do not normally have access to the

necessary data required to judge whether these criteria have been met. For

example, it must be determined whether the structure was built on fill material

and whether it was placed before or after the SFHA was first identified at the

site in question. If no fill was involved, then the criteria in Part 70 of the NFIP

regulations apply, and only the lowest adjacent ground elevation must be at or

above the base (1-percent annual chance) flood elevation. If fill was placed

after the SFHA was identified on the site, then the criteria of Section 65.5

apply, and the lowest floor (including basement/crawl space) and lowest

adjacent ground elevations must both be at or above the base flood elevation.

We are currently investigating the possibility of delegating our authority to

issue revisions and amendments; however, we are discovering that the

challenges associated with reviewing cases as discussed above would be very

limiting. Allowing lenders to waive the insurance requirement on the basis of

an elevation survey would not only require changes to the NFIP legislation and

regulations, but would necessitate placing an additional burden on the lenders

while they may not have access to the necessary information to make an

accurate determination.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-42

Issue: LOMA and LOMR – other hazard identification/mapping issues

Replacing the LOMC process with a simple administrative waiver without

recognizing the inaccuracy identified in the NFIP map would only perpetuate

existing problems and penalize property owners. The waiver of the flood

insurance purchase requirement can only be done by the lender that imposed it

under current legislation. Retaining a property in the SFHA when technical

data demonstrate it should not be could be challenged by the property owner in

court and be overturned. The LOMC process was designed to address only the

question of the flood insurance purchase requirement, but has been applied to

floodplain management issues as well.

The U.S. National Weather Service has already initiated and made significant

progress in the revision of TP-40. We have been and are currently committed

to providing funding assistance in this effort, and will continue to attend

coordination meetings to ensure that our agency provides the necessary

support to continue this important endeavor.

Issue: LOMA and LOMR – outreach, communication, education, and publications

Respondent’s Recommendation(s):

The recommendations/comments to FEMA were as follows:

• Provide better guidance/requirements to map determination companies

regarding properties partially in the SFHA.

• Improve the accuracy of flood zone determinations (made by map

determination companies).

FEMA’s Response: No Further Action Required

Explanation: Letters of Map Amendment (LOMAs) and Letters of Map

Revision (LOMRs) continue to be one of the most widely requested products

from FEMA. The resources required to respond to this demand could be put to

better use in the map modernization program if the demand for LOMAs and

LOMRs could be reduced. Implementation of the LOMA 2000 process has

already shown some streamlining of portions of the process, and, when fully
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-43

Issue: LOMA and LOMR – outreach, communication, education, and publications

• Provide determination services for lenders in areas where map

determination companies are scarce.

• Make half-yearly compendia of map panel changes available to map

determination companies via automatic distribution.

• Establish guidelines for communicating LOMA and LOMR

information to map determination companies.

operational, it is anticipated that it will further reduce the time required to

produce responses for these requests. However, the limitations of the mapping

process will continue to drive the larger number of requests for LOMAs and

LOMRs until we are able to make substantial improvements in our map

inventory through our map modernization effort.

The National Flood Insurance Act, as amended, requires that lenders examine

the NFIP map for the community in which they are considering a loan to

determine if the property is in an SFHA. Some lenders choose to rely on a

map determination company for this action. Map determination companies

market themselves to lenders on the basis of their expertise. They are required

by Section 528 of the National Flood Insurance Reform Act of 1994 (NFIRA)

to provide their determination on the Standard Flood Hazard Determination

(SFHD) form and to guarantee the accuracy of the determination. Lenders are

under no obligation to use one company over another. Under the NFIP, only

structures are insurable. If map determination companies are making

determinations for structures without knowing the location of the structure on

the property, they are taking a shortcut that affects the accuracy of their

determination. FEMA has no regulatory authority over map determination

companies and cannot impose procedures or policies on their operations. If

FEMA was to provide a flood zone determination service to lenders, it would

be in direct competition with the map determination companies. Registered

land surveyors can provide this service by plotting the property and structure

on the effective NFIP map when the mortgage survey for the property is

completed.

A compendia of map actions is published in the Federal Register twice yearly,

in addition to the twice-per-month publication of copies of all Letters of Map
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-44

Issue: LOMA and LOMR – outreach, communication, education, and publications

Change (LOMCs) on CD-ROM. The compendia is made available free of

charge to Federal entities for lending regulation, Federal agency lenders, and

States and communities participating in the NFIP, and at cost to all other

interested parties, as required by Section 4101 of the National Flood Insurance

Act, as amended.

The criteria for determining whether or not a property or structure is eligible

for removal from the SFHA by LOMA or LOMR are established in the NFIP

regulations at Part 70 and Section 65.5, respectively. Further, application

forms and instructions are available from FEMA’s Web site for free

downloading. Questions about specific situations that appear not to be

described by the criteria can be answered by calling the FEMA Map

Assistance Center at 1-877-FEMA MAP (1-877-336-2627).

Issue: LOMA and LOMR – map production

Respondent’s Recommendation(s):

The recommendations/comments to FEMA were as follows:

• Use maximum probable BFE from contour interpolation for LOMA

determinations in approximate Zone A areas.

• Lower the level of analysis required for LOMAs in approximate Zone

A.

• Require an annotated map panel be included with each LOMA and

LOMR.

• Require 5-foot freeboard for LOMAs or record LOMA with deed.

FEMA’s Response: Assigned for Further Study

The FEMA publication Managing Floodplain Development in Approximate

Zone A Areas, FEMA 265, July 1995, contains a description of acceptable

methods of estimating a BFE, including contour interpolation. When FEMA

reviews single lot/structure requests for a LOMA/LOMR in approximate Zone

A areas, the first step is to overlay the SFHA from the FIRM at the same scale

with the U.S. Geologic Survey (USGS) topographic quadrangle map to see if a

correlation with the contours exists. If it does, and the structure/property

meets the ± one-half contour-interval rule, then the contour-interpolated BFE

can be used for the determination. If it does not, then the next level of analysis
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-45

Issue: LOMA and LOMR – map production

• Remove LOMA and LOMR repository from community and transfer it

to FEMA.

• Require that each LOMA and LOMR be recorded with the deed for

the affected property and that it be reflected in the next FIRM panel

revision.

• Provide better explanation how individuals and towns apply for

LOMAs.

• Discontinue issuing LOMRs – based on fill.

• Eliminate removing any structures on fill from the SFHA.

• Clarify which LOMC forms must be signed by a registered

professional engineer or licensed land surveyor.

• Streamline LOMA processing using technology and other approaches.

• Require fill compaction for all LOMR and CLOMR requests.

