Document ID: FEMA-2016-0012-0007
Agency: fema
Document Type: Rule
Title: National Flood Insurance Program (NFIP): Financial Assistance/Subsidy
Arrangement
Posted Date: 2016-11-23T05:00Z

[Federal Register Volume 81, Number 226 (Wednesday, November 23, 2016)]
[Rules and Regulations]
[Pages 84483-84491]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28224]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 62

[Docket ID: FEMA-2016-0012]
RIN 1660-AA86

National Flood Insurance Program (NFIP): Financial Assistance/
Subsidy Arrangement

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Final rule.

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SUMMARY: The Federal Emergency Management Agency (FEMA) is issuing this 
final rule to remove the copy of the Financial Assistance/Subsidy 
Arrangement (Arrangement) and the summary of the Financial Control Plan 
from the appendices of the National Flood Insurance Program (NFIP) 
regulations. It is no longer necessary or appropriate to retain a 
contract, agreement, or any other arrangement between FEMA and private 
insurance companies in the Code of Federal Regulations.

DATES: This final rule is effective December 23, 2016.

FOR FURTHER INFORMATION CONTACT: Claudia Murphy, Director, Policyholder 
Services Division, Federal Insurance and Mitigation Administration, 
Federal Emergency Management Agency, 400 C Street SW., Washington, DC 
20472, (202) 646-2775.

SUPPLEMENTARY INFORMATION:

I. Background and Regulatory History

    The National Flood Insurance Act of 1968 (NFIA), as amended (42 
U.S.C. 4001 et seq.), authorizes the Administrator of the Federal 
Emergency Management Agency (FEMA) to establish and carry out a 
National Flood Insurance Program (NFIP) to enable interested persons to 
purchase insurance against loss resulting from physical damage to or 
loss of real or personal property arising from flood in the United 
States. See 42 U.S.C. 4011(a). Under the NFIA, FEMA has the authority 
to undertake arrangements to carry out the NFIP through the facilities 
of the Federal government, utilizing, for the purposes of providing 
flood insurance coverage, insurance companies and other insurers, 
insurance agents and brokers, and insurance adjustment organizations, 
as fiscal agents of the United States. See 42 U.S.C. 4071. To this end, 
FEMA is authorized to ``enter into any contracts, agreements, or other 
arrangements'' with private insurance companies to utilize their 
facilities and services in administering the NFIP, and on such terms 
and conditions as may be agreed upon. See 42 U.S.C. 4081(a).
    Pursuant to this authority, FEMA enters into a standard Financial 
Assistance/Subsidy Arrangement (Arrangement) with private sector 
property insurers, also known as Write Your Own (WYO) companies, to 
sell NFIP flood insurance policies under their own names and adjust and 
pay claims arising under the Standard Flood Insurance Policy (SFIP). 
Each Arrangement entered into by a WYO company must be in the form and 
substance of the standard Arrangement, a copy of which is in Title 44 
of the Code of Federal Regulations (CFR) Part 62, Appendix A. See 44 
CFR 62.23(a). Since the primary relationship between the Federal 
government and WYO companies is one of a fiduciary nature (that is, to 
ensure that any taxpayer funds are appropriately expended), FEMA 
established ``A Plan to Maintain Financial Control for Business Written 
Under the Write Your Own Program,'' also known as the ``Financial 
Control Plan.'' See 42 U.S.C. 4071; 44 CFR 62.23(f), Part 62, App. B. 
To ensure financial and statistical control over the NFIP, as part of 
the Arrangement, WYO companies agree to adhere to the standards and 
requirements in the Financial Control Plan.
    On May 23, 2016, FEMA published a proposed rule (81 FR 32261) 
proposing to remove the copy of the Arrangement in 44 CFR part 62, 
Appendix A, and the summary of the Financial Control Plan in 44 CFR 
part 62, Appendix B. In addition, FEMA proposed to make conforming 
amendments to remove citations to these appendices in 44 CFR 62.23.
    FEMA proposed to remove the Arrangement from the NFIP regulations 
because it is no longer necessary to include a copy of the Arrangement 
in the CFR. FEMA originally included the Arrangement in the CFR to 
inform the public of the procedural details of the WYO Program. See 50 
FR 16236 (April 25, 1985). There are now more efficient ways to inform 
the public of the procedural details of the WYO Program, and after more 
than 30 years of operation, the public is more familiar with the 
procedural details of the WYO Program and the flood insurance provided 
through WYO companies. Further, the NFIA does not require FEMA to 
include a copy of the Arrangement in the CFR. See 42 U.S.C. 4081. 
Finally, it is inappropriate to codify in regulation a contract, 
agreement, or other arrangement between FEMA and private insurance 
companies.
    With the removal of the copy of the Arrangement from the NFIP 
regulations, FEMA and its industry partners can have flexibility to 
make operational adjustments and corrections to the Arrangement more 
quickly and efficiently. Although the rulemaking process plays an 
important role in agency policymaking, when this process is not 
required or necessary, the requirement to undergo rulemaking can 
unnecessarily slow down the operation of the NFIP by FEMA and its 
industry partners and can result in the use of alternate, less than 
ideal measures that result in business and operational inefficiencies.
    FEMA also proposed to remove the summary of the Financial Control 
Plan in Appendix B, because this information is contained in either 
FEMA's Financial

[[Page 84484]]

Control Plan,\1\ or in 44 CFR Section 62.23. Reprinting these 
requirements elsewhere in the CFR is duplicative and unnecessary.
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    \1\ See National Flood Insurance Program, The Write Your Own 
Program Financial Control Plan Requirements and Procedures (1999), 
http://bsa.nfipstat.fema.gov/manuals/fcp99jc.pdf (last accessed 
April 8, 2016).
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    Finally, FEMA proposed to make conforming amendments to the 
language in 44 CFR 62.23 where FEMA references Appendix A and Appendix 
B of 44 CFR part 62, because those appendices will be removed.

