118 
‘‘(i) RATES FOR PROPERTIES NEWLY MAPPED INTO 
AREAS WITH SPECIAL FLOOD HAZARDS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2) and notwithstanding’’; 
(2) by redesignating paragraphs (1) and (2) as 
subparagraphs (A) and (B), respectively, and mov-
ing the left margins of such subparagraphs, as so re-
designated, and the matter following subparagraph 
(B), 2 ems to the right; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) 
INAPPLICABILITY
TO
MULTIPLE-LOSS 
PROPERTIES.—Paragraph (1) shall not apply to 
multiple-loss properties.’’. 
(i) CLEAR
COMMUNICATION
OF
MULTIPLE-LOSS 
PROPERTY STATUS.— 
(1) IN
GENERAL.—Subsection (l) of section 
1308 of the National Flood Insurance Act of 1968 
(42 U.S.C. 4015(l)), as amended by the preceding 
provisions of this Act, is further amended by adding 
at the end the following new paragraph: 
‘‘(2) MULTIPLE-LOSS
PROPERTIES.—Pursuant 
to paragraph (1), the Administrator shall clearly 
communicate to all policyholders for multiple-loss 
properties before the effectiveness of any such new
119 
or renewed coverage and after each qualified claims 
payment for the property— 
‘‘(A) the availability of flood mitigation as-
sistance under section 1366; and 
‘‘(B) the effect on the premium rates 
charged for such a property of filing any fur-
ther claims under a flood insurance policy with 
respect to that property.’’. 
(j) MITIGATION
ASSISTANCE
PROGRAM.—Section 
1366 of the National Flood Insurance Act of 1968 (42 
U.S.C. 4104c) is amended— 
(1) in subsection (a)— 
(A) in the matter preceding paragraph (1), 
by inserting after the period at the end of the 
first sentence the following: ‘‘Priority under the 
program shall be given to providing assistance 
with respect to multiple-loss properties.’’; 
(B) in paragraph (1), by inserting ‘‘and’’ 
after the semicolon at the end; and 
(C) by striking paragraphs (2) and (3) and 
inserting the following: 
‘‘(2) to property owners, in coordination with 
the State and community, in the form of direct 
grants under this section for carrying out mitigation
120 
activities that reduce flood damage to extreme repet-
itive-loss properties. 
The Administrator shall take such actions as may be nec-
essary to ensure that grants under this subsection are pro-
vided in a manner that is consistent with the delivery of 
coverage for increased cost of compliance provided under 
section 1304(b).’’; 
(2) in subsection (c)(2)(A)(ii), by striking ‘‘se-
vere repetitive loss structures’’ and inserting ‘‘mul-
tiple-loss properties’’; 
(3) in subsection (d)— 
(A) in paragraph (1)— 
(i) by striking ‘‘SEVERE REPETITIVE 
LOSS
STRUCTURES’’ and inserting ‘‘EX-
TREME
REPETITIVE-LOSS
PROPERTIES’’; 
and 
(ii) by striking ‘‘severe repetitive loss 
structures’’ and inserting ‘‘extreme repet-
itive-loss properties’’; 
(B) in paragraph (2)— 
(i) by striking ‘‘REPETITIVE
LOSS 
STRUCTURES’’ and inserting ‘‘SEVERE RE-
PETITIVE-LOSS PROPERTIES’’;
121 
(ii) by striking ‘‘repetitive loss struc-
tures’’ and inserting ‘‘severe repetitive-loss 
properties’’; and 
(iii) by striking ‘‘90 percent’’ and in-
serting ‘‘100 percent’’; 
(C) by redesignating paragraph (3) as 
paragraph (4); and 
(D) by inserting after paragraph (2) the 
following new paragraph: 
‘‘(3) REPETITIVE-LOSS PROPERTY.—In the case 
of mitigation activities to repetitive-loss properties, 
in an amount up to 100 percent of all eligible 
costs.’’; 
(4) in subsection (h)— 
(A) by striking paragraphs (2) and (3); 
(B) by striking the subsection designation 
and all that follows through ‘‘shall apply:’’; and 
(C) in paragraph (1)— 
(i) by striking ‘‘COMMUNITY’’ and in-
serting ‘‘DEFINITION OF COMMUNITY’’; 
(ii) by striking ‘‘The’’ and inserting 
‘‘For purposes of this section, the’’; 
(iii) by redesignating such paragraph 
as subsection (j);
122 
(iv) in subparagraph (B), by striking 
‘‘subparagraph (A)’’ and inserting ‘‘para-
graph (1)’’; 
(v) by redesignating subparagraphs 
(A) and (B) as paragraphs (1) and (2), re-
spectively; 
(vi) in paragraph (1), as so redesig-
nated by clause (v) of this subparagraph, 
by redesignating clauses (i) and (ii) as sub-
paragraphs (A) and (B), respectively (and 
moving the margins two ems to the left); 
and 
(vii) by moving the left margins of 
subsection (j) (as so redesignated) and 
paragraphs (1) and (2), all as so redesig-
nated, two ems to the left; and 
(5) by inserting after subsection (g) the fol-
lowing new subsections: 
‘‘(h) ALIGNMENT WITH INCREASED COST OF COM-
PLIANCE.—Notwithstanding any provision of law, any 
funds appropriated for assistance under this title may be 
transferred to the National Flood Insurance Fund estab-
lished under section 1310 (42 U.S.C. 4017) for the pay-
ment of claims to enable the Administrator to deliver 
grants under subsection (a)(2) of this section to align with
123 
the delivery of coverage for increased cost of compliance 
for extreme repetitive-loss properties. 