• Eliminate the wholesale issuance of LOMAs and LOMRs.

must be applied. Also, when FEMA reviews requests from private

homeowners for a LOMA/LOMR in approximate Zone A areas, if a BFE

cannot be found through inquiry by the requester from an authoritative source,

then FEMA will develop one for the requester. The level of effort chosen by a

registered professional engineer for a BFE determination for an approximate

Zone A area should be guided by the information in the above-referenced

Zone A manual (FEMA 265). The lowest level of effort described in the

manual is acceptable if the criteria for its use are met.

The format of LOMAs and LOMRs has recently been redesigned in a

standardized “Determination Document” format that will be used for all

LOMAs and LOMRs issued by FEMA. Upon issuance, copies are distributed

by FEMA to the requester, the community, and the State. Copies are also

made available to the general public through the LOMC compendium

subscription service.

LOMAs and LOMRs can remove a structure, a lot or parcel, or a portion of a

lot or parcel from the SFHA. When only a structure is removed from the

SFHA, it cannot be reflected in the SFHA delineation on the map panel

because of scale limitations. When a lot or parcel or a portion of a lot or

parcel is removed from the SFHA, the area may also not be large enough to

revise the SFHA delineation on the map panel, depending on the map panel

scale. In the instances where the removed area could be shown on the map

panel, an annotated copy is retained in the LOMA or LOMR case file and is

used to revise the area the next time the map panel is physically revised and

reprinted. When a LOMA or LOMR is issued, it officially amends or revises

the effective NFIP map for the community. For this reason, a copy of each

LOMA and LOMR is sent to the community’s map repository with
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-46

Issue: LOMA and LOMR – map production

instructions to attach it to the map. This process is necessary because most of

the results cannot be reflected on the map panel and it is not financially

feasible to physically redraw and reprint the map panel each time a LOMA or

LOMR is issued. When a map panel is physically revised and reprinted, all

previously issued LOMAs and LOMRs are reflected where possible and all

valid LOMAs and LOMRs that were not able to be reflected are revalidated by

letter shortly after the revised panel is issued. A listing of incorporated,

revalidated, and superseded LOMC actions is provided to the community with

the revised map panel. The community must maintain copies of the LOMAs

and LOMRs to provide local access to information regarding the community’s

floodplains for its residents and lending institutions. Homeowners can attach a

copy of the LOMC to their deed and transfer it with ownership because the

LOMC is issued for a specific structure or lot or parcel of land, not for a

specific owner. Recording the LOMC with the deed for the property is at the

discretion of the community.

The criteria for removing a property from the SFHA was chosen using the

same reasoning applied for mapping SFHA boundaries. If the flood elevation

is greater than a given elevation contour, it is shown as inundated. If the flood

elevation is less than a given elevation contour, it is shown as not being

inundated. The boundary is determined based on a comparison of the ground

elevation with the BFE. Likewise, when determining if a property is

incorrectly mapped, the elevation of the property is compared with the BFE. If

the property elevation is equal to or greater than the BFE, it is considered

outside the SFHA. To apply a 5-foot freeboard to property elevations would

require doing the same to SFHA boundaries, thereby overstating the limits of

the flood boundaries.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-47

Issue: LOMA and LOMR – map production

Floodplain management is a local community responsibility. Whether or not

fill is permitted in the SFHA cannot be dictated from the Federal level. Some

communities have already chosen to impose that no construction of any kind

may occur within the limits of the 1-percent annual chance (base) flood.

Those local requirements for floodplain management take precedence over the

minimum Federal requirements for participating in the NFIP. To cease issuing

LOMRs – based on fill would be a de facto imposition on property owners of

Federal requirements over local regulations. The minimum requirements of

the NFIP would need to be revised through legislation and policy directives to

implement such changes and take responsibility of floodplain management

away from the communities. It is our contention that to have a viable flood

program, we need to have communities involved in making the appropriate

floodplain management decisions for their community.

Certification requirements for elevation data submitted in support of a LOMA

are described in the NFIP regulations at 44 CFR 70.3. They require

certification by a registered professional engineer or licensed land surveyor.

Certification requirements for data submitted in support of a LOMR are

described in the NFIP regulations at 44 CFR 65.5(c). They require that

elevation data submitted in support of a LOMR be certified by a registered

professional engineer or licensed land surveyor. Information required

concerning certification of fill placement must be certified by either the

community’s NFIP permit official, a registered professional engineer, or an

accredited soils engineer. The instructions for FEMA Form 81-87 Series state

which forms must be certified by a surveyor or engineer. The instructions for

the Elevation Certificate (FEMA Form 81-31) state: “Lowest floor and lowest
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-48

Issue: LOMA and LOMR – map production

adjacent ground elevations certified by a surveyor or engineer will be required

if the certificate is used to support a LOMA or LOMR-F request.”

The LOMC process is currently being automated through the development of

software that can assemble and evaluate the data submitted by property owners

to demonstrate whether or not their property should be excluded from the

SFHA. The software provides generation of the Determination Document and

other required documents without the need of conventional word processing.

This automation can reduce LOMC processing time by several weeks.

The requirement for certifying that fill placement has been done (or will be

done) in accordance with accepted engineering practice is stated in section

65.6 of the NFIP regulations. An exception is provided in the case of a single

lot or structure that has already transferred from a developer to private

ownership to preclude prohibitive costs from being borne by individual

homeowners. Requests to FEMA from developers always require certification

of fill placement, unless the request is for an already existing building.

The LOMA process was originally developed to address properties that were

included in the rectilinear or “blocked out” SFHA boundaries of the first

emergency program maps. These boundaries were meant to be more

simplified for insurance agents and lenders to interpret the maps. Exaggerated

boundaries were acceptable because only owners of structures mapped within

the SFHA could purchase flood insurance coverage. Accurate SFHA

boundaries were not required because the purchase of flood insurance was

voluntary until 1973. Beginning in 1973, lenders were mandated to require

flood insurance coverage for a federally affected mortgage for a structure

mapped within the SFHA, unless they received official notification from the

Federal Insurance Administration that the structure had been removed from the
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-49

Issue: LOMA and LOMR – map production

SFHA. Until the maps could be physically revised to reflect the more correct

curvilinear flood boundaries, a quick process was needed to inform lenders

that a specific property or structure was not in the actual floodplain, even

though mapped to be so. After curvilinearization of the SFHAs, inaccuracies

remained owing to lack of detailed topographic information used to plot flood

boundaries. Until this problem is resolved, the LOMA process will be

necessary.