II. Public Comments on the Proposed Rule

    FEMA received five comments in response to the proposed rule, one 
from a WYO company (Allstate/FEMA-2016-0012-0003), one from a member of 
the public, two from organizations representing agents and brokers 
(Independent Insurance Agents & Brokers of America, Inc./FEMA-2016-
0012-0004; National Association of Professional Insurance Agents/FEMA-
2016-0012-0005), and one collective comment from four organizations 
representing insurance companies (The American Insurance Association 
(AIA), The Financial Services Roundtable (FSR), The National 
Association of Mutual Insurance Companies (NAMIC), The Property and 
Casualty Insurers Association of America (PCIAA)/FEMA-2016-0012-0006). 
FEMA responds to these comments below.
    With this regulatory action, FEMA finalizes the proposed rule, with 
one revision made in response to the comments received. FEMA is adding 
a requirement to 44 CFR 62.23 that FEMA must publish the Arrangement in 
the Federal Register at least 6 months prior to the effective date of 
the Arrangement.

A. Notice to WYO Companies of Changes to the Arrangement

    Under the terms of the Arrangement, FEMA must publish in the 
Federal Register each year, and make available to the WYO companies, 
the terms for subscription or re-subscription to the Arrangement. WYO 
companies must notify FEMA of their intent to re-subscribe or not re-
subscribe within 30 days of the publication of the notice in the 
Federal Register. See Financial Assistance/Subsidy Arrangement, Article 
V(B).
    FEMA received two comments requesting FEMA to provide WYO companies 
sufficient notice prior to the effective date of a revised Arrangement 
(FEMA-2012-2016-0003/FEMA-2012-2016-0006). The commenters said this 
would provide time for WYO companies to assess the impact to their 
business (FEMA-2012-2016-0003), and provide time for the marketplace to 
assess the impact of changes, thereby allowing WYO companies to 
determine what, if any, changes would be necessary (FEMA-2012-2016-
0006). They stated that this would also provide WYO companies time to 
decide whether to continue in or withdraw from the NFIP (FEMA-2012-
2016-0003; FEMA-2012-2016-0006). One commenter suggested this notice be 
at least 1 year prior to the effective date of the revised Arrangement 
(FEMA-2012-2016-0003).
    The current Arrangement does not specify how far in advance FEMA 
must publish the Arrangement in the Federal Register. Typically, FEMA 
publishes the Arrangement in the Federal Register in August, and the 
Arrangement becomes effective October 1.\2\ As a result, WYO companies 
typically have less than a month to decide whether to subscribe, 
because they must notify FEMA of their intent to re-subscribe or not 
re-subscribe within 30 days of the publication of the Arrangement in 
the Federal Register. WYO companies commented that they accepted this 
short timeline because they knew that they would receive notice of 
substantive changes to the Arrangement as part of the notice-and-
comment rulemaking process. (FEMA-2016-0012-0006).
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    \2\ See, e.g., 81 FR 51460 (Aug. 4, 2016).
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    FEMA agrees it should provide sufficient notice to WYO companies 
prior to the effective date of a revised Arrangement. Therefore, FEMA 
is adding a requirement to paragraph (a) of Section 63.23 which states 
that each year, FEMA must publish the Arrangement at least 6 months 
before the effective date of the Arrangement. FEMA adds this 6-month 
notice requirement to the NFIP regulations to provide the WYO companies 
time to assess the impact of any changes to the Arrangement, including 
whether to re-subscribe. In addition, by placing this requirement in 
the CFR, FEMA will preserve certainty and protect the ability of WYO 
companies to adjust to any changes to the Arrangement. FEMA believes 
the 6-month notice provision is an appropriate balance between the 1-
year notice proposed by the commenter, and the language of the current 
Arrangement, which does not specify how much notice FEMA must provide 
WYO companies, other than it must publish it each year.
    Much like how WYO companies need time to adjust to changes to the 
Arrangement, FEMA needs time to evaluate the need for changes to the 
Arrangement. A 6-month notice period will enable FEMA, working with WYO 
companies, to incorporate lessons learned from the performance of the 
previous year's Arrangement into the next year's Arrangement. With a 1-
year notice period, FEMA would have to publish the Arrangement for the 
next Arrangement Year the same day the current year's Arrangement takes 
effect. Accordingly, if stakeholders requested a change to the 
Arrangement based on experience for the current year, FEMA could not 
implement the change until nearly two years later. A 1-year notice 
period would also hinder FEMA's ability, in partnership with WYO 
companies, to make these operational adjustments and corrections to the 
Arrangement more quickly and efficiently, which is one of the stated 
purposes of this rule.
    FEMA believes the 6-month notice provision is appropriate because 
it aligns with the amount of notice FEMA typically provides when it 
makes changes, for example, through bulletins announcing program 
changes or changes to the Flood Insurance Manual. Finally, FEMA 
believes the notice provision provides flexibility to both FEMA and WYO 
companies, because the 6-month notice is the minimum notice; FEMA may 
provide more notice than 6 months as necessary.
    In addition to providing notice in the Federal Register 6 months 
prior to the effective date of the Arrangement, FEMA will continue to 
engage WYO companies, as it does currently, before it makes any changes 
to the Arrangement.

B. Uniformity of the Arrangement After Removal From the CFR

    Two commenters stated that removing the copy of the Arrangement 
from the NFIP regulations might lead to significant variation among 
agreements executed between FEMA and the various WYO companies, 
including disparity in the obligations and expectations between 
entities not party to, but affected by, the Arrangement (FEMA-2016-
0012-0003; FEMA-2016-0012-0006). Currently, 44 CFR 62.23(a) requires 
that arrangements between the NFIP and private insurance companies as 
part of the WYO Program be in the ``form and substance'' of the copy of 
the Arrangement found in Appendix A of Part 62. This final rule 
maintains this requirement. However, the rule no longer requires that 
the copy of the Arrangement be found in the CFR. As a result, FEMA will 
continue to enter into the same standard Arrangement with each WYO 
company or other insurer. Any changes FEMA makes to the Arrangement 
will be uniformly reflected

[[Page 84485]]

in each arrangement entered into by WYO companies in a particular year.