‘‘(i) FUNDING.— 
‘‘(1) AUTHORIZATION
OF
APPROPRIATIONS.— 
Notwithstanding any other provision of law, assist-
ance provided under this section shall be funded 
by— 
‘‘(A) $225,000,000 in each fiscal year, 
subject to offsetting collections, through risk 
premium rates for flood insurance coverage 
under this title, and shall be available subject to 
section 1310(f); 
‘‘(B) any penalties collected under section 
102(f) the Flood Disaster Protect Act of 1973 
(42 U.S.C. 4012a(f); and 
‘‘(C) any amounts recaptured under sub-
section (e) of this section. 
The Administrator may not use more than 5 percent 
of amounts made available under this subsection to 
cover salaries, expenses, and other administrative 
costs incurred by the Administrator to make grants 
and provide assistance under this section. 
‘‘(2) 
AVAILABILITY.—Amounts 
appropriated 
pursuant to this subsection for any fiscal year may 
remain available for obligation until expended.’’.
125 
‘‘(1) ALLOWANCE RATE.— 
‘‘(A) LIMITATION.—The allowance paid to 
companies participating in the Write Your Own 
Program (as such term is defined in section 
1370 (42 U.S.C. 4004)) with respect to a policy 
for flood insurance coverage made available 
under this title shall not be greater than 27.9 
percent of the chargeable premium for such 
coverage. 
‘‘(B) 
INAPPLICABILITY.—Subparagraph 
(A) shall not apply to actual and necessary 
costs related to section 1312(a) (42 U.S.C. 
4019(a)), or to payments deemed necessary by 
the Administrator. 
‘‘(C) IMPLEMENTATION.—The limitation in 
subparagraph (A) shall be imposed by equal re-
ductions over the 3-year period beginning on 
the date of the enactment of this subsection. 
‘‘(2) PROGRAM SAVINGS.— 
‘‘(A) IMPLEMENTATION.—The Adminis-
trator, within three years of the date of the en-
actment of this Act, shall reduce the costs and 
unnecessary burdens for the companies partici-
pating in the Write Your Own program by at 
least half of the amount by which the limitation
126 
under paragraph (1)(A) reduced costs compared 
to the costs as of the date of the enactment of 
this subsection. 
‘‘(B) CONSIDERATION
OF
SAVINGS.—In 
meeting the requirement of subparagraph (A), 
the Administrator shall consider savings includ-
ing— 
‘‘(i) indirect payments by the Admin-
istrator of premium; 
‘‘(ii) eliminating unnecessary commu-
nications requirements; 
‘‘(iii) reducing the frequency of Na-
tional Flood Insurance Program changes; 
‘‘(iv) simplifying the flood rating sys-
tem; and 
‘‘(v) other ways of streamlining the 
Program to reduce costs while maintaining 
customer service and distribution.’’. 
SEC. 507. ENFORCEMENT OF MANDATORY PURCHASE RE-
QUIREMENTS. 
(a) PENALTIES.—Paragraph (5) of section 102(f) of 
the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a(f)(5)) is amended by striking ‘‘$2,000’’ and insert-
ing ‘‘$5,000’’.
127 
(b) INSURED DEPOSITORY INSTITUTIONS.—Subpara-
graph (A) of section 10(i)(2) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1820(i)(2)(A)) is amended by strik-
ing ‘‘date of enactment of the Riegle Community Develop-
ment and Regulatory Improvement Act of 1994 and bien-
nially thereafter for the next 4 years’’ and inserting ‘‘date 
of enactment of the 21st Century Flood Reform Act and 
biennially thereafter’’. 
(c) CREDIT UNIONS.—Subparagraph (A) of section 
204(e)(2) of the Federal Credit Union Act (12 U.S.C. 
1784(e)(2)(A)) is amended by striking ‘‘date of enactment 
of the Riegle Community Development and Regulatory 
Improvement Act of 1994 and biennially thereafter for the 
next 4 years’’ and inserting ‘‘date of enactment of the 21st 
Century Flood Reform Act and annually thereafter’’. 
(d) 
GOVERNMENT-SPONSORED
ENTERPRISES.— 
Paragraph (4) of section 1319B(a) of the Federal Hous-
ing Enterprises Financial Safety and Soundness Act of 
1992 (12 U.S.C. 4521(a)(4)) is amended, in the matter 
after and below subparagraph (B), by striking ‘‘first, 
third, and fifth annual reports under this subsection re-
quired to be submitted after the expiration of the 1-year 
period beginning on the date of enactment of the Riegle 
Community Development and Regulatory Improvement 
Act of 1994’’ and inserting ‘‘first annual report under this
128 
subsection required to be submitted after the expiration 
of the 1-year period beginning on the date of enactment 
of the 21st Century Flood Reform Act and every such sec-
ond annual report thereafter’’. 