FEMA cannot issue a waiver of the flood insurance purchase requirement

because it is the lender that places the requirement, as required by the National

Flood Insurance Act. The decision to place the requirement is based on the

lender’s reading of the NFIP map of the community. The community’s

regulation of the property for floodplain management decisions is not subject

to Federal scrutiny unless it fails to enforce the minimum requirement for

program participation. Any measures adopted by the community above and

beyond the minimum Federal requirements are encouraged and take

precedence. If a structure is incorrectly mapped within the SFHA, having the

same insurance requirements as those for structures actually subject to the

defined risk imposed on their structures should not penalize the owner. The

definition of the risk boundary is finite. If it were not, the alternative would be

to require insurance coverage for all structures in the watershed. Including

flood insurance coverage as part of every federally assisted mortgage

transaction would require legislative changes to the National Flood Insurance

Act. The LOMA response has never sent the message that a property is safe

from flooding. To the contrary, it warns that many properties outside the

mapped SFHAs suffer flood damage and advises the purchase of the low-risk

policy available for single-family residential structures outside the SFHA.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-50

Issue: LOMA and LOMR – map production

Development pressures in communities have led to LOMRs – based on fill.

These have been issued to be consistent with the floodway concept presented

in the Flood Insurance Study. Managing floodplain development is the

community’s responsibility. It has the authority to adopt regulations and

ordinances it feels appropriate as long as they incorporate the minimum

program requirements. Some communities already prohibit any construction

in the SFHA. To change the NFIP requirements to exclude elevation by

engineered fill would require major regulation and policy revisions.

Issue: LOMA and LOMR – map accuracy and completeness

Respondent’s Recommendation(s):

The recommendations/comments to FEMA were as follows:

• Refine maps to better account for topographic differences in local

areas.

• Enable communities to correct inaccurate map determinations [by

determination companies] by dropping the guarantee from the

regulations.

FEMA’s Response: No Further Action Required

Explanation: The NFIP is mandated by Congress to provide flood hazard

identification and mapping for the United States, Territories, and Possessions.

Mapping every flood-prone community within the available budget requires

use of much existing topographic data. The level of detail available in many

areas is limited to the USGS 7.5-minute series topographic maps. The LOMA

process was developed to address the resulting inaccuracies generated from

lack of more detailed topographic data. As more detailed data are collected

through the LOMA process, map panels are periodically physically revised

and reprinted to incorporate them when sufficient numbers justify the expense.

If more detailed local topographic data are available, the community can

submit them to FEMA at any time and request that the map for the community

be revised to reflect them.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-51

Issue: LOMA and LOMR – map accuracy and completeness

Lenders that rely on map determination companies do not remove the

responsibility from themselves of making a determination of whether the

subject structure lies in an SFHA according to the NFIP map of the

community. Those who provide map determination services to lenders are

required to guarantee that they have plotted correctly the structure on the NFIP

map and reported correctly what that plot indicates. They are not required to

guarantee that the NFIP map correctly depicts the flood hazard for the

structure. Map determination companies are liable for their errors in

determination, but not for errors in the NFIP maps. Lenders are free to consult

anyone with expertise in interpreting the NFIP maps, including community

officials. If a borrower feels that the determination made for his or her

structure is incorrect, he or she may request, within 45 days of being informed

of it, that FEMA review the determination. Procedures for this process are

described in Section 65.17 of the NFIP regulations. If a borrower feels that the

NFIP map incorrectly delineates the SFHA affecting his or her structure, he or

she may request a LOMA or LOMR from FEMA. Procedures for these

processes are described in Part 70 and Section 65.5, respectively, of the NFIP

regulations.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-52

Issue: LOMA and LOMR – other regulatory requirements

Respondent’s Recommendation(s):

The recommendation/comment to FEMA was as follows:

• Change NFIP regulations to require submittal of BFE data and map

change information [to FEMA] for development proposals involving

at least 50 lots or five acres.

FEMA’s Response: Adopted/Action Underway

Explanation: The NFIP is administered by FEMA as a two-part program

based on cooperation between the community and FEMA. It provides flood

insurance coverage at reasonable rates in exchange for community adoption

and enforcement of sound floodplain management ordinances. The

community is responsible for enforcing the measures it adopts. FEMA’s role

is to provide, with community input, identification and mapping of the flood

hazards affecting the community. Through its Cooperating Technical

Communities (CTC) initiative, FEMA is developing partnerships to map

unmapped flood-prone areas and to provide detailed information for Zone A

areas. Under the CTC initiative, a shared commitment is made by FEMA and

State and/or local governments, which includes the planning, funding, and

implementation of various floodplain mapping activities. In addition to a

Memorandum of Agreement, the partners are asked to sign secondary

agreements that are developed based on a menu of work activity templates.

These templates include the redelineation of floodplains using updated

topographic data, refinement of Zone A boundaries, and hydrologic and

hydraulic analyses and floodplain mapping.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-53

Issue: LOMA and LOMR – other floodplain management issues

Respondent’s Recommendation(s):

The recommendations/comments to FEMA were as follows:

• Revise floodplain management regulations concerning basements

constructed in fill.

• Put mechanism in place to require communities to request map

revisions in a timely manner when measures are taken to mitigate

flood hazards.

FEMA’s Response: No Further Action Required

Explanation: The issue of constructing lowest floors in fill below the BFE

has been a subject of discussion in the floodplain management community. It

is generally recognized that saturated soil will produce more stress than most

structural designs for foundation walls and floors were meant to bear.

Allowing the removal of a structure from the SFHA, and thus the removal of

the mandatory flood insurance coverage, through the placement of fill could

leave an unsuspecting homeowner facing major structural damage that is not

covered by any insurance. The mandate of the NFIP is to ensure that new

construction does not create new opportunity for flood damages. The use of

engineered earth fill to elevate entire structures above potential flood damage

is an accepted practice. The use of engineered earth fill to create barriers to

flooding is also an accepted practice, but it is one that recognizes that earth fill

barriers are not waterproof and do leak. Unless the structure remains elevated

above the BFE, the protection of elevation is lost. Excavating the lowest floor

below the BFE removes the protection provided by elevation that the fill

provided. If the lowest floor criterion was removed from the NFIP regulations

and structures with basements below the BFE were allowed preferred risk

flood insurance coverage with basement and structural damage excluded, the

flood insurance policy would have to be revised and a new rate structure

would have to be developed.

FEMA recognizes that development in the SFHA often causes changes to the

SFHA that are not reflected on the NFIP maps. Provisions exist in Part 65 of

the NFIP regulations that require communities to provide information to

FEMA about changes affecting the community’s SFHAs. FEMA continues to

provide training for community officials through State water resource agencies
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FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-54

Issue: LOMA and LOMR – other floodplain management issues

and the Emergency Management Institute to improve awareness of their

responsibilities as program participants. Many communities face budget

restrictions that limit their ability to provide the necessary data.

Issue: Models and Modeling – coastal modeling technology and funding

Respondent’s Recommendation(s):

The recommendations/comments from two responses for FEMA were as

follows (incorporate new technology into modeling,

• increase funding for development and use of new technologies, and

• establish procedures for identifying better models.