C. Publication in the CFR or the Federal Register as a Condition of 
Participation

    One commenter stated that in 1983, as a condition of private 
insurance companies returning to the NFIP, FEMA agreed to propose and 
implement the Arrangement through the Federal Register so that it could 
not be changed quickly (FEMA-2016-0012-0003). The commenter stated that 
the current regulatory structure creates an incentive for FEMA to work 
with the WYO companies to avoid surprises, which promotes the sharing 
of information and helps prevent unintended consequences. A second 
commenter stated that the condition of the return of the private 
insurance companies to the NFIP in 1983 was that the Arrangement would 
be codified in the CFR (FEMA-2016-0012-0006). The second commenter 
echoed the statement of the first commenter, stating that since 1983, 
both FEMA and the companies operate in an atmosphere of trust and 
certainty, as the regulatory process ensures that any issues or 
proposed changes will be adequately aired before implementation. The 
second commenter stated that if FEMA removes the Arrangement from the 
CFR, FEMA must provide a clear, consistently followed, and easily 
enforced alternative notice requirement.
    FEMA is not aware of an agreement between FEMA and WYO companies 
that, as a condition of the WYO companies returning to the flood 
program, FEMA agreed to place the Arrangement in the appendices of the 
NFIP regulations. The WYO Program began in 1983, and FEMA added a copy 
of the WYO Arrangement to the appendices of the NFIP regulations in 
1985 for the stated purpose of informing the public of the procedural 
details of the WYO Program. See 50 FR 16236 (April 25, 1985).
    Two commenters mentioned FEMA's past failure to provide sufficient 
notice of the Arrangement offer prior to the new Arrangement year 
(FEMA-2016-0012-0003 and FEMA-2016-0012-0006). Article V.B of the 
Arrangement requires that a WYO company currently subject to the 
Arrangement inform FEMA of its intent to re-subscribe or not re-
subscribe within 30 days of receiving the offer for the upcoming 
Arrangement Year. The provision is intended to help FEMA determine 
whether a current WYO company intends to continue participating or if 
they intend to not participate again, thus triggering the transition 
process described in Article V.C. No other similar deadlines or other 
timelines exist in statute, regulation, or in the Arrangement.
    In practice, the Article V.B requirement has led FEMA to aim to 
provide the annual offer more than 30 days prior to the beginning of 
the next Arrangement Year to ensure clear program continuity. FEMA 
believes that the addition of the 6-month notice requirement in the 
Federal Register provides a clearer timeline going forward and will 
give WYO companies much greater notice before deciding whether to 
subscribe for the upcoming Arrangement Year.
    Although FEMA is removing the copy of the Arrangement from the NFIP 
regulations, FEMA is committed to maintaining an atmosphere of trust 
and certainty with WYO companies. As discussed, FEMA is adding language 
to the NFIP regulations in Section 63.23(a) providing that each year, 
FEMA will publish the Arrangement in the Federal Register at least 6 
months before the effective date of the Arrangement. However, FEMA 
intends to work with WYO companies through the NFIP's Industry 
Management Branch well before publication of the Arrangement in the 
Federal Register. FEMA believes that the 6-month notice requirement and 
ongoing collaboration efforts will encourage a more responsive 
Arrangement-modification process than what is possible through the 
formalities of the notice-and-comment rulemaking process.

D. Applicability of Government Contract Laws to the Arrangement

    One commenter asked whether WYO companies would be subject to 
government contract laws if FEMA takes the Arrangement out of the 
regulatory process and WYO companies sign individual contracts with 
FEMA (FEMA-2016-0012-0003).
    Since 1983, the first year of the WYO program, FEMA has not 
utilized contracting to effectuate its arrangement with the WYO 
companies and it has no intention of doing so in the future.
    The NFIA authorizes FEMA to ``enter into any contracts, agreements, 
or other arrangements'' with private insurance companies to utilize 
their facilities and services in administering the NFIP, and on such 
terms and conditions as may be agreed upon. 42 U.S.C. 4081(a) (emphasis 
added). FEMA interprets section 4081(a) as distinguishing ``contracts'' 
from ``agreements'' and ``other arrangements.'' Accordingly, FEMA has 
relied upon section 4081(a)'s authority to enter into appropriate 
arrangements with private insurance companies.
    On these grounds, FEMA has never utilized a contracting mechanism 
for the arrangements entered into between private insurance companies 
and FEMA as part of the WYO program. As this rule only changes the 
manner in which the Arrangement is published, FEMA does not intend to 
alter the Agency's longstanding interpretation of the NFIA and does not 
foresee any changes to the legal status of arrangements between FEMA 
and WYO companies.

E. Judicial Deference to FEMA's Interpretation of the Arrangement

    One commenter noted that while the NFIA does not require the 
Arrangement to be codified in the CFR and be subject to public notice 
and comment, it has been so since the Arrangement's inception, and as a 
result, FEMA is entitled to the highest Chevron \3\ deference in any 
judicial challenges to its interpretations of the NFIA under the 
Administrative Procedure Act. The commenter stated that once the 
Arrangement is removed from the CFR, FEMA would be entitled to only 
weaker Skidmore \4\ deference, and that undoubtedly future judicial 
challenges to FEMA's interpretations of the Arrangement will raise the 
fact that FEMA sponsored the Arrangement's removal from the CFR and 
understood the negative impact on the deference given to its 
interpretations (FEMA-2016-0012-0006).
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    \3\ Chevron U.S.A. Inc. v. Natural Resources Defense Council, 
Inc. 467 U.S. 837 (1984).
    \4\ Skidmore v. Swift & Co., 323 U.S. 134 (1944).
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    FEMA acknowledges the commenter's concern. However, FEMA believes 
that the effects of this change will be minimal given that the 
Arrangement is a largely technical document that does little to 
interpret or expand upon statute. Rather, the NFIP's regulations, 
particularly 44 CFR part 62, contain the substantive policies and 
statutory interpretations relevant to the WYO Program. FEMA does not 
expect the level of deference owed to these regulations to change due 
to this rule.