(e) GUIDELINES.—The Federal entities for lending 
regulation (as such term is defined in section 3(a) of the 
Flood Disaster Protection Act of 1973 (42 U.S.C. 
4003(a))), in consultation with the Administrator of the 
Federal Emergency Management Agency, shall jointly up-
date and reissue the rescinded document of the Adminis-
trator entitled ‘‘Mandatory Purchase of Flood Insurance 
Guidelines’’ (lasted updated on October 29, 2014). The 
updated document shall incorporate recommendations 
made by the Comptroller General pursuant to the study 
conducted under section 514 of this Act. 
SEC. 508. SATISFACTION OF MANDATORY PURCHASE RE-
QUIREMENT IN STATES ALLOWING ALL-PER-
ILS POLICIES. 
Section 102 of the Flood Disaster Protection Act of 
1973 (42 U.S.C. 4012a), as amended by the preceding 
provisions of this Act, is further amended— 
(1) in subsection (a), by striking ‘‘After’’ and 
inserting ‘‘Subject to subsection (i) of this section, 
after’’; 
(2) in subsection (b)—
129 
(A) in paragraph (1), by striking ‘‘Each’’ 
and inserting ‘‘Subject to subsection (i) of this 
section, each’’; 
(B) in paragraph (2)— 
(i) in subparagraph (A), by striking 
‘‘A’’ the first place such term appears and 
inserting ‘‘Subject to subsection (i) of this 
section, a’’; 
(ii) in subparagraph (B), by striking 
‘‘Each’’ and inserting ‘‘Subject to sub-
section (i) of this section, each’’; and 
(C) in paragraph (3), by striking ‘‘The’’ 
the first place such term appears and inserting 
‘‘Subject to subsection (i) of this section, the’’; 
(3) in subsection (e)(1), by striking ‘‘If’’ and 
inserting ‘‘Subject to subsection (i) of this section, 
if’’; and 
(4) by adding at the end the following new sub-
section: 
‘‘(i) SATISFACTION OF MANDATORY PURCHASE RE-
QUIREMENT
IN STATES ALLOWING ALL-PERILS POLI-
CIES.— 
‘‘(1) WAIVERS.—Subsections (a) and (b) of this 
section shall not apply with respect to residential 
properties in any State that allows any property in-
130 
surance coverage that covers ‘all-perils’ except spe-
cifically excluded perils and that includes coverage 
for flood perils in an amount at least equal to the 
outstanding principal balance of the loan or the 
maximum limit of flood insurance coverage made 
available under this title with respect to such type 
of residential property, whichever is less. 
‘‘(2) 
DEFINITIONS, 
PROCEDURES, 
STAND-
ARDS.—The Administrator may establish such defi-
nitions, procedures, and standards as the Adminis-
trator considers necessary for making determina-
tions under paragraph (1).’’. 
SEC. 509. FLOOD INSURANCE PURCHASE REQUIREMENTS. 
Section 102 of the Flood Disaster Protection Act of 
1973 (42 U.S.C. 4012a), as amended by the preceding 
provisions of this Act, is further amended— 
(1) in subsection (c)(2)(A), by striking ‘‘$5,000 
or less’’ and inserting the following: ‘‘$25,000 or 
less, except that such amount (as it may have been 
previously adjusted) shall be adjusted for inflation 
by the Administrator upon the expiration of the 5- 
year period beginning upon the enactment of the 
21st Century Flood Reform Act and upon the expi-
ration of each successive 5-year period thereafter, in
131 
accordance with an inflationary index selected by the 
Administrator’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(j) FLOOD
INSURANCE
PURCHASE
REQUIRE-
MENTS.—Notwithstanding any other provision of law, a 
State or local government or private lender may require 
the purchase of flood insurance coverage for a structure 
that is located outside of an area having special flood haz-
ards.’’. 
SEC. 510. CLARIFICATIONS; DEADLINE FOR APPROVAL OF 
CLAIMS. 
(a) RULE OF CONSTRUCTION.—Part C of chapter II 
of the National Flood Insurance Act of 1968 (42 U.S.C. 
4081 et seq.), as amended by the preceding provisions of 
this Act, is further amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 1350. RULE OF CONSTRUCTION. 
‘‘A policyholder of a policy for flood insurance cov-
erage made available under this title must exhaust all ad-
ministrative remedies, including submission of disputed 
claims to appeal under any appeal process made available 
by the Administrator, prior to commencing legal action on 
any disputed claim under such a policy.’’. 
(b) DEADLINE FOR APPROVAL OF CLAIMS.—
132 
(1) IN
GENERAL.—Section 1312 of the Na-
tional Flood Insurance Act of 1968 (42 U.S.C. 
4019), as amended by the preceding provisions of 
this Act, is further amended— 
(A) in subsection (a), by striking ‘‘The Ad-
ministrator’’ and inserting ‘‘Subject to the 
other provisions of this section, the Adminis-
trator’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(c) DEADLINE FOR APPROVAL OF CLAIMS.— 
‘‘(1) IN
GENERAL.—The Administrator shall 
provide that, in the case of any claim for damage to 
or loss of property under flood insurance coverage 
made available under this title, an initial determina-
tion regarding approval of a claim for payment or 
disapproval of the claim be made, and notification of 
such determination be provided to the insured mak-
ing such claim, not later than the expiration of the 
120-day period (as such period may be extended 
pursuant to paragraph (2)) beginning upon the day 
on which the policyholder submits a signed proof of 
loss detailing the damage and amount of the loss. 
