Document ID: FEMA-2006-0001-0001
Agency: fema
Document Type: Notice
Title: Privacy Act of 1974; The National Flood Insurance Program (NFIP) Claims Appeals System of Records
Posted Date: 2006-06-02T17:35:26Z

[Federal Register: June 2, 2006 (Volume 71, Number 106)]
[Notices]               
[Page 32115-32117]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jn06-106]                         

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[FEMA-2006-0001]
RIN 1660-ZA13

 
Privacy Act of 1974; The National Flood Insurance Program (NFIP) 
Claims Appeals System of Records

AGENCY: Federal Emergency Management Agency, Department of Homeland 
Security.

ACTION: Notice of Privacy Act system of records.

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SUMMARY: Pursuant to the Privacy Act of 1974, the Department of 
Homeland Security gives notice that the Federal Emergency Management 
Agency is establishing a new system of records entitled ``The National 
Flood Insurance Program Claims Appeals Process.'' This appeals process 
is mandated by section 205 of the Bunning-Bereuter-Blumenauer Flood 
Insurance Reform Act of 2004.

DATES: The new system of records will be effective July 3, 2006, unless 
comments are received that result in a contrary determination.

ADDRESSES: You may submit comments, identified by DHS DOCKET NUMBER: 
FEMA-2006-0001 by one of the following methods:
    Federal e-Rulemaking Portal: http://www.regulations.gov. Follow the 

instructions for submitting comments.
    E-mail: FEMA-RULES@dhs.gov. Include Docket Number FEMA-2006-0001 in 
the subject line of the message.
    Fax: (202) 646-4536.
    Mail: Rules Docket Clerk, Federal Emergency Management Agency, 
Office of General Counsel, Room 406, 500 C Street SW., Washington, DC 
20472; Maureen Cooney, Acting Chief Privacy Officer, 601 S. 12th 
Street, Arlington, VA 22202.

FOR FURTHER INFORMATION CONTACT: Rena Y. Kim, Privacy Act Officer, Room 
406, 500 C Street, SW., Washington, DC 20472; (telephone) (202) 646-
3949; Maureen Cooney, Acting Chief Privacy Office, 601 S. 12th Street, 
Arlington, VA 22202.

SUPPLEMENTARY INFORMATION: Pursuant to the Privacy Act of 1974, the 
Department of Homeland Security (DHS) is establishing a new system of 
records to be maintained by the Federal Emergency Management Agency 
(FEMA). The new system of records is entitled the ``National Flood 
Insurance Program (NFIP) Claims Appeals Process.''
    Congress created the NFIP (42 U.S.C. 4001) in 1968 to reduce future 
flood losses through flood hazard identification, floodplain management 
(i.e., land use controls and building codes), and insurance protection. 
NFIP coverage is available to all owners and occupants of insurable 
property in a participating community upon payment of a premium.
    FEMA was designated by Congress to be the administrator of the 
NFIP. In 1983, FEMA partnered with the private insurance industry in 
its efforts to expand the NFIP policy base. This partnership between 
FEMA and the private sector property insurance companies is termed the 
Write Your Own (WYO) program. Under the WYO program, private insurers 
agree to issue flood policies in their own name and take responsibility 
for policy administration, claims processing, marketing, and sales. 
Private insurers handle all claims issued in their name, and adjust and 
settle flood loss claims consistent with their general claims 
practices. Over 95 percent of flood polices in force are maintained by 
WYO Companies.
    Because the WYO Companies are responsible for all administrative 
activities associated with the flood insurance policies they write, 
they also maintain policyholder information for

[[Page 32116]]