F. Notice to and Involvement of Non-WYO Companies

    Three commenters expressed concern that by removing the Arrangement 
from the rulemaking process, interested persons not a party to the 
Arrangement will not have an opportunity to comment on proposed changes 
(FEMA-2016-0012-0003; FEMA-2016-0012-0004; FEMA-2016-0012-0006). One of 
these commenters stated that the removal of the Arrangement would 
prejudice third-party stakeholders (FEMA-2016-0012-0006). The

[[Page 84486]]

commenter suggested that FEMA establish an alternative mechanism that 
would allow for meaningful stakeholder and public consultation.
    Another commenter stated that the removal of the Arrangement would 
exclude independent insurance agents from the NFIP purchasing process 
at an unacceptable detriment to consumers, and that independent 
insurance agents, through their interactions with consumers, play a 
pivotal role in educating property owners about their flood insurance 
purchasing options and providing information vital to the NFIP's 
current and potential future policy holders (FEMA-2016-2012-0005). This 
commenter pointed out how the notice of proposed rulemaking stated that 
removing the Arrangement and the summary of the Financial Control Plan 
from regulation would keep the Arrangement between FEMA and WYO 
companies, and thus FEMA's position seemed to be that excluding ``the 
multitude of others involved in the program would improve the complex 
NFIP process.'' The commenter noted that in reality, consumers depend 
on the wisdom, experience, and access to information provided by 
independent insurance agents in navigating the program. The commenter 
acknowledged that the Arrangement is technically between FEMA and the 
WYO companies, but asserted that other stakeholders including 
independent insurance agents and members of the public, while not 
technically direct parties to the contract, are equally affected by the 
terms of the Arrangement and therefore must be included in any 
discussions about changes to it. The commenter pointed out that while 
the notice of proposed rulemaking asserts that removing the Arrangement 
would allow FEMA and its ``industry partners'' to be flexible in 
negotiating changes to the Arrangement, FEMA should be aware that its 
``industry partners'' include more than just the WYO companies.
    This commenter expressed ``grave concerns'' about the appearance of 
a lack of transparency that would be engendered in the removal of the 
Arrangement and the summary of the Financial Control Plan, and that 
NFIP stakeholders and members of the public who hope to see the NFIP 
reauthorized and improved over the next 18 months will be shut out of 
any changes being made to these documents if they are removed from 
regulation, and the essential input the stakeholders and public provide 
in the regulatory process would be lost. The commenter referred to 
FEMA's statement in the notice of proposed rulemaking that FEMA has 
carried out the regulatory process 21 times when seeking changes to the 
Arrangement, and the regulatory process is necessary and vital to the 
credibility of both FEMA as a Federal agency and the NFIP as a Federal 
program.
    This commenter noted how, although the notice of proposed 
rulemaking characterized the removal of the Arrangement as 
nonsubstantive, FEMA's ``description of the benefits of the removal 
belies FEMA's intent to make substantive changes to the Arrangement 
upon its removal from regulation.'' The commenter stated that once 
removed from the CFR, changes to the Arrangement would no longer be 
subject to the valuable input of many parties affected by the terms of 
the Arrangement, such as independent agents, consumers, adjusters, 
State insurance regulators, and others.
    A third commenter echoed this commenter's concerns that the 
flexibility and efficiencies that may be gained by removing the 
Arrangement from the rulemaking process will compromise the current 
transparent process where interested persons such as adjusters, 
consumers, or insurance agents who are not a party to the Arrangement 
but are impacted by the Arrangement are afforded an opportunity to 
comment on proposed changes (FEMA-2016-0004). This commenter stated 
that although the notice of proposed rulemaking stated that FEMA will 
continue to post the Arrangement online and in the Federal Register, it 
did not provide information on how the Arrangement negotiation process 
is intended to work, including how interested persons who are not a 
party to the Arrangement but impacted by it can comment on proposed 
changes or participate in the negotiation process. The commenter asked 
that FEMA continue to provide an avenue for interested persons to be 
informed and involved when changes to the Arrangement are considered.
    As discussed, FEMA enters into arrangements with insurance 
companies to utilize their facilities and services in administering the 
NFIP, and on such terms and conditions as may be agreed upon. See 42 
U.S.C. 4081(a). These insurance companies are fiscal agents of the 
United States, and through the terms of the Arrangement, sell NFIP 
flood insurance policies under their own names and adjust and pay 
claims arising under the SFIP. See 42 U.S.C. 4071. As discussed in the 
proposed rule, FEMA is removing the copy of the Arrangement from the 
NFIP regulations, because the NFIA does not require FEMA to include a 
copy of the Arrangement in the CFR and it is inappropriate to codify in 
regulation a contract, agreement, or other arrangement between FEMA and 
private insurance companies.
    While FEMA appreciates the input of other stakeholders such as 
adjusters, consumers, and insurance agents, FEMA does not believe it is 
necessary to establish a formal alternative mechanism to allow for 
stakeholder and public consultation on the Arrangement. All members of 
the public have opportunities to comment on proposed rulemakings 
affecting the NFIP. Such regulations reflect the overarching policies 
and structures of the NFIP.
    In addition to comments made as part of a rulemaking, FEMA 
encourages the public to comment on any other aspect of the NFIP. The 
NFIP Office of the Flood Insurance Advocate provides an excellent 
avenue for voicing comments, questions, or concerns. Members of the 
public can contact the Office via email at insurance-advocate@fema.dhs.gov. Members of the public can also send inquiries to 
Federal Insurance and Mitigation Administration, Federal Emergency 
Management Agency, 400 C Street SW., Washington, DC 20472.

G. Consistency Within the NFIP

    Two commenters stated the current structure, with the copy of the 
Arrangement in the NFIP regulations, helps to promote consistent 
policies, procedures, and claims handling, and helps to shield FEMA 
from political pressures (FEMA-2016-2012-0003; FEMA-2016-2012-0006). 
FEMA believes the NFIP regulations, including the SFIP, help to promote 
consistent policies and claims handling. The copy of the Arrangement in 
the NFIP regulations is a copy of an arrangement between FEMA and 
private insurance companies acting as fiscal agents of the United 
States. As such, FEMA believes removing a copy of the Arrangement from 
the CFR will not have an impact on NFIP policies, procedures, and 
claims handling. The public will still have an opportunity to comment 
on proposed changes to the NFIP, including claims handling, whenever 
FEMA makes changes to its NFIP regulations.