FEMA’s Response: Evaluation/Study Required

Explanation: Models and modeling methodologies play an important role

in the analysis of the hydrology and hydraulics of riverine and coastal

waterways and flooded areas for the communities that participate in the

National Flood Insurance Program (NFIP). There is a need to continually

evaluate the models and methodologies to improve the analysis for general and

specific situations. Under the Call for Issues project, specific issues have been

addressed with suggestions for FEMA action.

A process for developing and implementing new technology into coastal flood

hazard modeling will be integrated into the Map Modernization plan. A

Modernized Coastal Flood Hazard Modeling and Mapping Plan is being

prepared to develop more efficient, high-quality modeling and mapping

products and procedures for FEMA customers and partners. The development

of these products and procedures will help to apply emerging coastal analysis

technologies to develop accurate and complete flood hazard information for

the entire nation. One of the possible funding sources for model development

would be the Cooperating Technical Communities (CTC) partnership for flood

mapping, which is part of the Map Modernization plan. Under this partnership

program models could be developed jointly.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-55

Issue: Models and Modeling – coastal modeling technology and funding

In general, FEMA does not create new models, but FEMA does adopt models

for application based on procedures established in the regulations to review

public domain models and place them on the acceptable models list (i.e.,

Numerical Models Accepted by FEMA for NFIP Usage). To assist in coastal

model application, FEMA has developed the Coastal Hazard Analysis

Modeling Program (CHAMP), which improves the interface among existing

models and methodologies. CHAMP is a Window-interfaced Visual Basic

language program that allows users to enter data, perform coastal engineering

analysis, visualize and tabulate results, and chart summary information with a

user-friendly graphical interface.

In response to comment by Pinellas County, Florida, on their preliminary

Flood Insurance Study (FIS), FEMA will convene a panel of experts to assess

current storm surge modeling, and make recommendations regarding

enhancing current models and developing new models for application to

coastal FISs.

Issue: Models and Modeling – archived hydraulic models

Respondent’s Recommendation(s):

The recommendations/comments from two responses for FEMA were as

follows (problem finding the effective hydraulic models and most current

models,

• establish searchable database to find most recent hydraulic model, and

• each State create a hydraulic model archive.

FEMA’s Response: No Further Action Required

Explanation: A program at the D&D Library establishes digital packages

containing technical support data generated during the preparation of technical

reviews of FISs. These digital records are called the Engineering Study Data

Package (ESDP) and are written to compact disk (CD). The ESDP will have

the most current hydraulic model for the community. Many digital records

have already been completed. FEMA has set up the information request
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-56

Issue: Models and Modeling – archived hydraulic models

process that must also be followed to obtain the CDs. There are no plans to

develop a database to be used to store and retrieve hydraulic models.

Issue: Models and Modeling – standards for water surface elevation reporting

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Change the accuracy standard for modeling from 0.01 to 0.1 foot.

FEMA’s Response: No Further Action Required

Explanation: The regulations state that there will be no increase to the

water-surface elevation (WSEL) for a project constructed in the floodway.

Any investigation into the change to the WSEL for a project should be

evaluated with the original model. If the original model (e.g., HEC-2) reports

the WSEL to two decimal places, then additional analysis would be conducted

with the same model, or with HEC-RAS, and likewise report to two decimal

places for comparison purposes. The focus should be on using the same model

to evaluate different scenarios, and not on some pre-established “accuracy”

standard.

Issue: Models and Modeling – base flood elevations in potholes

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Provide guidance for determining base flood elevations (BFE) for

other that effects in streams, such as potholes.

FEMA’s Response: No Further Action Required

Explanation: Guidance is provided in the Guide lines and Specifications for

Study Contractors regarding areas of ponding where flow collects in

depressions. An AH zone has been established for this situation. This case is

restricted to an area where the depths are limited to 3 feet or less, where no

defined channel exists, and where the flooding is not a result of backwater.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-57

Issue: Models and Modeling – model selection when analyzing levees

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Unsteady flow models consider both the conveyance and storage in the

floodplain.

• Require the use of unsteady flow models when analyzing levees.

FEMA’s Response: Evaluation/Study Required

Explanation: The U.S. Army Corps of Engineers (USACE) is performing a

study of the Mississippi River levees that were designed with a steady State

model. The USACE is looking at the impacts of applying unsteady flow

models in their levee analysis. FEMA will interact with the USACE on the

use of unsteady flow models with suggestions for their project, and FEMA will

consider further evaluation of unsteady flow models to determine if such

models should be required when analyzing levees.

Issue: Models and Modeling – combined rainfall/snowmelt analysis and modeling

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• The interaction of rainfall and snowmelt is not considered; they are

evaluated separately.

• Develop methodologies for estimating runoff generated by combined

rainfall/snowmelt processes.

• Convene a panel of experts to assess a practical solution.

FEMA’s Response: Evaluation/Study Required

Explanation: FEMA convened a panel of experts to look at Snow and Ice

Modeling for Flood Frequency Analysis. The panel discussed the following

issues. There are snow hydrology models in existence for specific cold region

basins that have invested in the data collection and modeling required for

accurate snowmelt simulation. These basin modeling systems are currently in

use for hydrologic and water resources operations by FEMA partners. For

these basins, FEMA may consider using these proven hydrologic models to

estimate flood frequencies and potentially adopt the results for use in NFIP

flood studies. This approach may help develop basin-wide consistency in

hydrology used for flood studies. These models need to be evaluated for

potential use and applicability to the flood study requirements in the NFIP.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-58

Issue: Models and Modeling – combined rainfall/snowmelt analysis and modeling

FEMA will continue to focus research efforts on the use of snowmelt

modeling to estimate flood frequency data; investigate and evaluate the use of

existing operational basin hydrology models for use in NFIP flood studies; and

evaluate the potential use of cold/warm season regression equations.

Issue: Models and Modeling – hydrologic review for map revision requests

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Revised hydraulic modeling may use outdated discharges as input.

• Regulatory authority already exists to evaluate discharges to assess

accuracy before performing hydraulic modeling.

• May require leniency in requirement to tie into unrevised areas.

FEMA’s Response: No Further Action Required

Explanation: As part of the revision process the discharges are reviewed,

and an “existing conditions” model is developed to represent existing

hydrology and existing hydraulics. By regulation there is no need to tie in the

WSEL of a revised area with the area that has not been revised. This could be

made clearer in the next version of the Guidelines and Specifications for Study

Contractors. The FIS may show an abrupt change in the profile due to the

revision of only a portion of the study area. This change is discussed in the

FIS text. At the lower limits of the revised area, the starting WSEL is based

on the slope area method. At the upper limits of the revised area, the WSEL is

determined by the backwater. No specific tie-ins are made at either location.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-59

Issue: Models and Modeling – debris blockage at hydraulic structures

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Blockage at hydraulic structures often increases WSELs and a

standard paragraph in the FIS text states that hydraulic analyses for

this FIS were based on unobstructed flow.

