{ "id": "R45019", "type": "CRS Report", "typeId": "REPORTS", "number": "R45019", "active": true, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 585170, "date": "2018-01-23", "retrieved": "2020-01-02T13:44:04.873266", "title": "21st Century Flood Reform Act (H.R. 2874): Reforming the National Flood Insurance Program", "summary": "The National Flood Insurance Program (NFIP) was established by the National Flood Insurance Act of 1968 (NFIA, 42 U.S.C. \u00a74001 et seq.), and was reauthorized until February 8, 2018 (H.R. 195). Unless reauthorized or amended by Congress, the following will occur after February 8, 2018: (1) the authority to provide new flood insurance contracts will expire; and (2) the authority for the NFIP to borrow funds from the Treasury will be reduced from $30.425 billion to $1 billion.\nThe House passed H.R. 2874, the 21st Century Flood Reform Act, on November 14, 2017, with a vote of 237-189. H.R. 2874 would authorize the NFIP until September 30, 2022. This report summarizes selected provisions of the bill, concentrating on changes related to premiums and surcharges, affordability, increasing participation, the role of private insurance, treatment of multiple loss properties, and some provisions related to floodplain mapping and mitigation. \nH.R. 2874 would phase out the subsidy provided for primary residences built before the first Flood Insurance Rate Map (FIRM) was published in their community, at a rate of 6.5%-15% compared to the present rate of 5%-18%. The minimum would be phased in over a four-year period. The phaseout of the pre-FIRM subsidy for other categories of properties would remain at 25%. The Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) surcharge would be increased from $25 to $40 for primary residences and from $250 to $275 for nonresidential properties and most nonprimary residences. The reserve fund assessment would be increased by at least one percentage point per year until the statutory reserve ratio is achieved. The bill would cap the premiums for 1-4 unit residential properties at $10,000 per year. The Federal Emergency Management Agency (FEMA) would be required over time to include additional considerations in the setting of premium rates, including the use of replacement cost value of a property, the difference in flood risk between coastal and inland locations, and the use of risk assessment tools other than FIRMs. H.R. 2874 would authorize a state or a consortium of states to create a voluntary flood insurance affordability program for low-income owner-occupants of 1-4 unit residences, to be funded by a surcharge on other NFIP policyholders in the state(s). The bill would increase the civil penalties from $2,000 to $5,000 on federally regulated lenders for failure to comply with enforcing the mandatory purchase requirement. \nH.R. 2874 would strike existing statutory language describing how private flood insurance must provide coverage \u201cas broad as the coverage\u201d provided by the NFIP, and would instead require that policies comply with the laws and regulations of the state where the property is located. Federal regulators would be required to develop and implement regulations relating to the financial strength of private insurers, and lenders would have to accept a private insurance policy from a company with adequate financial strength. The mandatory purchase requirement would be eliminated for commercial property from January 1, 2019. The noncompete clause that currently restricts private companies from selling both NFIP and private flood insurance policies would be eliminated. \nH.R. 2874 would define a new \u201cmultiple-loss property\u201d category, which would include a revised definition of repetitive loss properties, severe repetitive loss properties, and a new category of extreme repetitive loss properties. Any multiple-loss property with at least two claims after enactment would have rates increased by 10% per year until the rates reflect current risks. Those with at least three future claims would have their rates increased by 15% per year.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/R45019", "sha1": "f10fd90c1b724391bf0bed131e2fc5fa36b653ef", "filename": "files/20180123_R45019_f10fd90c1b724391bf0bed131e2fc5fa36b653ef.html", "images": {} }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/R45019", "sha1": "9132a290ecd272f234378c9fbdd17882566add37", "filename": "files/20180123_R45019_9132a290ecd272f234378c9fbdd17882566add37.pdf", "images": {} } ], "topics": [] }, { "source": "EveryCRSReport.com", "id": 577385, "date": "2018-01-03", "retrieved": "2018-01-08T14:17:04.451256", "title": "21st Century Flood Reform Act (H.R. 2874): Reforming the National Flood Insurance Program", "summary": "The National Flood Insurance Program (NFIP) was established by the National Flood Insurance Act of 1968 (NFIA, 42 U.S.C. \u00a74001 et seq.), and was reauthorized until January 19, 2018 (P.L. 115-96). Unless reauthorized or amended by Congress, the following will occur after January 19, 2018: (1) the authority to provide new flood insurance contracts will expire; and (2) the authority for the NFIP to borrow funds from the Treasury will be reduced from $30.425 billion to $1 billion.\nThe House passed H.R. 2874, the 21st Century Flood Reform Act, on November 14, 2017, with a vote of 237-189. H.R. 2874 would authorize the NFIP until September 30, 2022. This report summarizes selected provisions of the bill, concentrating on changes related to premiums and surcharges, affordability, increasing participation, the role of private insurance, treatment of multiple loss properties, and some provisions related to floodplain mapping and mitigation. \nH.R. 2874 would phase out the subsidy provided for primary residences built before the first Flood Insurance Rate Map (FIRM) was published in their community, at a rate of 6.5%-15% compared to the present rate of 5%-18%. The minimum would be phased in over a four-year period. The phaseout of the pre-FIRM subsidy for other categories of properties would remain at 25%. The Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) surcharge would be increased from $25 to $40 for primary residences and from $250 to $275 for nonresidential properties and most nonprimary residences. The reserve fund assessment would be increased by at least one percentage point per year until the statutory reserve ratio is achieved. The bill would cap the premiums for 1-4 unit residential properties at $10,000 per year. The Federal Emergency Management Agency (FEMA) would be required over time to include additional considerations in the setting of premium rates, including the use of replacement cost value of a property, the difference in flood