H. Technical Changes

    One commenter asked whether FEMA intended to repeal any portion of 
44 CFR Section 63.23(a), which requires the Arrangement to be in the 
form and substance of the standard arrangement, a copy of which is 
included in Appendix A (FEMA-2016-2012-0003). In the proposed rule, 
FEMA proposed to remove reference to Appendix A in paragraph (a) of 
Section 62.23, because

[[Page 84487]]

FEMA was proposing to remove Appendix A. As a result, FEMA will remove 
reference to Appendix A in the last sentence of paragraph (a) of 
Section 62.23 which will then read: ``Arrangements entered into by WYO 
companies or other insurers under this subpart must be in the form and 
substance of the standard arrangement, titled `Financial Assistance/
Subsidy Arrangement.' ''

I. Comments Outside the Scope of the Rulemaking

    FEMA received two comments outside the scope of this rulemaking. 
One comment was on an individual's observation of a flood event, which 
is outside the scope of this rulemaking (FEMA-2016-2012-0002). Another 
comment recommended changes to the existing Arrangement (FEMA-2016-
2012-0006). As noted in this final rule, FEMA is adding a requirement 
to the regulations that FEMA will publish the Arrangement in the 
Federal Register at least 6 months before the effective date of the 
Arrangement. FEMA will continue to engage WYO companies, as it does 
currently, before it makes any changes to the Arrangement. In 
accordance with the process in the current Arrangement, FEMA published 
notice for the Fiscal Year 2017 Arrangement on August 4, 2016 (81 FR 
51460), but FEMA will consider the commenter's recommendations for 
future possible revisions to the Arrangement.

III. Regulatory Analysis

A. Executive Order 12866, as Amended, Regulatory Planning and Review; 
Executive Order 13563, Improving Regulation and Regulatory Review

    Executive Orders 13563 and 12866 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has not been designated a ``significant 
regulatory action'' under section 3(f) of Executive Order 12866. 
Accordingly, the Office of Management and Budget has not reviewed this 
rule.
    FEMA is issuing a final rule removing Appendix A and B from Part 62 
of 44 CFR. These Appendices contain a copy of the WYO Financial 
Assistance/Subsidy Arrangement (Arrangement) and a summary of the 
``Plan to Maintain Financial Control for Business Written Under the 
Write Your Own Program'' (Financial Control Plan), respectively. In 
addition, FEMA makes conforming amendments to remove citations to these 
appendices in 44 CFR 62.23.
    Since 1983, FEMA has entered into a standard Arrangement with WYO 
companies to sell NFIP insurance policies under their own names and 
adjust and pay SFIP claims.\5\ Since 1985, FEMA has included a copy of 
the Arrangement in the CFR. In order to maintain the Arrangement, FEMA 
has undertaken rulemaking approximately 21 times to update the copy of 
the Arrangement in the regulations. The NFIA does not require FEMA to 
place the Arrangement in the CFR. Accordingly, undergoing such 
rulemakings is an unnecessary requirement.
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    \5\ As of August 2016, 73 private property or casualty insurance 
companies participate in the Write Your Own program. Federal 
Emergency Management Agency, Write Your Own Flood Insurance Company 
List, http://www.fema.gov/wyo_company (last accessed August 25, 
2016).
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    FEMA is removing the copy of the Arrangement in 44 CFR part 62, 
Appendix A, because the NFIA does not require FEMA to include a copy of 
the Arrangement in the CFR. Therefore, its inclusion is no longer 
necessary. In 1985, FEMA added a copy of the Arrangement to the 
regulations to inform the public of the procedural details of the WYO 
Program. However, since that time, there have been technological 
advances for disseminating information to the public, and there are now 
more efficient ways to inform the public of the procedural details of 
the WYO Program. For example, FEMA now posts a copy of the Arrangement 
on its Web site. This serves the purpose of promoting awareness and 
disseminating program information, without needing to go through the 
rulemaking process. This rulemaking does not impose any changes to the 
current Arrangement with WYO companies. As such, FEMA believes there 
will not be any costs imposed on participating WYO companies because of 
this final rule.
    FEMA received a public comment highlighting that ``circumventing'' 
the rulemaking process could permit FEMA to more easily make changes to 
the Arrangement. Changes to the Arrangement would not necessarily occur 
more frequently or be any more impactful in nature than they had been 
thus far. The pattern of changes seen in the history of the 
Arrangement, with relatively frequent minor changes and the occasional 
substantive adjustment, is expected to continue into the future and 
will not change due to this rule. FEMA will continue to enter into the 
Arrangement with WYO companies, and make available the Arrangement, as 
well as the terms for subscription or re-subscription, through Federal 
Register notice. FEMA will also publish the Arrangement at least 6 
months prior to it becoming effective.
    One of the benefits associated with this final rule is enhanced 
flexibility for FEMA and WYO companies to make operational adjustments 
to the Arrangement more quickly and efficiently in order to be more 
responsive to the needs of WYO companies and the operation of the NFIP. 
FEMA received two public comments requesting that FEMA provide WYO 
companies notice prior to the effective date of a revised Arrangement. 
FEMA agrees it should provide notice to the WYO companies and will 
publish the Arrangement in the Federal Register at least 6 months 
before the effective date of the Arrangement. This 6-month notice 
requirement will provide the marketplace time to assess the impact of 
any changes to the Arrangement, including whether to re-subscribe. FEMA 
believes that the primary benefits will be reinforced as FEMA, working 
with WYO companies, is able to make operational adjustments and 
corrections to the Arrangement more quickly and efficiently 
incorporating lessons learned from the performance of the previous 
year's Arrangement into the next year's Arrangement. These revisions, 
both the removal from the CFR as well as the 6- month advance notice, 
will preserve certainty, maintain transparency, and protect the ability 
of WYO companies to adjust to any changes to the Arrangement.
    As discussed in the proposed rule, although the rulemaking process 
plays an important role in agency policymaking, when this process is 
not required or necessary, the requirement to undergo rulemaking can 
unnecessarily slow down the operation of the NFIP and can result in the 
use of alternate, less than ideal measures that result in business and 
operational inefficiencies. The elimination of the administrative 
burden that accompanies repeated updates to the CFR and the use of 
alternative, less than ideal measures are an additional benefit. FEMA 
believes there will be no economic impact associated with implementing 
the final rule.
    Additionally, FEMA will remove a summary of the Financial Control 
Plan. FEMA removed the plan itself in 1985