• Blockage should be considered in hydraulic modeling provided there

is historical evidence.

FEMA’s Response: No Further Action Required

Explanation: There is an option in HEC-RAS to consider blockage at a

hydraulic structure. Blockage should be considered and modeled where there

is a history of blockage that caused an increase in the WSEL. However,

blockage should not be assumed for all structures in a study area, but only at

specific, individual structures that warrant such a consideration.

Issue: Models and Modeling – starting water surface elevations in hydraulic models

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• The Guidelines and Specifications for Study Contractors presents

different methods for choosing the starting WSEL for profile

computations.

• Additional situations for determining the starting WSELs should be

added to the document.

FEMA’s Response: Assigned for Further Study

Explanation: Many of the recommendations for setting the starting WSEL

deal with tributaries. As presented in the Guidelines and Specifications for

Study Contractors, normal depth should be used unless a coincident peak

situation is assumed, or the tributary flow depths are higher than the

corresponding main stream events. Several comments are specific, more

detailed examples of these situations. Including detailed examples in the

Guidelines and Specifications may not be warranted. However, there are

future plans to produce a database of technical information related to the NFIP

that will include information about acceptable model practices and

applications. Details, over and above what has been presented in the

Guidelines and Specifications, on specific situation for developing starting

WSELs may be more appropriately included in the technical information

database.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-60

Issue: Models and Modeling – acceptance of HEC-RAS model

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows :

• All Federal agencies that are related to flood control and floodplain

management support the HEC-RAS program.

• Mandate the use of HEC-RAS for steady flow riverine analyses, unless

extenuating circumstances.

• Accept the use of HEC-RAS to revise the effective HEC-2 models.

FEMA’s Response: Evaluation/Study Required

Explanation: Federal agencies involved in flood control and floodplain

management accept the HEC-RAS model; some no longer support previous

models; and others have assisted in the development of the models by

supporting the inclusion of specific routines in the model as an enhancement.

HEC-RAS has the benefit of many options, and there is a powerful program,

CHECK-RAS that provides checks on potential errors in hydraulic modeling

and FEMA’s policy requirements. The use of HEC-RAS and its companion

CHECK-RAS for all studies would provide consistency for the NFIP.

However, as stated in the submitted issue, there are extenuating circumstances

that would dictate that another model be used (e.g., a particular community has

applied, over the years, a model that has been accepted by the State and FEMA

and is particular to the study area or region).

Conversions from HEC-2 to HEC-RAS are becoming more prevalent. A

manual is being developed that will assist HEC-2 users with the application of

the HEC-RAS model. HEC-RAS can import HEC-2 input data with only

minor additions to the bridge data. As a general policy for revisions, the same

model used in the effective study should be used for a revision of a smaller

section of the study area. This policy is considered on a case-by-case basis.

Where justified, HEC-RAS is used to revise the effective HEC-2 models. For

example, if the revision must consider modeling certain types of bridge/culvert

configurations that cannot be modeled in HEC-2, then the HEC-RAS model

will be accepted.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-61

Issue: Models and Modeling – acceptance of HEC-RAS model

FEMA will consider its policy on the use of HEC-RAS in light of the utility of

the model and its CHECK-RAS companion for the NFIP, and the specific

modeling needs required for revisions.

Issue: Models and Modeling – alluvial fan flooding and the NRC recommendations

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• FEMA extended the “alluvial fan flooding” concept to flood hazards

in non-alluvial fan areas.

• Implement the action plan for adopting the recommendations of the

National Research Council regarding alluvial fan flooding.

FEMA’s Response: No Further Action Required

Explanation: FEMA has provided guidelines for mapping alluvial fans in

the Guidelines for Determining Flood Hazards on Alluvial Fans. These

guidelines address recommendations in a 1996 report by the National Research

Council’s (NRC’s) Committee on Alluvial Fan Flooding. The committee was

created by the NRC (upon FEMA’s request for assistance in dealing with

alluvial fan flooding issues) to study how to improve the way FEMA addresses

alluvial fan flooding hazards in the context of the NFIP. The guidelines

provide guidance for the identification and mapping of flood hazards occurring

on alluvial fans, regardless of the level of fan forming activity, including

active and inactive alluvial fan flooding.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-62

Issue: Models and Modeling – NAS methodologies for coastal zone designations

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• When there is a breach on a barrier island due to a storm or hurricane,

the National Academy of Sciences (NAS) methodology allows FEMA

to designate the entire island as a V Zone.

• Adopt the NAS methodology into the mapping program.

FEMA’s Response: Evaluation/Study Required

Explanation: FEMA has adopted the NAS methodology for wave height

analysis that establishes zones based on the 3-foot criterion above the

stillwater elevation. This method does not account for erosion, and wave

height analysis does not establish breaches on a barrier island. Storm-induced

erosion was added as part of the overall analysis to look at beaches and

primary frontal dunes. FEMA will further evaluate the NAS methodology to

determine if it is applicable to designate an entire island as a V Zone where a

breach on the barrier island has occurred.

Issue: Models and Modeling – wave runup determinations

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• In the RUNUP model, the mean wave runup is calculated base on

mean wave height and period.

• Revise wave runup modeling to convert mean wave runup to the 1-

percent annual chance wave runup.

FEMA’s Response: Evaluation/Study Required

Explanation: Runup is viewed in a similar manner as dune erosion in the

fact that the risk methodology for runup is based on the mean value and dune

erosion is based on the median value. Runup is not generally considered as

having an annual chance of occurrence, but the method looks at the runup that

would correspond to a 1-percent chance of stillwater elevation. The runup

analysis in the model application applies the mean; however, FEMA could

consider an evaluation of an extreme runup value, but not a 1-percent chance

of occurrence of wave runup to be applied to the 1-percent chance of the

stillwater elevation.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-63

Issue: Models and Modeling – floodway conveyance concept

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Floodway determination assumes that the discharge stays the same; a

loss of storage occurs as encroachment occurs, and this would cause

the discharge to increase.

• Consider additional studies to determine procedures for storage loss in

floodway computations.

• Set building standards in the floodplain fringe based on the WSEL

plus the surcharge limit.

FEMA’s Response: No Further Action Required

Explanation: At present for steady flow modeling, the same discharge is

used for base flood and floodway analysis. A study was performed as part of

the Community Rating System (CRS) to look at the impact on the surcharge

based on the fill storage lost and on the reduction in conveyance. Thirty

percent of surcharge was a function of loss of storage. For steady flow

modeling, consideration could be given to reducing the maximum allowable

rise criterion from 1.0 foot to 0.7 foot. Unsteady flow models will account for

the differences in flows due to the loss of conveyance and the loss of storage.

