Opinion ID: 449236
Heading Depth: 1
Heading Rank: 3

Heading: The NFIP

Text: 17 The National Flood Insurance Act of 1968 was enacted by Title XIII of the Housing and Urban Development Act of 1968, Public Law 90-448, August 1, 1968, to provide previously unavailable flood insurance protection to property owners in flood prone areas. 2 42 U.S.C. Sec. 4001 et seq. 18 Dissatisfied with the lack of commitment being made to the program by the municipalities to which insurance was available, Congress added additional incentives for communities to participate in the NFIP. Congress' persuasive stick--used as an aid to the insufficient insurance carrot--was the Flood Disaster Protection Act of 1973. 3 19 To qualify for the sale of federally subsidized flood insurance, a community was required to adopt and submit as part of its application, flood plain management regulations. These regulations were designed to reduce or avoid future flood damages. 20 However, the 1968 Act required a risk study to be undertaken for each community before it could become eligible for the sale of flood insurance. Since this requirement resulted in a delay in providing insurance protection, Congress established an Emergency Flood Insurance Program to permit the early sale of insurance in flood prone communities. The emergency program did not affect the requirement that a community adopt adequate flood plain management regulations; it only permitted insurance to be sold before a study was conducted to determine actual risk premium rates for the particular community. The emergency program still required the charging of actual risk premium rates for all new construction, substantial improvements, and high limits of coverage on existing structures when a flood insurance rate map became effective. 21 To qualify for flood insurance, a community was required to apply for the entire area within its jurisdiction. 4 The program requires the community to designate an agency or official with responsibility, authority, and means to implement the specific requirements of the program and to make an annual report concerning the community's participation in the program. The regulations provide that a community is subject to suspension from the NFIP for failure to implement adequate flood plain management regulations. During a suspension, no flood insurance may be sold or renewed. 22 Thus, the Act contemplates the participation of both the federal agency charged with the program's oversight and the local community government charged with implementing the agency's flood plain regulations. Under the regulations, however, ultimate responsibility for community compliance remains with the Agency since it has the power to suspend any municipality for lack of compliance with the NFIP.