[[Page 84488]]

thus FEMA does not anticipate any economic impacts from removing the 
summary.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) 
requires agency review of proposed and final rules to assess their 
impact on small entities. When an agency promulgates a final rule under 
5 U.S.C. 553, after being required by that section or any other law to 
publish a general notice of proposed rulemaking, the agency must 
prepare a final regulatory flexibility assessment (FRFA) or have the 
head of the agency certify pursuant to 5 U.S.C. 605(b) that the rule 
will not, if promulgated, have a significant economic impact on a 
substantial number of small entities. Having conducted and published an 
Initial Regulatory Flexibility Analysis (IRFA) for the proposed rule, 
and having received no public comments on that analysis, FEMA does not 
believe this final rule will have a significant economic impact on a 
substantial number of small entities.
    NFIA authorizes FEMA to ``enter into any contracts, agreements, or 
other arrangements'' with private insurance companies to utilize their 
facilities and services in administering the NFIP, and on such terms 
and conditions as may be agreed upon. See 42 U.S.C. 4081. Pursuant to 
this authority, FEMA enters into a standard Arrangement with private 
sector property insurers, also known as WYO companies, to sell NFIP 
flood insurance policies under their own names and adjust and pay 
claims arising under the policy. Since the primary relationship between 
the Federal government and WYO companies is one of a fiduciary nature, 
FEMA established the Financial Control Plan. The NFIA does not require 
FEMA to include a copy of the Arrangement or a summary of the Financial 
Control Plan in the CFR.
    ``Small entity'' is defined in 5 U.S.C. 601. The term ``small 
entity'' can have the same meaning as the terms ``small business'', 
``small organization'' and ``small governmental jurisdiction.'' Section 
601(3) defines a ``small business'' as having the same meaning as 
``small business concern'' under Section 3 of the Small Business Act. 
This includes any small business concern that is independently owned 
and operated, and is not dominant in its field of operation. Section 
601(4) defines a ``small organization'' as any not-for-profit 
enterprises that are independently owned and operated, and are not 
dominant in their field of operation. Section 601(5) defines small 
governmental jurisdictions as governments of cities, counties, towns, 
townships, villages, school districts, or special districts with a 
population of less than 50,000. No small organizations or governmental 
jurisdictions participate in the WYO Program and therefore will not be 
affected.
    The Small Business Administration (SBA) stipulates in its size 
standards \6\ the largest an insurance firm that is ``for profit'' may 
be and still be classified as a ``small entity.'' The small business 
size standards for North American Industry Classification System 
(NAICS) code 524126 (direct property and casualty insurance carriers) 
is 1,500 employees. The size standard for the four remaining applicable 
codes of 524210 (Insurance Agencies and Brokerages), 524113 (Direct 
Life Insurance Carriers), 524292 (Third Party Administration of 
Insurance and Pension Funds) and 524128 (Other Direct Insurance) is 
$7.0 million in revenue as modified by the SBA, effective February 26, 
2016.
---------------------------------------------------------------------------

    \6\ U.S. Small Business Administration, Table of Small Business 
Size Standards, February 26, 2016. https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf.
---------------------------------------------------------------------------

    This final rule directly affects all WYO companies. There are 
currently 73 companies participating in the WYO Program; these 73 
companies are subject to the terms of the Arrangement and the standards 
and requirements in the Financial Control Plan. FEMA researched each 
WYO company to determine the NAICS code, number of employees, and 
revenue for the individual companies. FEMA used the open-access 
database, www.manta.com, as well as www.cortera.com to find this 
information for the size determination. Of the 73 WYO companies, FEMA 
found a majority of 50 firms were under code 524210 (Insurance Agencies 
and Brokerages), of which 19 firms or 38 percent were found to be small 
(with only one lacking full data but presumed to be small). The second 
largest contingent of 13 firms were under code 524126 (direct property 
and casualty insurance carriers), of which 9 firms or 69 percent were 
found to be small (with only one missing data points but presumed to be 
small). Of the other three aforementioned industry codes, 524113, 
524292 and 524128, there was one firm under each and none were small. 
Finally, six firms were missing industry classifications, and FEMA 
believes that all but one are likely to be small. In total, we found 
that 33 of the 73 companies are below these thresholds, and therefore 
will be considered small entities. Consequently, small entities 
comprise 45 percent of participating companies.
    FEMA believes that the final rule will impose no direct cost on any 
participating company because it is removing a copy of the Arrangement 
and a summary of the Financial Control Plan from the CFR, and is not 
making substantive changes to the Arrangement or the Financial Control 
Plan itself.
    During the proposed rule public comment period, FEMA did not 
receive any comments discussing the IRFA. Pursuant to the RFA (5 U.S.C. 
605 (b)), the administrator of FEMA hereby certifies that this rule 
will not have a significant economic impact on a substantial number of 
small entities. Although a substantial number of these small entities 
will be affected by the final rule, none of these entities will be 
significantly impacted.

C. Unfunded Mandates Reform Act of 1995

    Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency ``shall, unless 
otherwise prohibited by law, assess the effects of Federal regulatory 
actions on State, local, and tribal governments, and the private sector 
(other than to the extent that such regulations incorporate 
requirements specifically set forth in law).'' Section 202 of the Act 
(2 U.S.C. 1532) further requires that ``before promulgating any general 
notice of proposed rulemaking that is likely to result in the 
promulgation of any rule that includes any Federal mandate that may 
result in expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector, of $100 million or more (adjusted 
annually for inflation) in any one year, and before promulgating any 
final rule for which a general notice of proposed rulemaking was 
published, the agency shall prepare a written statement'' detailing the 
effect on State, local, and tribal governments and the private sector. 
The final rule will not result in such an expenditure, and thus 
preparation of such a statement is not required.

D. National Environmental Policy Act of 1969 (NEPA)

    Under the National Environmental Policy Act of 1969 (NEPA), as 
amended, 42 U.S.C. 4321 et seq. an agency must prepare an environmental 
assessment and environmental impact statement for any rulemaking that 
significantly affects the quality of the human environment. FEMA has 
determined that this rulemaking does not significantly affect the 
quality of the human environment and consequently has not prepared an

[[Page 84489]]

environmental assessment or environmental impact statement. Although 
rulemaking is a major Federal action subject to NEPA, the list of 
exclusion categories within DHS Instruction 023-01-001-01 includes a 
categorical exclusion for rules that are of a strictly administrative 
or procedural nature (A3). This is a rulemaking related to an 
administrative function. An environmental assessment will not be 
prepared because a categorical exclusion applies to this rulemaking and 
no extraordinary circumstances exist.

