National Flood Insurance Program Administrative Reform Act of 2017

Bill: 115-hr-2875
Sponsor: Rep. Velazquez, Nydia M. [D-NY-7]
Introduced: 2017-06-12 in the House
Policy area: Finance and Financial Sector
Subjects: Administrative law and regulatory procedures
Administrative remedies
Advisory bodies
Civil actions and liability
Congressional oversight
Department of Homeland Security
Disaster relief and insurance
Federal Emergency Management Agency (FEMA)
Floods and storm protection
Fraud offenses and financial crimes
Government information and archives
Government studies and investigations
Government trust funds
Insurance industry and regulation
Land use and conservation

Summary:
action_date: 2017-06-12
text: 

National Flood Insurance Program Administrative Reform Act of 2017

 
This bill amends the National Flood Insurance Act of 1968 to direct the Federal Emergency Management Agency (FEMA) to revise the appeals process for National Flood Insurance Program (NFIP) policyholders seeking review of a flood insurance claim denial by their insurer. The bill also establishes penalties for &quot;Write Your Own&quot; companies that knowingly underpay NFIP claims. (A Write Your Own company writes and services federal standard flood insurance policies in its own name.) Civil enforcement actions, penalties, and suspension from the program may result from fraud and false statements in connection with a flood insurance claim under NFIP.
 
Claims under NFIP must be approved or denied no later than 90 days after the claim is made, with provisions for an extension in extraordinary cases. 
 
The bill gives FEMA litigation oversight, strategy authority, and substitution powers in litigation conducted by Write Your Own companies. FEMA may not hire in connection with NFIP any disbarred or suspended attorney.
 
FEMA must make additional coverage available under its Increased Cost of Compliance program. Currently, the program provides coverage to insure the cost of mitigating future flood damage to an NFIP-insured structure that has been substantially or repetitively damaged by floods.
 
This bill directs FEMA to ensure sufficient staff for the Flood Insurance Advocate, authorizes FEMA to credit reserve funds to the National Flood Insurance Fund, and establishes pilot programs and committees.
 
The Government Accountability Office must report on claims adjustment practices under NFIP and NFIP coverage of earth movement and subsidence.
 
 


action_date: 2017-07-18
text: 
(This measure has not been amended since it was introduced. The summary has been expanded because action occurred on the measure.)
 

National Flood Insurance Program Administrative Reform Act of 2017

 
(Sec. 2) This bill amends the National Flood Insurance Act of 1968 to require the Federal Emergency Management Agency (FEMA) to make additional coverage of up to $30,000 available under its existing Increased Cost of Compliance program, with optional coverage of up to $60,000. Currently, FEMA may make available coverage to insure the cost of mitigating future flood damage to a structure insured by the National Flood Insurance Program (NFIP) that has been substantially or repetitively damaged by floods. The bill allows FEMA to require the property owner maintain continuous flood insurance coverage as a condition of providing cost of compliance coverage.
 
(Sec. 3) FEMA is directed to establish a pilot program for &quot;Write Your Own&quot; companies (companies that write and service federal standard flood insurance policies in their own name) to investigate preexisting structural conditions in properties that may result in a denial of a claim in the event of a flood loss under NFIP. 
 
(Sec. 4) Fraud and false statements in connection with a flood insurance claim under NFIP are subject to civil enforcement, penalties, and suspension from the program. The bill directs FEMA to refer evidence of this activity to the Department of Justice.
 
(Sec. 5) FEMA is directed to revise the appeals process for policyholders seeking review of a flood insurance claim denial by their insurer. A decision shall be provided to the policyholder.
 
(Sec. 6) Claims under NFIP must be decided no later than 90 days after the claim is made. In extraordinary cases, the deadline may be extended by an additional 15 days.
 
(Sec. 7) This bill establishes FEMA's authority to oversee litigation conducted by Write Your Own companies regarding NFIP contracts, including expenses and litigation strategy. FEMA is authorized to substitute itself for a Write Your Own company in litigation.
 
(Sec. 8) FEMA may not hire in connection with NFIP any disbarred or suspended attorney.
 
(Sec. 9) FEMA must establish penalties for Write Your Own companies that knowingly underpay NFIP claims.
 
(Sec. 10) FEMA may rely upon technical assistance reports when adjusting claims made under NFIP only if the reports are final and meet applicable professional standards. Technical assistance reports must be made available to policyholders upon request when used in claim determinations.
 
(Sec. 11) Every policy issued under NFIP must include documents describing the type of loss covered, a summary of the costs of the policy, and an explanation of the policy's parameters.
 
(Sec. 12) FEMA is authorized to credit reserve funds to the National Flood Insurance Fund.
 
(Sec. 13) FEMA is directed to ensure sufficient staff for the Flood Insurance Advocate.
 
(Sec. 14) The bill establishes a Federal Flood Insurance Advisory Committee.
 
(Sec. 15) The bill directs federal lending regulation entities and FEMA to update interagency guidance regarding flood insurance.
 
(Sec. 16) The bill directs the Government Accountability Office (GAO) to report on claims adjustment practices under NFIP.
 
(Sec. 17) The bill directs GAO to report on NFIP coverage of earth movement and subsidence caused by flooding.
 
 



Legislative actions:
action_date: 2017-07-18
text: Placed on the Union Calendar, Calendar No. 166.
action_date: 2017-07-18
text: Reported by the Committee on Financial Services. H. Rept. 115-233.
action_date: 2017-07-18
text: Reported by the Committee on Financial Services. H. Rept. 115-233.
action_date: 2017-06-21
text: Ordered to be Reported by the Yeas and Nays: 58 - 0.
action_date: 2017-06-21
text: Committee Consideration and Mark-up Session Held.
action_date: 2017-06-12
text: Referred to the House Committee on Financial Services.
action_date: 2017-06-12
text: Introduced in House
action_date: 2017-06-12
text: Introduced in House