Payment of approved claims shall be made as soon 
as possible after such approval.
133 
‘‘(2) EXTENSION OF DEADLINE.—The Adminis-
trator shall provide that the period referred to in 
paragraph (1) may be extended by a single addi-
tional period of 15 days in cases where extraordinary 
circumstances are demonstrated. The Administrator 
shall, by regulation, establish criteria for dem-
onstrating such extraordinary circumstances and for 
determining to which claims such extraordinary cir-
cumstances apply.’’. 
(2) APPLICABILITY.—The amendments made 
by paragraph (1) shall apply to any claim under 
flood insurance coverage made available under the 
National Flood Insurance Act of 1968 (42 U.S.C. 
4001 et seq.) pending on the date of the enactment 
of this Act and any claims made after such date of 
enactment. 
SEC. 511. RISK TRANSFER REQUIREMENT. 
Subsection (e) of section 1345 of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4081(e)) is amended— 
(1) by striking ‘‘(e) RISK TRANSFER.—The Ad-
ministrator’’ and inserting the following: 
‘‘(e) RISK TRANSFER.— 
‘‘(1) AUTHORITY.—The Administrator’’; and 
(2) by adding at the end the following new 
paragraph:
134 
‘‘(2) REQUIRED RISK TRANSFER COVERAGE.— 
‘‘(A) REQUIREMENT.—Not later than the 
expiration of the 18-month period beginning 
upon the date of the enactment of this para-
graph and at all times thereafter, the Adminis-
trator shall annually cede a portion of the risk 
of the flood insurance program under this title 
to the private reinsurance or capital markets, or 
any combination thereof, and at rates and 
terms that the Administrator determines to be 
reasonable and appropriate, in an amount 
that— 
‘‘(i) is sufficient to maintain the abil-
ity of the program to pay claims; and 
‘‘(ii) manages and limits the annual 
exposure of the flood insurance program to 
flood losses in accordance with the prob-
able maximum loss target established for 
such year under subparagraph (B). 
‘‘(B) PROBABLE
MAXIMUM
LOSS
TAR-
GET.—The Administrator shall for each fiscal 
year, establish a probable maximum loss target 
for the national flood insurance program that 
shall be the maximum probable loss under the
135 
national flood insurance program that is ex-
pected to occur in such fiscal year. 
‘‘(C) CONSIDERATIONS.—In establishing 
the probable maximum loss target under sub-
paragraph (B) for each fiscal year and carrying 
out subparagraph (A), the Administrator shall 
consider— 
‘‘(i) the probable maximum loss tar-
gets for other United States public natural 
catastrophe insurance programs, including 
as State wind pools and earthquake pro-
grams; 
‘‘(ii) the probable maximum loss tar-
gets of other risk management organiza-
tions, including the Federal National Mort-
gage Association and the Federal Home 
Loan Mortgage Corporation; 
‘‘(iii) 
catastrophic, 
actuarial, 
and 
other appropriate data modeling results of 
the national flood insurance program port-
folio; 
‘‘(iv) the availability of funds in the 
National Flood Insurance Fund established 
under section 1310 (42 U.S.C. 4017);
136 
‘‘(v) the availability of funds in the 
National Flood Insurance Reserve Fund 
established under section 1310A (42 
U.S.C. 4017a); 
‘‘(vi) the availability of borrowing au-
thority under section 1309 (42 U.S.C. 
4016); 
‘‘(vii) the ability of the Administrator 
to repay outstanding debt; 
‘‘(viii) amounts appropriated to the 
Administrator to carry out the national 
flood insurance program; 
‘‘(ix) reinsurance, capital markets, ca-
tastrophe bonds, collateralized reinsurance, 
resilience bonds, and other insurance- 
linked securities, and other risk transfer 
opportunities; and 
‘‘(x) any other factor the Adminis-
trator determines appropriate. 
‘‘(D) MULTI-YEAR
CONTRACTS.—Nothing 
in this paragraph may be construed to prevent 
or prohibit the Administrator from complying 
with the requirement under subparagraph (A) 
regarding ceding risk through contracts having 
a duration longer than one year.’’.
137 
SEC. 512. GAO STUDY OF SIMPLIFICATION OF NATIONAL 
FLOOD INSURANCE PROGRAM. 
(a) STUDY.—The Comptroller General of the United 
States shall conduct a study of options for simplifying 
flood insurance coverage made available under the Na-
tional Flood Insurance Act, which shall include the fol-
lowing: 
(1) An analysis of how the administration of 
the National Flood Insurance Program can be sim-
plified—statutorily, regulatorily, and administra-
tively—for private flood insurance policyholders, 
companies, agents, mortgage lenders, and flood in-
surance vendors. 
(2) An assessment of ways in which flood insur-
ance coverage made available under the National 
Flood Insurance Act and the program for providing 
and administrating such coverage may be har-
monized with private insurance industry standards. 
