National Flood Insurance Program Commitment to Policyholders and Reform Act of 2005 - (Sec. 3) Directs the Comptroller General to study and report to Congress on whether the mandatory flood insurance coverage purchase requirements of the Flood Disaster Protection Act of 1973 should extend to properties located in the 500-year floodplain.
Requires the Director of the Federal Emergency Management Agency (FEMA) to report annually to Congress on the extent to which updating and modernization of all floodplain areas and flood-risk zones has been completed.
(Sec. 4) Amends the Flood Disaster Protection Act of 1973 to: (1) increase from $350 to $2,000 the civil monetary penalty for mortgage lender failures to require flood insurance; and (2) eliminate the $100,000 cap on the total amount of such penalties assessed against any single regulated lending institution or enterprise during any calendar year.
(Sec. 5) Requires the FEMA Director to: (1) establish an appeals process through which holders of a flood insurance policy may appeal decisions on claims, proofs of loss, and loss estimates relating to such flood insurance policy; (2) enforce the minimum training and education requirements for insurance agents who sell certain flood insurance policies; (3) issue regulations to implement specified requirements of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004; and (4) identify for Congress each regulation, order, notice, and other material issued by the Director to implement each provision of such Act.
(Sec. 6) Amends the National Flood Insurance Act of 1968 to increase the maximum flood insurance coverage limits for residential property.
(Sec. 7) Prescribes coverage of additional living expenses and business interruption.
(Sec. 8) Increases from $3.5 billion to $22 billion the borrowing authority vested in the Director. Requires the Director to report to Congress a plan for repaying any amounts borrowed pursuant to such increase.
(Sec. 9) Instructs the Director to: (1) issue regulations and revise materials to clarify replacement cost coverage under the national flood insurance program; and (2) revise regulations, forms, notices, guidance, and publications regarding the full cost of repair or replacement under the replacement cost coverage to more clearly describe such coverage and to avoid providing misleading information to policyholders.
(Sec. 10) Requires the Director to report semi-annually to Congress on the financial status of the national flood insurance program.
(Sec. 11) Amends the Real Estate Settlement Procedures Act of 1974 to require a good faith estimate to include a conspicuous statement that flood insurance coverage for residential real estate is generally available under the National Flood Insurance Program whether or not the real estate is located in an area having special flood hazards and that, to obtain such coverage, a home owner or purchaser should contact a hazard insurance provider.
(Sec. 12) Amends the National Flood Insurance Act of 1968 to include among eligible mitigation plan activities the demolition and rebuilding of structures located in areas having special flood hazards to at least Base Flood Elevation or any higher elevation required by any local ordinance.
(Sec. 13) Authorizes the Director to employ additional FEMA staff.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4320 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 4320
To restore the financial solvency of the national flood insurance
program, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 15, 2005
Mr. Oxley (for himself and Mr. Frank of Massachusetts) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To restore the financial solvency of the national flood insurance
program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``National Flood Insurance Program
Commitment to Policyholders and Reform Act of 2005''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) the amount of the flood insurance claims resulting from
Hurricane Katrina and Hurricane Rita will likely exceed the
aggregate amount of all claims previously paid in the history
of the national flood insurance program, and will require an
increase in the program's borrowing authority;
(2) flood insurance policyholders have a legitimate
expectation that they will receive fair and timely compensation
for losses covered under their policies;
(3) substantial flooding has occurred, and will likely
occur again, outside of the areas designated as the 100-year
floodplain;
(4) to adequately and correctly assess potential flood
damage and losses in all areas on the United States, the
national flood insurance program will need to update its flood
maps with the latest technology;
(5) the maximum coverage limits for flood insurance
policies should be increased to reflect inflation and the
increased cost of housing;
(6) significant reforms to the national flood insurance
program required in the Bunning-Bereuter-Blumenauer Flood
Insurance Reform Act of 2004 have yet to be implemented; and
(7) despite reforms required in the Bunning-Bereuter-
Blumenauer Flood Insurance Reform Act of 2004, the national
flood insurance program requires a modernized and updated
administrative model to ensure that the people of the United
States have continued access to flood insurance.
(b) Purposes.--The purposes of this Act are--
(1) to protect the integrity of the national flood
insurance program by fully funding existing legal obligations
expected by existing policyholders who have paid policy
premiums in return for flood insurance coverage;
(2) to increase incentives for homeowners and communities
to participate in the national flood insurance program and to
improve oversight to ensure full participation in the program
for owners of properties for which such participation is
mandatory;
(3) to increase awareness of homeowners of flood risks and
improve the quality of information regarding such risks
provided to homeowners; and
(4) to better mitigate future flood damage risks through a
combination of enhanced protective measures, property
elevation, and buyouts of flood-prone properties.