E. Paperwork Reduction Act of 1995

    Under the Paperwork Reduction Act of 1995 (PRA), as amended, 44 
U.S.C. 3501-3520, an agency may not conduct or sponsor, and a person is 
not required to respond to, a collection of information unless the 
agency obtains approval from the Office of Management and Budget (OMB) 
for the collection and the collection displays a valid OMB control 
number. See 44 U.S.C. 3506, 3507. This final rule does not call for a 
new collection of information under the PRA. The removal of the 
Arrangement from the regulation will not impact any existing 
information collections in that it would not substantively change any 
of the information collection requirements, because the information 
collection requirements still exist in the regulations. The existing 
information collections listed include citations to 44 CFR part 62 
Appendices A and B. FEMA will update these citations in the next 
information collection renewal cycle. FEMA will continue to expect WYO 
companies to comply with each of the information collection 
requirements associated with the WYO Program.
    The collections associated with this regulation are as follows: (1) 
OMB Control Number 1660-0038, Write Your Own Company Participation 
Criteria, 44 CFR 62 Appendix A, which establishes the criteria to 
return to or participate in the WYO Program; (2) OMB control number 
1660-0086, the National Flood Insurance Program--Mortgage Portfolio 
Protection Program (MPPP), 44 CFR part 62.23 (l)(2) and Appendix B, 
which is a program lenders can use to bring their mortgage loan 
portfolios into compliance with flood insurance purchase requirements; 
and (3) OMB control number 1660-0020, WYO Program, 44 CFR 62.23 (f) and 
Appendix B, the Federal Insurance and Mitigation Administration program 
that requires each WYO company to submit financial data on a monthly 
basis into the National Flood Insurance Program's Transaction Record 
Reporting and Processing Plan (TRRPP) system as referenced in 44 CFR 
62.23(h)(4). Part 62 still requires each of these collections. The 
removal of the Arrangement from the regulation will not impact these 
information collections because the existing information collections 
cover requirements in the regulations, not requirements in the 
Appendices.

F. Privacy Act/E-Government Act

    Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must 
determine whether implementation of a regulation will result in a 
system of records. A record is any item, collection, or grouping of 
information about an individual that is maintained by an agency, 
including, but not limited to, his/her education, financial 
transactions, medical history, and criminal or employment history and 
that contains his/her name, or the identifying number, symbol, or other 
identifying particular assigned to the individual, such as a finger or 
voice print or a photograph. See 5 U.S.C. 552a(a)(4). A system of 
records is a group of records under the control of an agency from which 
information is retrieved by the name of the individual or by some 
identifying number, symbol, or other identifying particular assigned to 
the individual. An agency cannot disclose any record which is contained 
in a system of records except by following specific procedures.
    The E-Government Act of 2002, 44 U.S.C. 3501 note, also requires 
specific procedures when an agency takes action to develop or procure 
information technology that collects, maintains, or disseminates 
information that is in an identifiable form. This Act also applies when 
an agency initiates a new collection of information that will be 
collected, maintained, or disseminated using information technology if 
it includes any information in an identifiable form permitting the 
physical or online contacting of a specific individual. A Privacy 
Threshold Analysis was completed. This rule does not require a Privacy 
Impact Analysis or System of Records Notice.

G. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments, 65 FR 67249, November 9, 2000, applies to agency 
regulations that have Tribal implications, that is, regulations that 
have substantial direct effects on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. Under this Executive Order, to the extent 
practicable and permitted by law, no agency shall promulgate any 
regulation that has Tribal implications, that imposes substantial 
direct compliance costs on Indian Tribal governments, and that is not 
required by statute, unless funds necessary to pay the direct costs 
incurred by the Indian Tribal government or the Tribe in complying with 
the regulation are provided by the Federal Government, or the agency 
consults with Tribal officials.
    This rule does not have Tribal implications. Currently, Indian 
Tribal governments cannot participate in the WYO Program as WYO 
companies, and thus are not affected by this rule. To participate in 
the WYO Program, a company must be a licensed property or casualty 
insurance company and meet the requirements in FEMA regulations at 44 
CFR 62.24.

H. Executive Order 13132, Federalism

    Executive Order 13132, Federalism, 64 FR 43255, August 10, 1999, 
sets forth principles and criteria that agencies must adhere to in 
formulating and implementing policies that have federalism 
implications, that is, regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' Federal 
agencies must closely examine the statutory authority supporting any 
action that would limit the policymaking discretion of the States, and 
to the extent practicable, must consult with State and local officials 
before implementing any such action.
    As noted in the notice of proposed rulemaking, FEMA has determined 
that this rulemaking does not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government, and therefore does not have federalism 
implications as defined by the Executive Order. No commenters disagreed 
with this determination. This rule does not have federalism 
implications because participation as a WYO company is voluntary and 
does not affect State policymaking discretion. Moreover, States cannot 
participate in the WYO Program as WYO companies, and thus are not 
affected by this regulatory action. To participate in the WYO Program, 
a company must be a licensed

[[Page 84490]]

property or casualty insurance company and must meet the requirements 
in FEMA regulations at 44 CFR 62.24.

I. Executive Order 11988, Floodplain Management

    Pursuant to Executive Order 11988, each agency is required to 
provide leadership and take action to reduce the risk of flood loss, to 
minimize the impact of floods on human safety, health and welfare, and 
to restore and preserve the natural and beneficial values served by 
floodplains in carrying out its responsibilities for (1) Acquiring, 
managing, and disposing of Federal lands and facilities; (2) providing 
Federally undertaken, financed, or assisted construction and 
improvements; and (3) conducting Federal activities and programs 
affecting land use, including but not limited to water and related land 
resources planning, regulating, and licensing activities. In carrying 
out these responsibilities, each agency must evaluate the potential 
effects of any actions it may take in a floodplain; to ensure that its 
planning programs and budget requests reflect consideration of flood 
hazards and floodplain management; and to prescribe procedures to 
implement the policies and requirements of the Executive Order.
    Before promulgating any regulation, an agency must determine 
whether the regulations will affect a floodplain(s), and if so, the 
agency must consider alternatives to avoid adverse effects and 
incompatible development in the floodplain(s). If the head of the 
agency finds that the only practicable alternative consistent with the 
law and with the policy set forth in Executive Order 11988 is to 
promulgate a regulation that affects a floodplain(s), the agency must, 
prior to promulgating the regulation, design or modify the regulation 
in order to minimize potential harm to or within the floodplain, 
consistent with the agency's floodplain management regulations and 
prepare and circulate a notice containing an explanation of why the 
action is to be located in the floodplain. The changes in this rule 
would not have an effect on land use, floodplain management, or 
wetlands.

