II 114th CONGRESS 1st Session S. 2324 IN THE SENATE OF THE UNITED STATES November 19, 2015 Mrs. Gillibrand (for herself and Mr. Schumer ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To provide for transparency, accountability, and reform of the National Flood Insurance Program.

1. Short title This Act may be cited as the Flood Insurance Transparency and Accountability Act of 2015 . 2. Flood insurance transparency, accountability, and reform (a) Reports and other claim-Related documents Section 1312 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4019 ) is amended by adding at the end the following: (d) Final engineering reports The Administrator shall require that, in the case of any on-site inspection of a property by an engineer for the purpose of assessing any claim for losses covered by a policy for flood insurance coverage provided under this title, the final engineering report shall be provided to the insured under the policy, as follows: (1) Timing The final engineering report may not be transmitted to any other person, employer, agency, or entity, before it is transmitted to the insured. (2) Prohibition on alterations; certification The final engineering report may not include alterations by, or at the request of, anyone other than the responsible in charge for such report and shall include a certification, signed by the responsible in charge for the report, that it does not contain any such alterations. (3) Transmittal The final engineering report shall be transmitted to the insured in a manner as the Administrator shall provide that provides reasonable assurance that it was transmitted directly to the insured by the responsible in charge. (4) Reports covered For purposes of this subsection, the term final engineering report means an engineering report, survey, or other document in connection with such claim that— (A) is based on such on-site inspection; (B) contains final conclusions with respect to an engineering issue or issues involved in such claim; and (C) is signed by the responsible in charge or affixed with the seal of such responsible in charge, or both. (e) Claims adjustment reports The Administrator shall require that, in the case of any on-site inspection of a property by a claims adjustor for the purpose of assessing any claim for losses covered by a policy for flood insurance coverage provided under this title, any report shall be provided to the insured under the policy, as follows: (1) Timing Such report may not be transmitted to any other person, employer, agency, or entity, before it is transmitted to the insured. (2) Prohibition on alterations; certification The report may not include alterations by, or at the request of, anyone other than such preparer and shall include a certification, signed by the preparer of the report, that it does not contain any such alterations. (3) Transmittal The report shall be transmitted to the insured in a manner as the Administrator shall provide that provides reasonable assurance that it was transmitted directly to the insured by the preparer. (4) Reports covered For purposes of this subsection, the term report means any report or document in connection with such claim that is based on such on-site inspection by the claims adjustor, including any adjustment report and field report. Such term also includes any draft, preliminary version, or copy of any such report and any amendments or additions to any such report. Such term does not include any engineering report, as such term is defined for purposes of subsection (d). (f) Other claim-Related documents (1) Definition of claim-related document In this subsection, the term claim-related document means any document, other than a final engineering report (as defined in subsection (d)) or a report (as defined in subsection (e)), that was prepared for the purposes of assessing a claim for losses covered by flood insurance made available under this title, including— (A) a repair and replacement estimate or bid; (B) an appraisal; (C) a scope of loss; (D) a drawing; (E) a plan; (F) a report, including a draft report prepared based on an on-site inspection of a property conducted by a claims adjustor or engineer; (G) a third-party finding on the amount of loss, amount of covered damage, or cost of repairs; and (H) any other valuation, measurement, or loss adjustment calculation of the amount of loss, amount of covered damage, or cost of repairs. (2) Availability of documents Any entity servicing a claim under the national flood insurance program— (A) shall retain each claim-related document prepared by or for the entity; (B) upon request by a claimant or an authorized representative of a claimant, shall provide to the claimant or representative a copy of any claim-related document described in subparagraph (A) that pertains to the claimant; and (C) not later than 30 days after receiving notice of a claim, shall notify the claimant that the claimant or an authorized representative of the claimant may obtain, upon request, a copy of any claim-related document described in subparagraph (A) that pertains to the claimant. . (b) Judicial review (1) Government program with industry assistance Section 1341 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4072 ) is amended by striking within one year after the date of mailing of notice of disallowance or partial disallowance by the Administrator and inserting the following: not later than the expiration of the 2-year period beginning upon the date of the occurrence of the losses involved in such claim or, in the case of a denial of a claim for losses that is appealed to the Administrator, not later than (1) the expiration of the 90-day period beginning upon the date of a final determination upon appeal denying such claim in whole or in part, or (2) the expiration of such 2-year period, whichever is later . (2) Industry program with Federal financial assistance Section 1333 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4053 ) is amended by striking within one year after the date of mailing of notice of disallowance or partial disallowance of the claim and inserting the following: not later than the expiration of the 2-year period beginning upon the date of the occurrence of the losses involved in such claim or, in the case of a denial of a claim for losses that is appealed to the Administrator, not later than (1) the expiration of the 90-day period beginning upon the date of a final determination upon appeal denying such claim in whole or in part, or (2) the expiration of such 2-year period, whichever is later . (c) Flood Insurance Advocate Section 24(b) of the Homeowner Flood Insurance Affordability Act of 2014 ( 42 U.S.C. 