Document ID: FEMA-2011-0037-0009
Agency: fema
Document Type: Proposed Rule
Title: National Flood Insurance Program: Insurance Coverage and Rates; Withdrawal
Posted Date: 2012-05-30T04:00Z

[Federal Register Volume 77, Number 104 (Wednesday, May 30, 2012)]
[Proposed Rules]
[Pages 31814-31815]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-13017]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 61

[Docket ID: FEMA-2011-0037]
RIN 1660-AA09 (Formerly 3067-AD02)

National Flood Insurance Program (NFIP); Insurance Coverage and 
Rates

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Proposed rule; withdrawal.

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SUMMARY: The Federal Emergency Management Agency (FEMA) is withdrawing 
a previously published Notice of Proposed Rulemaking (NPRM) concerning 
National Flood Insurance Program (NFIP) insurance premium rates for 
structures that have suffered multiple flood losses. The proposed rule 
would have required owners of such structures to pay a higher premium 
for flood insurance if they declined an offer of funding to eliminate 
or reduce future flood damage. FEMA is withdrawing the NPRM because it 
has been superseded by legislation.

DATES: The Notice of Proposed Rulemaking, published on August 5, 1999 
(64 FR 42632), is withdrawn as of May 30, 2012.

ADDRESSES: The Notice of Proposed Rulemaking and this withdrawal notice 
are available online at http://www.regulations.gov under docket ID 
FEMA-2011-0037. Insert FEMA-2011-0037 in the ``Keyword'' box, and then 
click ``Search.'' The Docket is also available for inspection or 
copying at FEMA, 500 C Street SW., Room 840, Washington, DC 20472.

FOR FURTHER INFORMATION CONTACT: Thomas Hayes, Federal Insurance and 
Mitigation Administration, DHS/FEMA, 1800 South Bell Street, Arlington, 
VA 20598-3020. Phone: (202) 646-3419. Facsimile: (202) 646-7970. Email: 
Thomas.Hayes@dhs.gov.

[[Page 31815]]

SUPPLEMENTARY INFORMATION: 

I. Background

    The National Flood Insurance Act of 1968, as amended, 42 U.S.C. 
4001 et seq., authorizes FEMA to offer insurance against flood losses 
through the National Flood Insurance Program (NFIP). The NFIP allows 
FEMA to offer flood insurance at less-than-full-risk premium rates for 
older structures. This is because Congress recognized that in 
authorizing the NFIP there would be a trade-off: Participating local 
governments would adopt and enforce flood mitigation standards that 
make future construction resistant to future flood loss, but federally-
backed flood insurance would be available for older structures built 
without the benefit of detailed flood risk information.
    To implement the NFIP, FEMA has worked with communities to develop 
the kind of detailed flood risk information needed for flood mitigation 
efforts. This information is reflected in a community's Flood Insurance 
Rate Map (FIRM). Many properties built before the publication of a 
community's FIRM are at a greater risk of incurring flood loss because 
they were constructed prior to the availability of full flood risk 
information. These properties are discussed in FEMA's actuarial 
studies, which show that the owners of buildings insured under the NFIP 
that repetitively flood are not charged premiums that truly reflect the 
risk.
    One of FEMA's highest priorities is to correct the problem of 
multiple flood losses to older structures (target repetitive loss 
buildings) insured under the NFIP. The Notice of Proposed Rulemaking 
(NPRM) defined target repetitive loss buildings as those with four or 
more losses, or with two or more flood losses cumulatively greater than 
the building's value. The NPRM proposed to apply full-risk premiums for 
flood insurance coverage to a target repetitive loss building, if an 
owner declined an offer of mitigation funding authorized by FEMA. Under 
the proposed rule, if the owner of a target repetitive flood loss 
building declined an offer of mitigation funding to relocate, elevate, 
or flood-proof the structure, then that owner would, upon the next 
policy renewal, have to pay full-risk premiums for flood insurance 
coverage under the NFIP.

II. Summary of Comments

    FEMA received seven comments on the NPRM from private parties and 
interest groups. Generally, commenters supported the regulation. Some 
had concerns that it needed to include greater detail on important 
issues. Several commenters had reservations about the NPRM's possible 
effects on the mortgage industry. Specifically, they discussed the 
criteria banks use in issuing mortgages, such as a borrower's ability 
to insure the building, which they stressed is the collateral for the 
loan. If the insurance rate increases to the point where the borrower 
can no longer afford insurance, the collateral for the mortgage is at 
substantial risk and the mortgage is in jeopardy. This relationship to 
the requirements of the NPRM caused concern that the NPRM could 
destabilize the primary and secondary mortgage markets. Commenters also 
expressed the opinion that public notice, or at least notice to the 
mortgage holder, should be incorporated into the premium rate increase 
process. Finally, one commenter was concerned that the NPRM would be 
economically detrimental to homeowners who suffer from flood damages 
through no fault of their own.

III. Reason for Withdrawal

    FEMA is withdrawing the NPRM because it has been superseded by the 
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (the 
Act), Public Law 108-264, 118 Stat. 712, 42 U.S.C. 4001 note. The Act 
amended the National Flood Insurance Act of 1968 by authorizing 
increases to the flood insurance premium rates for building owners of 
repetitive loss who decline offers of mitigation funding (section 102 
of the Act; 42 U.S.C. 4102a). FEMA promulgated a final rule 
implementing this amendment at 44 CFR part 79 on September 16, 2009 (74 
FR 47471). Therefore, this NPRM is no longer necessary.

IV. Conclusion

    FEMA is withdrawing the August 5, 1999 NPRM for the reasons stated 
in this notice.

W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2012-13017 Filed 5-29-12; 8:45 am]
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