FEMA will consider previous analyses, such as the CRS study, and the

possibility of evaluating unsteady flow models to develop procedures that are

applicable to steady flow models to account for the storage loss in floodway

computations.

FEMA will maintain its present position on building standards based on the

base flood elevation. The floodway surcharge limit is based on a future

condition, and future conditions are not considered under the present

regulations. The community can base its own codes on the base flood

elevation plus the surcharge limit; however, FEMA can not make that

recommendation.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-64

Issue: Models and Modeling – simple floodway encroachment

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• In some cases it should be unnecessary to require hydraulic

computations to evaluate the loss of conveyance for floodway

encroachment analysis, especially in urban areas where streets look

like channels.

• Presently, previous to issuing a variance it is necessary to do hydraulic

computations.

• Revise the regulations based on the principles the Certification

Requirements for Simple Floodway Encroachment to benefit those

who submit simple cases and for which an hydraulic study could be

too expensive.

FEMA’s Response: No Further Action Required

Explanation: Floodway analysis deals with the encroachment on the stream

channel and does not include considerations of street flooding which would be

a local urban drainage problem. In addition, variances cannot be issued by a

community within any designated regulatory floodway if any increase in the

flood levels during the base flood would result.

Issue: Models and Modeling – standards for designing and approving USACE structural projects

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• The USACE is developing a new approach to levee height, which is

called “risk-based” design, and this approach will almost always lead

to levee designs with lower heights and less freeboard than by

applying the previous standard.

• Require USACE to use former proven standards when designing or

approving structural projects.

FEMA’s Response: Addressed in Program/Other Actions To Be

Taken

Explanation: Risk-based analysis has been reviewed and considered by

FEMA. At the present time, standards for design and approval are considered

on a case-by-case basis.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-65

Issue: Models and Modeling – standards for designing and approving USACE structural projects

• Any modification to standards for design or approval should require

the approval of all the NFIP partners.

Issue: Mudslide hazard mapping

Respondent’s Recommendation(s):

Two respondents submitted recommendations regarding mudslide hazards and

FEMA’s policy for mapping those hazards. One respondent indicated the

mudslide hazard is handled differently in Oregon and California and attributed

this to incomplete or inaccurate information provided to the States by FEMA.

The respondent recommended that FEMA update all written documentation

regarding mudslide hazards and provide training to Regional Office and State

staff to ensure the situation in Oregon is interpreted consistently for all NFIP

constituents. The other respondent recommended that FEMA show the

mudslide hazards on all affected NFIP maps to comply with existing

legislation for mapping the hazard and implement mitigation requirements for

this hazard in these communities. It is this respondent’s position that the

approach to mudslide/mudflow hazards being taken by FEMA does not fulfill

the intent of the U.S. Congress to provide insurance protection to citizens

affected by this hazard and to mitigate the damage caused by this hazard.

FEMA’s Response: Adopted/Action Underway

Explanation: Through a 1969 revision to Section 1302 of the National

Flood Insurance Act of 1968, the U.S. Congress added “mudslides” to the

flood hazards to be addressed under the NFIP. No unambiguous, technically

acceptable definition of mudslides was provided at that time; however, an

attempt was made a few years later to clarify the term “mudslide” by the

addition of the phrase “i.e., mudflow.” In addition, no standard procedure

existed at that time for identifying mudslide-prone areas and calculating the

degree of mudslide risk. As a consequence, although mudslide coverage was

included in the Standard Flood Insurance Policy (SFIP), no mudslide hazard

maps were published by FEMA and no formal system of mudslide

management and mitigation were established. Insurance premiums were based

entirely on flood risk and did not reflect the presence or absence of mudslide

risk.

In 1979, the Los Angeles County Flood Control District (LACFCD) developed

a methodology for delineating areas of mudslide hazard along the southern

flank of the San Gabriel Mountains in California and to use it to identify

mudslide hazard areas in the City of Sierra Madre. In 1981, FEMA requested

that the National Academy of Sciences (NAS) evaluate the validity of the

LAFCD methodology, determine whether the methodology could be applied in
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FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-66

Issue: Mudslide hazard mapping

other geographic areas, identify any other mudslide prediction methodologies

that might exist, and make recommendations concerning methods for

delineating areas of mudslide hazard.

The NAS undertook a study in 1981 to address the problem of how to

delineate areas prone to mudslides and identify the degree of risk associated

with mudslides in a manner compatible with other hazard mapping prepared

for the NFIP; the resulting report entitled Selecting a Methodology for

Delineating Mudslide Areas for the National Flood Insurance Program, was

published in 1982. The NAS study and report focused on three areas: (1)

definition of the terms used to describe mudslides and related phenomena; (2)

Methodologies for delineating areas to prone to mudslides and related hazards;

and (3) strategies for developing methods for delineating areas prone to

mudslides. A copy of that report may be obtained by contacting either the

NAS or FEMA.

In the “Conclusions” section of the 1982 report, the NAS indicated the

following:

1. The LACFCD methodology appeared to be valid for mud floods on

the alluvial fans of the San Gabriel Mountains, where an extensive

system of debris catchment basins and flood control channels is in

place and there is a long historical record of debris accumulations.

While the general approach may be applicable to the mapping of mud

flood hazards in some other hydrologically similar areas, the

methodology cannot be used as a general mudslide hazard mapping

procedure for the NFIP.
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FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-67

Issue: Mudslide hazard mapping

2. FEMA must decide which phenomena are to be included or excluded

under the mudslide provisions of the NFIP, with reference to a

standard classification scheme for earth movements.

3. FEMA must determine which NFIP needs can and cannot be met by

activities that are already being carried out by various Federal

agencies, specifically citing the activities of the U.S. Geological

Survey, Natural Resources Conservation Service, and the U.S. Forest

Service and suggesting the adaptation of their products for the needs

of the NFIP.

4. FEMA should identify and draw on technical expertise in geology,

soil science, geotechnical engineering, hydrology, and other relevant

fields to select a mapping strategy, formulate criteria for developing

specific methodologies, and evaluate newly developed

methodologies. The NAS suggested cooperative arrangements with

other Federal agencies, establishment of technical advisory and

review bodies, and use of outside consultants to accomplish this.

Section 59.1 of the NFIP regulations provides the following definition for

mudslide:

Mudslide (i.e., mudflow) describes a condition where there is a river,

flow or inundation of liquid mud down a hillside usually as a result of a

dual condition of loss of brush cover, and the subsequent accumulation

of water on the ground preceded by a period of unusually heavy or

sustained rain. A mudslide (i.e., mudflow) may occur as a distinct

phenomenon while a landslide is in progress, and will be recognized as
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FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-68

Issue: Mudslide hazard mapping

such by [FEMA] only if the mudflow, and not the landslide, is the

proximate cause of damage that occurs.

