I 114th CONGRESS 2d Session H. R. 6434 IN THE HOUSE OF REPRESENTATIVES December 5, 2016 Mr. Pallone (for himself, Mr. Pascrell , and Mr. Payne ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To provide for more transparent and appropriate reimbursement of insurers participating in the Write Your Own program under the National Flood Insurance Program, and for other purposes.

1. Short title This Act may be cited as the Flood Insurance Reimbursement Standards Transparency Cap Profits Act of 2016 or the FIRST Cap Profits Act of 2016 . 2. Implementation of oversight and expense reimbursement provisions for Write Your Own insurers (a) Methodology and rulemaking Not later than the expiration of the 12-month period beginning on the date of the enactment of this Act, the Administrator of the Federal Emergency Management Agency (in this Act referred to as the Administrator ) and each property and casualty insurance company participating in the Write Your Own program (as such term is defined in section 100202 of the Biggert-Waters Flood Insurance Reform Act of 2012 ( 42 U.S.C. 4004 )), as applicable, shall comply with and complete all requirements under subsections (a) through (e) of section 100224 of the Biggert-Waters Flood Insurance Reform Act of 2012 ( 42 U.S.C. 4081 note), as amended by section 3(a) of this Act, including issuing a final rule under subsection (d) of such section 100224, notwithstanding any period of time specified in such section 100224. The Administrator shall take such actions as may be necessary to ensure such compliance. (b) GAO report Paragraph (1) of section 100224(f) of the Biggert-Waters Flood Insurance Reform Act of 2012 ( 42 U.S.C. 4081 note) is amended by inserting of this section and section 2(a) of the Flood Insurance Reimbursement Standards Transparency Cap Profits Act of 2016 before the first comma. 3. WYO reimbursement methodology (a) Limitation on reimbursements Subsection (b) of section 100204 of the Biggert-Waters Flood Insurance Reform Act of 2012 ( 42 U.S.C. 4081 note) is amended by adding after and below paragraph (3) the following: Any such methodology developed shall provide that such reimbursements for any property and casualty insurer for selling, writing, and servicing flood insurance policies, and adjusting flood insurance claims, including any allowances for profit, shall not in any case exceed 110 percent of the aggregate amount of such actual expenses of the insurer. . (b) Submission of methodology to Congress Not later than the expiration of the 90-day period beginning on the date of the enactment of this Act, the Administrator shall submit to the Congress the methodology required to be developed under section 100224(b) of the Biggert-Waters Flood Insurance Reform Act of 2012 ( 42 U.S.C. 4081 note), as amended by subsection (a) of this subsection, or, if such methodology has not been completed as of the time of such submission, the methodology to the extent so completed and all information in the possession of the Administrator regarding the development of such methodology. 4. Noncompliance (a) Timing for compliance If— (1) upon the expiration of the 12-month period referred to section 2(a) of this Act, the Administrator has not issued the final rule required under such section 2(a), or (2) upon the expiration of the 90-day period referred to in section 3(b) of this Act, the Administrator has not submitted to the Congress the methodology required under such section 3(b), subsection (b) of this section shall take effect and shall apply until such final rule has been issued or such methodology has been submitted, as the case may be. (b) Limitations During any period that this subsection is in effect— (1) the Administrator may not reimburse, or otherwise provide any allowance, payment, or compensation for selling, writing, or servicing flood insurance policies, or adjusting flood insurance claims, including any allowance for profit, to any property and casualty insurance company participating in the Write Your Own program and shall withhold all amounts for such reimbursements, allowance, payments, and compensation; and (2) any claim under a flood insurance policy serviced by an insurance company participating in the Write Your Own program shall be adjusted and serviced only by a direct servicing agent of the Federal Emergency Management Agency. 5. Award of costs of litigation in cases of WYO fraud Section 1345 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4083 ) is amended by adding at the end the following new subsection: (f) Award of costs of litigation in cases of WYO fraud If the plaintiff prevails in any civil action for fraud or misrepresentation by any insurance company occurring in the course of its participation in the Write Your Own program (as such term is defined in section 100202 of the Biggert-Waters Flood Insurance Reform Act of 2012 ( 42 U.S.C. 4004 )), the court shall award costs of litigation (including reasonable attorney and expert witness fees) to the plaintiff. .