(3) Identification and analysis of ways in which 
the structure of the National Flood Insurance Pro-
gram may be simplified, including analysis of the ef-
ficacy and effects each of the following actions: 
(A) Eliminating the use of two deductibles 
under the Program.
138 
(B) Including in claims for flood-damages 
full replacement cost for property not damaged, 
but rendered unusable, by the flooding. 
(C) Using umbrella policies that allow mul-
tiple structures on a property to be insured 
under the same policy. 
(b) REPORT.—Not later than the expiration of the 
18-month period beginning on the date of the enactment 
of this Act, the Comptroller General shall submit a report 
to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, 
and Urban Affairs of the Senate regarding the findings 
and conclusions of the study conducted pursuant to this 
section. 
SEC. 513. GAO STUDY ON ENFORCEMENT OF MANDATORY 
PURCHASE REQUIREMENTS. 
(a) IN GENERAL.—The Comptroller General of the 
United States shall conduct a study of the implementation 
and efficacy of the requirements of section 102 of the 
Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a). 
Such study shall at minimum consider the following ques-
tions: 
(1) How effectively do Federal agencies, regu-
lated lending institutions, and Federal entities for 
lending regulation implement the requirements of
139 
section 102 of the Flood Disaster Protection Act of 
1973? 
(2) Does the current implementation of Flood 
Disaster Protection Act of 1973 align with the con-
gressional findings and purposes described in section 
2(b) of such Act (42 U.S.C. 4002)? 
(3) What is the current level of compliance with 
section 102? 
(4) What are the estimated historical impacts 
on revenue to the National Flood Insurance Pro-
gram based on the current level of compliance of 
section 102? 
(5) Is the current monitoring and tracking 
framework in place sufficient to ensure compliance 
with section 102? 
(6) What is the best way to establish a consoli-
dated, comprehensive, and accurate repository of 
data on compliance with section 102? 
(7) What, if any, unintended consequences have 
resulted from the requirements and implementation 
of section 102? 
(8) How can Federal agencies and regulated 
lending institutions improve compliance with section 
102?
140 
(b) REPORT.—Not later than the expiration of the 
18-month period beginning on the date of the enactment 
of this Act, the Comptroller General shall submit a report 
to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, 
and Urban Affairs of the Senate regarding the findings 
and conclusions of the study conducted pursuant to this 
section. 
TITLE VI—ADMINISTRATIVE 
REFORMS 
SEC. 601. PENALTIES FOR FRAUD AND FALSE STATEMENTS 
IN THE NATIONAL FLOOD INSURANCE PRO-
GRAM. 
Part C of chapter 2 of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4081 et seq.), as amended by the 
preceding provisions of this Act, is further amended by 
adding at the end the following new section: 
‘‘SEC. 1351. PENALTIES FOR FRAUD AND FALSE STATE-
MENTS IN THE NATIONAL FLOOD INSURANCE 
PROGRAM. 
‘‘(a) PROHIBITED ACTS.—A person shall not know-
ingly make a false or misleading statement, production, 
or submission in connection with the proving or adjusting 
of a claim for flood insurance coverage made available 
under this Act. Such prohibited acts include—
141 
‘‘(1) knowingly forging an engineering report, 
claims adjustment report or technical assistance re-
port used to support a claim determination; 
‘‘(2) knowingly making any materially false, fic-
titious, or fraudulent statement or representation in 
an engineering report, claims adjustment report, or 
technical assistance report to support a claim deter-
mination; 
‘‘(3) knowingly submitting a materially false, 
fictitious, or fraudulent claim. 
‘‘(b) CIVIL ENFORCEMENT.—The Attorney General 
may bring a civil action for such relief as may be appro-
priate whenever it appears that any person has violated 
or is about to violate any provision of this section. Such 
action may be brought in an appropriate United States 
district court. 
‘‘(c) REFERRAL TO ATTORNEY GENERAL.—The Ad-
ministrator shall expeditiously refer to the Attorney Gen-
eral for appropriate action any evidence developed in the 
performance of functions under this Act that may warrant 
consideration for criminal or civil prosecution. 
‘‘(d) PENALTIES.— 
‘‘(1) CIVIL MONETARY PENALTY.—Any person 
who violates subsection (a) shall be subject to a civil 
penalty of not more than $10,000 for each violation,
142 
which shall be deposited into the National Flood In-
surance Fund established under section 1310 (42 
U.S.C. 4017). 
‘‘(2) SUSPENSION AND DEBARMENT.—Any per-
son who violates subsection (a) shall not be eligible, 
for a period of not less than 2 years and not to ex-
ceed 5 years, to— 
‘‘(A) receive flood insurance coverage pur-
suant to this title; or 
‘‘(B) provide services in connection with 
the selling, servicing, or handling of claims for 
flood insurance policies provided pursuant to 
this title. 
‘‘(3) OTHER
PENALTIES.—The penalties pro-
vided for in this subsection shall be in addition to 
any other civil or criminal penalty available under 
law.’’. 
SEC. 602. ENHANCED POLICYHOLDER APPEALS PROCESS 
RIGHTS. 