SEC. 3. MANDATORY PURCHASE REQUIREMENT FOR 500-YEAR FLOOD PLAIN.
(a) Flood Disaster Protection Act of 1973.--Section 3(a) of the
Flood Disaster Protection Act of 1973 (42 U.S.C. 4003(a)) is amended--
(1) in paragraph (10), by striking ``and'' at the end;
(2) in paragraph (11), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following new paragraph:
``(12) `area having special flood hazards' or `flood hazard
area' means any area that is determined by the Director--
``(A) pursuant section 1360 of the National Flood
Insurance Act of 1968, to be subject to inundation by
the flood that has a 0.2 percent chance of being
equaled or exceeded in any year; or
``(B) to be an area that would be an area described
in subparagraph (A) of this paragraph, but for the
existence of a structural flood protection system;''.
(b) National Flood Insurance Act of 1968.--The National Flood
Insurance Act of 1968 is amended--
(1) in section 1370(a) (42 U.S.C. 4121(a))--
(A) in paragraph (14), by striking ``and'' at the
end;
(B) in paragraph (15), by striking the period at
the end and inserting a semicolon; and
(C) by adding at the end the following new
paragraph:
``(16) the term `area having special flood hazards' and
`flood hazard area' mean an area that is determined by the
Director--
``(A) pursuant section 1360, to be subject to
inundation by the flood that has a 0.2 percent chance
of being equaled or exceeded in any year; or
``(B) to be an area that would be an area described
in subparagraph (A) of this paragraph, but for the
existence of a structural flood protection system;'';
(2) in section 1361A(g)(4) (42 U.S.C. 4102a(g)(4)), by
striking ``flood hazard area'' and inserting ``area having
special flood hazards''; and
(3) in section 1366(m) (42 U.S.C. 4104c(m)), by striking
``100-year'' and inserting ``500-year''.
(c) Annual Flood Map Modernization Reports and Certification of
Completion.--
(1) In general.--During the period that ends upon the
completion by the Director of the Federal Emergency Management
Agency of the updating and modernization of all floodplain
areas and flood-risk zones, the Director shall submit a report
annually to the Congress describing the extent to which such
updating and modernization has been completed. Upon the
completion of such updating, the Director shall submit to the
Congress, and cause to be published in the Federal Register, a
report certifying such completion.
(2) Timing.-- The first report under this subsection shall
be submitted not later than June 30, 2006, and successive
reports required under this subsection during the period
referred to in paragraph (1) shall be submitted not later than
June 30 of each year during such period.
(d) Applicability.--The amendments made by subsections (a) and (b)
shall take effect, and apply beginning on--
(1) January 1, 2009, or
(2) publication of the certification by the Director
pursuant to subsection (c),
whichever occurs first.
SEC. 4. ENFORCEMENT.
Paragraph (5) of section 102(f) of the Flood Disaster Protection
Act of 1973 (42 U.S.C. 4012a) is amended--
(1) by striking ``$350'' and inserting ``$2,000''; and
(2) by striking the last sentence.
SEC. 5. REITERATION OF FEMA RESPONSIBILITIES UNDER 2004 REFORM ACT.
(a) Appeals Process.--As directed in section 205 of the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011
note), the Director of the Federal Emergency Management Agency is again
directed to, not later than 90 days after the date of the enactment of
this Act, establish an appeals process through which holders of a flood
insurance policy may appeal the decisions, with respect to claims,
proofs of loss, and loss estimates relating to such flood insurance
policy as required by such section.
(b) Minimum Training and Education Requirements.--The Director of
the Federal Emergency Management Agency is directed to enforce the
minimum training and education requirements for all insurance agents
who sell flood insurance policies that have been established under the
notice published September 1, 2005 (70 Fed. Reg. 52117) pursuant to
section 207 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform
Act of 2004 (42 U.S.C. 4011 note).
(c) Mitigation Programs.--Not later than the expiration of the 30-
day period beginning on the date of the enactment of this Act, the
Director of the Federal Emergency Management Agency shall issue
regulations necessary to implement the amendments made by sections 102,
103, 104, and 105 of the Bunning-Bereuter-Blumenauer Flood Insurance
Reform Act of 2004 (118 Stat. 714 et seq.).
(d) Report.--Not later than the expiration of the 6-month period
beginning on the date of the enactment of this Act, the Director of the
Federal Emergency Management Agency shall submit a report to the
Congress describing the implementation of each provision of the
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (Public
Law 108-264) and identifying each regulation, order, notice, and other
material issued by the Director in implementing each such provision.
SEC. 6. MAXIMUM COVERAGE LIMITS.