The NFIP definition for a “mudslide (i.e., mudflow) prone area” is “an area

with land surfaces and slopes of unconsolidated material where the history,

geology and climate indicate a potential for mudflow.”

To date, FEMA has not issued maps separately identifying areas subject to

mudslide hazards for the following reasons:

• The delineation on the NFIP maps are not needed to settle flood

insurance claims. The existing definition of mudflows (presented

above) has worked well in settling such claims for more than 20 years.

• The areas affected by these hazards generally overlap with other

mapped flood-prone areas, resulting in the whole affected area being

labeled a Special Flood Hazard Area (SFHA).

• Depiction of these hazards on NFIP maps would trigger hazard

mitigation requirements for the affected communities that would be

nearly impossible to enforce.

Over the next several years, FEMA plans to move forward, under the auspices

of its Map Modernization Program, with the creation of new digital products

using GIS technology. Because these products will be produced using

multiple layers of information, FEMA will need to study the feasibility of

including information on mudslide/mudflow hazards as a layer separate from

the SFHAs. As recommended by NAS, FEMA will coordinate closely with

other Federal agencies to determine what is readily available. Simultaneous

with these coordination efforts, FEMA will also study the additional
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FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-69

Issue: Mudslide hazard mapping

requirements that will be place on the affected communities to effectively

mitigate the hazard and the feasibility of enforcing these requirements.

To address the concern of the first respondent regarding the apparent

inconsistent application of FEMA policy in Oregon and California, appropriate

clarification will be developed and distributed to all FEMA staff in the near

future. Similar information will be disseminated to FEMA’s State agency

partners. If additional in-house training is needed, this will be conducted by

FEMA as well.

Issue: Structure Identification – incorporating new technologies to increase map utility

Respondent’s Recommendation(s):

The recommendation for FEMA was to update and digitize maps to make

them address-driven and more usable.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA produces flood map as authorized by the National

Flood Insurance Act, as amended, to support the National Flood Insurance

Program (NFIP). These flood maps include the flood theme (floodplain and

floodway boundaries, flood elevations) and the base map. The base map

includes non-engineering references features, such as roads, streamlines, and

corporate limits, that users need to precisely locate properties and structures on

the maps. The flood maps do not include information on individual structures

and property parcels. Rather, it is incumbent on the user to use the flood map

produced by FEMA and some other source to locate properties and/or

structures to make mandatory flood insurance purchase determinations and

floodplain management decisions.

One of the key objectives of FEMA’s Map Modernization plan is the Digital

FIRM (DFIRM) product. The DFIRM product involves converting the
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FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-70

Issue: Structure Identification – incorporating new technologies to increase map utility

existing inventory of manually produced FIRMs to digital format. While the

database supporting the DFIRM product will be designed to accommodate

structure and/or parcel data, it will not typically include georeferenced

property data due to funding limitations. When property information becomes

available for distribution, the database users will be able to use the digital

flood data to develop their own address-driven tools.

Issue: Structure Identification – database of insurable and at-risk structures and infrastructure

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Develop, on a nationwide basis, maps showing “local regulatory flood

zones” and identify at-risk structures and infrastructures within zones

as a first step in developing a strategy to reduce and insure flood

losses.

• Perform Global Positioning System (GPS) surveys for all insurable

structures in the Special Flood Hazard Area (SFHA).

FEMA’s Response: Other

Explanation: The NFIP regulations mandate FEMA to map certain flood

zones, most notably the 1-percent annual chance, existing conditions

floodplain. The new DFIRM product enables the inclusion of locally

generated information, such as local regulatory zones and information on atrisk structures and infrastructure. However, FEMA does not have the

resources to initiate such data collection; but encourages it at State and local

levels. The database supporting the proposed new DFIRM product will be

capable to include GPS information on insurable structures in the SFHA;

however, the incorporation of this information will be dependent on funding

limitations.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-71

Issue: Study Process – improve coordination between FEMA and communities for flood studies

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Improve coordination with communities during restudies to improve

accuracy of flood hazard information on maps.

• Involve community officials in map update process.

• Improve coordination during flood studies and restudies to ensure all

affected contractors and agencies (Federal, State, and local) are

involved from the beginning to the end.

• Change revision process; more community involvement; don’t just ask

for data; go get it; work more with USACE, USGS, NRCS, States to

improve map quality.

• Require FEMA contractors handling map revisions to visit the affected

community and conduct field visits with the community officials.

FEMA’s Response: Adopted/Action Underway

Explanation: It is a fundamental tenet of the NFIP to provide participating

communities with the most accurate, up-to-date flood hazard information

available. Because flood hazards change over time and areas that were not

studied or studied only by approximate methods begin to experience

development, FEMA has an ongoing program to update the flood maps, within

funding limits. The traditional study process has been to hire a locally based

Study Contractor (SC) (an architectural/ engineering firm or other Federal

agency) to do fieldwork, develop H&H analyses, and prepare the floodplain

delineations. FEMA’s Technical Evaluation Contractors (TECs) then review

the technical accuracy of the SC work and prepare the flood maps.

FEMA has redesigned the study process to involve the SCs, communities,

State and regional agencies, and FEMA’s Flood Map Production Coordination

Contractors (FMPCCs) (which replaced the TECs) more at the beginning, and

throughout, the study process. Tailored approaches will be developed for each

study that build on the strengths of the participants in the mapping program

(CTCs, SCs, FMPCCs, and other Federal agencies). The effective use of

partnerships will enable FEMA to maximize the capabilities and resources of

other stakeholders in a cost-efficient manner. FEMA’s various mapping

partners will complete their work collaboratively and concurrently.

FEMA’s various Map Modernization objectives have led to the enhanced

study process described above. This process will increase State and regional

agency and community involvement in the mapping process, particularly

through the Cooperating Technical Communities (CTC) initiative. FEMA will

begin implementing this new process in FY 2000.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-72

Issue: Study Process – improve coordination between FEMA and communities for flood studies

It would be impractical for FEMA to go to the community to obtain data. It

would also be cost prohibitive for FEMA to require its contractors, as part of

the review of map revisions, to visit communities. Rather, FEMA must rely

on qualified, licensed professionals to certify data and on communities to

approve the data.

Issue: Study Process – community outreach

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Don’t take community’s word as Gospel; involve the public.

• Work with communities to hold workshops or town hall meetings after

public review period/appeal periods ends.

• Tailor community outreach programs to unique community needs in

the study/restudy process.

• Work with local officials to improve notification of property owners

concerning new or revised NFIP mapping.

FEMA’s Response: Adopted/Action Underway

Explanation: As noted above, FEMA has redesigned its process for

conducting flood studies and restudies to increase community involvement.