(a) ESTABLISHMENT.—Part C of chapter II of the 
National Flood Insurance Act of 1968 (42 U.S.C. 4081 
et seq.), as amended by the preceding provisions of this 
Act, is further amended by adding at the end the following 
new section:
143 
‘‘SEC. 1352. APPROVAL OF DECISIONS RELATING TO FLOOD 
INSURANCE COVERAGE. 
‘‘(a) IN GENERAL.—The Administrator shall estab-
lish an appeals process to enable holders of a flood insur-
ance policy provided under this title to appeal the decisions 
of their insurer, with respect to the disallowance, in whole 
or in part, of any claims for proved and approved losses 
covered by flood insurance. Such appeals shall be limited 
to the claim or portion of the claim disallowed by the in-
surer. 
‘‘(b) APPEAL DECISION.—Upon a decision in an ap-
peal under subsection (a), the Administrator shall provide 
the policyholder with a written appeal decision. The appeal 
decision shall explain the Administrator’s determination to 
uphold or overturn the decision of the flood insurer. The 
Administrator may direct the flood insurer to take action 
necessary to resolve the appeal, to include re-inspection, 
re-adjustment, or payment, as appropriate. 
‘‘(c) RULES OF CONSTRUCTION.—This section shall 
not be construed as— 
‘‘(1) making the Federal Emergency Manage-
ment Agency or the Administrator a party to the 
flood insurance contract; or 
‘‘(2) creating any action or remedy not other-
wise provided by this title.’’.
144 
(b) REPEAL.—Section 205 of the Bunning-Blu-
menauer-Bereuter Flood Insurance Reform Act of 2004 
(42 U.S.C. 4011 note) is hereby repealed. 
SEC. 603. DEADLINE FOR APPROVAL OF CLAIMS. 
(a) IN GENERAL.—Section 1312 of the National 
Flood Insurance Act of 1968 (42 U.S.C. 4019), as amend-
ed by the preceding provisions of this Act, is further 
amended by adding at the end the following new sub-
section: 
‘‘(d) DEADLINE FOR APPROVAL OF CLAIMS.— 
‘‘(1) IN
GENERAL.—The Administrator shall 
provide that, in the case of any claim for damage to 
or loss of property under flood insurance coverage 
made available under this title, a final determination 
regarding approval of a claim for payment or dis-
approval of the claim be made, and notification of 
such determination be provided to the insured mak-
ing such claim, not later than the expiration of the 
90-day period (as such period may be extended pur-
suant to paragraph (2)) beginning upon the day on 
which such claim was made. Payment of approved 
claims shall be made as soon as possible after such 
approval. 
‘‘(2) EXTENSION OF DEADLINE.—The Adminis-
trator shall provide that the period referred to in
145 
paragraph (1) may be extended by a single addi-
tional period of 15 days in cases where extraordinary 
circumstances are demonstrated. The Administrator 
shall, by regulation, establish criteria for dem-
onstrating such extraordinary circumstances and for 
determining to which claims such extraordinary cir-
cumstances apply.’’. 
(b) APPLICABILITY.—The amendments made by sub-
section (a) shall apply to any claim under flood insurance 
coverage made available under the National Flood Insur-
ance Act of 1968 (42 U.S.C. 4001 et seq.) pending on 
the date of the enactment of this Act and any claims made 
after such date of enactment. 
SEC. 604. LITIGATION PROCESS OVERSIGHT AND REFORM. 
Part C of chapter II of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4081 et seq.), as amended by the 
preceding provisions of this Act, is further amended by 
adding at the end the following new section: 
‘‘SEC. 1353. OVERSIGHT OF LITIGATION. 
‘‘(a) OVERSIGHT.—The Administrator shall monitor 
and oversee litigation conducted by Write Your Own com-
panies arising under contracts for flood insurance sold 
pursuant to this title, to ensure that— 
‘‘(1) litigation expenses are reasonable, appro-
priate, and cost-effective; and
146 
‘‘(2) Write Your Own companies comply with 
guidance and procedures established by the Adminis-
trator regarding the conduct of litigation. 
‘‘(b) 
DENIAL
OF
REIMBURSEMENT
FOR
EX-
PENSES.—The Administrator may deny reimbursement 
for litigation expenses that are determined to be unreason-
able, excessive, contrary to guidance issued by the Admin-
istrator, or outside the scope of any arrangement entered 
into with a Write Your Own company. 
‘‘(c) LITIGATION
STRATEGY.—The Administrator 
may direct litigation strategy for claims arising under a 
contract for flood insurance sold by a Write Your Own 
company.’’. 
SEC. 605. PROHIBITION ON HIRING DISBARRED ATTOR-
NEYS. 
Part C of chapter II of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4081 et seq.), as amended by the 
preceding provisions of this Act, is further amended by 
adding at the end the following new section: 
‘‘SEC. 1354. PROHIBITION ON HIRING DISBARRED ATTOR-
NEYS. 
‘‘The Administrator may not at any time newly em-
ploy in connection with the flood insurance program under 
this title any attorney who has been suspended or dis-
147 
barred by any court, bar, or Federal or State agency to 
which the individual was previously admitted to practice.’’. 
SEC. 606. TECHNICAL ASSISTANCE REPORTS. 