Subsection (b) of section 1306 of the National Flood Insurance Act
of 1968 (42 U.S.C. 4013(b)) is amended--
(1) in paragraph (2), by striking ``$250,000'' and
inserting ``$335,500'';
(2) in paragraph (3), by striking ``$100,000'' and
inserting ``$135,000''; and
(3) in paragraph (4), by striking ``$500,000'' each place
such term appears and inserting ``$670,700''.
SEC. 7. COVERAGE FOR ADDITIONAL LIVING EXPENSES AND BUSINESS
INTERRUPTION.
Subsection (b) of section 1306 of the National Flood Insurance Act
of 1968 (42 U.S.C. 4013), as amended by section 5 of this Act, is
further amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following new paragraph:
``(6) in the case of any residential property, each renewal
or new contract for flood insurance coverage shall provide not
less than $1,000 aggregate liability per dwelling unit for any
necessary increases in living expenses incurred by the insured
when losses from a flood make the residence unfit to live in,
which coverage shall be available only at chargeable rates that
are not less than the estimated premium rates for such coverage
determined in accordance with section 1307(a)(1);
``(7) in the case of any residential property, coverage for
additional living expenses described in paragraph (6) shall be
made available to every insured upon renewal and every
applicant in excess of the limits provided in paragraph (6) in
such amounts and at such rates as the Director shall establish,
except that such chargeable rates shall not be less than the
estimated premium rates for such coverage determined in
accordance with section 1307(a)(1); and
``(8) the Director shall make available, for purchase by
any policyholder of a policy for flood insurance coverage for a
commercial property, optional coverage for losses resulting
from any partial or total interruption of the policyholder's
business caused by damage to or loss of such property from a
flood, except that--
``(A) for purposes of such coverage, losses shall
be determined based on the profits the covered business
would have earned, based on previous financial records,
had the flood not occurred; and
``(B) such coverage shall be made available only at
chargeable rates that are not less than the estimated
premium rates for such coverage determined in
accordance with section 1307(a)(1).''.
SEC. 8. INCREASE IN BORROWING AUTHORITY.
(a) Borrowing Authority.--The first sentence of subsection (a) of
section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C.
4016(a)), as amended by the National Flood Insurance Program Enhanced
Borrowing Authority Act of 2005 (Public Law 109-65; 119 Stat. 1998), is
amended by striking ``$3,500,000,000'' and inserting
``$22,000,000,000''.
(b) FEMA Report.--Not later than the expiration of the 6-month
period beginning on the date of the enactment of this Act, the Director
of the Federal Emergency Management Agency shall submit a report to the
Congress setting forth a plan for repaying any amounts borrowed
pursuant to increase in borrowing authority authorized under the
amendments made by subsection (a).
SEC. 9. CLARIFICATION OF REPLACEMENT COST PROVISIONS, FORMS, AND POLICY
LANGUAGE.
Not later than the expiration of the 3-month period beginning on
the date of the enactment of this Act, the Director of the Federal
Emergency Management Agency shall--
(1) issue regulations, and revise any materials made
available by such Agency, to clarify the applicability of
replacement cost coverage under the national flood insurance
program;
(2) revise any regulations, forms, notices, guidance, and
publications relating to the full cost of repair or replacement
under the replacement cost coverage to more clearly describe
such coverage to flood insurance policyholders and information
to be provided by such policyholders relating to such coverage,
and to avoid providing misleading information to such
policyholders; and
(3) revise the language in standard flood insurance
policies under such program regarding rating and coverage
descriptions in a manner that is consistent with language used
widely in other homeowners and property and casualty insurance
policies, including such language regarding classification of
buildings, basements, crawl spaces, detached garages,
enclosures below elevated buildings, and replacement costs.
SEC. 10. FEMA REPORTS ON FINANCIAL STATUS OF INSURANCE PROGRAM.
Section 1320 of the National Flood Insurance Act of 1968 (42 U.S.C.
4027) is amended--
(1) in the section heading, by striking ``report to the
president'' and inserting ``reports'';
(2) in subsection (a), by striking ``In General'' and
inserting ``Biennial Report to President''; and
(3) by adding at the end the following new subsection:
``(c) Semiannual Reports to Congress on Financial Status.--Not
later than June 30 and December 31 of each year, the Director shall
submit a report to the Congress regarding the financial status of the
national flood insurance program under this title. Each such report
shall describe the financial status of the National Flood Insurance
Fund and current and projected levels of claims, premium receipts,
expenses, and borrowing under the program.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
Committee Consideration and Mark-up Session Held.
Ordered to be Reported (Amended) by Voice Vote.
Reported (Amended) by the Committee on Financial Services. H. Rept. 109-370.
Reported (Amended) by the Committee on Financial Services. H. Rept. 109-370.
Placed on the Union Calendar, Calendar No. 199.
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