the policies they write. FEMA, however, has access to these records as 
part of its oversight role. Once FEMA obtains the WYO Company's records 
of an individual policyholder, the records become a part of FEMA's 
system of records.
    The remaining policies in force are written and maintained directly 
by FEMA via a contractor known as the NFIP Servicing Agent, and are 
considered part of FEMA's system of records. The NFIP Servicing Agent 
serves as a private insurance company and writes NFIP flood insurance 
policies on behalf of the Federal government.
    FEMA also utilizes a contractor to support program management and 
oversight activities. This contractor is responsible for the 
administration of FEMA's system of records for the NFIP insurance 
policy information.
    Section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance 
Reform Act of 2004 (FIRA), 42 U.S.C. 4011, requires that FEMA establish 
an appeal process for flood insurance policyholders who wish to dispute 
decisions made by any insurance agent or adjuster, insurance company, 
or by a FEMA employer or contractor with respect to:
     Claims (request for payment associated with losses from 
floods);
     Proofs of Loss (statement of the amount claimed, sworn, 
and signed by the policyholder); and
     Loss estimates relating to the flood insurance policy.
    The NFIP Appeals Procedure provides the policyholder a voluntary 
option for resolving problems relating to flood insurance without 
proceeding to a lawsuit. Because this appeals process is completely 
voluntary, a policyholder still has the option of instituting a lawsuit 
without utilizing this process. In other words, the appeals process is 
not an administrative prerequisite to the policyholder's option of 
proceeding directly to litigation.
    When a policyholder opts to appeal, FEMA will request information 
relevant to their appeal that includes the following personally 
identifying information:
     Individual Policyholder Name: The name of the person 
requesting an appeal.
     Policyholder Address: Policyholder address/place where the 
loss occurred, which may be a home address.
     Policyholder Telephone Number: Policyholder telephone, 
where the individual can be reached, which may be a home phone number.
     Personal Property Claimed: A list of personal property 
claimed as damaged and the subject of the appeal and relevant 
information.
     Policyholder statement of facts: The policyholder's 
statement of why he is contesting the claim's disposition and 
supporting proof or records to document the policyholder's position.
     Appeal letter from the policyholder. May include any of 
the ``individually identifying'' information already described above.
     Appeal decision letter from FEMA--This decision letter 
will include FEMA's appeal decision and inform the policyholder of 
further recourse with respect to the disposition of the claim.
    The appeals process authorized by FIRA is intended to resolve claim 
issues and is not intended to grant coverage or limits that are not 
provided by the policy contract. Filing an appeal does not waive any of 
the policyholder's requirements for perfecting a claim, nor does it 
extend any of the time limitations established in the policy insurance 
contract. Participating in the appeals process is completely voluntary 
on the part of the individual policyholder. The appeal process is not 
an administrative prerequisite to litigation, but is an additional 
remedy available to policyholders. Therefore, only the information 
required to resolve the dispute will be requested.
    This proposed new system of records developed for the NFIP Claims 
Appeals Process will be used for this appeals process only.
    The Privacy Act embodies fair information principles in a statutory 
framework governing the means by which the United States Government 
collects, maintains, uses, and disseminates personally identifiable 
information. The Privacy Act applies to information that is maintained 
in a ``system of records.'' A ``system of records'' is a group of any 
records under the control of an agency from which information is 
retrieved by the name of the individual or by some identifying number 
such as property address, or mailing address symbol, assigned to the 
individual. The NFIP Claims Appeals Process System is such a system of 
records.
    The Privacy Act requires each agency to publish in the Federal 
Register a description denoting the type and character of each system 
of records that the agency maintains, and the routine uses that are 
contained in each system in order to make agency record keeping 
practices transparent, to notify individuals regarding the uses to 
which personally identifiable information is put, and to assist 
individuals to more easily find such files within the agency. Below is 
the description of the NFIP Claims Appeals Process system of records.
    In accordance with 5 U.S.C. 552a(r), DHS has provided a report of 
this new system of records to the Office of Management and Budget and 
to Congress.
DHS/FEMA/Mitigation/Mitigation-1

System name:
    NFIP Claims Appeals Process.

Security classification:
    Unclassified.

System location:
    The database will be maintained at FEMA Headquarters at 500 C 
Street, SW., Washington, DC 20472.

Categories of individuals covered by the system:
    The system covers the individual NFIP policyholders who are 
appealing decisions on their flood insurance claim.

Categories of records in the system:
    Information is collected from individual NFIP policyholders, who 
have voluntarily opted to appeal the disposition of their flood 
insurance claim. In addition, FEMA collects individual policyholder 
information from the WYO Companies that service the policies which are 
the subject of appeals in order to make a determination on these 
appeals. The ``individually identifying information'' collected 
includes the policyholders name, address where the loss occurred, 
telephone number, a list of personal property that is claimed to be 
damaged and is the subject of the appeal, the policyholder's statement 
of facts about the claim, the policyholder's statement why the claim's 
disposition is being disputed and supporting proof or records to 
document the policyholder's position, correspondence pertaining to the 
appeal which may include the foregoing individually identifying 
information, and FEMA's appeal decision.

Authority for maintenance of the system:
    Section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance 
Reform Act (FIRA) of 2004, 42 U.S.C. 4011.

Purpose(s):
    These records are collected for the purpose of FEMA's review and 
determination on NFIP flood insurance individual policyholder's claim 
appeals, so that FEMA may determine whether additional payment to the 
individual policyholder is warranted.