(a) USE.—Section 1312 of the National Flood Insur-
ance Act of 1968 (42 U.S.C. 4019), as amended by the 
preceding provisions of this Act, is further amended by 
adding at the end the following new subsection: 
‘‘(e) USE OF TECHNICAL ASSISTANCE REPORTS.— 
When adjusting claims for any damage to or loss of prop-
erty which is covered by flood insurance made available 
under this title, the Administrator may rely upon technical 
assistance reports, as such term is defined in section 
1312A, only if such reports are final and are prepared 
in compliance with applicable State and Federal laws re-
garding professional licensure and conduct.’’. 
(b) DISCLOSURE.—The National Flood Insurance 
Act of 1968 is amended by inserting after section 1312 
(42 U.S.C. 4019) the following new section: 
‘‘SEC. 1312A. DISCLOSURE OF TECHNICAL ASSISTANCE RE-
PORTS. 
‘‘(a) IN GENERAL.—Notwithstanding section 552a of 
title 5, United States Code, upon request by a policy-
holder, the Administrator shall provide a true, complete, 
and unredacted copy of any technical assistance report 
that the Administrator relied upon in adjusting and pay-
148 
ing for any damage to or loss of property insured by the 
policyholder and covered by flood insurance made available 
under this title. Such disclosures shall be in addition to 
any other right of disclosure otherwise made available pur-
suant such section 552a or any other provision of law. 
‘‘(b) DIRECT DISCLOSURE BY WRITE YOUR OWN 
COMPANIES AND DIRECT SERVICING AGENTS.—A Write 
Your Own company or direct servicing agent in possession 
of a technical assistance report subject to disclosure under 
subsection (a) may disclose such technical assistance re-
port without further review or approval by the Adminis-
trator. 
‘‘(c) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) POLICYHOLDER.—The term ‘policyholder’ 
means a person or persons shown as an insured on 
the declarations page of a policy for flood insurance 
coverage sold pursuant to this title. 
‘‘(2) TECHNICAL
ASSISTANCE
REPORT.—The 
term ‘technical assistance report’ means a report 
created for the purpose of furnishing technical as-
sistance to an insurance claims adjuster assigned by 
the National Flood Insurance Program, including by 
engineers, surveyors, salvors, architects, and cer-
tified public accounts.’’.
149 
SEC. 607. IMPROVED DISCLOSURE REQUIREMENT FOR 
STANDARD FLOOD INSURANCE POLICIES. 
Section 100234 of the Biggert-Waters Flood Insur-
ance Reform Act of 2012 (42 U.S.C. 4013a) is amended 
by adding at the end the following new subsection: 
‘‘(c) DISCLOSURE OF COVERAGE.— 
‘‘(1) DISCLOSURE SHEET.—Each policy under 
the National Flood Insurance Program shall include 
a disclosure sheet that sets forth, in plain lan-
guage— 
‘‘(A) the definition of the term ‘flood’ for 
purposes of coverage under the policy; 
‘‘(B) a description of what type of flood 
forces are necessary so that losses from an 
event are covered under the policy, including 
overflow of inland or tidal waves, unusual and 
rapid accumulation or runoff of a surface any 
source, and mudflow; 
‘‘(C) a statement of the types and charac-
teristics of losses that are not covered under the 
policy; 
‘‘(D) a summary of total cost and amount 
of insurance coverage, and any other informa-
tion relating to such coverage required to be 
disclosed under section 1308(l) of the National
150 
Flood Insurance Act of 1968 (42 U.S.C. 
4015(l)); 
‘‘(E) a statement that the disclosure sheet 
provides general information about the policy-
holder’s standard flood insurance policy; 
‘‘(F) a statement that the standard flood 
insurance policy, together with the endorse-
ments and declarations page, make up the offi-
cial contract and are controlling in the event 
that there is any difference between the infor-
mation on the disclosure sheet and the informa-
tion in the policy; and 
‘‘(G) a statement that if the policyholder 
has any questions regarding information in the 
disclosure sheet or policy he or she should con-
tact the entity selling the policy on behalf of the 
Program, together with contact information suf-
ficient to allow the policyholder to contact such 
entity. 
‘‘(2) ACKNOWLEDGMENT SHEET.—Each policy 
under the National Flood Insurance Program shall 
include an acknowledgment sheet that sets forth, in 
plain language—
151 
‘‘(A) a statement of whether or not there 
is a basement in the property to be covered by 
the policy; 
‘‘(B) a statement of whether or not the 
policy provides coverage for the contents of the 
property covered by the policy; 
‘‘(C) a statement that the standard flood 
insurance policy, together with the endorse-
ments and declarations page, make up the offi-
cial contract and are controlling in the event 
that there is any difference between the infor-
mation on the acknowledgment sheet and the 
information in the policy; and 
‘‘(D) a statement that if the policyholder 
has any questions regarding information in the 
acknowledgment sheet or policy he or she 
should contact the entity selling the policy on 
behalf of the Program, together with contact in-
formation sufficient to allow the policyholder to 
contact such entity. 