J. Executive Order 11990, Protection of Wetlands

    Pursuant to Executive Order 11990, each agency must provide 
leadership and take action to minimize the destruction, loss or 
degradation of wetlands, and to preserve and enhance the natural and 
beneficial values of wetlands in carrying out the agency's 
responsibilities for (1) Acquiring, managing, and disposing of Federal 
lands and facilities; and (2) providing Federally undertaken, financed, 
or assisted construction and improvements; and (3) conducting Federal 
activities and programs affecting land use, including but not limited 
to water and related land resources planning, regulating, and licensing 
activities. Each agency, to the extent permitted by law, must avoid 
undertaking or providing assistance for new construction located in 
wetlands unless the head of the agency finds (1) that there is no 
practicable alternative to such construction, and (2) that the action 
includes all practicable measures to minimize harm to wetlands which 
may result from such use. In making this finding the head of the agency 
may take into account economic, environmental and other pertinent 
factors.
    In carrying out the activities described in the Executive Order, 
each agency must consider factors relevant to a proposal's effect on 
the survival and quality of the wetlands. Among these factors are: 
Public health, safety, and welfare, including water supply, quality, 
recharge and discharge; pollution; flood and storm hazards; and 
sediment and erosion; maintenance of natural systems, including 
conservation and long term productivity of existing flora and fauna, 
species and habitat diversity and stability, hydrologic utility, fish, 
wildlife, timber, and food and fiber resources; and other uses of 
wetlands in the public interest, including recreational, scientific, 
and cultural uses. The changes in this rule would not have an effect on 
land use or wetlands.

K. Executive Order 12898, Environmental Justice

    Pursuant to Executive Order 12898, --Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations, 59 FR 7629, February 16, 1994, as amended by Executive 
Order 12948, 60 FR 6381, February 1, 1995, FEMA incorporates 
environmental justice into its policies and programs. The Executive 
Order requires each Federal agency to conduct its programs, policies, 
and activities that substantially affect human health or the 
environment in a manner that ensures that those programs, policies, and 
activities do not have the effect of excluding persons from 
participation in programs, denying persons the benefits of programs, or 
subjecting persons to discrimination because of race, color, or 
national origin.
    This rulemaking will not have a disproportionately high or adverse 
effect on human health or the environment. Therefore, the requirements 
of Executive Order 12898 do not apply to this rule.

L. Congressional Review of Agency Rulemaking

    Under the Congressional Review of Agency Rulemaking Act (CRA), 5 
U.S.C. 801-808, before a rule can take effect, the Federal agency 
promulgating the rule must submit to Congress and to the Government 
Accountability Office (GAO) a copy of the rule, a concise general 
statement relating to the rule, including whether it is a major rule, 
the proposed effective date of the rule, a copy of any cost-benefit 
analysis, descriptions of the agency's actions under the RFA and the 
Unfunded Mandates Reform Act, and any other information or statements 
required by relevant executive orders.
    FEMA will send this rule to the Congress and to GAO pursuant to the 
CRA. The rule is not a major rule within the meaning of the CRA. It 
will not have an annual effect on the economy of $100,000,000 or more, 
it will not result in a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions, and it will not have significant 
adverse effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and export markets.

List of Subjects in 44 CFR Part 62

    Claims, Flood insurance, and Reporting and recordkeeping 
requirements.

    For the reasons stated in the preamble, the Federal Emergency 
Management Agency amends 44 CFR Chapter I as follows:

PART 62--SALE OF INSURANCE AND ADJUSTMENT OF CLAIMS

0
1. The authority citation for part 62 continues to read as follows:

    Authority:  42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of 
1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; E.O. 12127 of Mar. 31, 
1979, 44 FR 19367, 3 CFR, 1979 Comp., p. 376.

0
2. Amend Sec.  62.23 by:
0
a. Removing the last sentence of paragraph (a) and adding two sentences 
in its place;
0
b. Revising the second sentence of paragraph (f);
0
c. Revising paragraph (i)(1); and

[[Page 84491]]

0
d. Revising the last sentence of paragraph (l)(2).
    The revisions read as follows:

Sec.  62.23   WYO companies authorized.

    (a) * * * Arrangements entered into by WYO companies or other 
insurers under this subpart must be in the form and substance of the 
standard arrangement, titled ``Financial Assistance/Subsidy 
Arrangement.'' Each year, at least six months before the effective date 
of the ``Financial Assistance/Subsidy Arrangement,'' FEMA must publish 
in the Federal Register and make available to the WYO companies the 
terms for subscription or re-subscription to the ``Financial 
Assistance/Subsidy Arrangement.''
* * * * *
    (f) * * * In furtherance of this end, the Federal Insurance 
Administrator has established ``A Plan to Maintain Financial Control 
for Business Written Under the Write Your Own Program.''
* * * * *
    (i) * * *
    (1) WYO companies will adjust claims in accordance with general 
company standards, guided by NFIP Claims manuals. The Arrangement 
provides that claim adjustments shall be binding upon the FIA.
* * * * *
    (l) * * *
    (2) * * * Participating WYO companies must also maintain evidence 
of compliance with paragraph (l)(3) of this section for review during 
the audits and reviews required by the WYO Financial Control Plan.
* * * * *

Appendix A to Part 62 [Removed]

0
3. Remove Appendix A to Part 62.

Appendix B to Part 62 [Removed]

0
4. Remove Appendix B to Part 62.

    Dated: November 17, 2016.
W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2016-28224 Filed 11-22-16; 8:45 am]
 BILLING CODE 9110-11-P