risk between coastal and inland locations, and the use of risk assessment tools other than FIRMs. H.R. 2874 would authorize a state or a consortium of states to create a voluntary flood insurance affordability program for low-income owner-occupants of 1-4 unit residences, to be funded by a surcharge on other NFIP policyholders in the state(s). The bill would increase the civil penalties from $2,000 to $5,000 on federally regulated lenders for failure to comply with enforcing the mandatory purchase requirement. \nH.R. 2874 would strike existing statutory language describing how private flood insurance must provide coverage \u201cas broad as the coverage\u201d provided by the NFIP, and would instead require that policies comply with the laws and regulations of the state where the property is located. Federal regulators would be required to develop and implement regulations relating to the financial strength of private insurers, and lenders would have to accept a private insurance policy from a company with adequate financial strength. The mandatory purchase requirement would be eliminated for commercial property from January 1, 2019. The noncompete clause that currently restricts private companies from selling both NFIP and private flood insurance policies would be eliminated. \nH.R. 2874 would define a new \u201cmultiple-loss property\u201d category, which would include a revised definition of repetitive loss properties, severe repetitive loss properties, and a new category of extreme repetitive loss properties. Any multiple-loss property with at least two claims after enactment would have rates increased by 10% per year until the rates reflect current risks. Those with at least three future claims would have their rates increased by 15% per year.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R45019", "sha1": "0f5d4a859474360450bc6874a31d3b6c6d93a703", "filename": "files/20180103_R45019_0f5d4a859474360450bc6874a31d3b6c6d93a703.html", "images": {} }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R45019", "sha1": "a0e207714d9f73e136e518aa4fb2797cec4308f6", "filename": "files/20180103_R45019_a0e207714d9f73e136e518aa4fb2797cec4308f6.pdf", "images": {} } ], "topics": [] }, { "source": "EveryCRSReport.com", "id": 575846, "date": "2017-11-27", "retrieved": "2017-11-28T14:31:13.216208", "title": "21st Century Flood Reform Act (H.R. 2874): Reforming the National Flood Insurance Program", "summary": "The National Flood Insurance Program (NFIP) was established by the National Flood Insurance Act of 1968 (NFIA, 42 U.S.C. \u00a74001 et seq.), and was reauthorized until December 8, 2017 (P.L. 115-56). Unless reauthorized or amended by Congress, the following will occur after December 8, 2017: (1) the authority to provide new flood insurance contracts will expire; (2) the authority for the NFIP to borrow funds from the Treasury will be reduced from $30.425 billion to $1 billion; and (3) the authorization of appropriations for the flood hazard mapping program will expire.\nThe House passed H.R. 2874, the 21st Century Flood Reform Act, on November 14, 2017, with a vote of 237-189. H.R. 2874 would authorize the NFIP until September 30, 2022. This report summarizes selected provisions of the bill, concentrating on changes related to premiums and surcharges, affordability, increasing participation, the role of private insurance, treatment of multiple loss properties, and some provisions related to floodplain mapping and mitigation. \nH.R. 2874 would phase out the subsidy provided for primary residences built before the first Flood Insurance Rate Map (FIRM) was published in their community, at a rate of 6.5%-15% compared to the present rate of 5%-18%. The minimum would be phased in over a four-year period. The phaseout of the pre-FIRM subsidy for other categories of properties would remain at 25%. The Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) surcharge would be increased from $25 to $40 for primary residences and from $250 to $275 for nonresidential properties and most non-primary residences. The reserve fund assessment would be increased by at least one percentage point per year until the statutory reserve ratio is achieved. The bill would cap the premiums for 1-4 unit residential properties at $10,000 per year. The Federal Emergency Management Agency (FEMA) would be required over time to include additional considerations in the setting of premium rates, including the use of replacement cost value of a property, the difference in flood risk between coastal and inland locations, and the use of risk assessment tools other than FIRMs. H.R. 2874 would authorize a state or a consortium of states to create a voluntary flood insurance affordability program for low-income owner-occupants of 1-4 unit residences, to be funded by a surcharge on other NFIP policyholders in the state(s). The bill would increase the civil penalties from $2,000 to $5,000 on federally regulated lenders for failure to comply with enforcing the mandatory purchase requirement. \nH.R. 2874 would strike existing statutory language describing how private flood insurance must provide coverage \u201cas broad as the coverage\u201d provided by the NFIP, and would instead require that policies comply with the laws and regulations of the state where the property is located. Federal regulators would be required to develop and implement regulations relating to the financial strength of private insurers, and lenders would have to accept a private insurance policy from a company with adequate financial strength. The mandatory purchase requirement would be eliminated for commercial property from January 1, 2019. The noncompete clause that currently restricts private companies from selling both NFIP and private flood insurance policies would be eliminated. \nH.R. 2874 would define a new \u201cmultiple-loss property\u201d category, which would include a revised definition of repetitive loss properties, severe repetitive loss properties, and a new category of extreme repetitive loss properties. Any multiple-loss property with at least two claims after enactment would have rates increased by 10% per year until the rates reflect current risks. Those with at least three future claims would have their rates increased by 15% per year.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R45019", "sha1": "f5454529374e3ea5235a17db8146044938016ff5", "filename": "files/20171127_R45019_f5454529374e3ea5235a17db8146044938016ff5.html", "images": {} }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R45019", "sha1": "126a4e9b601a9414edebcbcf0bbf628b988827db", "filename": "files/20171127_R45019_126a4e9b601a9414edebcbcf0bbf628b988827db.pdf", "images": {} } ], "topics": [] } ], "topics": [] }