[[Page 32117]]

Routine uses of records maintained in the system, including categories 
of users and the purposes of such uses:
    In addition to those disclosures generally permitted under 5 U.S.C. 
552a(b) of the Privacy Act, all or a portion of the records or 
information contained in this system may be disclosed outside DHS as a 
routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
    A. To the Government Accountability Office (GAO), DHS Office of the 
Inspector General (OIG), or other organization for the purposes of 
performing authorized audits or oversight of the NFIP program.
    B. To a Congressional office from the record of an individual in 
response to an inquiry from that Congressional office made at the 
request of the individual to whom the record pertains.
    C. To FEMA contractors as necessary to provide an appeal 
resolution.
    D. To the Department of Justice (DOJ), the United States Attorney's 
Office, or a consumer-reporting agency for further collection action on 
any debt in relation to the appeals process, when circumstances 
warrant.
    E. Where a record, either on its face or in conjunction with other 
information, indicates a violation or potential violation of law--
criminal, civil or regulatory--the relevant records may be referred to 
an appropriate Federal, State, territorial, tribal, local, 
international, or foreign agency law enforcement authority or other 
appropriate agency charged with investigating or prosecuting such a 
violation or enforcing or implementing such law.
    F. To DOJ or other Federal agency conducting litigation or in 
proceedings before any court, adjudicative or administrative body, 
when: (1) FEMA, or (2) any employee of FEMA in his/her official 
capacity, or (3) any employee of FEMA in his/her individual capacity 
where DOJ or FEMA have agreed to represent the employee, or (4) the 
United States or any agency thereof, is a party to the litigation or 
has an interest in such litigation and when the records are determined 
by FEMA to be arguably relevant to the proceeding.

Disclosure to consumer reporting agencies:
    Privacy Act information may be reported to consumer reporting 
agencies pursuant to 5 U.S.C. 552a(b)(12).

Policies and practices for storing, retrieving, accessing, retaining, 
and disposing of records in the system:
Storage:
    The hard copy files and the electronically scanned document files 
will be maintained at FEMA Headquarters at 500 C Street, SW., 
Washington, DC 20472.

Retrievability:
    Hard copy files and the electronically scanned document files are 
retrieved by the individual flood insurance policyholder's name or 
property address.

Safeguards:
    Information in this system is safeguarded in accordance with 
applicable laws, rules and policies, including the DHS Information 
Technology Security Program Handbook. All records are protected from 
unauthorized access through appropriate administrative, physical, and 
technical safeguards. These safeguards include restricting access to 
authorized personnel who have a need-to-know, using locks, and password 
protection identification features. DHS file areas are locked after 
normal duty hours and the facilities are protected from the outside by 
security personnel.
    Each authorized individual working on the NFIP appeals procedure 
will have access only to information necessary to perform his or her 
official duties. Activity logs (audit trails) are maintained for all 
operating systems, applications, and middleware. A periodic review is 
conducted to monitor all user access. Incident response procedures are 
established to address reported security incidents as quickly as 
possible. Use of the access database will be carefully monitored and 
reviewed on a periodic basis by the system administrator.

Retention and disposal:
    The paper copy of the appeal letter and supporting documentation 
that are sent to FEMA by the individual with the appeal letter, and 
FEMA's response letter reflecting its appeal decision constitute the 
official copy of the records. Electronically scanned copies will be 
kept as back up. FEMA will retain both the paper and electronic copies 
for six years and three months. This retention schedule has been 
approved by the National Archives and Records Administration (NARA). 
The NARA authority is N1-311-86-1 2A12 (a)(2) FIA File 12-2.

System Manager and address:
    Director of Claims, Mitigation Division, Federal Emergency 
Management Agency, 500 C Street, SW., Washington, DC 20472.

Notification procedure:
    A request for access to records in this system may be made in 
writing to the System Manager identified above, or to the Privacy Act 
Officer, DHS/FEMA, Office of General Counsel (GL), Room 406, 500 C 
Street, SW., Washington, DC 20472, in conformance with 6 CFR part 5, 
subpart B and 44 CFR part 6, which provide the rules for requesting 
access to Privacy Act records.

Record access procedures:
    See Notification procedure above. Request for access must comply 
with DHS and FEMA regulations for Privacy Act requests.

Contesting record procedures:
    Policyholders typically contest their records with their service 
provider (WYO or NFIP Servicing Agent). Virtually all of theses 
disputes are successfully handled through that mechanism. However, 
policyholders may also contest their records using the process outlined 
in the Notification procedures section above. State clearly and 
concisely the information being contested, the reasons for contesting 
it and the proposed amendment to the information sought.

Record source categories:
    The ``individually identifying'' information may come from the 
individual NFIP policyholder and/or the entity servicing the policy.

Exemptions claimed for the system:
    None.

    Dated: May 25, 2006.
Maureen Cooney,
Acting Chief Privacy Officer, Department of Homeland Security.
 [FR Doc. E6-8625 Filed 6-1-06; 8:45 am]

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