‘‘(3) 
REQUIRED
SIGNATURES.—Notwith-
standing section 1306(c) of the National Flood In-
surance Act of 1968 (42 U.S.C. 4013(c)), a policy 
for flood insurance coverage under the National 
Flood Insurance Program may not take effect unless
152 
the disclosure sheet required under paragraph (1) 
and the acknowledgment sheet required under para-
graph (2), with respect to the policy, are signed and 
dated by the policyholder and the seller of the policy 
who is acting on behalf of the Program.’’. 
SEC. 608. RESERVE FUND AMOUNTS. 
Section 1310 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4017) is amended by adding at the end 
the following new subsection: 
‘‘(g) CREDITING OF RESERVE FUND AMOUNTS.— 
Funds collected pursuant to section 1310A may be cred-
ited to the Fund under this section to be available for the 
purpose described in subsection (d)(1).’’. 
SEC. 609. SUFFICIENT STAFFING FOR OFFICE OF FLOOD IN-
SURANCE ADVOCATE. 
(a) IN GENERAL.—Section 24 of the Homeowner 
Flood Insurance Affordability Act of 2014 (42 U.S.C. 
4033) is amended by adding at the end the following new 
subsection: 
‘‘(c) STAFF.—The Administrator shall ensure that 
the Flood Insurance Advocate has sufficient staff to carry 
out all of the duties and responsibilities of the Advocate 
under this section.’’. 
(b) TIMING.—The Administrator of the Federal 
Emergency Management Agency shall take such actions
153 
as may be necessary to provide for full compliance with 
section 24(c) of the Homeowner Flood Insurance Afford-
ability Act of 2014, as added by the amendment made by 
subsection (a) of this section, not later than the expiration 
of the 180-day period beginning on the date of the enact-
ment of this Act. 
SEC. 610. LIMITED EXEMPTION FOR DISASTER OR CATAS-
TROPHE CLAIMS ADJUSTERS. 
Section 7 of the Fair Labor Standards Act of 1938 
(29 U.S.C. 207) is amended by adding at the end the fol-
lowing: 
‘‘(s)(1) The provisions of this section shall not apply 
for a period of 2 years after the occurrence of a major 
disaster to any employee— 
‘‘(A) employed to adjust or evaluate claims re-
sulting from or relating to such major disaster, by 
an employer not engaged, directly or through an af-
filiate, in underwriting, selling, or marketing prop-
erty, casualty, or liability insurance policies or con-
tracts; 
‘‘(B) who receives from such employer on aver-
age weekly compensation of not less than $591.00 
per week or any minimum weekly amount estab-
lished by the Secretary, whichever is greater, for the
154 
number of weeks such employee is engaged in any 
of the activities described in subparagraph (C); and 
‘‘(C) whose duties include any of the following: 
‘‘(i) interviewing insured individuals, indi-
viduals who suffered injuries or other damages 
or losses arising from or relating to a disaster, 
witnesses, or physicians; 
‘‘(ii) inspecting property damage or review-
ing factual information to prepare damage esti-
mates; 
‘‘(iii) evaluating and making recommenda-
tions regarding coverage or compensability of 
claims or determining liability or value aspects 
of claims; 
‘‘(iv) negotiating settlements; or 
‘‘(v) making recommendations regarding 
litigation. 
‘‘(2) Notwithstanding any other provision of section 
18, in the event of a major disaster, this Act exclusively 
shall govern all such employers in lieu of any State or 
other Federal law or regulation or local law or regulation, 
with respect to the employees described in paragraph (1). 
‘‘(3) The exemption in this subsection shall not affect 
the exemption provided by section 13(a)(1). 
‘‘(4) For purposes of this subsection—
155 
‘‘(A) the term ‘major disaster’ means any nat-
ural catastrophe, including any hurricane, tornado, 
storm, high water, wind driven water, tidal wave, 
tsunami, earthquake, volcanic eruption, landslide, 
mudslide, snowstorm, or drought, or, regardless of 
cause, any other catastrophe, including fire, flood, 
explosion, land collapse, avalanche, or pollutant or 
chemical release; 
‘‘(B) the term ‘employee employed to adjust or 
evaluate claims resulting from or relating to such 
major disaster’ means an individual who timely se-
cured or secures a license required by applicable law 
to engage in and perform the activities described in 
clauses (i) through (v) of paragraph (1)(C) relating 
to a major disaster, and is employed by an employer 
that maintains worker compensation insurance cov-
erage or protection for its employees, if required by 
applicable law, and withholds applicable Federal, 
State, and local income and payroll taxes from the 
wages, salaries and any benefits of such employees; 
and 
‘‘(C) the term ‘affiliate’ means a company that, 
by reason of ownership or control of twenty-five per-
cent (25%) or more of the outstanding shares of any 
class of voting securities of one or more companies,
156 
directly or indirectly, controls, is controlled by, or is 
under common control with, another company.’’. 
Passed the House of Representatives November 14, 
2017. 
Attest: 
Clerk.
115TH CONGRESS 
1ST SESSION 
H. R. 2874 
AN ACT 
To achieve reforms to improve the financial sta-
bility of the National Flood Insurance Program, 
to enhance the development of more accurate es-
timates of flood risk through new technology and 
better maps, to increase the role of private mar-
kets in the management of flood insurance risks, 
and to provide for alternative methods to insure 
against flood peril, and for other purposes.