4033(b) ) is amended— (1) in paragraph (4), by striking and at the end; (2) in subparagraph (5), by striking the period at the end and inserting ; and ; and (3) by adding at the end the following: (6) provide a direct point of contact for policyholders under the National Flood Insurance Program to discuss the status of their claim appeals and the basis of the decision to initially deny their claims. . (d) Records and reviews Section 1348 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4084 ) is amended by adding at the end the following: (c) Annual review The Administrator shall conduct an annual review of each private entity participating in the national flood insurance program, including any company that has entered into a contract with a Write Your Own insurance company to provide any service related to a policy or claim under the national flood insurance program, including adjusting, engineering, and legal services, to ensure compliance with this title and with all policies and procedures established by the Administrator to prevent fraud and protect policyholders. . (e) Publication of claims data Section 1312 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4019 ), as amended by subsection (a), is amended by adding at the end the following: (g) Publication of claims data Not later than 1 year after the date of enactment of the Flood Insurance Transparency and Accountability Act of 2015 , the Administrator shall create and maintain a publically searchable online database that includes, with respect to claims filed under the national flood insurance program after that date of enactment— (1) the number of claims filed each month, broken down by State; (2) the number of claims paid in part or in full; (3) the number of claims denied and the reasons cited for each denial; and (4) the number of claim denials appealed, the number of claim denials upheld on appeal, and the number of claim denials overturned on appeal. . (f) Engineering and litigation costs Section 1311 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4018 ) is amended by adding at the end the following: (c) Engineering and litigation costs The Administrator shall— (1) in order to ensure that taxpayer funds are being appropriately expended, establish clear guidelines and standards to require that any engineering or litigation cost billed to the national flood insurance program by a Write Your Own insurance company is justified on a case-by-case basis, both by the entity that originally incurs the cost and by the Write Your Own Company; and (2) enforce compliance with the guidelines and standards established under paragraph (1). . (g) Earth movement Section 1306 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4013 ) is amended by adding at the end the following: (e) Earth movement A flood insurance claim filed under this title for damage to or loss of property shall not be denied based on the earth movement exclusion in the Standard Flood Insurance Policy if the claim is filed as the result of a flood, including a claim for damage to or loss or property caused by earth movement that was caused by a flood. . (h) Appeals process Section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 ( 42 U.S.C. 4011 note) is amended— (1) by striking Not later than and inserting (a) In general .—Not later than ; and (2) by adding at the end the following: (b) Review of appeals (1) Clarity The Director shall ensure that the appeals process established under subsection (a) has clear rules, forms, and deadlines. (2) Notification upon initial denial of claim The Director shall ensure that a claimant is provided with the rules, forms, and deadlines described in paragraph (1) at the time a claim is first denied in full or in part, including— (A) the effective date of the denial; (B) a justification for the denial, including supporting documentation; (C) the date on which the period of limitation for instituting an action against the Administrator on the claim under section 1341 will end; and (D) a point of contact through which the claimant can directly discuss an appeal with a representative of the Federal Emergency Management Agency. (3) Notification upon denial of appeal If the Administrator denies an appeal filed by a policyholder, the Administrator shall include with the notice of denial an explanation of the policyholder's legal options for further challenging the denial. . (i) Definition of Write Your Own Section 1370(a) of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4121(a) ) is amended— (1) in paragraph (14), by striking and at the end; (2) in paragraph (15), by striking the period at the end and inserting ; and ; and (3) by adding at the end the following: (16) the term Write Your Own means the cooperative undertaking between the insurance industry and the Federal Insurance and Mitigation Administration which allows participating property and casualty insurance companies to write and service standard flood insurance policies. . 3. Reports to Congress (a) Definitions In this section— (1) the term National Flood Insurance Program means the program established under the National Flood Insurance Act of 1968 ( 42 U.S.C. 4001 et seq. ); (2) the term Task Force means the National Flood Insurance Program Transformation Task Force established by the Federal Emergency Management Agency; and (3) the term Write Your Own has the meaning given the term in section 1370(a) of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4121(a) ), as amended by section 2(i). (b) Report to Congress on accountability for defrauding policyholders Not later than 90 days after the date of enactment of this Act, the Secretary of Homeland Security shall submit to Congress a report on specific actions the Department of Homeland Security will take to identify individuals and private entities that have engaged in activities to defraud policyholders under the National Flood Insurance Program following Superstorm Sandy and prevent those individuals and private entities from continuing to receive Federal funding through— (1) contracts with, or employment by, a Write Your Own insurance company; or (2) employment by the Federal Emergency Management Agency. (c) Report to Congress on recommendations of the NFIP Transformation Task Force Not later than 1 year after the date of enactment of this Act, the Administrator of the Federal Emergency Management Agency shall submit to Congress a report that describes— (1) the recommendations of the Task Force for reforming the National Flood Insurance Program; (2) a timeline for implementing the recommendations of the Task Force; and (3) any recommendations of the Task Force that require additional legislation.