FEMA will take all of these suggestions into consideration as it begins

implementing the new process in FY 2000.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-73

Issue: Study Process – zone designation and use

Respondent’s Recommendation(s):

The recommendations/comments for FEMA were as follows:

• Revise study/restudy procedures and funding to ensure entire affected

area can be studied by detailed methods, with BFEs determined.

• Discontinue delineation of new approximate A-zones on maps.

FEMA’s Response: Adopted/Action Underway

Explanation: To discontinue delineation of A zones entirely would be cost

prohibitive. Because of funding limitations, FEMA must prioritize its flood

study updates based on cost/benefit. In the prioritization process, FEMA must

consider factors other than Zone A areas, such as projected development in the

floodplain. However, FEMA is currently developing guidance, tools, and

processes for Zone A areas to ensure, as the flood map inventory is upgraded,

that:

• Zone A areas are converted to detailed studies where the level of

existing and/or proposed development warrants doing so;

• Zone A areas are refined where detailed studies are not warranted; and

• Zone A areas that are not in the floodplain are removed.

Further, through its CTC initiative, FEMA is developing partnerships to

develop detailed information for Zone A areas.

Issue: Study Process – improve quality control and quality assurance of study data

Respondent’s Recommendation(s):

The recommendation for FEMA was to improve the reliability of hydraulic

data used in preparing FIRMs through enhanced quality control efforts by

FEMA and its contractors.

FEMA’s Response: Adopted/Action Underway

Explanation: All FEMA contractors must meet specific Quality

Control/Quality Assurance (QC/QA) requirements. Further, all CTCs will

have to ensure a third party, independent QC review as part of their Mapping

Activity Statements. We feel the existing QC/QA requirements are adequate.
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-74

Issue: Study Process – regionalize mapping coordination contractor activities

Respondent’s Recommendation(s):

The recommendation for FEMA was to move TEC [Technical Evaluation

Contractor] functions to Territories/Regions or shift more responsibilities to

the SCs and eliminate TECs.

FEMA’s Response: Adopted/Action Underway

Explanation: FEMA is always evaluating the most effective means of

contract support for the flood mapping program. Beginning in FY 2000, the

Technical Evaluation Contractor has been replaced with the Flood Map

Production Coordination Contractor (FMPCC). The purpose of the FMPCC is

to support FEMA’s SCs, communities, and CTCs through facilitation,

coordination, and integration of efforts in the completion of flood mapping

projects.

Issue: Study Process – using students at universities in the study process

Respondent’s Recommendation(s):

The recommendation for FEMA was to give grants to universities to allow

students to review and revise FIRMs digitally, because FIRMs are inaccurate

and out of date.

FEMA’s Response: Adopted/Action Underway

Explanation: Although FEMA lacks the resources or funding to actively

develop programs with such institutions, State and local governments and/or

communities can initiate such activities on their own as part of their floodplain

management program or as a CTC partner. The university, if a State

institution, can become a CTC on its own or partner with a community in the

NFIP. Currently, the University of New Hampshire is participating in the

NFIP as a CTC. For more information on CTCs, interested persons can

contact the Regional CTC Coordinator in their FEMA Regional Office (see

Guidance Document at www.fema.gov/mit/tsd/CTC_main.htm for a complete

listing of Regional Offices).
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-75

Issue: Terminology

Respondent’s Recommendation(s):

FEMA received one response to the Call for Issues indicating that the use of

terms “1-percent annual chance” and “100-year” give a false sense of security

to the public because these terms make the likelihood of a flood occurring

seem remote. The respondent suggested using the following terms: “highrisk,” “medium-risk,” and “low-risk.”

FEMA received two responses to the Call for Issues indicating that the zone

designations are confusing. One response indicated that having so many

different zone designations is confusing to insurance agents, who must

determine the proper insurance rate for a property, and suggested paring the

list of zone designations to two: Zone A (flood insurance is required –area

within the 1-percent annual chance floodplain) and Zone X (flood insurance

not required –area not in 1-percent annual chance floodplain, area of minimal

flooding, or area between 1-percent annual chance floodplain and 0.2-percent

annual chance floodplain boundaries).

The other response indicated that there is confusion regarding the two types of

Zone X, shaded and unshaded. Confusion results because an area within Zone

X could be in or out of 1-percent annual chance floodplain.

FEMA’s Response: Other

Explanation: FEMA uses specific terminology and zone designations to

describe the flood hazards that exist. The standard flood event used for the

National Flood Insurance Program (NFIP) is the flood that has a 1-percent

chance of occurring or being exceeded in any given year, which is said to have

a recurrence interval of 100 years.

FEMA designates areas on the NFIP maps using the zones defined in Section

64.3 of the NFIP regulations.

Use of 1-Percent Annual Chance and 100-Year Flood: The use of “1-

percent annual chance” accurately defines the actual risk. While it is

unfortunate that the general public may interpret “1-percent annual chance” as

a low risk, the designations are intended to convey to local governments and

insurance agents the actual risk. These latter entities, being more familiar with

assessing risk, will make the proper interpretation that a 1-percent annual

chance risk will require proper planning and coverage.

FEMA realizes that the term “100-year” can be misleading, causing some in

the general public to believe that such an event can only happen once in a 100-

year period. Therefore, FEMA is careful to define “100-year” as “1-percent

annual chance” in correspondence, reports, and presentations. FEMA is

reviewing its products to ensure that 100-year is always defined as 1-percent

annual chance.

Zone Designations: Local governments as well as insurance agents use the

zone designations. The current zone designations affect local communities’

floodplain management programs and zoning ordinances. Therefore, while
Hazard Identification/Mapping

FEMA’s NFIP Call for Issues Status Report, June 2000 III-1-76

Issue: Terminology

paring the list down to two zones may simplify insurance rating for insurance

agents, it would negatively affect local governments’ floodplain management

programs and zoning ordinances, which often differentiate among the various

zones. Furthermore, the insurance rates are set according to risk, and the

various zones each have varying risks and must be distinguished from one

another. If the zones were not differentiated, some policyholders would be

overpaying for the actual risks of their property, and some would be

underpaying.

FEMA established the shaded and unshaded Zone X areas to differentiate

flood risk in areas for which Federal flood insurance requirements do not

apply. Using the Zone X designation for these areas simplifies flood insurance

agents’ decisions regarding whether Federal flood insurance requirements

apply in an area (they do not in Zone X areas, regardless of whether the area is

a shaded or unshaded Zone X), while still giving local governments valuable

information about variations in the flood risk. The type of 1-percent annual

chance flooding identified by the shaded Zone X represents a moderate risk

because of small contributing drainage area (less than 1 square mile) or low

average depths of flooding (less than 1 foot); therefore, flood insurance is not

required in the shaded Zone X, even though it can represent an area prone to a

1-percent annual chance flood.